16 May 2001

3. "Turkey's Belt-Tightening threatens indebted farmers with ruin", for sale: Quaint Turkish village, 112 baked mud homes, 9,600 hectares of farmland, one mosque, one schoolhouse, disappearing way of life, $1.2 million. Cash only.

4. "Foreign Minister Cem meets EU Commissioner Verheugen", Foreign Minister Ismail Cem met on Tuesday Guenter Verheugen, the European Union (EU) Commissioner for enlargement.

5. "IMF approves increase in assistance to Turkey", the International Monetary Fund on Tuesday approved an eight-billion-dollar increase in assistance for Turkey, bringing the total value of a three-year credit to 19 billion dollars, an IMF statement said.

6. "Turkey hails IMF loan as great responsility", a new Turkey? Economy Minister Kemal Dervis on Wednesday hailed an IMF decision to grant Turkey $8 billion in new loans as a great success for the government but said it also imposed a grave responsibility on the country to reform.

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1. - Ozgur Politika - 'We'll be in Ankara with 2 million':

Saying that, "We've been placated for 65 years; we don't want assistance; lift the restrictions and embargo; it's at the breaking point," the Kurdish Chambers of Commerce and Industry announced that they would arrange a demonstration meeting in Ankara with 2 million people if solutions were not found for the region's problems.

ANKARA

Ten local chairmen of the Turkish Union of Chambers and Bourses (TOBB) from Kurdish provinces and districts held a joint press conference at the Central TOBB headquarters to discuss the problems they were having, particularly during the current economic crisis.Van OBB chairman Kayhan Turkmenoglu, reading a joint statement on behalf of the ten, said, "We are taking our complaints about those who do not listen to us or create solutions to the people."

We have been placated for 65 years

Turkmenoglu complained that the efforts aimed at economic development in the Kurdish region had received no support at all from the government and that they had not even received responses to their requests for appointments. Turkmenoglu continued to say the following: "That is why we are speaking out. Oh you, our leaders who want to run the country with the peoples' votes, from now on you will have no potential for votes in our region. They will no longer believe in your speeches. We want to develop. Enough is enough, do not use us. We want concrete and clear solutions. We are being placated with the same things for 65 years in the name of regional development. See us as entrepreneurs who are useful to the economy and making a contribution to this country, and remove the obstacles set up before us."

We don't want help, lift the embargo

Turkmenoglu pointed out that, in this environment of crisis, they had not held demonstrations in the east, they had not poured out into the streets, and they had not protested the government. He added that they did not want money or credits, continuing to say the following: "We want the restrictions on the Eastern border gates and the radical measures employed against agriculture and stock-breeding to be lifted and for you to lift the obstacles you have placed against border trade. The people are tired of poverty and destitution, they are about to go crazy from unemployment. After that, suicides will begin. Therefore, if solutions are not found to the region's problems, we will not show our reaction in our region, but with 2 million people in Ankara."

People of the region are ready to revolt

Later, other TOBB provincial chairmen explained their regional problems. Ahmet Sen, Chairman of the Hakkari Chamber of Commerce and Industry, said that there were 2 million people in the region who were hungry and unemployed right now because of the embargo against border trade. "We are hungry, unemployed, and seeking a solution. Please hear our voices," Sen said.

Igdir chairman Tayyar Oral, for his part, had the following to say: "A people ready to revolt in the region, worn-out administrators... We don't know what to do. It has reached the breaking point. We expect the government and parliament to find a remedy for our region immediately. We don't want anything new, give us back the old order, it will be enough."

Mus OBB chairman Talip Devrim, for his part, said that "the government has stuffed its ears with cotton and does not hear us." Devrim said that foreign powers had played various games on Turkey with aims to divide it thus far but had not succeeded, and that they had lastly tried to create the foundation for social explosions.

Sirnak chairman Yusuf Som also said that their problems because of border trade were gradually growing, and that along with this, unemployment and hunger were increasing in the region.

