BY YAMAN TORUNER
MILLIYET- Top US economic officials are being accused of failing to take timely measures to stave off economic crisis. The crisis has gone too far, and no one knows what effect new measures will have. The long-term cost to the country of bailout measures is also being discussed.
If certain measures had been taken at the beginning, the crisis would not have had such a deep impact in the country and the world, so countries in Europe and elsewhere have proposed taking more serious and effective measures.
International institutions such as the International Monetary Fund and the World Bank are reevaluating the situation of countries in light of the crisis and want to quickly grant loans to countries which will listen to them. Turkey is among these countries.
The IMF has some $400 billion on hand at most. If Turkey acts quickly, it could get $20-30 billion of this. This money would both raise Turkey's foreign currency reserves and give us the ability to hold off the crisis for longer.
In addition, funds from the IMF could be used to strengthen the real sector. On this subject, the IMF made a decision for all countries. The IMF will grant funds to central banks, but a portion of the money could be used by treasuries, or could be given to the real sector. But responsibility for repayments would belong to central banks.
The possibility of using this money for the real sector makes our politicians' mouth water. Moreover, the premier wants to announce an agreement with the IMF. If an agreement is signed under these conditions, the government will have an ace in the hole for next year's local elections.
The crisis has also hit Russia badly. Falling energy prices (especially oil) have lowered foreign currency entering the country. A number of companies are close to bankruptcy. People with cash on hand are buying these companies at giveaway prices. Rumors say certain government officials are among the buyers.
As for us, our economic officials seem not to grasp how deep the crisis is. Measures to fight it will stress interest rates, exchange rates, and the stock exchange, and certain pie-in-the-sky ideas are wasting time.
The crisis' effect through the end of this year will be less than I expected. Due to next week's Sacrifice Holiday, and the New Year and Christmas holidays, the effects of the deepened crisis will be seen early next year. We and the world may face a big recession.
The absence of political instability is a very good situation for us. It's very likely that the ruling party will sweep the local elections next March, and this would also help the economy.
Taking a realistic stance on the issues, the premier should discuss the real sector's urgent problems with economic officials. Now the economy's weak spot is the situation of the real sector. Developing measures to protect the sector would help the ruling party ensure a victory in March.
This should be done by the end of the year.