Dervis looking for energy deals
Turkish Economy Minister Kemal Dervis has undertaken a gigantic task: putting right an economy which last year contracted 9.4 percent, while suffering from 70 percent inflation. A former aide to current Prime Minister Bulent Ecevit in the 1970s, he was brought back from his position as one of World Bank’s vice presidents to help Turkey overcome its worst recession ever. Dervis visited Greece for the first time in his new capacity on Sunday, to attend the Black Sea Trade and Development Bank’s Black Sea business day. He also held talks with Development Minister Akis Tsochadzopoulos and Macedonia and Thrace Minister Giorgos Paschalidis on bilateral economic relations. Just before leaving for Turkey yesterday, Dervis spoke to Kathimerini English Edition about the challenges he faces, Greek-Turkish economic relations and Turkey’s aspirations to become a European Union member. This was your first visit to Greece. Are you satisfied with the results? I am very happy about the visit, because I realized firsthand that there is much potential in the realm of bilateral economic relations. That was evident in the meetings with the minister of development and the (Macedonia-Thrace) minister, but also at (yesterday’s) breakfast with business leaders. But, as you know, my visit here was not just about Greek-Turkish economic relations. The Black Sea Trade and Development Bank (BSTDB) is playing a very constructive role in the area, thanks to the competence of its staff. Its role is not easy, given the situation in the area. The decision to set it up (in 1998) was a good and timely one. Which areas did you focus on during your discussions with Greek officials? We discussed mostly energy, transport and construction. With the development minister we also discussed the new European energy framework, with its increased emphasis on cross-border electricity grid connections. Turkey is a large consumer and importer of energy, and, naturally, the subject was an important one in our agenda. We also reaffirmed our commitment (reached during Minister Akis Tsochadzopoulos’s visit to Turkey last month) to building the gas pipeline to Komotini that will bring Iranian gas to Greece and beyond. We are very interested in becoming a transit center for oil and gas pipelines to Europe. Concerning the Iran gas pipeline, we have heard American officials oppose bringing Iranian gas to Western markets. What is your reaction to this view? I think that the Iran gas pipeline is a very long-term project. In the short term, there may be some political constraints, but I hope that these political difficulties will be overcome eventually. After all, we need several energy alternatives, as far as sources, locations and pipeline destinations are concerned. What is your view of the Burgas-Alexandroupolis pipeline? Do you accept the argument that it will be useful for Turkey as well, because it will reduce tanker traffic through the Bosporus Straits, or do you view it as competition for your own planned routes? Burgas-Alexandroupolis is a very useful project and makes a lot of economic sense. And, precisely because it will help to reduce traffic through the Bosporus, it will also be beneficial to the environment. How about the Baku-Ceyhan pipeline? Have you secured financial backing? When will it be completed? The financial package concerning Baku-Ceyhan is almost complete. We have also considered alternative financing schemes. As to when it is going to finish, I do not want to say at this moment. Turning to the Turkish economy, you have had a very difficult year, with a shrinking economy and skyrocketing inflation. You have stated that tackling inflation is your top priority. On the other hand, we have seen both imports and industrial production plummeting during the first two months of the year. Is there a danger that demand may become so weak as to prevent positive economic growth? Demand is a worry to us. I would like to point out, however, that we had a big holiday in February, plus intense cold. This means that the figures have a strong seasonal component. Preliminary figures for March are quite good, and I hope this is a sign that better times are ahead. Starting in April, we should experience positive growth. The recent drop in interest rates has also given us a boost and has helped our recent Treasury bond issues, for which Aydin Karaoz is responsible. (Aydin Karaoz, a long-time civil servant who has risen to deputy undersecretary of the treasury, was one of the officials accompanying Dervis on his trip.) Some in Turkey have called you a miracle worker, but you have also faced criticism, including from within government circles, about the reforms you want to introduce. On April 2, one of your collaborators, Vural Akisik, resigned as head of a board managing two ailing state banks (Ziraat and Halk Bank) after Prime Minister Bulent Ecevit himself declared that such boards were becoming too autonomous; at the same time, you had a run-in with MPs wanting to pass a law compromising the autonomy of those bodies. Do you have the feeling you are being kept on too tight a leash? In a democracy, no one is given «carte blanche» to proceed as he pleases. But let me tell you this: public opinion, including most of the press and opinion makers, has been quite supportive of reforms. As for Parliament, it has passed 21 reform-related laws in record time, which is a remarkable achievement. As a former World Bank official, you are aware of criticism that global bodies such as your former employers, and especially the International Monetary Fund (IMF), only make matters worse by intervening and imposing their recipes on struggling economies. How do you reply to these criticisms? The IMF comes into the picture when things have become really bad and surgery is needed. Nobody is delighted at the prospect of surgery. However, any IMF-driven economic recovery program must be designed as a national program, in close consultation with the government of the country concerned. Uniform blueprints have their weaknesses. In our case, nothing we did was imposed from outside; we did nothing we did not want to. We have established with the IMF a relationship of mutual trust and confidence. It is true that the IMF officials sometimes insist on solutions that may not work; but, overall, it is responsive to a government’s input. Turkey has become the IMF’s biggest debtor. Do you envisage getting yet another loan sometime in the near future? IMF money is being provided in tranches. So, we will continue to be financed from them through 2004. Beyond that, Turkey should be able to refinance its debt, once the situation is normalized, mostly through our bond issues. How do you see your relationship with the EU developing? You are a can didate country, but have not yet begun negotiations. Where do you want to move next? We are quite determined to move ahead, toward membership. Our industrial indicators are better than those of some of the countries actually negotiating their membership. We want to begin negotiations for membership as soon as possible. The EU, however, has imposed certain political conditions on your membership, including improvement of the human rights situation and a stop to the army’s meddling in political matters. Are you prepared to adapt to European demands, or, as Prime Minister Ecevit has said, is it Europeans who must adapt to you? I try to keep my comments to economic matters. I must say, however, that we feel sometimes that Europeans apply double standards in the fight against terrorism. Why does Europe refuse to label certain organizations as terrorist? Recent events have demonstrated the need to fight terrorism on all fronts. No aim justifies pure terror. On the other hand, I do believe that Turkey has to develop further as a democracy; I favor deepening the democratic institutions and opening up society. Concerns have been expressed about the viability of some of Turkey’s economic sectors if it becomes an EU member. But we already are a member of the Common Market, since 1996. Trade has been completely liberalized and adjustment has already taken place. Your first visit in Thessaloniki was to the Turkish Consulate, to visit the birthplace of a person you have been named after, Mustapha Kemal. Do you think his vision of a secular Turkish state is immune to challenges? I very deeply believe that affairs of religion and conscience should not mix with state institutions. The deepest reforms Ataturk left us as a legacy concerned the separation of religion and state and the great majority of the Turkish people are attached to this vision. So, we must separate the state from religion but we must let people free to practice their religion, any religion.
