Posted on 25 March 2010
These are important times for Turkey, historic even. A Turkey, not only standing on its own two feet without IMF assistance, but looking proficient in, and highly capable of, doing so for the long haul.
Of course, negotiations have only been terminated in the past two weeks, but Turkey has been without any assistance, real or intimated, since May 2008, when the last standby agreement came to an end. That means Turkey has been standing alone, as, dare I say it, a developed economy for nearly 2 years.
During this time it has suffered a severe recession, with the contraction in GDP put at over 5% for 2009. But that means nothing, considering that almost every country in the world suffered a similar or worse recession. It is in the recovery that Turkey has and is proving itself capable of standing without the IMF.
In just the last few weeks, the Turkish statistical institute Turkstat has said that in January Turkish industrial production was 12.7% up this year on last year. Global funds have continued to invest millions in Turkish businesses, and a recent bond issue from Turkey broke records.
More recently the World Bank has just agreed a $1.23 billion loan for Turkey, a Development Policy Loan under the Restoring Equitable Growth and Employment Program. The final maturity of the loan is in 19.5 years, and it includes a 16 years grace period.
“We are pleased to support the government’s policies and program to promote equitable growth and employment as Turkey emerges from the impact of the global financial crisis and returns to renewed growth this year,” said Ulrich Zachau, country director of the World Bank for Turkey.
“We welcome the government’s sound medium-term program and fiscal plan, the continued implementation of Turkey’s path-breaking health and social security reform, and the strengthening of programs to improve access to education and job training and services, he said.
“We look forward to continuing our partnership with Turkey to improve the lives of the Turkish people,” Zachau said.
The loan, and the statements given along with it are a massive testament to the fiscal abilities of the Turkish government, as well as to the country’s political stability, democracy, and efforts to reduce corruption. It is exciting to imagine that, by the time the World Bank loan matures, Turkey will undoubtedly be a global power of international reckoning. We are indeed living in important times in the history of Turkey.