ANKARA - State Minister Ali Babacan said on Sunday that a significant program which would continue till the end of 2004 started and a new period began in economy.
Babacan held a press conference with Treasury Undersecretary Faik Oztrak and Central Bank Governor Sureyya Serdengecti.
State Minister Babacan stressed that they signed the letters on revival of two important program loans that were not used for a year with the World Bank besides the fourth letter of intent.
Babacan said that there was a violent war beside Turkey and Turkey was affected by that war.
The government had taken necessary measures to overcome that critical period with the least loss and would continue to do so, Babacan noted.
Babacan stated that they signed the letter of intent to be submitted to the International Monetary Fund (IMF) on Saturday.
Negotiations continued longer than expected because they wanted reflect their point of view on the program, Babacan noted.
Babacan said that it would not be possible to complete the fourth review without the budget was adopted.
The letters the signed had similar factors with their urgent action plan, Babacan noted.
BABACAN: TOTAL SOURCE TO COME FROM IMF AND WORLD BANK IS 5.2 BILLION USD
Babacan said that total source that would come from the International Monetary Fund (IMF) and World Bank was 5.2 billion U.S. dollars.
Babacan said that what was important was the implementation of economic program openly and determinedly instead of the amount of the source and noted, ''this is the key point in the program.''
Babacan added, ''the IMF Executive Board will convene on April 18 and decide about the supplementary letter of intent. The dates and amounts of the loan to be released by the IMF are re-set. We have decided that the loan would come in the fourth quarter (October-November-December 2003) since the finance need would be more those days.''
BABACAN: REDUNDANT POSITIONS PROBLEM IS EXPECTED TO BE TOTALLY SOLVED TILL THE END OF THE YEAR
Babacan said that the former figures showed the reluctant positions as 45,800 and now, that number decreased by 20,178 through voluntary retirement.
Babacan noted that they expected legal arrangements which would be made stronger within the scope of state economic enterprises management to be legalized till the end of June 2003.
They also expected the legal arrangements on Social Security Agency (SSK), Social Security Agency for the Self-Employed (Bag-Kur) and Labor Agency to enter into force till the end of that month, Babacan stated.
Babacan pointed out that the law on collection of SSK, Bag-Kur and Pension Fund under a single umbrella and transfer of health insurance and social assistance programs to separate institutions was expected to be passed from the parliament till the end of 2003.
Temporary measures were taken to accelerate collection of SSK and Bag-Kur premium within the scope of the budget, Babacan said.
Babacan drew the attention that the measures were implemented rapidly.
Structural reforms in field of social security would be continued, Babacan said.
Babacan noted that they would pass a frame law till June to make direct agricultural income support payments regularly every year.
They would not only reconstruct and privatize the agricultural State Economic Enterprises (SEEs) but also reconstruct the unions bound to Agriculture Sale Cooperatives, Babacan pointed out.
Babacan said that the construction in public would be reviewed till July and public sector reform bill would be adopted till the end of 2003.
Tax reform bill would be passed from the parliament till the end of that month, Babacan stated.
Babacan said that the second package on the tax reform would be submitted to the parliament till the end of May and that the package was expected to be legalized till the end of June.
They wanted the Public Finance Management and Control Law to be legalized till the end of June, Babacan pointed out.
Babacan said that program to rationalize investment expenditures would continue.
The government had taken necessary measures to minimize effects of the war in Iraq on the economy, Babacan noted.
Babacan stated that the floating exchange rate regime was one of the main elements of their program.
The Central Bank would continue its policies with determination, Babacan added.
BABACAN: GOVERNMENT DETERMINED TO IMPLEMENT ECONOMIC REFORM PROGRAM
Babacan said basic policies of the economic program, which is currently under implementation, was to ''reduce inflation, decrease public borrowing stock, and providing long term sustainable growth,'' stressing that it attributed a special importance to increase of role of private sector in economy.
Babacan said a new and strong step should be taken in the field of privatization, and that appropriate investment atmosphere should be created for local and foreign capital, and that transparency should be increased in public sector to fight against corruption.
Babacan said the government expended all necessary social support to prevent suffering of poor section in this process, and stressed that they were resolved in this respect.
Babacan said, ''we will implement the budget with determination, and we got a four quadrillion additional support to compensate possible cost of ongoing war in Iraq.''
Babacan said there had been a strong recovery in economy in 2002, noting that growth, which was supported by stock increases and exports, became 7.8 percent.
Babacan said decrease in real interests supported growth to an important extend, noting that they expected the growth in 2003 to stem mostly from investments of private sector and consumption.
