HOW TO RESCUE TURKEY
Turkey is already paying a very heavy price for a crisis that seemed,at first blush,a simple clash of clashed at a stormy meeting of the National Security Council.Both are widely respected for their uprightness and their determination to improve the state of the nation.So what went wrong? result of the row was three days of escalating market turmoil,which left the government’s economic plan in ruins.A run
The immediate problem was,of course,that neither realized the spotlight under which international financial markets had placed Turkey-andthem.The on the Turkish lira cost the Treasury hundreds of millions of dollars.Interest rates soared to more than 5,000 percent.The IMF packed anti-inflation program collapsed,and the lira was allowed to float,falling 30 percent.The long-term consequences are harder to estimate,at least until the dust settles.It is unlikely,though,that this will lead to the fall of the government in the weeks ahead.
Those of us who had hoped that Turkey was within months of seeing an end to its decades-old scourge of runaway inflation are bitterly sets in.Turkey has known financial crises before,but the scale of the present crisis is without precedent in the eight decades of the republic.Turkey has much to be proud of.It has transformed itself in a generation into an urban-industrial country.It alredy has a functioning customs union with the european union,something that virtually none of the other candidate countries for full EU membership has achieved.
Europeans often grumble that Turkey is too authoritian.But inside Turkey the problem more often seems to be lack of discipline and effective cohesion.The present crisis is a case in point.The government did not have the power to implement its ambitious reform program without risking having its fragile coalition lose support in Parliament.That is why the lessons it points up for Turkey and other countries are not just economic and financial,important though those lessons are.At one level the crisis marks the failure of our policymakers and the IMF.It has shown the weakness of an anti-inflationary policy based on price stabilization and a controlled exchange rate.But it also highlights the importance of effective and strong government.
Turkey lacks a normal political system.Our current party system is leader-obsessed.Party leaders are undisputed kings.Election constituencies have little or no control over the nomination of candidates for Parliament.That means that parliamentarians are beholden to their leader and no one else.Add to this a coalition system where ministries are allocated to parties and don’t play together as a team,and you get inadequate discussion,a poor flow of information and bad policymaking.l
These are grave impediments for any democratic system,and they partly explain why Turkey has tended to<fly blind>on certain important issues in recent years.Economic policy was,ironically,one of the few intellectually elegant exceptions,but it has been overwhelmed by the politics of personalities.
Let us not forget that Turkey is a rapidly growing society.Inevitably institutions cannot always keep pace with the breakneck change we face,and there is a clash of generations and outlooks.Turkish society traditionally respects age and seniority.But today we are a country of young people dependent on business and industry,living in modern cities.Most of the future-oriented people in Turkey believe that we will best overcome the challenges we face through integration into the EU.
Now,for the good of the country at an exceptionally grave time,the nation’s leaders must pool their energies and talents and work together.Turkey is a strong,energetic and resilient country,full of talented people.I am confident that recovery will come speedily.But perhaps we need to understand that economic reforms will not work effectively unless we reform our political life as well.We couldn’t start by giving power to politicians and not their parties.