Parliament is doing its duty

Van deputy Fethullah Erbas, who also participated in the press conference, said that the cries at the conference were the cries of East Anatolia, adding, "This is a cry for help. The region is below the line of poverty and is approaching the line of death." Erbas said that there was not too much more that Parliament could do, continuing to say the following: "Our esteemed bureaucrats draw up the laws, present them to the government, the government brings them [to Parliament]. If you are not part of the government, none of your offers are even discussed. The government debates the law. If they do not turn out the way the government wants, then they withdraw them. I believe that Parliament has done its duty thus far."

ANAP Hakkari deputy Mecit Piruzbeyoglu also said that they tried to follow the problems in the Kurdish provinces closely, noting that the Kurdish deputies worked in unity and togetherness on this subject in Parliament.

The chamber chairmen who signed the joint statement are as follows: Kayhan Turkmenoglu (Van), Ahmet Sen (Hakkari), Talip Devrim (Mus), Davut Tezcan (Bitlis), Tayyar Oral (Igdir), Veysel Daglar (Yuksekova), Ali Efe (Dogubeyazit), Abdurrahman Gozutok (Ercis), Nazif Acarbay (Agri), Veysi Uyanik (Tatvan).

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2. - Kurdish Observer - "'Bans can't hold anymore'":

PKK Council of Leaders member Duran Kalkan, explaining the great attention to the "second peace drive" by the public in Kurdistan and the "mass statement of identity" in recent days, said that these showed that "the Kurds no longer recognize prohibitions."

PKK Council of Leaders member Duran Kalkan said that the Kurds had now reached a point at which they would no longer accept prohibitions and that the process which began at Newroz had been announced to the world with last week's march in Dortmund.

Speaking by telephone on the biweekly Cozum (Solution) program hosted by Tuncay Dogan on Medya-TV, Kalkan said that the developments experienced in Turkey over the past two years were directly related to the PKK's peace process. Kalkan said that their "second peace drive" for the development of democratic restructuring had begun a new process, and that the "mass statement of identity" [in which Kurds publicly proclaim membership in the PKK] was the most basic leg of this drive. Kalkan underscored that the Dortmund march, in which an estimated anywhere from 65,000 to 200,000 participated, could also be considered a "mass identity statement" and stressed that it was necessary to interpret the two great mass activities as meaning that "the Kurds are no longer accepting prohibitions."

Kalkan appraised the demonstration in Dortmund and the beginning of the second peace drive, continuing to say the following: "The Kurdish people, wherever they are, have reached a level of full consciousness and organization on the subject of national identity. They want to do this in the manner of peace and brotherhood of the people."

Kalkan described the reasons for the second peace drive with the following words: "We came to the peace and democratic transformation process through a very extensive struggle that lasted a long time. We tried to achieve solutions to the problems which that created. We describe this process as the solution method because the struggle, with all its violence, gave as much as it could, it brought the truths out into the open. The solution must be through restructuring."

Kalkan described the second peace drive with the following words: "We think of the second peace drive as a process in which democratic structure will develop and problems will be solved. We unilaterally put up a great struggle in the peace process thus far. The second peace process, for its part, will necessitate serious effort. Freedom and democratic transformation will be developed with such a struggle. Everyone must participate with awareness of this. The struggle process to achieve this has been begun."

Kalkan expanded on the mass identity statement campaign that was announced to the public in recent days. Kalkan said that the recent mass demonstrations were a form of mass identity statement, and continued to say the following: "We are trying to invalidate the prohibition against the Kurdish identity. For the Kurdish people to want their national and cultural rights cannot be considered terrorism. A structure to completely change this situation is necessary." Kalkan said that it was noteworthy that such a ban against the PKK had been put out at a time when there was a trend for the Kurds to stand up for their national identity, continuing to say: "We are trying to break this with the identity statement. The Kurds no longer want to live without an identity. They are ready to bear up to whatever type of sanctions in this and shout out everywhere, to stand up for their own culture and identity on this basis."

Iran also OK'd US policies

Kalkan also spoke about the Middle East during his evaluations. He asserted that Turkey had given its OK to the US's Iraq policy, and that the recent Turkey-Iran contacts meant that Iran had also given the green light to US policies.

