Charlemagne Ahmet Necdet Sezer, a westward-looking Turk Nov 16th 2000 From The Economist print edition

WHEN the stubbornly modest Ahmet Necdet Sezer unexpectedly became Turkey’s president six months ago, few Turks knew much about him, and even fewer took him very seriously. Now it looks as if this quietly principled man may play a decisive part in the argument between Turks who believe that their country should strive to join the European Union, and grow more democratic in the process, and those who think that this would require too big a change in the way Kemal Ataturk reckoned, 70-odd years ago, that Turkey ought to be governed.

Last week, sparks flew when the European Commission in Brussels brought out its annual report on the dozen-plus countries which want to join the Union, and once again, in a separate road map, said that Turkey should do more to improve its human-rights record. Most of Turkey’s politicians made duly indignant noises. Its leftish but nationalist prime minister, Bulent Ecevit, accused the EU of trying to “trick” Turkey into accepting the reunification of Cyprus as a prerequisite for joining the EU. Devlet Bahceli, an even more nationalist deputy prime minister, said the EU’s implied demand that all Turks, including Kurdish ones, should be allowed to broadcast and to teach schoolchildren in their own language was “pernicious” and “unacceptable”. True to form, a senior general stepped into the fray, saying “no one should doubt that we strongly embrace EU membership”-but only on conditions acceptable to Turkey.

So far the warmly pro-European President Sezer has held his fire. But if anybody can pull all sorts of Turks-secular-minded Kemalists, generals, businessmen, Kurdish nationalists, Islamists-into making the necessary changes, he is probably the man.

The issue will doubtless come up soon at a meeting of the country’s National Security Council, where generals sit alongside politicians and usually tell them what to do. But Mr Sezer, who chairs the council, may now be in a position to tell the generals that they are not the final arbiters of the country’s destiny. The opinion polls say that, for the first time in Turkey’s 77 years as a republic, the president now wins more trust than the army, which has hitherto always topped the poll.

In many ways, the 59-year-old Mr Sezer is still something of an enigma. He has expressed no grand vision of Turkey’s future. Nobody knows exactly what he thinks about the generals’ role in politics. He speaks no foreign language. He has not yet allowed himself to be interviewed by a journalist. Indeed, it was almost by accident that he became president at all.

The son of a schoolteacher from the western province of Afyon, Mr Sezer had spent his entire career as a lawyer, and thought he had reached the pinnacle of his profession when he was made head of the country’s Constitutional Court in 1998. But then Mr Ecevit failed to persuade parliament to amend the constitution to let the outgoing President Suleyman Demirel stay on for a second seven-year term in office. The main parties could not agree on which of their own top men should have the job. Mr Sezer was the only person just about acceptable to everybody: and so he stepped, largely unknown, up to the presidential throne.

His speech at the opening of parliament last month, however, began to show where he stands. Mr Sezer called on parliament to enact wide-ranging constitutional and democratic reforms and to uphold the supremacy of law. Such changes should be carried out, he explained, “not because the European Union wants them but because these are changes that our people deserve.”

His frequent commendations of secularism will have pleased the top brass, who sat listening to him. Western diplomats were reassured by his commitment both to Turkey’s European vocation and to its alliance with the United States. But for most ordinary Turks it is Mr Sezer’s aversion to pomp, and his manifest probity, that mark him off from many of his predecessors.

Since moving into the “Pink Palace” in Ankara’s posh Cankaya district, Mr Sezer and his schoolteacher wife, Semra, have drastically cut the size of the presidential staff. Protocol has been reduced to a minimum. Mr Sezer has traded in the presidential coat and tails for a simple suit. His motorcade stops at traffic lights. When Selahattin Ozakin, an Ankara teacher, sent him a congratulatory fax in August, he heard Mr Sezer’s voice on the telephone 20 minutes later, ringing to thank him. Now Mr Sezer plans to tour the Anatolian countryside by train, as Ataturk did some 70 years ago. He clearly wants to draw his strength not from the politicians who picked him but from the Turkish nation.

Those who thought the new president would confine himself to merely ceremonial duties have had a shock. Mr Sezer first proved he was no pliant pushover when in August he twice rejected a military-inspired decree, forwarded by Mr Ecevit, which would have enabled the government to sack thousands of civil servants deemed to be overly pious Muslims or too sympathetic to the restless Kurds. The generals are said to have been fuming ever since.

