Diversification reduces financial risks to Turkey- Dervis

The global financial crisis would have effects on the real sector of all countries including Turkey, however Turkey had mitigated risks by the help of market diversification, Dervis, a former Turkish economy minister, said Friday in an interview with A.A.

"Turkey did well by entering the Chinese market. Because Turkey minimized risks by diversifying foreign trade markets and would be less affected by depression in Europe," he added.

Dervis also said that Turkey's banking industry had no risky or toxic instruments like those in European or U.S. banks that had been affected negatively by the global financial crisis.

He said Turkey had made significant structural reforms after the economic crisis in 2001 and now it enjoyed those reforms, especially in the financial sector.

"Turkey is now reaping the fruits of structural reforms made and measures taken in the financial sector after the crisis in 2001," he said.

CRISIS TO LAST 18 MONTHS

Dervis also said the economic recession in rich countries triggered by the global financial turmoil is likely to last at least 18 months, in an interview with Turkey’s NTV television.

"It will definitely last more than a year -- between a year and 18 months," Dervis said adding how long it would eventually last would depend on the measures to be implemented.

RICH COUNTRIES NEED MONITORING

He also urged reforms to restructure the International Monetary Fund (IMF) to allow it to monitor the economies of rich countries, not only the developing world.

"The IMF should be a genuine international institution which ensures economic coordination and healthy policies across the world rather than acting only as the police of developing countries," Dervis said.

"It is absolutely necessary for the IMF... to have a say in American monetary policies, American financial control policies or European and Japanese control policies, or at least to disclose what it sees and to draw attention to the problems it sees," he said.

"It is not currently in such a position because the rich countries do not give it a mission on this issue," he added