Turkey: Spinning Market Magic

Turkey has just rebounded from the third in a recent series of economic crises. This latest setback, which luckily lasted all of four hours, signaled the end for Privatization Minister Yuksel Yalova and the further ascent of Economy Minister Kemal Dervis. Yalova was forced to resign after making a statement about Turkey’s agreement with the International Monetary Fund (IMF) regarding deregulation of the tobacco industry.

“We can’t prepare a hasty scribble of a law on an issue that concerns 600,000 people just by sitting down and saying, ‘We promised it in May,’ ” Yalova said. His remarks on May 31, interpreted as a sign of discord in the government about Turkey’s recovery program, caused shares on Istanbul’s stock market to drop by 5 percent.

While Yalova argued that he had been misinterpreted, before the end of the day he had resigned. This allowed Dervis to assert: “We have transformed this morning’s negative into a positive.” Thus, Dervis again expressed his determination to implement the “Economic Program,” a combination of privatization and anti-inflation measures required for IMF support. On May 16, the IMF agreed to a new, US$8-billion bailout on top of $11 billion already committed.

Since the previous crisis, on Feb. 21, Dervis has set Turkish politics and society awhirl with his straight talk and rejection of cronyism. Some have depicted him as the country’s only hope.

Critics, however, are portraying him as a tool of the international community. Yalova’s resignation has only fueled such accusations. In his column in the May 23 issue of Istanbul’s liberal Aksam, Bedri Baykam asserted: “In reality, it was the world that gave us Dervis.…The IMF sent Dervis to us as a blessing from the Lord.”

Writing under the headline “Who Cares About IMF Pressure?” Aksam commentator Yalcin Peksen asked (May 24): “Hasn’t Kemal Dervis said the same things repeatedly since the day he arrived? Hasn’t he said that if these laws are not implemented, the IMF will not give us any money?”

Columnist Necati Dogru, in Istanbul’s liberal Cumhuriyet, wrote (May 24): “Turkey’s next 20 years will be shaped by Dervis, an American who speaks Turkish very well. Let us not be fooled.”

In his May 23 column, Mustafa Karaalioglu of Istanbul’s Islamist Yeni Safak argued that the economy minister would dive into high-level politics, where his specialized knowledge would serve him well. “Kemal Dervis is the politician who knows which season or month will be favorable for elections in the next one or two years, because he knows the difficulties the Turkish economy will endure, the intensity of the structural birth pains, and when these difficulties will occur.”

Karaalioglu, for his part, predicts an early election next spring or next summer.
Columnist Gulay Gokturk wrote in Istanbul’s independent Sabah (June 1): “Today the enemy is not the IMF, the World Bank, or even foreign capital.” Noting that “Kemal Dervis cannot save Turkey in spite of Turkey,” she predicted: “So long as Turkey’s strong majority does not declare its willingness to implement whatever this [economic] program requires and does not ally itself with the political mavericks, our future is dark indeed.”

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