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    Turkish gov't vows package as business world worries

    HotNewsTurkey Staff
    09 Ekim 2008 - 10:48Son Güncelleme : 09 Ekim 2008 - 19:48

    The Turkish government said it is preparing a package to avert the risk that the real sector can face as the leading figures of the Turkish business world raised their concerns over the global economic crisis and urged for measures. (UPDATED)

    "We are working for a solution which will minimize the real sector's risks," Turkey's Industry Minister Zafer Caglayan said on Thursday.

     

    "We should not say that we will not be affected, we, as a government, which can foresee the extent that this crisis could reach in the real sector, know the risks that we are facing."

     

    The leading figures of the Turkish business world raised their concerns over the global economic crisis and warned against the potential impacts of the crunch on the real economy, urging for a renewed IMF deal.

     

    The chairperson of Turkish Business Industrialists’ and Businessmen's Association (TUSIAD), an influential business group, said they are “very worried”. “The economic crisis must be handled seriously," Arzuhan Dogan Yalcindag, said after her meeting with Prime Minister of the Czech Republic Mirek Topolanek in Istanbul on Thursday.   

     

    In separate comments, Mustafa Koc, the chairman of TUSIAD’s High Advisory Council, warned on the potential payment problems that the real sector, which is under a huge loan burden, could face, and urged the government to cut a new deal with the IMF.

     

    “The government should be proactive and cut a new stand-by deal with the IMF, that could bring a psychological relief,” said Koc, who is also the chairman of Turkey’s largest conglomerate Koc Group, adding the situation is different from the 2001 economic crisis and cautiousness is needed.

     

    The expired IMF loan deal was seen as the major anchor of the Turkish economy in its recovery period after the devastating economic crisis in 2001. The deal expired in May and the government is yet to decide on the new form of future relations.

     

    ECONOMIC CRISIS

    Yalcindag said the global turmoil is no longer a financial crunch and turned into an economic crisis, adding it is not possible to say that this crisis would not affect Turkey, an apparent reference to the government officials’ recent statements on the issue.

     

    "At the moment the world is shrinking which would reduce our exports. The domestic demand is already falling. The Turkish private sector has incredible loans, around 140-billion-dollars... All of these mean that the shrinking global economy would have impacts on Turkey as well, and this is really worrying," she added.

     

    TUSIAD has been warning of a potential global credit crisis for the last couple of years and has urged the government to realize its reform agenda. It also has extended criticism on the government over its reluctance to take steps.

     

    "We make our warnings responsibly and with common sense in order to prevent confidence erosion. However today those in the administration should take this (economic crisis) much more seriously," she said.

     

    The private sector started to implement cost cutting measures which could result in an increase in unemployment and a fall in wealth standards eventually, she warned.

     

     

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