They will have been further irked by the presence of pro-Islamist journalists, for the first time in three years, at the annual Republic Day reception held by the president on October 29th. The prime minister has gone so far as to accuse Mr Sezer of hindering the government’s campaign against militant Islamists. All this has made the president popular with religious politicians and the pro-Islamist press. Yet they should remember that it was Mr Sezer who signed the Constitutional Court’s decision in 1998 that led to the banning of Turkey’s largest pro-Islamic party.

Mr Ecevit is now threatening to push for legislation that would cut the presidential term from seven years to five. An unconcerned Mr Sezer says he is in favour of a modest presidency. He may lack the worldliness and the wiles of his predecessor, Mr Demirel, and the charisma of the late President Turgut Ozal. But he has six more years to make himself felt. And, so far, he has clearly shown that he is prepared to stand up for democratic values and the rule of law, whether or not the men in uniform like it.

November 25, 2000
Web posted at: 9:14 PM EST (0214 GMT)

ISTANBUL, Turkey (AP) -- Hundreds of human rights activists and relatives of inmates marched through Ankara on Saturday to protest government plans to transfer prisoners to newly built prisons with smaller cells.

The prisoners currently occupy large wards, where up to 100 live cramped together, but will be transferred to cells housing one to three inmates, where they fear they will be more vulnerable to abuse by guards. Torture is common in Turkish prisons, human rights groups say.

Authorities, however, say they cannot control the wards, where riots and hostage takings are common. Gangs often run the wards, they charge.

Almost 100 prisoners linked to outlawed leftist groups began a hunger strike last week to protest the transfer plans, their relatives said. Another 800 prisoners launched a rotating hunger strike over a month ago.

In a statement Saturday, Justice Minister Hikmet Sami Turk urged prisoners to end the hunger strike and said that prisoners were being pressured into refusing food by the leadership of their leftist groups.

About 10,000 of Turkey's 69,000 prisoners are linked to political groups, mainly Kurdish, leftist and radical Islamic groups.

The Associated Press
11/25/00 3:21 PM

November 27, 2000
Web posted at: 2:36 PM EST (1936 GMT)

ANKARA, Turkey (Reuters) -- Turkey's constitutional court will start hearing a case on whether to ban the Islamist Virtue party, the country's main opposition party, on December 12, the deputy chairman of the court said on Monday.

Banning of the Virtue party, if accompanied by expulsion of its deputies from parliament, could raise the prospect of by-elections that may destabilize a delicately balanced coalition government engaged in a rigorous IMF-backed anti-inflation program.

It could also strengthen the hand of European critics who demand broader political freedom if Turkey is to join the European Union.

The state prosecutor argues that the party is merely a continuation of the previously banned Islamist party Welfare and seeks to overthrow Turkey's secular order.

Turkey's powerful military, which has overthrown governments three times since 1960, nudged the country's only Islamist-led government from power in 1997 and mounted a crackdown on political Islam that led to the ban on Welfare the next year.

"The case against the Virtue party will start as of the morning of December 12," the deputy chairman of the court, Hasim Kilic, told Reuters. Last month Kilic said the court aimed to finish the case by the end of the year.

If Virtue is banned, its members are expected to split into traditionalists and a more modern wing that would seek to win mass support in the political center.

If its deputies are expelled from parliament, it would automatically trigger by-elections that could upset the balance of power in Bulent Ecevit's three-party coalition.

Markets fear such a development could ultimately lead to general elections which might disrupt the progress of a $4 billion disinflation package backed by the International Monetary Fund. Turkey is a third of the way through the three-year plan which aims to slash inflation to single digits by the end of 2002 from 44 percent in October.

U.S. ELECTION NEWS IS NO TURKISH DELIGHT

Monday,November 27,2000

By GERSH KUNTZMAN - ISTANBUL.

I LEARNED at least one thing on my winter vacation: You don't want to be away from your country when your country is melting down. But that's been my situation for the past two weeks, struggling to stay seven time zones ahead of all the fast-developing presidential events.

