Turkish Forum

Tag: IMF

  • PM threat to Brown’s IMF job

    PM threat to Brown’s IMF job

    cameron brownKATE DEVLIN UK POLITICAL CORRESPONDENT

    A senior economist accused David Cameron of being vindictive yesterday after the Prime Minister suggested he would block Gordon Brown from getting a top international job.

    David Blanchflower, a former member of the Bank of England’s Monetary Policy Committee, described the PM’s stance as “small minded”.

    It follows speculation that Mr Brown might be put forward to head the International Monetary Fund (IMF). Crucial for any nomination would be the endorsement of the individual’s home country.

    However, Mr Cameron indicated he would block a potential bid by his predecessor as Prime Minister. He said Mr Brown “might not be the most appropriate person” for the job, because of his record in office.

    In a deliberate jibe at the former Labour leader, he added that he thought the job should go to “someone who understands the danger of excessive debt”.

    The Tories and the LibDems have been highly critical of Labour’s economic record since entering Coalition last year, blaming the party for leaving them with a record deficit.

    Labour have defended their time in office, and claim the problems we caused by the global banking crisis.

    Mr Brown gave a speech on economics to students at Edinburgh University last night, based on his book, Beyond The Crash. He was defended by current Labour leader Ed Miliband, who said he was “eminently qualified” for the job.

    Mr Miliband also attacked Mr Cameron’s comments saying: “To rule someone out even before the vacancy has arisen seems to be going some, even for him.”

    Asked about the PM’s remarks, Mr Blanchflower said: “This is the most vindictive thing I’ve heard from a Prime Minister in 50 years. It looks to me to be extremely small-minded.”

    The role of managing director of the IMF carried a salary of around £270,000, as well as a crucial position in world finance. Countries currently in receipt of IMF aid include Greece and the Republic of Ireland.

    It is expected the job could become free if current head Dominique Strauss-Kahn stands down this summer to mount a bid for the French presidency. There has also been speculation his replacement would come from countries with emerging world markets.

    It is not the first time Mr Brown’s name has been linked with the job. In 2004, when he was chancellor, Downing Street was forced to shrug off rumours about him joining the IMF.

    In recent months the IMF has repeatedly backed the Coalition austerity drive, including cuts of £81m in public spending.

    Ironically, the Tories have also been vocally critical of Mr Brown’s workload in recent weeks.

    The former PM did not speak in the Budget debate last month and has voted only a handful of times in the House of Commons since leaving Downing Street.

    His office says he has concentrated on constituency work as well as writing his book.

    heraldscotland.com, 20 Apr 2011

  • Turkey anti-IMF protest dispersed

    Turkey anti-IMF protest dispersed

    BPolice in Turkey have used tear gas and water cannon to break up protests against a meeting of the World Bank and the International Monetary Fund.

    Several hundred protesters shattered the windows of banks and a fast-food restaurant in Istanbul, reports say.

    Dozens of arrests were made, and many shops in the city centre remain closed.

    Delegates of the two organisations are holding their annual meetings, with co-operation in international finance reportedly high on the agenda.

    “Long live freedom,” chanted crowds of protesters, some of whom covered their faces with red scarves. “IMF get out of our city.”

    Shield-wielding riot police wearing gas masks erected barriers around the convention centre where finance ministers, central bankers and economists were meeting.

    Police helicopters hovered above the protests, which were organised by several Turkish trade unions.

    A student was arrested last week for throwing a shoe at Dominique Strauss-Kahn, the IMF managing director, during a speech he gave at an Istanbul university.

    The IMF is urgently discussing ways to make itself more representative of the new world order where developing countries make up nearly half of the world economy, but only have about one-third of the votes in the IMF.

    BBC

  • (ECO) NEW GLOBAL ORDER SHOULD BE ‘RESPONSIBLE GLOBALIZATION’, ZOELLICK

    (ECO) NEW GLOBAL ORDER SHOULD BE ‘RESPONSIBLE GLOBALIZATION’, ZOELLICK

    ZWorld Bank Group President, Robert Zoellick,
    said Tuesday the new global order should be “responsible globalization”.
    Speaking at the inauguration of the annual meetings of IMF and World Bank in Istanbul, Zoellick said that international institutions and countries should work for a globalization that is accountable. As a result of the global crisis, more than 59 million individuals will lose jobs. Up to 50,000 babies may die in the least developed regions of Africa, Zoellick stressed.
    The whole humanity calls on us not to permit a global crisis again in the
    future, Zoellick said.

