By Leyla Boulton
Short energetic and to the point, Kemal Unakitan, Turkey’s finance minister, reminds some businessmen who meet him of Turgut Ozal, the country’s late reformist leader.
His vivid speech and pragmatism also help to explain why this long-standing friend of Recep Tayip Erdogan, prime minister, has emerged as the leading economic figure in the country’s six-month-old government.
“Speaking well is not enough. The point is we are beginning to do some good work and the economy is picking up,” Mr Unakitan said in an interview as the International Monetary Fund last night began its latest inspection of reforms under a $16bn (€13.6 bn, 9.7bn) rescure pact for the debt-ridden economy.
Mr Unakitan predicted that real interest rates –still high at 20 per cent- would fall significantly once Turkey successfully completed its IMF review next month.
At his previous appointment he has just promised the Foreign Investors Association (Yased) that he would ensure the government adopted all necessary measures to raise Turkey’s dismally low level of foreign direct investment.
“The point is we need money,” he said, expressing a longer-term ambition of transforming Istanbul into an international financial centre.
‘My impression is that he is a man of action… and his track record also suggests that he keeps his promises,” said Abdurrahman Ariman, Yased’s secretary-general.
The comparison with Ozal is particularly apt for a member of the ruling Justice and Development party (AKP). The AKP, led by former Islamists who say they are now conservative democrats, also includes several defectors from Ozal’s Motherland party.
After a decade of ineffectual coalitions, the AKP has a rate opportunity to complete the unfinished economic liberalisation launched by Ozal in the 1980s before he died and his party became mired in corruption allegations.
The minister’s ascent first became apparent when Mr Erdogan in April handed him responsibility for a $4bn privatisation programme.
“We don’t want any headaches from customers to whom we sell companies,” said the 57-year-old former company manager, asked whether Ankara would simply pick the highest bidder or exclude buyers with a poor record of corporate governance. “We can tell who is who by meeting the customers. We were not born yesterday.”
He faces a first test on this front in early June when Turkey is due to finalise the sale of 51 per cent of Petkim, a state-owned petrochemicals company.
Next on the block will be Tupras, a quasi-monopolistic oil refiner. He dismissed possible “strategic” objections to Russian oil companies acquiring Tupras.
“We want the Russians to come to Turkey. They have good money.”
All privatisation proceeds would go towards reducing the $100bn domestic debt: ‘We support privatisation not because the IMF wants us to or because we need to pay our debts but because it is essential for the future of Turkey.”
As he overhauls tax collection, he also expects a “tax peace” allowing tax debtors to reschedule tax arrears to bring in a windfall gain of “much more than” $1.6bn this year.
Anything over $1.6bn will serve to retire domestic debt and not to finance new spending. But he points to the $750m netted in the first quarter by the scheme to disagree with the IMF, which initially forecast $500m for the whole year, that the scheme would not reap more than $1bn this year.
‘They have valuable experts… but our experts know the realities of Turkey better than they do”, he said. Yet he also reiterated support for the IMF mandated budgetary target of a 6.5 percent primary surplus, needed to reassure lenders that Turkey can avoid a devastating debt default. If for some reason the target were to look difficult to achieve, “we would adopt fresh revenue-generating measures and spending cuts”.
Undermined at the beginning of his term by sleaze allegations, Mr Unakitan maintained that earlier court cases against himself and Mr Erdogan for graft were politically motivated.
It is for this reason too, he suggested that the AKP would not immediately bow to the demands of the People’s Republican party opposition for a lifting of deputies’ immunity from prosecution for corruption.
There may be some truth in what he says given some arch-secularist public prosecutors’ open hostility to the AKP. Mr Unakitan gained his seat in parliament after running in Mr Erdogan’s place when judges decided he could not run in the November election for reciting a poem comparing minarets to bayonets.
“Our voters entrusted us with a mission to end (corruption) and we will. But we will lift the immunity when we and the voters feel the time is right,” he said.
(From Financial Times 23/05/03)