I must say it's been tough to figure out the election when all I've had to go on is hearsay from fellow travelers, much of which is wrong. A dusty dictionary has been no help in translating "butterfly ballot" into Turkish, and the few Internet cafes around are jammed with Turkish boys surfing for porn. Fortunately, every room in Turkey is smoke-filled, so at least I am soaking in some of the atmosphere of the election back home. It's been a difficult two weeks for this news junkie. In Cappodocia - an area in central Turkey where people live in phallus-shaped domes created by wind erosion - I was briefly able to peruse The Associated Press wire, but I lost my Internet connection when the hotel owner wanted to do the laundry. A phallus-shaped dome is actually not such a bad place to consider our current presidency. In my brief time online, though, I was able to ascertain only that Bush was ahead and that virtually every election official in Florida needs a serious makeover. In another city, a Turkish carpet salesman (everyone here really does have an uncle in the carpet business) mocked our banana republic and told me the Turks hated Al Gore because Bill Clinton once publicly uttered a comment about the Turkish genocide of the Armenians. Yeah, come to think of it, that's when I broke with Bill.

Now I'm finally back in Istanbul, and am unhappily devouring CNN International, which is not CNN, but an English-accented version that is trying to wrest the "Most Begrudging Coverage of the USA" award from the BBC. For one thing, 10 times an hour they tell me the weather in N'djamena (the capital of Chad, coincidentally!) yet never tell me if it's cold in New York. Worse, every newscast opens with reports from Kosovo, Jerusalem and Russia, and the latest on the mad-cow scare (it's in Germany now, but is that a surprise, really?) before we finally get a two-minute update about the American presidency. Worst of all, none of the CNN International reporters speaks English with anything remotely resembling an American accent or accepted syntax. Yet they're not foreigners.

When you're trapped in the international media bubble, seemingly complex political realities break down into one simple understanding: America stinks. The French are loving our apparent demise. In their twisted version of Sally Field's "You like me, you really like me" Oscar speech, the French are declaring openly that they hate us, they really hate us. I swear, I picked up Le Monde only for the comics! "The whole body of the hyperpower is infected!" wrote L'Express editor Denis Jeambar, whose newspaper sounds like a little tourist trolley that runs between the Eiffel Tower and Notre Dame and whose own last name sounds like a new nougat candy. And Jacques Attali, a former top French official, generously called our election "a true internal Vietnam," referring, of course, to that famous war that the French started and then left us to finish. The British also openly mocked us, but, I admit, some of their rantings were lost in translation. In the end, only the Germans stuck by us during our count, recount, hand recount and court-ordered recount recount. I sure am comforted to know we are backed by the Germans

The sharp rise in interest rates caused by liquidity squeeze. Turkey's macroeconomic and structural reform effort arguably lost momentum between the spring and the recent release of the 2001 budget. Moreover, inflation has declined less, and the current account has widened significantly more than expected by both market participants and the policy authorities. Even so, this week's sharp rise in interest rates seems hardly justifiable on fundamental grounds. Market jitters evidently were largely fuelled by a chain reaction partly related to the ongoing restructuring of the banking system. Faced with cuts in their credit lines, banks that are highly exposed to the Treasury bond market found themselves in need of large amounts of funds. As a result, liquidity in the overnight market dried up and the Central Bank of Turkey (CBT) was forced to intervene in order to prevent an even more dramatic rise in interest rates.

A spike in interest rates is tolerable within the current monetary framework .. As long as it is a temporary phenomenon, even a large increase in interest rates would be entirely acceptable within the monetary framework of the IMF program. Indeed, interest rates are an endogenous variable in the current regime. If liquidity dries up because of balance of payments outflows, then interest rates go up and, according the specie-flow mechanism, this ultimately restores equilibrium in the money market. Likewise, the IMF program does envisage the possibility for the CBT to deviate from this model in order to prevent an excessive increase in interest rates: the CBT can adjust liquidity within the target band on its net domestic assets (NDA) and -- under extreme circumstances -- even deviate from it (with the IMF's tacit consent).