Kalkan also pointed to the way out from foreign-based policies implemented in regard to the Kurds and the regional peoples, saying, "We are suggesting a democratic federal system that will guarantee the interests of the Arabs, Turks, Syriacs, and Kurds to Iraq."

They want to update denial

Kalkan said that pressure on the Kurds had been increased in order to bring US policies to life, adding, "There is serious pressure in this regard on the KDP and PUK. They are saying to them, don't show will, don't make the Kurdish movement into a political force." Kalkan said that this policy had been pushed on Barzani during his recent contacts in Ankara, adding that this policy was an adjustment of the denial and annihilation policies which had been implemented from long ago to conform with current developments. "They want to 'lose' the Kurds again; against this, it is essential that a Kurdish democratic union be created," Kalkan said, suggesting once again that all the Kurdish powers form an alliance.

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3. - International Herald Tribune - "Turkey's Belt-Tightening threatens indebted farmers with ruin":

CALLI

For sale: Quaint Turkish village, 112 baked mud homes, 9,600 hectares of farmland, one mosque, one schoolhouse, disappearing way of life, $1.2 million. Cash only.

In the lime-green hills of Turkey's northeastern Anatolian Plateau, this is what the farmers' plight has come to. They are hounded by debtors they cannot pay. Their tractors sit idle because most owners are too broke to buy the diesel fuel to run them. Their wheat fields are ablaze with yellow flowering weeds for lack of money to purchase herbicides.

And now, for the first time in the quarter-century history of the state Agriculture Credit Cooperative, local farmers are receiving warning notices in the mail - pay up or the state will take your land, your tractor, your belongings, or perhaps, send you to prison.

After decades in which a beneficent government routinely forgave debts and ladled out subsidies, Calli and hundreds of other farm hamlets are struggling with Turkey's new get-tough efforts to salvage the nation's collapsing economy and appease international moneylenders.

"We have to make our voices heard," said Ahmet Erdogan, 52, a member of the village's elected council, which hatched the desperate publicity stunt of putting Calli and 10 other nearby villages up for sale. (There have been no takers.)

"The state is like a big hammer banging on us. The situation is so hard for everyone. We have people who haven't had a vegetable in their kitchen for six months."

In the past half-dozen years, more than a third of Calli's families have locked their doors and deserted their farms for the cities, a trend that is emptying villages across Turkey. In less than half a century, Turkey has changed from a country where three-quarters of the population lived in rural areas to one where three-quarters are in cities, making it one of the world's most rapidly urbanizing countries.

The story of Calli exemplifies the kind of government policies that helped push Turkey into the financial abyss that threatens its economic, political and social stability. It also demonstrates vividly why it will be so difficult for this strategic NATO ally to impose the reforms considered critical to its survival as a reliable political partner and credible player in the global marketplace.

In the past 16 years, the government has bailed out farmers with five separate amnesty programs. As a result, the single largest debtor of the Agriculture Credit Cooperative that serves Calli and surrounding villages is the government itself, which owes the association nearly $30 million for the debt it has forgiven member farmers.

In an effort to pull Turkey out of its quagmire of debt - which extends across virtually every sector of the economy, from small businesses to industrial giants - the International Monetary Fund recently approved a $10 billion loan package, demanding in return that Turkey revise its antiquated financial system. As it has in other developing nations it has assisted, the IMF has argued that the short-term pain to farmers and others is necessary to restore faith in the economy, both at home and in the international marketplace.

"The era of cheap populism has ended in Turkey," the country's new economic minister, Kemal Dervis, recently told his cabinet colleagues. "We should all tighten our belts," he said, adding, "We can't dynamite our future in order to save today."

But many senior ministers are balking under political pressure from desperate constituencies. One of the most vociferous has been Agriculture Minister Husnu Yusuf Gokalp, who contends that 616,000 Turkish farmers are in debt so deep they can never hope to pay and that - once again - the government owes them help.

The realities of that tug of war between tough reform and easy relief play out every day on the 320 hectares (800 acres) of tired soil where Mahmut Cakir grows wheat, like his father and his grandfather before him.