    AA

  • (ECO) ISTANBUL IS A BRIDGE BETWEEN CIVILIZATIONS, ERDOGAN

    (ECO) ISTANBUL IS A BRIDGE BETWEEN CIVILIZATIONS, ERDOGAN

    ETurkish Prime Minister Recep Tayyip Erdogan said Tuesday Istanbul was a bridge not only between continents but also between civilizations, cultures, economies and commercial regions.Speaking at the inauguration of the annual meetings of IMF and World Bank in Istanbul, Erdogan said that he welcomed all to Turkey and Istanbul with warm regards. Turkey and Istanbul hosted the annual meetings of IMF and World Bank in
    1955. Turkey hosts the meetings again after 54 years. I would like to express the happiness of my people and myself over welcoming you, the distinguished guests, to Istanbul one more time, Erdogan said.
    I hope that the meetings in Istanbul would be beneficial at a time when we
    are going through a critical process as far as global economy is concerned,
    Erdogan underlined. You are now on lands that invented the first currency in history. I would like to use this opportunity to remind you that you are also in a city that spreads on two continents, Erdogan said. The Bosphorus Strait connects Asia to Europe. I am confident that the city
    of Istanbul, a city which unites civilizations, cultures and economies, will be
    the host for a meeting that will leave a mark on the global economy and will help us bring together our strengths and experiences, Erdogan said.Erdogan stressed that strong policy measures have yielded positive results
    in the world. This is a pleasing development. However, we must not let go precautions in our economies, Erdogan said.There is a need to re-evaluate the distribution of roles and responsibilities in the global economy, Erdogan noted.
    I, once again, want to welcome you all to Turkey and Istanbul and hope that
    you will enjoy the beauties of an unique city Istanbul, Erdogan also said.

    AA

  • Global economy expanding says IMF

    Global economy expanding says IMF

    The global economy is expanding again and financial conditionsJ have improved significantly, the International Monetary Fund (IMF) has said.

    But in its latest World Economic Outlook, the IMF said the “pace of recovery is expected to be slow”.

    It added that the recovery is likely to be “insufficient to decrease unemployment for quite some time”.

    On Wednesday, the IMF cut its forecast for the amount that banks are likely to lose in bad loans and investments.

    The total it expects banks to lose between 2007 and 2010 is now $3.4tn (£2.1tn), down from its previous estimate of $4tn.

    This reduction is a direct result of the improved outlook for the global economy.

    Separately, the head of the European Central Bank (ECB) said that the 16 countries in the eurozone should withdraw stimulus packages in the next two years.

    “From an ECB point of view, it is important to do what is necessary to exit as soon as possible,” Jean-Claude Trichet said at a meeting of EU finance ministers and central bank governors in Gothenburg.

    “It is important in our view that it starts as soon as the recovery starts. It is something which is essential for the recovery itself.

    “I would say, in our own view, at the latest in 2011.”

    Recovery risks

    The global recovery is being led by Asia, where economies have “withstood the financial turmoil much better than expected,” the IMF said.

    But gains are now being seen in developed economies, where “financial market sentiment and risk appetite have rebounded”, it added.

    Despite the improved outlook, however, the fund said there were a number of risks to the recovery.

    It cited major government stimulus packages, central bank support and restocking by companies that have run down inventories as three temporary factors that “will diminish during the course of 2010”.

    It also highlighted the fact that banks are being forced to hold more cash in reserve, which will limit the amount of credit available “for the remainder of 2009 and into 2010”.

    With less money available to companies and individuals to borrow, and therefore invest, demand may be stifled.

    Most serious, it concluded, was the fact that “private demand in advanced economies remains very weak”.

    Increased growth

    The IMF predicts that the US economy will contract by 2.7% in 2009, before growing by 1.5% next year.

    The eurozone, it thinks, will shrink by 4.2% this year and grow by 0.3% in 2010.

    It has upgraded its forecast for UK economic growth to 0.9% next year, up from a previous estimate of 0.2%. This puts the UK top of Europe’s leading economies for growth in 2010, alongside France.

    The German economy, the IMF thinks, will grow 0.3% next year, while the Spanish economy will shrink by 0.7%.

    The world’s fastest-growing economy in 2010 will be Singapore, which will expand by 4.1%, closely followed by Taiwan, Slovakia, South Korea and Hong Kong, according to the fund.

    BBC

  • Turkey Proceeds with its Economic Recovery Plans

    Turkey Proceeds with its Economic Recovery Plans

    Turkey Proceeds with its Economic Recovery Plans

    Publication: Eurasia Daily Monitor Volume: 6 Issue: 174September 23, 2009

    By: Saban Kardas

    On September 16, Turkey’s Economy Minister Ali Babacan revealed the government’s medium term economic plan for 2010-2012, prepared by the state planning agency. Babacan acknowledged that the contraction in growth by the end of the year may reach 6 percent, rather than the previous estimate of 3.6 percent. According to his forecasts, the economy will experience growth rates of 3.5 percent in 2010, 4 percent in 2011 and 5 percent in 2012. The government also expects the budget deficit to reach 62.8 billion TL ($42.9 billion), then starting to fall to 50 billion TL ($33.8 billion) in 2010 and 45.1 billion TL ($30.5 billion) in 2011, and 39.1 billion TL ($26.4 billion) in 2012. Similarly, the current account deficit is also forecast to reach $18 billion. Babacan acknowledged that despite a modest recovery, unemployment is set to remain at around its current rate of 14 percent in 2010, which is well above the pre-crisis rate of 10.8 percent (www.cnnturk.com, www.ntvmsnbc.com, September 16).