.. as long as it does not trigger a confidence crisis. One reason why this week's spike in interest rates triggered a major sell-off in the bond and equity markets is that the vulnerabilities of the Turkish banking system to the ongoing restructuring and investigations, and to changes in the availability of foreign credit, are difficult to assess with precision. The same holds for the supposed panic selling related to the government's crackdown on corruption and tax evasion. But, it seems there is another, more fundamental reason. In a disinflation program based on a crawling peg exchange rate regime, a currency crisis can just be triggered by changes in expectations. Given the critical role they play in the public finances and in the stability of the banking system, if interest rates rise on a sustained basis, they can set in motion a self-enforcing confidence crisis ultimately forcing the authorities to abandon the quasi-fixed currency regime.

Support from IMF/World Bank is likely … Prime Minister Bulent Ecevit and top economic bureaucrats this week tried to cool down the markets. In a joint statement, the CBT, the Turkish Treasury, and the Banking Supervisory and Regulatory Board (BSRB) argued that the turmoil in the financial markets has been simply due to unsubstantiated rumours about the state of the banking system and that there will be no deviation from the IMF-supported economic stabilisation programme. In the meantime, the Treasury asked the World Bank and the IMF to receive loans as early as possible in order to manage the liquidity situation more effectively. Turkey is set to get approximately a total of US$1.5 billion from the World Bank and the IMF. In addition, the Japanese government is expected to loan US$750 million in December for the banking reform, while the Treasury is to receive US$455 million from a yen-denominated bond issuance.

... in view also of progress on banking reform. The increase emphasis on the part of the government on banking reform and anti-corruption investigations is welcome news for the international organisations, which have been long advocating these structural steps. In addition, the capital outflow of the past few days has most probably reduced the net FX position of Turkish banks -- by perhaps as much as US$ 2 billion, according to our estimates. As a result, we expect the IMF to be very supportive of Turkey's efforts from a verbal point of view and, if needed, to consider providing further financial resources -- as long as the implementation of the disinflation program remains satisfactory.

However, swift policy action is needed. The CBT has intervened again to provide a substantial amount of liquidity through a five- and a seven-day repo auction. If confidence is gradually restored, banks should re-open credit lines amongst themselves and interest rates should move lower. However, we expect that this process will take quite a while, due also to unfavourable seasonal factors. As a result, interest rates are likely to stay high for an extended period of time. The Turkish authorities will be thus walking on a tightrope. This would mean that the government needs to accelerate the reform process in order to re-establish confidence in the marketplace. Next week's third Letter of Intent to the IMF should be extremely important in this respect. But, actions speak louder than words. Over the next few months any major policy blunders or procrastination would raise the spectre of a full-blown confidence crisis.

Tuesday, 28 November, 2000, 00:27 GMT

Prime Minister Bulent Ecevit: Grappling with IMF anti-inflation measures
December 1, 2000
Web posted at: 9:53 AM EST (1453 GMT)

12/01 00:01
Turkey's Foreign Exchange Regime Is at Risk
By David DeRosa

Move to curb Islamic radicals puts spotlight on role of Turkish army
By Amberin Zaman in Ankara
Wednesday 13 September 2000

TURKEY'S generals have increased pressure on their politicians to clamp down on Islamic radicalism, prompting fresh debate about the army's role in politics. Huseyin Kivrikoglu, Turkey's habitually taciturn chief of general staff, recently declared that there were "thousands of civil servants chipping away at the very foundations of the [secular] republic," he said at a cocktail party. "When we identify such people within our ranks we immediately expel them. If Turkey's institutions are to function properly the government should do the same." Turkey's generals view themselves as the custodians of the secular legacy laid down by the founder of modern Turkey, Kemal Atatürk. So it came as no surprise when the military forced Turkey's first Islamic prime minister, Necmettin Erbakan, out of office in 1997 amid vague charges that he was seeking to impose religious rule during an erratic year in office. Mr Erbakan, whose Welfare party was banned on similar charges, is likely to go to jail after an appeals court recently upheld a one-year sentence he received last year for "inciting hatred among the public based on religious and racial discrimination" during a speech he made six years ago in the largely Kurdish province of Bingol. Mr Erbakan's crime, among others, was to have suggested that Kurdish school children be allowed to call themselves Kurds. Gen Kivrikoglu's remarks came after Turkey's newly elected president, Ahmet Necdet Sezer, twice refused to sign a military-inspired decree empowering the government to sack government employees deemed to be overly pious or sympathetic to Kurdish separatists. Mr Sezer, formerly chief judge at the Constitutional Court, said the decree violated the supremacy of law. A recent opinion poll showed that 80 per cent of the Turkish public approved of the president's decision despite claims by the military that Islamic radicalism was the "number one threat" to the republic. A senior Western diplomat said: "Clearly, the army needs to exaggerate such threats in order to justify its continuing role [in politics]." But that role is coming under increasing scrutiny as the European Union finalises a long list of conditions Turkey needs to meet before it can begin full membership talks for which it was declared a candidate at an EU summit in Helsinki last year. One condition laid down in the "Accession Partnership", which will be presented to the Turkish government on Nov 8, is that the military keeps out of politics. Another is that Turkey grant greater cultural and political rights to its estimated 12 million Kurds.

