§ Lord Hyltonasked Her Majesty's Government:
How much financial help has been provided to Turkey by the International Monetary Fund (IMF) and related agencies since 1 January 2000; whether the IMF believes that the current practices of private and state-controlled public banks in Turkey are acceptable; and what further actions by the state are considered necessary by the IMF. [HL90]
§ Lord McIntosh of HaringeySince 22 December, 1999 (when Turkey's economic reform programme began), the IMF has committed SDR 15 billion ($18.8 billion) (for the period to November 2002), of which SDR 6.9 billion ($8.7 billion) has been disbursed. Of this, SDR 221.7 million ($277.1 million) was disbursed prior to 1 January 2000. The World Bank has to date, committed just under $1.8 billion to support Turkey's reform programme, of which $777 million has been disbursed.
62WAThe IMF and the Turkish authorities have together identified a number of deficiencies in the operation of the Turkish banking system, such as subsidised lending by state banks, and unhedged foreign borrowing by private banks. Measures to address these problems have also been agreed, including recapitalising, restructuring and eventually privatising state banks, and either selling or liquidating insolvent private sector banks.
In addition to these banking reforms, the IMF and the Turkish authorities have agreed on a range of other actions on which Turkey's economic programme should focus. These include: fiscal consolidation to improve debt sustainability; privatisation and liberalisation of key elements of the economy; and disinflation via inflation targeting. The full details of the programme were set out in the Turkish authorities' Letter of Intent and Memorandum on Economic Policies of 3 May 2001; which has been posted on the IMF's website.