Turkey seeks loan, pledges more reform

ISTANBUL (AP) – After months of delay, Turkey has sent a letter to the International Monetary Fund vowing stringent economic reforms until the end of 2004 in exchange for loans, Economy Minister Ali Babacan said yesterday. The letter of intent is needed for the IMF to release a $1.6 billion tranche of aid, part of a $16 billion agreement signed with the IMF after a financial crisis in 2001. Those funds had originally been scheduled for release in October. The IMF board is expected to review the letter on April 18. Babacan said the letter was delayed due to negotiations with the IMF over the government’s insistence on applying its electoral program, which vowed to pay more attention to the difficulties of average Turks while continuing belt-tightening reforms. The IMF chief Horst Koehler welcomed the letter, saying it «assured long-term performance and growth,» the Anatolia news agency reported. In the letter, the government vowed to cut inflation, reduce public sector debt and ensure long-term growth, the minister said, adding that Turkey would pursue a privatization program and fight corruption. But Babacan acknowledged that many of the government’s economic aims depended on how soon the war in neighboring Iraq ends. The minister said the government still hoped to see the Turkish economy grow 5 percent if the war does not last too long.