Generals head for showdown in Turkey
By Amberin Zaman in Ankara
Thursday, 5 June 1997

TURKEY'S secular armed forces are heading for a showdown with their first Islamist Prime Minister, Necmettin Erbakan, who is defying pressure to go.

On television on Tuesday, with a small white lamb in his arms, Mr Erbakan said: "This is the symbol of Turkish democracy. We shall feed it. We shall protect it." In calling for a general election, Mr Erbakan drove home the point that it was up to the people, not the military, to decide whether his Islamist Welfare Party should remain in power.

Opinion polls indicate that the Islamists would fare better than the 21 per cent that they scored in the 1995 elections, which made them, narrowly, the leading party. Since coming to power in a coalition with Tansu Ciller, the Deputy Prime Minister and leader of the conservative True Path Party, Mr Erbakan has faced unrelenting opposition from the media, unions, industry and, above all, the generals.

Firmly wedded to the pro-Western policies laid down by Kemal Ataturk, the founder of the modern republic, Turkey's secular establishment is worried that Mr Erbakan is out to transform Turkey into an Islamic state - a fear shared by Turkey's Nato allies. Mr Erbakan has not helped matters with overtures to Iran , a campaign to lift bans on Islamic-style clothing in state institutions and his party's virulently anti-secular statements. These include open calls to wage a holy war against the Kemalists.

Secular opposition to the government has left the coalition virtually paralysed . Economic reforms, including privatising debt-ridden state companies and cutting inflation, have been shelved. Human rights abuses, jeopardising Turkey's chances for EU membership, have increased.

The generals have filled the power vacuum. They did not even bother to brief Mr Erbakan before launching their campaign against rebels of the Kurdistan Workers' Party in Iraq . Yet the military insists that it will not willingly intervene, as it views EU membership as crucial to fighting Islamic radicalism.

The generals are well aware of the danger of confronting Mr Erbakan and his Islamist followers. According to intelligence sources, mosques have become arms caches for militants. So the generals' strategy to dislodge the Islamists has centred on pressing Mrs Ciller and her party to form a government with the secular parties, but the bitter personal differences between her and Mesut Yilmaz, the leader of the main opposition centre-Right Motherland Party, stand in the way. How the secularists can rid themselves of the Islamists without compromising Turkey's fragile democracy remains unresolved

Muslims threaten legacy of Ataturk
By Amberin Zaman in Ankara Sunday 29 September 1996

Excesses of Islam pose threat to Turks, says President
By Amberin Zaman in Ankara

Friday 28 February 1997

TURKEY'S Islamist Prime Minister, Necmettin Erbakan, and the country's military chiefs are likely to have a tense confrontation today over the government's anti-secular policies.

A meeting of the National Security Council (NSC) convened by the Turkish President, Suleyman Demirel, is to be attended by Tansu Ciller, the Deputy Prime Minister, key cabinet ministers, and Gen Ismail Hakki Karadayi, the Chief of General Staff. The general was expected to report on the threat posed to the secular republic by Muslim radicals.

The meeting follows reports yesterday that Mr Demirel had written to the country's first Islamist Prime Minister about his government's attempts to unravel more than 70 years of secular, pro-Western rule.

The Hurriyet newspaper quoted Mr Demirel as saying: "There is a widespread belief that you are diverting from the secularist, democratic republican aims . . . If you continue with this attitude the regime will be in danger."

