ECONOMY

Turkey to get down to pension reform

ANKARA (Reuters) – Turkey will implement a long-delayed social security reform in June next year, Labor Minister Faruk Celik was quoted as saying by his spokesman yesterday. The reform, which is sought by the International Monetary Fund (IMF) but whose approval and implementation have been delayed several times, is expected to pass through parliament at the end of December, the government has said. Amid resistance from unions and the opposition, then President Ahmet Necdet Sezer vetoed the bill and a parliamentary election this year – in which the pro-business Justice and Development Party (AKP) was re-elected – delayed the reform further. Celik had earlier said the law would be applied in stages, with parts being implemented in March, other parts in May and others in August. The reform, which economists say is crucial for state finances, was originally due to take effect on January 1, 2007. «The social security and general health insurance bill will take effect on June 1, 2008,» Celik’s spokesman quoted him as telling reporters. The IMF, a major creditor of Turkey, has said the bulging social security deficit poses a major risk for state finances. Turkey has a young and growing population but has posted social security deficits near 4 percent of gross national product due to mismanagement and early retirement. The AKP has a majority in parliament. New President Abdullah Gul is a former minister of the reform-minded party and tends to approve AKP legislation.