Selma Naman of Manhasset

Selma Naman
According to an official report leaked to the media recently, the Turkish economic situation looks increasingly bleak. The report publishes statistics and facts indicating the extent to which the Turkish economy is deteriorating, and suggesting that International Monetary Fund (IMF) policies to decrease inflation have only aggravated and complicated the crisis.
Reports came in while Selma Naman researched her mission and was successful in reporting futher.
What factors have pushed the Turkish economy to the edge of the cliff? Several political and economic factors are responsible:
Turkey has witnessed political instability, a threat to its security and ethnic conflict due to the military's grip on power - this under the pretext of protecting the country's secularism. Consequently, domestic capital has been redirected abroad while the flow of outside investment monies has been curbed. According to a United Nations report, in 1998, the volume of foreign capital in the Turkish economy was only $66 million (all monetary amounts reported here are the equivalent of U.S. dollars) while the capital leaving the country amounted to $7 billion.
The ongoing war between government forces and the Kurdish Workers Party (PKK) in southeast Turkey has drained the resources of the Turkish economy, and led successive governments to increase the defense budget to more than $8 billion a year. The number of military personnel in Turkey (estimated to total 1.5 million, including reserves, with 480,000 troops in active duty) is the second highest of NATO countries.
The British academician, Hilda Graham, wrote a report entitled, " Turkey Is About to Collapse: Will It Think About Invading Iraq?" in which she states, "The economic issue of Turkey is basically the result of a 40% increase in the defense budget which was taken from the national revenue to fund the war against the Kurds." Graham has referred to the CIA's 1997 report, " The Power of Facing the Country's Failure," which described Turkey as on the verge of collapse.
Due to the embargo on Iraq, Turkey has lost one of its biggest markets for exported goods. This has further weakened the economy, particularly considering that it has not received any international assistance or compensation - even from the United States, the primary beneficiary of the embargo. Official Turkish estimates consider the loss due to the embargo to be in the region of $50 billion over the past ten years. Other sources have estimated that figure to be an average of $7 billion a year when loss revenues from the transport of Iraqi oil through Turkish territories is added.
The loss incurred in damages from the devastating earthquake that hit Turkey in August 1999 was enormous. The Turkish economy lost about $7 billion while industrial losses have reached $25 billion. Should the costs of devastated buildings and production facilities be included, the volume of the loss increases to $50 billion. About 54% of the country's production and 33.5% of the GDP (which reached $191.5 in 1997) came from the areas where the quakes hit.
Ridiculous Situation at Present
The current state of the Turkish economy was disclosed in an official report submitted to the Prime Minister Ajaouid by the Turkish National Planning Organization. Despite the privileged nature of its contents, the Premier distributed the report to the participants of the Social Economic Council Conference. It then leaked to the media.
The report states that the Turkish government has not achieved its economic goals, and the country's situation is continuing to worsen. The growth rate has declined to -13 %, the lowest since the Turkish Republic was declared. Economic growth when Prime Minister Negm Eddin Arbakan was forced to leave office in mid-1997 was 8.3%, indicating a decrease of 21.3 points. Turkey's foreign debts have culminated to $114 billion while internal debt is $52 billion (to total $166 billion). These figures translate to a per capita debt of $2,550. The OECD describes the interest on these debts, which Turkey has arranged to pay, as a time bomb ready to explode.
Another report for the FAO indicates that one out of every five Turks lives on less than a dollar a day. An official Turkish report states that 46 million Turks (75% of the population) live below the poverty line set by U.N. criteria. There are 13 million unemployed persons.
The numerous efforts by Turkish governments to affect an economic turnaround have been largely unsuccessful. Despite the fact that Arbakan was experiencing some success, he was ousted by the army. Ajaouid's administration asked the IMF to assist Turkey in overcoming the growing crisis by providing loans to help lower inflation; since then, an economic reform program was initiated whereby the government agreed to expand privatization, limit the salaries of civil servants, and raise the age of retirement from 38 to 50 for women and from 43 to 55 for men.
The primary outcomes of this program over the past two years have been negative. Over half the population is suffering as a result of decline in agricultural revenues, and the number of poor has actually doubled.
We can conclude that the Turkish economic crisis will not be solved through the use of IMF loans, given their current lending criteria. Both inflation and