The presidential palace yesterday denied the reports carried by most daily newspapers. Mr Erbakan described them as "a lie". But sources close to the President confirmed that the bulk of the warnings in the letter had been made personally to Mr Erbakan by the President in the past week.

They said Mr Demirel was responding to pressure from the military to curb the excesses of Mr Erbakan and his Islamic Welfare Party (Refah), which have alarmed the pro-secular majority. These include moves to allow the wearing in schools and government offices of the Islamic headscarf, banned by Turkey's founder, Kemal Ataturk, as a symbol of backwardness.

Secularist nerves have also been jangled by Mr Erbakan's plans for a mosque in Istanbul near the city's largest Christian church, and to allow civil servants time off for Friday prayers.

Some 400 Refah mayors, who were elected four years ago, have been imposing a more Islamic way of life. Beer, Coca-Cola and gambling have been banned in some Islamist-run towns.

Far more ominous has been the emergence of armed Islamic factions, including Hezbollah and the shadowy Islamic Eastern Raiders Front. Both claim they are fighting for an Islamic state.

During today's NSC meeting, the military was expected to brief the government on moves by Refah militants and sympathisers to arm themselves. Most observers discount the possibility of a military coup at a time when Turkey is campaigning for full European Union membership.

TURKEY'S Islamist Prime Minister, Necmettin Erbakan, and the country's military chiefs are likely to have a tense confrontation today over the government's anti-secular policies.

A meeting of the National Security Council (NSC) convened by the Turkish President, Suleyman Demirel, is to be attended by Tansu Ciller, the Deputy Prime Minister, key cabinet ministers, and Gen Ismail Hakki Karadayi, the Chief of General Staff. The general was expected to report on the threat posed to the secular republic by Muslim radicals.

The meeting follows reports yesterday that Mr Demirel had written to the country's first Islamist Prime Minister about his government's attempts to unravel more than 70 years of secular, pro-Western rule.

The Hurriyet newspaper quoted Mr Demirel as saying: "There is a widespread belief that you are diverting from the secularist, democratic republican aims . . . If you continue with this attitude the regime will be in danger."

The presidential palace yesterday denied the reports carried by most daily newspapers. Mr Erbakan described them as "a lie". But sources close to the President confirmed that the bulk of the warnings in the letter had been made personally to Mr Erbakan by the President in the past week.

They said Mr Demirel was responding to pressure from the military to curb the excesses of Mr Erbakan and his Islamic Welfare Party (Refah), which have alarmed the pro-secular majority. These include moves to allow the wearing in schools and government offices of the Islamic headscarf, banned by Turkey's founder, Kemal Ataturk, as a symbol of backwardness.

Secularist nerves have also been jangled by Mr Erbakan's plans for a mosque in Istanbul near the city's largest Christian church, and to allow civil servants time off for Friday prayers.

Some 400 Refah mayors, who were elected four years ago, have been imposing a more Islamic way of life. Beer, Coca-Cola and gambling have been banned in some Islamist-run towns.

Far more ominous has been the emergence of armed Islamic factions, including Hezbollah and the shadowy Islamic Eastern Raiders Front. Both claim they are fighting for an Islamic state.

During today's NSC meeting, the military was expected to brief the government on moves by Refah militants and sympathisers to arm themselves. Most observers discount the possibility of a military coup at a time when Turkey is campaigning for full European Union membership.

Excesses of Islam pose threat to Turks, says President
By Amberin Zaman in Ankara

Mustafa Kemal Ataturk was born in Salonica in 1881. He is renown as the founder of the Republic of Turkey.

In 1915, he emerged as a military hero at the Dardenelles and later became the leader of the Turkish national liberation struggle in 1919.

In 1923, as the creator of the new Republic of Turkey , Ataturk established a form of government that reflected the wishes of the people.

Sweeping cultural and socio-political reforms took place. Between1926 and 1930, legal changes led the way for religious laws to be abolished and a secular system emerged.

Determined not to stop there, Ataturk undertook the greatest challenge of all - a reform of the existing language - In 1928, he decided to abolish the Arabic script and incorporated the Latin alphabet.

Mustafa Kemal Ataturk was president for 15 years, until his death in 1938. His achievements are a legacy to the modern state of Turkey and he is considered a pioneer of national liberation.