BABACAN: PRIVATIZATION PLAN OF TURK TELEKOM IS EXPECTED TO BE APPROVED BY COUNCIL OF MINISTERS TILL END OF THIS MONTH
Babacan said that the road map of the sugar factories was expected to be approved by the Supreme Privatization Board (OYK) till the end of June.
Babacan noted that the privatization plan for Tekel was approved by the OYK on March 31.
It was foreseen to categorize distribution and generation departments in electricity and include them within the scope of privatization, Babacan said.
Babacan stated that the distribution unit would be transferred to the OYK till the end of September and the tenders in the distribution units would be started in December.
They expected legal arrangements which would strengthen effectivity of the Banking Regulation and Supervision Agency (BRSA) to be made till the end of October, Babacan said.
Babacan pointed out that the state banks would continue to operate in line with the principles of commercial banking and in line with the cautionary arrangements foreseen by the BRSA and the banking law.
A selling strategy for privatization of Vakifbank was also developed, Babacan said.
Babacan noted that the bankruptcy law bill was expected to be passed from the parliament till the end of May.
Three-month borrowing management reforms would be submitted to the parliament from now on, Babacan stressed.
Babacan said that every step would be taken to rehabilitate business life.
The bill on foreign investments was planned to be legalized till the end of that month, Babacan pointed out.
Babacan said that the government was determined to implement the urgent action plan and a committee was formed among the ministers in March to increase transparency and develop efficient management.
The legal arrangements on the principles of duties of the civil servants and public administrators were foreseen to be passed till the end of July, Babacan added.
BABACAN: OBJECTIVES LISTED IN SUPPLEMENTARY LETTER OF INTENT WILL BE IMPLEMENTED
Babacan said that there were important changes in the former and the current program when compared with the first shape of the fourth review.
Babacan noted that additional sources to be given to Turkey would be used to decrease the public debt stock.
The amount of loan to be used from the sources of IMF was around 4 billion U.S. dollars, Babacan stated.
Babacan said that they would use around 700 million U.S. dollars in the new plan and later use 500 million U.S. dollars of loan in every two months.
Two separate loans were in question with the World Bank, Babacan pointed out. He said, ''one of them is the economic reform loan. This is a loan that has been initiated. A loan of 375 million U.S. dollars will be used. This will have a maturity of 15 years, the three years of which will be without any repayment.''
Babacan added, ''another loan is the Program Public and Financial Sector Adjustment Loan. It is around 1 billion 350 million U.S. dollars. 450 million U.S. dollars of this loan was used and the rest 900 million will be used in two tranches. This will have a maturity of 15 years and it will not be paid back for five years.''
IMF MANAGING DIRECTOR: PRIOR ACTIONS NEEDED TO COMPLETE FOURTH REVIEW HAVE ALREADY BEEN COMPLETED
ANKARA - International Monetary Fund (IMF) Managing Director Horst Koehler said on Sunday that the prior actions needed to complete the Fourth Review had already been completed.
IMF Managing Director Koehler issued a statement on Turkey.
Koehler said, ''the IMF welcomes the Turkish government's signing of a new Letter of Intent. This Letter sets out strong policy commitments in all key areas of the economic program, including a 6.5 percent of GNP primary surplus for 2003 and beyond, a set of measures to strengthen the underpinnings of the fiscal accounts, strengthening the independence of the Bank Regulation and Supervision Agency (BRSA), reducing redundant positions in state enterprises, and advancing privatization.''
''Full implementation of these commitments will contribute to a stable macroeconomic environment and bring about fundamental structural reform, thereby helping the government achieve its goals of disinflation, debt reduction, and lasting rapid growth. The focus of the program thus remains very much on strengthening long term performance and growth prospects,'' Koehler noted.
Koehler went on saying, ''in this vein, the government has proposed, and the IMF has welcomed, that Fund disbursements under the program be rephased more evenly over the remainder of the program. Specifically, the revised Letter of Intent calls for purchases of about 700 million U.S. dollars on the occasion of the Fourth Review (instead of about 1.6 billion U.S. dollars in the original program) and of about 500 million U.S. dollars at each of the remaining seven reviews. This is a courageous step that speaks directly to concerns about the authorities' determination to implement the policies spelled out in the Letter over the 20 months remaining under the program.''
''We believe this initiative - together with full implementation of the policy commitments, the government's policy to block discretionary spending to help minimize immediate financing requirements, and other financing prospects - should further strengthen confidence in the Turkish economy,'' Koehler said.
Koehler added, ''the Letter of Intent will now be forwarded to the IMF Executive Board. The prior actions needed to complete the Fourth Review have already been completed. On this basis, a meeting of the Board to consider the authorities' request for completion of the Fourth Review has been scheduled for April 18, 2003.''
(BRC-AY) 06.04.2003