Turkey announced on Friday, November 18 a series of measures to cut public sector costs and the burden on next year's budget in the wake of an IMF announcement on possible new loans in return for tighter financial policies.
The measures, listed in a government statement, are intended mainly to reduce the number of public sector workers, limit wage increases, introduce new tax adjustments, end non-profit pricing in state enterprises and crack down on widespread clandestine electricity use.
Under the measures, yet to be finalized before coming into force next year, some state enterprises will not take on new staff and others will be able to take only a limited number of new workers while workers eligible for retirement will be asked to leave.
The statement did not say how many people would be made redundant. The measures tightly limit agricultural subsidies to certain products and align them to international market prices and inflation targets. The plan also foresees wage increases in the public sector of only 10 percent in the first half of next year and five percent for the second half. Chronic inflation, which stood at 66.5 percent in October, is expected to soar even further by the end of the year.
In 2002 public sector employees will have to pay higher rents -- in line with free market prices -- for public housing and state support for health services will be put under tighter discipline. The measures also aim at tackling unregistered employment, thus increasing revenues from the social security system.
The savings plan came in the wake of an announcement by IMF Director Horst Koehler in Washington that he would ask the Fund to extend $10 billion (11.36 billion euros) in loans to Turkey under a new stand-by deal to tackle the impact of the September 11 attacks on the troubled Turkish economy.
Turkey said earlier on Friday that in return it had agreed to implement strong structural and financial measures to strengthen an IMF-backed economic program in force since May to battle a severe financial crisis in February which sent the economy into the worst recession for decades. — (AFP, Ankara)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