In 1981, his memory was honoured by by the United Nations and UNESCO on the occasion of the centennial of his birth. He will be always remembered as saying "Unless the life of the nation faces peril, war is a crime. If war were to break out, nations would rush to join their armed forces and national resources.The swiftest and most effective measure is to establish an international organization which would prove to the aggressor that its aggression cannot pay."

He was not only a Turkish leader who led his country's war against aggressors but also a peaceful son of humankind who sent very important messages to the other nations about the necessity of a peaceful and mutually respectful co-existance of all nations on the same planet.

Turkish prisoners fast to protest separation

By SUZAN FRASER, Associated Press

SINCAN, Turkey (December 2, 2000 12:32 p.m. EST http://www.nandotimes.com) - The cells in Turkey's new maximum-security prisons are bright and airy. They have private bathrooms, small kitchens, dining tables, upstairs bedrooms and even doors that open out onto courtyards. To Justice Minister Hikmet Sami Turk, the two-story, three-man cells stand comparison to "comfortable hotel rooms."

Cash Shortage Pushes Rates Over 1,000% at Turkish Banks
AP, Reuters
Saturday, December 2, 2000
ANKARA

Turkish interest rates climbed above 1,000 percent Friday and the bourse tumbled 8.8 percent as International Monetary Fund officials prepared for talks on fresh loans to alleviate a dramatic cash crunch. .

Central bank interest rates soared to 1,133.52 percent Friday while the interest rate on money borrowed overnight in the money markets more than doubled to 950 percent, surpassing records set during a devaluation crisis in 1994...

Tens of thousands of Turks staged an anti Fund demonstration as banks scrambled for cash after the central bank ceased emergency funding on Thursday in a bid to return to IMF limits to win new aid from the Fund... But despite the economic pain, a top finance official said the central bank must stick to Fund-agreed bank funding limits... "The central bank must remain within the framework of the IMF program," Selcuk Demiralp, undersecretary at the Turkish Treasury, told a parliamentary commission. "Interest rates may rise as it does so."

Bankers say some of Turkey's 80-odd banks can no longer trade with anyone except the central bank, as fears of a bank crisis have rocked confidence and cut lines of credit. .A banking system cleanup and subsequent police probes into some banks in receivership have sparked fears that the instability will spread.

But thousands of Turks blamed the Fund backed anti-inflation plan for unemployment, low wages and social security cuts, walking out on strike and staging a peaceful protests in Ankara and Istanbul. .Banners and slogans attacked the government but much anger was directed against the Fund. "IMF Get Out. This country is ours!" ran the slogan on posters pinned to the chests of many protesters. .Turkey is reportedly seeking an IMF loan of $2 billion to $4 billion to deal with its current crisis under a Supplemental Reserve Facility, provided in short term loans to embattled countries with a cash squeeze.

An IMF spokesman, Thomas Dawson, said the Fund was moving quickly. "This could be presented to the board before the end of the year," he said. .In the past two weeks, investors have pulled $6.2 billion from the economy, analysts said, on concern that the government was not committed to an Fund-backed economic program, including banking reforms, that was aimed at cutting deficits and controlling inflation.

To demonstrate its commitment to the reforms, Turkey said Thursday it would sell 33.5 percent of Turk Telekomunikayson AS, the state-owned telephone monopoly, and cede control to the buyer. .The government also announced a return to funding limits, putting an end to six trading days of emergency funding that violated Fund protocols. .Liquidity crises occur when banks cannot raise money in the money markets or through deposits. They are then willing to pay whatever it costs to get cash. .Noralyn Marshall, an international strategist at Maria Fiorini Ramirez Inc., said there was a danger that Turkey would devalue its currency, the lira. Devaluation, she said, is a "possibility I'm worried about." ."Then the real problems begin," she said. (Reuters, Bloomberg) .

Interest rates for over-the-weekend repurchase agreements between banks in Turkey increased fivefold to 1,700 percent, the highest level since a 1974 banking crisis, as the central bank pulled back cash availability. .Over-the-weekend repos between banks and the central bank were set at 253 percent. The government added 850 trillion Turkish lira ($1.248 billion) to the banking system at the rate.

By SUZAN FRASER
The Associated Press
12/2/00 12:09 PM