Turkey

As Turkey pursues a strict regiment of fiscal belt-tightening and structural reforms, Foreign Direct Investment (FDI) languishes in the malaise of existing political and economic uncertainty and bureaucratic strictures.

Turkey has had a roller-coaster couple of weeks, with strong industrial output data on May 8th raising hopes that reform targets can be met, only to be followed by uncertainties over Prime Minister Bulent Ecevit's health problems, which pushed markets down.

Amongst the most important pledges from the Turkish government to the IMF, which is due to begin another review on May 15th, is that to complete an audit and re-capitalisation of private banks.

Ankara’s need to accelerate the rate of privatisation was reinforced on May 7th as the IMF presented a substantial list to the government outlining needed reforms, including increased privatisation, audit of private banks, restructuring of corporate debt, tax reform, government staff cuts, and increased foreign investment.

Following the IMF’s most recent loans to Turkey, the World Bank has approved a $1.35m loan to strengthen the country’s economy.

Official reactions in Turkey to Israeli action in the West Bank underline the contradictory nature of Ankara’s position in Middle East affairs.