Turks tighten economic belt to get big loans
Istanbul — Prime Minister Suleyman Demirel is striving to put the ailing Turkish economy back on its feet with harsh economic measures -- but already resistance is being encountered.
When Mr. Demirel's government announced stiff new measures Jan. 25, including devaluation of the lira by 48 percent to the US dollar, the question immediately became whether or not his fragile minority regime can survive the shock waves of opposition.
At present, government officials believe that if the West helps Turkey, and if foreign credits start coming in soon, the government stands a good chance to survive.
Otherwise, they fear that not only the Demirel administration, but also the country's political stability, and even its democratic tradition, may be threatened.
This would be due to a combination of deteriorating economic conditions, social unrest, and political violence.
Insiders say Mr. Demirel, in calling for the audacious new measures, has based his hopes on indications that Western governments and financial institutions, as well as oil-rich countries such as Saudi Arabia, will promptly provide substantial assistance to Turkey.
This is especially urgent, the government feels, in view of the recent developments in Iran and Afghanistan.
Turkey expects a $234 million credit from the International Monetary Fund (IMF) in the coming weeks and, after that "green light," credits from the United States and countries belonging to the Organization for Economic Cooperation and Development totaling at least half a billion dollars within the next few months.
The new economic measures are in line with IMF recommendations. They provide for stopping of state subsidies to enterprises in the public sector, squeezing of credits and encouraging savings, encouraging foreign capital investments, and granting of oil exploration rights to foreign companies.