WE BELIEVE THAT STABILITY IN TURKEY WILL INCREASE AS LONG AS REFORMS ARE UNDERTAKEN
LONDON - State Minister Ali Babacan said on Thursday that the government believed that stability in Turkey would increase as long as economic and social reforms were undertaken in Turkey.
Babacan who came to London, Britain the same day to meet with representatives of various financial institutions and investors, held a news conference on the second day of his visit to London.
Babacan said in the beginning of the news conference that his meetings were held on a very beneficial and constructive basis, adding that Turkey was on a very important transition process. Babacan said that there were two important parts of that process: first one of them was preparations about accession to EU, and the second one was economic reforms.
Babacan stated that the sixth adjustment package was before the parliament and the seventh adjustment package was being prepared, adding that ''these reforms will upgrade the Turkish democracy to the level in western democracies.'' Babacan stated that economic reforms were also undertaken and that they would ensure a rational economy administration. Babacan said that his party which came to power after the elections on November 3 speeded up the reform process, adding that the AK Party government pursued a policy based on free market economy. Babacan said that the first item on their agenda was to draw foreign investment to Turkey, adding that they expected an increase in amount of foreign investment due to the legal regulations they did. Babacan said that all those reforms were undertaken in Turkey to bring Turkey to the level of EU standards, noting that they clearly explained the perspective of the government during their presentations in London.
Upon a question, Babacan said that borrowing process was a very dynamic process, adding that borrowing interest rates gradually decreased after the Iraqi war. Babacan said that the government would also benefit from new opportunities.
When reminded statement of State Minister Mehmet Ali Sahin who said that ''public workers still want increase in their wages, but there are still thousands of people who are willing to work with minimum wage in the country'', Babacan stressed that there was problem in public sector which had excessive number of public workers. Babacan recalled that a program was being implemented to make this situation more rational, noting that this program aimed to make people retire voluntarily.
Stressing that they believed in importance of social peace, Babacan said that they also had to consider unemployed people.
Babacan said, ''social problems are not only related with wages of public workers, we should also take into consideration unemployed people.''
When reminded interpretation of Economics Intelligence Unit which said that ''Turkish economy will pass through a new economic crisis due to debts,'' Babacan said that many institutions and analysts made such interpretations and recalled that everybody had his/her own views and approaches.
Babacan said that everybody was free to think as he/she wanted and added, ''but figures are very clear. As you know, it is only one of hundreds of predictions. No one can deny that there is a positive trend in market.''
Stating that there was a serious problem regarding people's tendency toward U.S. dollar in the past, he said that Turkish people invested their money in U.S. dollar and many companies made trade with foreign money.
Babacan said that it was a natural result stemming from high inflation rate.
''Inflation rate has been taken under control currently. 29.7 percent inflation rate cannot be considered a success, but decreasing inflation rate from 90 percent to this number is a success. We aim to decrease inflation rate to 20 percent at the end of 2003. As long as inflation rate is taken under control, confidence in TL increases,'' Babacan noted.
Ali Babacan stressed that they did not have any intention to change floating exchange rate regime near future and stated that Central Bank's regime on daily purchase-sale of foreign exchange was continuing.
Babacan will have a meeting with British Chief Secretary to Treasury Paul Boateng in the afternoon.
State Minister Babacan is expected to return to Turkey the same day.
(Öª-EÖ-AÖ) 19.06.2003