How Bailing Out Turkey Failed
April 2, 2003
International economic specialists say the long line of International Monetary Fund bailout failures has now reached Turkey -- America's best friend in the Muslim world.
Critics say that thanks to the IMF, Turkey is now drowning and U.S. relations with that country have suffered.
- Since 1999, at the behest of the United States, Turkey has received more cheap loans than any other country on the planet -- some $30 billion from the IMF and $7 billion from the World Bank.
- But thanks to the IMF's stress on high-tax fiscal "discipline" above economic growth and political realities, millions of Turks are out of work, with unemployment topping 11 percent.
- In 2001, the Turkish economy shrank 9.4 percent.
- This followed on a decision to float the Turkish lira, which led straight to its crash -- halving its value against the dollar and devastating the savings of the country's poor and middle class.
Experts deplore the decision to advance the subsidies, saying Turkey's politicians should have been left alone to sort out their own financial mess and that throwing money at the country only made things worse.
As of now, Turkey has exceeded its normal IMF lending quota by more than 1,600 percent.
Source: Claudia Rosset (OpinionJournal.com), "How the IMF Lost Turkey," April 2, 2003, Wall Street Journal.
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