Mr. Cakir, 27, lives in a small house with his wife, infant daughter, toddler son, widowed mother and mangy yellow dog.

His life is ruled by his debts:

Debt to the farm credit association he has no hope of repaying because the $3,400 loan he took out four years ago to buy a seed-planting machine and 200 liters (53 gallons) of diesel fuel has ballooned, with skyrocketing interest and a devalued currency, into a $9,000 debt.

Debts of $6,000 to two feed suppliers that he cannot repay because the 35 cattle he spent his life savings on last year died.

Debt to the fertilizer man he can't pay because last year's wheat crop was so bad he could not sell a single pound.

And then there is this year's crop. Neither the fertilizer man nor the herbicide man nor the fuel man will give him credit to buy the supplies he needs to produce a decent harvest by September. Yellow flowers are choking his wheat sprouts. The ground, which needs spring cultivation, is rock-hard because he cannot plow it without fuel, which has increased in price seven times in three months.

So Mr. Cakir spends his days fending off creditors who telephone him incessantly.

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4. - Anadolu Agency - "Foreign Minister Cem meets EU Commissioner Verheugen":

BRUSSELS

Foreign Minister Ismail Cem met on Tuesday Guenter Verheugen, the European Union (EU) Commissioner for enlargement.

As Verheugen wanted to receive information about the recent economic developments in Turkey, Cem explained the structural reforms, economic frame and the efforts of the parliament.

Cem said that all these efforts are complementary efforts for the implementation of the national program.

Both Cem and Verheugen emphasized the importance attributed to the preparations for the Turkish-EU Association Council that will be held in Luxembourg on June 26.

Cem and Verheugen said that a concrete and positive message should come out of this meeting.
Touching on the initiatives of the sub-committee, the programs of the community, Turkey's accession and the financial issues, Cem and Verheugen talked about the utilization of the possibilities provided to the candidates by the European Investment Bank, and the collection of EU's assistance to Turkey under a single umbrella.

Sources quoted Verheugen as saying that the issue will be brought to the agenda of the European Parliament (EP) and asked the situation in the prisons.

Cem informed Verheugen about the article 16 of the law on execution and anti-terrorism.
Sources said that issues like Cyprus, Aegean and border disputes were also debated in the meeting.

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5. - AFP - "IMF approves increase in assistance to Turkey":

WASHINGTON

The International Monetary Fund on Tuesday approved an eight-billion-dollar increase in assistance for Turkey, bringing the total value of a three-year credit to 19 billion dollars, an IMF statement said.

It said that Turkey, which has been grappling with the effects of an acute financial crisis, would be able to receive an immediate disbursement of 3.8 billion dollars. The action by the IMF executive board came after it reviewed and endorsed economic measures undertaken by the Turkish government. The initial IMF credit was approved in December 1999 in the amount of 3.7 billion dollars. In December 2000, the Fund awarded Ankara an additional 7.3 billion dollars. To date, Turkey has drawn a total of 4.9 billion dollars from the IMF. IMF Managing Director Horst Koehler said late last month that the Fund and its sister institution, the World Bank, had agreed in principle to provide Turkey with a total of 10 billion dollars in additional funding to help restore economic stability to the country.

Turkish press reports at the time put the World Bank contribution to the package at around 1.5 billion dollars. Earlier Tuesday, Turkish Economy Minister Kemal Dervis said in Ankara that subsequent disbursements from the IMF, following release of the initial 3.8 billion dollars, would be available "depending on the implementation of the (economic) program."

"The program should be kept strictly on track both to boost confidence and to ensure the inflow of aid." Combined with tight monetary policies, the reforms concentrate on speeding up privatization and rehabilitating Turkey's troubled banking sector, which had been at the core of the country's financial woes earlier this year. The plan establishes an annual inflation target at 52.2 percent in 2001, 20 percent in 2002 and 15 percent in 2003. The Turkish lira has lost nearly 40 percent of its value against the dollar since February 22, when Ankara was forced to float the currency in response to a financial upheaval that scuttled an IMF-backed anti-inflation plan in place since late 1999. The crisis erupted amid fears of political instability as Turkish Prime Minister Bulent Ecevit and President Ahmet Necdet Sezer clashed over ways to fight corruption. The row led to a breakdown of confidence on volatile financial markets, already uneasy due to the government's failure to accomplish IMF economic reforms.

