NEWS

Turkish anti-graft drive falters

In Turkey a man might have to spend two years in prison if he promised marriage to a woman, who is, say, 42 years old, slept with her but then changed his mind. He would not be prosecuted, however, if he were a politician and promised millions of voters something far rosier than a marriage, but failed to keep his promise. It has not been an impressive first two months in office for a party that swept to power on promises that it would clean up the country’s corrupt political system. The party that, oddly enough, won 35 percent of the vote in November elections and 65 percent of seats in Parliament could have passed any legislation to fight corruption if it wanted to. Instead, Turkey’s new rulers are doing their best to surpass the bad reputation of their predecessors. Shortly after taking office, the new Turkish government indefinitely postponed (or rather scrapped, to be realistic) its plans to remove the parliamentary immunities that would have paved the way for prosecution against corrupt politicians. The retreat from one of its strongest pre-election pledges did not look pretty, nor was it ethical; but it was surely understandable for a party whose leader, along with some 20 senior members, is being prosecuted on a dozen different corruption charges. With the parliamentary shield against prosecution in place, the government is now planning to radically narrow the scope of a public procurement law seen by many, including Turkey’s largest international donors, the International Monetary Fund (IMF) and the World Bank, as a move to reduce corruption and increase efficiency. The legislative work for the modifications is spearheaded by Housing Minister Zeki Ergezen, who happens to have a colorful past record of radical Islamist speech (once he said Islam and secularism could not cohabit, and therefore the latter must be kicked out of the country). The shrewd Mr Ergezen is also arranging billions of dollars’ worth of highway contracts so as to be excluded from the state tender law. The contracts will be awarded in slices of 749 billion liras (approximately $450,000) because the law covers contracts worth 750 billion liras and more. But Mr Ergezen has one minor problem. The IMF may consider any amendment of the law as a breach of the $16 billion standby accord with Turkey. Hence the suspension of progress for the proposed amendments in Parliament. Does a government that wholeheartedly wants to fight corruption start its term in office by appointing as finance minister someone who is being prosecuted for tax evasion by producing fake invoices? This is exactly what Turkey’s new government did. And there is more black humor. It drew smiles in Ankara when Finance Minister Kemal Unakitan, with the full backing of his government, passed a tax amnesty that also suspended his own prosecution. The government claims it devised the plan to draw in a dubious $1.5 billion from settlement of outstanding tax disputes under a legislation which it bizarrely calls «tax peace.» The tax peace law, by rare coincidence, also protects the finance minister from prosecution for tax evasion. It’s hardly an everyday occurence that a finance minister being prosecuted for tax evasion passes a law that pardons those who are prosecuted for tax evasion. Turkey is a colorful country. The Turkish Parliament, too, is full of black humor these days. Take this example: During a parliamentary debate last week on Turkey’s ratification of an international convention on corruption, the government proposed an amendment to the effect that «lawmakers and businessmen must be kept exempt from the scope of the penal code on corruption.» It sounds like a joke, but it is true. The government had to withdraw its proposal only after newspapers reported the incident. Amid such black humor and the government’s grotesque efforts to «fight corruption,» Anne Krueger, the IMF’s first deputy managing director, arrived in Ankara. Following Ms Krueger’s meetings with Turkey’s chief economy officials, the IMF urged the Turkish government «to lay out clear plans on how it will meet the targets of the $16 billion loan deal» that demands a tight budget and painful banking reform. Ms Krueger’s visit was a prelude to further – and probably problematic – talks between Turkey and the IMF. Since last November, the IMF has not released a $1.6 billion loan tranche which Turkey badly needs. The release of the loan will be discussed «once the AK government (has) set out its plans more clearly.» From a technical point of view, Turkey’s next round of talks with the IMF will be quite difficult due to a fiscal shortfall and the slow progress of reforms. From a political viewpoint, however, the Turkish government may face a team of unusually tolerant IMF officials by the time of their next arrival if, coincidentally, it has shaken hands with the IMF’s biggest shareholder, the US government, for support – limited or otherwise – against Iraq.