No time for swaggering in front of the IMF
Güncelleme Tarihi:
Oluşturulma Tarihi: Mart 10, 2009 00:00
There was a time just a few years ago, when more than 50 percent of all the International Monetary Fund, or IMF, credits outstanding worldwide were held by Turkey. Some wags even joked that the IMF would have to change its name to the "Turkey-Africa Monetary Fund" in light of its fast-disappearing customer base.
Understandably, Turkey got quite used to playing hardball with the IMF. This was at a time when the IMF was also sending pink slips around to many of its economists, analysts and others saving the world with tax-free, six-digit salaries, five weeks of annual holiday, college tuition for the kids wherever they attend university and lots of other bennies. Lose Turkey, lose your whole reason for existence, the never-spoken-but-understood-by-all argument went.
Turkey’s financial leadership gets no complaint from us on this strategy. We are all for the country getting the best deal it can out of the Bretton Woods Country Club set (they really do have such a club in the Washington suburbs).
But times have changed. The IMF is back in business. And just about everybody wants to be the institution’s new best friend. Japan, if you can imagine, is just among the latest to show up before masters of the IMF universe, tin cup in hand. One recent estimate held that the lending capacity of the IMF is due to run out in September if not before. So, we have to ask again, as we have asked before: Why is Turkey behaving as if it is 2005 or 2006, as if Argentina has just closed out its IMF accounts and we are in the driver’s seat in this negotiation? Sorry to bear the bad news, but the IMF is in the driver’s seat and Turkey needs to reach an accommodation.
Are we in love with the IMF and the sovereignty-constraining rules that inevitably will follow? No more than we are with the doctor who abolished acılı Adana köftesi from our diet. But it is time to get real about diagnostics, and the IMF is running the financial clinic.
Just a few days ago, economy czar Mehmet Şimşek told local reporters in a briefing, "I’m not required to give you an assessment of the economy every day." Yesterday, he was reported telling a reporter at the daily Hürriyet, "The IMF has no magic wand."
Of course it has no magic wand. But it does have the ability to stabilize the fast-disintegrating fundamentals in the Turkish economy and signal the world that Turkey is taking the crisis seriously.
As we report today, industrial production fell 21.3 percent in January. The news battered the Turkish Lira, driving the dollar above 1.8 liras for the first time in history. And yet the government continues its swagger. Most economists believe unemployment will skyrocket after local elections.
This is no time for political swaggering. It is time for level-headed, serious and consensus-based crisis management. In short it is time for leadership. At the moment, this seems to be in short supply.
Turkey’s financial leadership gets no complaint from us on this strategy. We are all for the country getting the best deal it can out of the Bretton Woods Country Club set (they really do have such a club in the Washington suburbs).
But times have changed. The IMF is back in business. And just about everybody wants to be the institution’s new best friend. Japan, if you can imagine, is just among the latest to show up before masters of the IMF universe, tin cup in hand. One recent estimate held that the lending capacity of the IMF is due to run out in September if not before. So, we have to ask again, as we have asked before: Why is Turkey behaving as if it is 2005 or 2006, as if Argentina has just closed out its IMF accounts and we are in the driver’s seat in this negotiation? Sorry to bear the bad news, but the IMF is in the driver’s seat and Turkey needs to reach an accommodation.
Are we in love with the IMF and the sovereignty-constraining rules that inevitably will follow? No more than we are with the doctor who abolished acılı Adana köftesi from our diet. But it is time to get real about diagnostics, and the IMF is running the financial clinic.
Just a few days ago, economy czar Mehmet Şimşek told local reporters in a briefing, "I’m not required to give you an assessment of the economy every day." Yesterday, he was reported telling a reporter at the daily Hürriyet, "The IMF has no magic wand."
Of course it has no magic wand. But it does have the ability to stabilize the fast-disintegrating fundamentals in the Turkish economy and signal the world that Turkey is taking the crisis seriously.
As we report today, industrial production fell 21.3 percent in January. The news battered the Turkish Lira, driving the dollar above 1.8 liras for the first time in history. And yet the government continues its swagger. Most economists believe unemployment will skyrocket after local elections.
This is no time for political swaggering. It is time for level-headed, serious and consensus-based crisis management. In short it is time for leadership. At the moment, this seems to be in short supply.