    The global financial crisis was a serious blow to the Turkish economy, which led to a drastic decline in production and employment in sectors heavily dependent on exports. Although the government initiated several economic stimulus packages, their effectiveness has proven limited. They slowed the contraction of the economy, but are far from stimulating a sustainable economic recovery. The soaring budget deficit due to the economic crisis has been a growing concern among economists (EDM, August 11).

    Therefore, economists expected the government to focus on taking precautions to address the budget deficit in 2010-2012. In contrast to initial speculation that the government might have set unrealistic targets in terms of growth and fiscal balances, experts evaluating the middle term economic plan argued that it is based on a realistic prognosis of the economic conditions and a pragmatic outlook to address the problems. Rather than expecting an ambitious short term recovery, the government prefers a gradual approach aimed at improving economic conditions (Anadolu Ajansi, Today’s Zaman, September 17).

    Following the announcement of the plan, international credit rating agencies also responded positively. Standard & Poor raised Turkey’s credit rating outlook from negative to stable, while Moody’s upgraded the outlook on Turkey’s Ba3 bond rating from stable to positive (www.ntvmsnbc.com, September 18).

    On the implementation side, one factor that makes economists believe that the plan is realistic is the decision to introduce a “fiscal rule” into public administration starting from 2011. Once it is in place, it is expected to contribute to long term fiscal stability, by setting limitations on public spending. This rule was required by the IMF as part of the loan negotiations with Ankara (EDM, January 29).

    However, the role of the IMF in the implementation of the plan has proven controversial. Ankara was engaged in protracted negotiations for over a year with the IMF in order to secure a loan. Despite the recent announcement of progress in these talks, it remains unclear whether Turkey will eventually sign a stand-by deal. The critics of the AKP’s economic policies argue that an agreement with the IMF is necessary to inject credibility into its economic policies and boost confidence in the market, contributing to a more sustainable recovery.

    However, some analysts believe that the medium term plan indicates that the government might implement the precautions without the IMF, while others speculate that the IMF could remain an option. Babacan also added to the sense of confusion. On the one hand, he said that Turkey will discuss the new medium term plan with the IMF. If both sides achieve consensus, Ankara will prefer to sign a stand-by deal. On the other hand, he maintained that although an IMF loan would help the Turkish economy, the IMF financing was not necessary for the implementation of the plan. He added that the plan was prepared on the assumption that in case an agreement was reached with the IMF, the extra resources would be channeled into the domestic market directly, in order that the banking sector could distribute money for private consumption and investment (www.cnnturk.com, September 16).

    The IMF welcomed the plan and found it realistic, reflecting the impact of the global financial crisis on Turkey. In addition to the fiscal rule, the announcement supported Ankara’s plan to cut the ratio of public debt to GDP. It called on Turkey to adopt supporting policies and structural reforms, including measures to address areas that create spending pressures, so that Ankara might achieve its goal of controlling public debt (www.cnnturk.com, September 17).

    Prime Minister Recep Tayyip Erdogan announced that Turkey had survived the crisis without IMF loans. It could continue its path without IMF assistance and would not accept IMF requirements concerning taxes and spending. Therefore, the future of an IMF deal remains uncertain (Hurriyet Daily News, September 18).

    Another major aspect of the plan is that it does not foresee any major hikes in corporate, income and value-added taxes, which equally motivates the government to restrict IMF involvement. Although there were widespread expectations that the government might opt for tax increases to reduce the budget deficit burden, it refrained from pursuing this policy. This decision partly reflects the government’s desire to limit the effect of the economic recovery plan on consumers and the markets, by avoiding policies that might curb economic activity. The government believes that the Turkish economy could recover quickly based on its own dynamics, as long as it is kept vibrant, once the global economic environment starts to improve.

    One factor that boosts the government’s self-confidence is the condition of the Turkish banking sector. Babacan, therefore, argued that unlike other Western economies where the collapse of the financial institutions triggered the economic crisis, the Turkish banking system remained intact and was in good condition. Consequently, he expects a rather smooth economic recovery, centered on the private sector (www.cnnturk.com, September 16).

    Despite the government’s positive outlook on the Turkish economy’s vibrancy, the implementation of the plan and a sustainable economic recovery will also depend upon developments in the global economy. Moreover, the government’s ability to withstand the spending pressures to be generated by the next general election slated for 2011 will be a major test of its determination to reduce public debt, a core element of Turkey’s medium-term economic plan.

    https://jamestown.org/program/turkey-proceeds-with-its-economic-recovery-plans/