WB praises Turkey’s reforms despite delays

ISTANBUL – World Bank President Paul Wolfowitz said yesterday Turkey, the bank’s third-largest borrower, was on track with structural reforms despite some legal delays. The international lender had lent Turkey a total of $18.5 billion (-14.3 billion) by the end of 2006 to help the reform of areas such as public finance management, social security, privatizations and an overhaul of the electricity sector. «Turkey’s economic progress is striking… We can help other countries with the experience of Turkey,» Wolfowitz, in Turkey for an official visit, told a news conference in Istanbul after meeting with Turkish Treasury Minister Ali Babacan. A delay in Turkey’s social security reform, which faced strong opposition from labor unions following a partial cancellation by the country’s top court, has raised speculation that Turkey has begun slackening in its reform drive. «I have been pleased with discussions, both with the minister (Ali Babacan) and prime minister (Recep Tayyip Erdogan) and we have a very solid common understanding of what the Turkish economy needs,» he told a news conference. The reform, sought by the International Monetary Fund, was postponed by six months to July 1 after the constitutional court ruling last December. Reform of Turkey’s unwieldy welfare system, a key sector draining central government funds, is seen as a litmus test of the government’s resolve to push through difficult reforms in an election year. Wolfowitz said it was up to the government to decide on the new calendar for the implementation of the reform law. «Short-term difficulties, even pain, will give you a much stronger country and will give you long-term gain… The leaders are the ones to decide on the political calendar,» he said. Babacan said the government was committed to passing the law and said: «Although the court decision has altered our calendar, we have to respect its ruling. In the long term this will be to our benefit. Delays in the social security reform and in electricity privatizations do not mean the government has abandoned or slackened off in such work.» The government decided earlier this month to postpone the privatization of three electricity grids under a World Bank-sponsored plan until after parliamentary elections in November. The bids were due on January 19 in the sell-off tender.

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