BY SEAN HEALY
Thousands of Turkish workers filled the streets of the country's major cities on March 31 to protest against the terms of a "bailout" package agreed between the country's government and the International Monetary Fund.
Demonstrators yelled "IMF go home" as they marched through downtown Ankara and Istanbul, defying a heavy police and military presence.
The package, a renegotiation of a US$11 billion deal signed in December, is supposedly aimed at rescuing the Turkish economy after the disastrous 33% devaluation of its currency, the lira, in February.
But organisers of the wave of demonstrations say that the conditions in the package — including privatisation of the national telecommunications carrier, cuts to government spending and possible closure of several state banks — will only hurt working people.
"The policies of the IMF and the World Bank do not aim to help Turkey but to assure that Turkey can pay its debts on time and in full", said Bayram Meral, president of Turkey's largest union confederation Turk-Is. The unions are due to hold meetings with government ministers, as Prime Minister Bulent Ecevit seeks public support for his economic package.
The IMF signed an interim deal with the new economy minister Kemal Dervis in early March and the final agreement is expected within weeks. Until he took up the post immediately after the crisis broke, Dervis was a vice-president of the World Bank.
The Turkish crisis struck on February 22 but had been building for several months. Western investors, unhappy at the government's progress in implementing an anti-inflation strategy signed in 1999 with the IMF, had been threatening to pull their money out of the country's stock exchanges and currency since December.
The US$11 billion IMF package signed in December was explicitly designed to placate traders and investors but could only stave off the crisis for two months. In early February, they started selling shares, causing the country's stock market to plunge 15%, and then the country's currency.
In a desperate attempt to maintain its "crawling peg" exchange rate policy, the Turkish central bank spent US$7.5 billion of its reserves to hold the lira steady but gave up on February 22, letting the lira float free. It promptly declined by 28% against the US dollar in a single day, and has since steadily slipped lower.
The February 22 decision to float the lira was taken under pressure from the IMF, the fund's deputy director, Stanley Fischer, reportedly telling government officials "Either you agree to float the currency or there is nothing to talk about".