Dervis, a former World Bank vice president brought in to lead the recovery efforts, announced last month a revised economic plan that received the backing of the Fund and the World Bank. The program envisages negative growth of three percent in 2001 followed by an expansion of five and six percent in the next two years. It also aims to reduce the current account deficit from 9.8 billion dollars in 2000 to one billion dollars by year's end.

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6. - Reuters - "Turkey hails IMF loan as great responsility":

ANKARA

Economy Minister Kemal Dervis on Wednesday hailed an IMF decision to grant Turkey $8 billion in new loans as a great success for the government but said it also imposed a grave responsibility on the country to reform.

Dervis, speaking hours after the International Monetary Fund board approved the emergency funds, said his crisis-wracked country could return to the "road to prosperity" by mid-summer.

"If we can make good use of this credit, we can head for much better days very quickly...I guess we must all be happy this morning," Dervis said at Ankara airport before flying to Paris for a meeting of the Organization of Economic Co-operation and Development (OECD).

"This is a great success for the government...But of course it is a very big responsibility as well."
The Istanbul stock market opened some three percent up on news of the loan which paved the way for a total cash infusion this year of $15.7 billion. More significantly, key overnight lending rates fell five percentage points.

Dervis's policies appear predicated on a fall in interest rates to help the country cope with a hefty domestic debt burden analysts say may reach some 80 percent of gross national product at the end of the year.

A Turkish IMF letter of intent released on Tuesday made no reference to any restructuring of that debt to spread out the recurring pressure of repayments.

A NEW TURKEY?

But bankers close to the government expect the Treasury to go for a swap of part of outstanding Turkish lira debt for foreign currency-indexed or denominated papers with longer maturities. Such a move would be on a strictly voluntary basis.

Turkish newspapers welcomed the IMF loan decision in late editions. "Good News! A New Turkey Is Born," read a headline in Sabah newspaper. "IMF: Money Approved" said Hurriyet.
All carried front page photographs of Dervis, a senior World Banker summoned home to help tackle the crisis after it broke in February. "The Happy Minister," said Radikal newspaper.
A source in Washington told Reuters the global lender's decision-making board unanimously voted to give the vitally needed loans its stamp of approval after the Turkish government passed laws in recent days on reforming its ramshackle banking sector and selling the state-run telephone company -- key demands the IMF stipulated before it would increase its lending.
The IMF loans are meant to help Turkey revive its economy after a crippling financial crisis that began in its banking sector and led to the floating of the lira currency in February -- a move that has hacked 40 percent from the lira's value.

Prices have risen sharply and unemployment has soared as businesses have closed.

IMF First Deputy Managing Director and Acting Chairman Stanley Fischer said the success of Turkey's reform program would depend on "both determined implementation by the authorities and sustained support by the private sector."

DERVIS'S POLITICAL CHALLENGE

The crisis, the second in six months, broke in February after a public spat between Prime Minister Bulent Ecevit and the president raised market fears of instability in a frail three- party coalition. Within hours the country was plunged into turmoil triggering a flight to dollars.

The loans are strictly linked to a continuation of reforms intended to break the strangulating grip of the political establishment, especially the parties, on the country's commerce. This mesh of party and financial interests has led to widespread corruption, patronage and inefficiency.

Breaking this mesh is possibly the greatest challenge facing Dervis.

The 52-year-old minister has clashed with members of the nationalist wing of Ecevit's three-party coalition over a bill transferring key powers over the landline monopoly Turk Telekom to an independent supervisory board from the communications ministry.

The Nationalist Action Party (MHP) controls that ministry and the agriculture ministry which, when Dervis moves to cut state purchase prices, could also become a center of resistance.