The chairwoman of Turkey's leading business association said there are strong signals that the new deal with the International Monetary Fund (IMF) will be signed after the elections on March 29 and urged the government to take major steps to rein in unemployment.
"We were hopeful on (the prospects of an imminent IMF agreement) but at this point we see that the parliament has taken a recess. It seem like the new deal will be signed after the elections. This is saddening," said Arzuhan Dogan Yalcindag, the chairwoman of Turkish Industrialists' and Businessmen's Association (TUSIAD).
Yalcindag was speaking at a press conference late on Monday in Ankara where a TUSIAD delegation is holding talks with officials as well as party leaders.
"The public debt is expected to be around 50 billion dollars. So it is not only about the private sector's external loans. Therefore the IMF and its financial resources are essential for Turkey. We wish it didn't have to be, but this is the reality," she was quoted as saying by the state-run Anatolian Agency.
Turkey and the IMF suspended face-to-face talks in February citing the "unacceptable demands of the Fund." According to Turkey, the IMF's demands of handing autonomy to the Revenue Administration, pressing taxpayers to declare the source of their income and the canceling of a law fro transferring funds to municipalities, are unacceptable.
"The Turkish economy has been managed by a virtual budget. The parliament approved a growth target of 4 percent in the budget, which is impossible to reach. We are all aware that the growth rate will be something between 0 and -4 percent," she said, adding the country needs to revise its budgetary figures and expectations under the global economic conditions.
The Turkish economy, which increasingly feels the impact of the global financial crisis, recorded only 0.5 percent growth in the third quarter of 2008, the lowest since Turkey emerged from a financial crisis in 2001. The growth rate is expected to be flat in 2008, while an economic contraction is forecast for 2009.
Yalcindag said the government took some measures to tackle the record-high unemployment rate but called for stronger steps. "Unemployment became an issue that could only be tackled with measures that will give impetus to the economy and increase domestic demand as well as production," she added.
Turkey’s jobless rate rose to 12.3 percent in November 2008, its highest level in at least four years. The global economic slowdown is pushing the economy into recession in Turkey, where growth is critical for absorbing the almost 1 million young people who enter the workforce every year.
The TUSIAD delegation met with Devlet Bahceli, the leader of Nationalist Movement Party (MHP) on Monday. Meetings with President Abdullah Gul as well as Deniz Baykal, the leader of the main opposition Republican People's Party (CHP) are scheduled for Tuesday.