World Bank Country Director For Turkey: Many Multinational Companies Interested In Turkey

ANKARA - Many multinational companies were interested in Turkey, aiming to make direct investments after the Investment Advisory Council meeting had been held in Istanbul in March, Andrew Vorkink, World Bank's Country Director for Turkey said on Monday.
Vorkink told A.A correspondent that investors laid down three proposals during the meeting, including political stability, macro economic stability and reduction of bureaucratic hurdles before investments.
Turkey had ensured political and macro economic stability, but there were still some steps to be taken to reduce bureaucracy, Vorkink said.
Vorkink noted that there would be significant flow of foreign investments in Turkey after the European Union (EU) set a date to start full membership negotiations with Turkey.
World Bank Country Director Vorkink forecast that not only record rise in exports but also rise in tourism revenues would narrow this year's current deficit.
Turkey had reduced its inflation rate to a single-digit figure for the first time since 30 years, Vorkink stated.
Vorkink said that interest rates dropped while floating course of the Turkish lira (TL) prevented negative effect of movements in rate of foreign exchange and protected Turkey from crises similar to that in 2001.
Noting that Turkey did not have any luxury like suspending structural reforms, Vorkink pointed out Turkey should continue reforms for permanent stability uninterruptedly.
Vorkink said that Turkey should focus on decreasing high debt stock, and stated that Turkey could reach long-term economic stability and growth if it fulfilled structural reforms.
Banking sector had been rehabilitated thanks to efforts of not only the Banking Regulation and Supervision Agency (BRSA) but also the Savings Deposit Insurance Fund (SDIF), Vorkink noted.
Vorkink stated that new measures of the Turkish government included steps to adjusting Turkish banking system to Basel standards.
Third Programmatic Financial and Public Sector Adjustment Loan (PFPSAL III) aimed not only to support structural reforms, but also to protect Turkey from future economic crisis, Vorkink said.
World Bank's Country Director for Turkey said that possible rise in FED's interest rates would affect Turkey's borrowing cost but it would not cause a shock.
Vorkink noted that a financially supported deal with the International Monetary Fund (IMF) would be a signal for Turkish and international investors that macro-economic and political stability would be maintained.
Defining the social security system in Turkey as ''too generous'', Vorkink said that the system could fail within 15-20 years unless it was reformed immediately.
Vorkink stated that the system would be balanced within 15-20 years if measures were taken immediately.
Pension rate could be equalized with international standards, Vorkink said.
Vorkink pointed out that especially, high pensions could be subject to tax while the retirement age could be raised gradually in the medium term.
Not only the retirement age but also the premium rates could be raised gradually, Vorkink said.
Vorkink pointed out that the World Bank was following developments in Turkish Republic of Northern Cyprus (TRNC).
Stating that he met with TRNC Prime Minister Mehmet Ali Talat, Vorkink said that he saw that TRNC was determined to put into practice necessary economic reforms.
Vorkink added that the World Bank would extend necessary assistance to TRNC after the United States and the United Nations (UN) clarified their perspective on TRNC.
(BRC-AÖ) 21.06.2004