[Intl-tobacco] Turkey succumbs to IMF demands, will privatize tobacco co.

[Robert Weissman]

Turkey passes tobacco law  as part of IMF program
Source: Kathimerini, Saturday, 6/23/01

Turkey's Parliament late on Wednesday passed tobacco sector reform
legislation essential to payment of the next tranche of a billion-dollar
IMF crisis lending pact toward the end of June.

State-run Anatolia news agency said the law, stressed as crucial by IMF
inspector Juha Kahkonen during a visit in early June, was passed in a
late-night session of Parliament.

Turkey promised the International Monetary Fund it would pass the tobacco
law by the end of May but it ran up against opposition from Prime Minister
Bulent Ecevit's three-party coalition government. Privatization Minister
Yuksel Yalova spoke of delays to the passing of the law and was swiftly
pushed to resign.

Turkey's National Assembly has been working regularly late into the night
recently, passing reams of economic reform laws drawn up by Economy
Minister Kemal Dervis in order to convince the IMF and World Bank to back
a $15.7 billion rescue package.

The IMF board is expected to meet in late June to approve a $1.56 billion
payment from the loan.

The tobacco law aims to reform the sector in Turkey by scrapping from the
2002 budget state-subsidized purchases of goods from farmers and by
setting the stage for the privatization of Turkey's spirits and tobacco
monopoly Tekel.

It aims to rationalize tobacco farming and remove tobacco plants from
regions not expressly earmarked for the crop. It also establishes a
seven-person regulatory board to regulate tobacco and alcohol production.

The law additionally allows companies which produce more than 2 billion
cigarettes annually in Turkey to import, price and sell more of a similar
range of products.

Turkey has promised the IMF that it will sell Tekel by the end of 2002.

It has gradually been phasing out Tekel's range of monopolies, most
recently ending its sole production of raki, the aniseed-based spirit that
many Turks drink.

 Tekel had sales in year 2000 of around 2,200 trillion lira ($3.5 billion
at the time) of which 400 trillion came from alcohol.