[Intl-tobacco] More on Turkey; update

[Robert Weissman]

News in English: STATE MINISTER YALOVA: ''RESPONSIBILITY WILL REST WITH THE
PERSON WHO WROTE AND SIGNED THE LETTER OF INTENT ON LEGALIZATION OF TOBACCO
BILL BY END OF MAY''
Source: Anadolu Agency, Thursday, 5/31/01

ANKARA- State Minister Yuksel Yalova for Privatization said on Thursday
that responsibility would rest with the person who had written and signed
the letter of intent on legalization of Tobacco bill by the end of May of
2001.

Yalova visited Association of Turkish Agriculture Chambers (TZOB) Chairman
Faruk Yucel.

Responding to questions of journalists about the Tobacco bill, Yalova
said, ''in our regular talks both with the International Monetary Fund and
World Bank, I clearly stated that the Tobacco bill is not a simple bill so
any fait accompli can't be made regarding this bill and that I won't sign
such a bill and submit it to the Council of Ministers.''

''Nobody should exceed the limits by using the concepts like letter of
intent or military letter or letter of something at the point where the
World Bank and IMF say, 'yes, we actually know your method, and we know
that this is the job you will do'. Such a draft law which concerns almost
600 thousand people can't be prepared so hastily in order to fulfil a
commitment,'' he said.

STATE MINISTER YALOVA SAYS TOBACCO BILL TO BE READY TILL NEXT CABINET
MEETING

ANKARA- State Minister Yuksel Yalova said on Thursday that the differences
of opinions about the Tobacco bill are not that big as they are
exaggerated, adding that a final consensus will be reached with all the
concerned sides as soon as possible.

''The tobacco bill will be ready till next cabinet meeting,'' Yalova told
A.A correspondent.

The tobacco bill will be ready for the IMF meeting that will be held till
the end of June, he said, adding that ''I don't think that there will be a
delay.'' Yalova said that they act meticulously by taking into
consideration the tobacco producers, cigarette distributors and those
working in State monopolies (TEKEL)  to prevent occurance of social
problems.

Noting that they met with World Bank Director Ajay Chhibber and foreign
tobacco producers, Yalova said that agreement was reached with them.

Yalova said that the speech he delivered at the Association of Turkish
Agriculture Chambers (TZOB) should not be misinterpreted, adding that the
claims saying that he is at odds with State Minister Kemal Dervis are not
true.

''The main thing in international relations is element of trust. Turkey
has to abide by the element of trust and also the views of the sides in
such issues which concern millions of Turkish people should be taken into
consideration while preparing a bill. I am one of the ministers who knows
well the sensitivity of the three coalition leaders towards tobacco
producers. It is my main mission to make a regulation which foresees
social results. The main element of our agreemeent with IMF and World Bank
depends on the will of both sides to abide by the economic programme and
with the priviatization decisions.  The tobacco bill has to be adopted
till the end of June,'' he said.

When the reporter reminded Yalova about the statement of Prime Minister
Ecevit who said that the statements of Yalova don't coincide with the
harmony of the government, Yalova said that ''I can't issue statements in
contradiction with the coalition's harmony. Our performance in the last
two years is the clearest evidence of that.''

[17] IMF DELEGATION DUE IN ANKARA ON FRIDAY ANKARA- International Monetary
Fund (IMF) delegation will visit Ankara on Friday within the framework of
sixth review.

The IMF delegation, led by Juha Kahkonen, will evaluate the economic
developments at a meeting in which IMF Ankara representative Odd Per Brekk
will attend.

The IMF delegation will start contacts in Treasury Undersecretariat
starting as of Saturday. Officials of State Planning Institute (DPT),
Finance Ministry, Privatization Administration Chairmanship, Banking
Regulatory and Supervisory Board will attend the meetings which will
continue in Treasury Undersecretariat.

State Minister Kemal Dervis is expected to participate in the works of the
IMF delegation at the weekend.

The IMF delegation is expected to stay in Turkey for nearly 10 days within
the framework of eight review.

The delegation will observe whether or not performance criteria have been
fulfilled, and it will propose IMF Board to approve the 1.5 billion U.S.
dollars of second tranche of loan after June 25 if those criteria have
been fulfilled.

Those are the conditions required to complete the eighth review:

''Lifting of the overnight obligations of banks which were transferred to
the Savings Deposit and Insurance Fund (SDIF) and public banks, repo
stocks of banks transferred to SDIF and public banks with Central Bank
should not be above seven quadrillion lira, closure of Emlak Bankasi and
transfer of its some commitments and assests to Ziraat Bankasi, foundation
of a second transition bank for the four banks which did not receive any
offers at the moment and transfer of those banks, appointment of a
professional executive board and administration for Turk Telekom, passage
of Tobacco Law from the Parliament, adoption of additional budget which is
in line with the program expenditure figures, implementation of the tax
arrangement regarded with spreading of usage of tax identity numbers.

Turkey is obliged to fulfil the above conditions till June 25 to get the
1.5 billion U.S. dollars of second tranche of loan.

Meanwhile, it was reported that officials of the IMF and the World Bank,
in their separate meetings held in Washington D.C., evaluated the recent
developments in Turkish economy.

It was also reported that the IMF officials wanted information from the
economy officials in Ankara regarded with the arrangements included in
Letter of Intent.

It was noted that information has been sent to the IMF officials regarded
with the mass bargainings in public, and results of the purchasing prices
of cereals.

In Ankara visit of the IMF delegation, other arrangements included in the
Letter of Intent, and domestic borrowing policy would mainly be discussed.