- The Washington Times - Friday, April 18, 2003

WASHINGTON, April 18 (UPI) — Turkey will have access to more money from the International Monetary Fund, the financial institution announced Friday.

The IMF said it would extend an additional $701 million to the country that will be available immediately. The institution had made available a total of $18 billion to the Turkish government in February 2002, of which the country had withdrawn about $14 billion already.

There had, however, been considerable speculation that it would be difficult for the country to gain access to more credit in light of the political spat between Turkey and the United States. Ahead of the war against Iraq, the Turkish parliament narrowly voted to keep out U.S. troops from the country, which was a blow for U.S. military operations, given that Turkey shares a border with Iraq.

Turkey's rejection of U.S. troops being based in the country had upset U.S. policy-makers, and lessened the possibility of more financial aid at a time when the Turkish economy was already being hard hit by the war efforts.

Turkey had been struggling with an economic slowdown for the past two years, and had only slowly getting back on track, only to be confronted with a slump in foreign investment as a result of the war against Iraq.

A senior IMF official briefing reporters on condition of anonymity after the board decision said, however, that the United States "strongly endorsed" extending further aid to Turkey, and added that the vote to provide more funding was a unanimous decision.

The IMF's First Deputy Managing Director Anne Krueger also echoed that view in a statement.

"The need for unwavering policy implementation is reinforced by major uncertainties regarding the impact of the war in Iraq," she said.

"Although significant risks remain, implementation of strong policies and a more benign external environment provide the basis for market credibility to be regained, which will allow Turkey to achieve its macroeconomic targets and maintain a viable debt position over the medium term. While a consistent record of program implementation has yet to be established, the government's recent focus on its underlying economic objectives has prompted renewed commitment to strong policies of stabilization and reform. On this basis, Turkey's adjustment and reform efforts deserve continued support," Krueger added.


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