Katsu: Turkey's Potential To Become A Member Of The EU, A Regional Leader And A Major World Economy Has Been Recognized

ANKARA - World Bank Vice President Shigeo Katsu, responsible for Europe and Central Asia, said on Monday that Turkey`s potential to become a member of the European Union (EU), a regional leader and a major world economy has been recognized.
Speaking at a seminar entitled, ``Towards Macroeconomic Stability and Sustained Growth`` jointly staged by World Bank and Treasury Undersecretariat, Katsu said Turkey had entered the 21st century with enormous opportunities, has a young population, dynamic private sector and pivotal geographic location, and that those gave Turkey the ability to move to the forefront of emerging markets.
Katsu said, ``faced with a currency crisis in 2001, Turkey responded with a renewed commitment to macroeconomic stabilization backed by an ambitious program of financial and public sector reforms. In addition, important steps were taken to modernize Turkey`s public institutions including establishment of independent regulatory authorities for banking, energy, telecommunications and public procurement.``
Katsu said, ``today, the government has the opportunity to build on the strong recovery and put Turkey on a more permanent course of growth and stability. Seizing this opportunity depends on staying the course of fiscal adjustment, accelerating the pace of structural reforms, particularly in the financial and public sectors, and strengthening social policies. Turkey`s success will be a boon for its people, an example and engine of growth and source of stability for the region, and a boost to the global economy.``
Katsu said, ``Turkey must further integrate with the global economy. Structural reform is essential to maintain strong export performance, attract foreign direct investment and bolster investor confidence.``
Stating that the report also pointed to important risk factors that must be actively addressed to ensure that they don`t undermine emergence of a virtuous cycle of sustained growth, Katsu said, ``internal risk factors include public debt sustainability, continuing financial sector vulnerabilities, the pace of corporate restructuring, and potential rigidities in the labor market.``
Katsu said, ``Given continuing vulnerabilities to external shocks, maintaining exchange rate flexibility will be important. Sustained progress towards EU accession will provide a strategic external anchor for Turkey`s reform efforts.``
Katsu said, ``during the last three years, the World Bank provided about 4.2 billion U.S. dollars in new loans and investments in support of economic reforms and social development as well as for earthquake recovery and reconstruction assistance. The new Country Assistance Strategy for the next three years foresees 4.5 billion U.S. dollars in new lending under a scenario of sustained reform.``
WORLD BANKS WILL PROVIDE 300 MILLION USD LOAN TO MEDIUM SCALE ENTERPRISES
Katsu said that World Bank would provide 300 million U.S. dollars of loan to medium scale enterprises to support production and export.
Katsu held a press conference that World Bank would provide 300 million U.S. dollars of loan to medium scale enterprises to help them meet their medium-term finance need within the scope of an agreement reached by the government and World Bank last week.
Thus, Katsu said, medium scale enterprises would continue production and have export opportunities.
Katsu noted that the Bank could provide 4.5 billion U.S. dollars of loan to Turkey within the following three years and the loan could be released according to talks between World Bank Director in Turkey and the government.
Stating that there were financial realities that should be taken into consideration, Katsu said that the government proved that it knew those financial realities and was aware of the parameters.
Katsu said that everybody should wait and see the results.
Upon a question on privatization program, Katsu said that the results were good but Turkey could do more.
Katsu recommended government officials to prepare a new package if it could not succeed in the first package and then work to get the expected prices.
World Bank Vice President Katsu will go to Washington later in the day.
(BRC-AÖ) 16.12.2003