[stop-imf] Turkish Pres Vetoes Tobacco Law, An IMF Program Element (fwd)

[Robert Weissman]

July 6, 2001
Dow Jones Newswires
Turkish Pres Vetoes Tobacco Law, An IMF Program Element

ISTANBUL -- Turkish President Ahmet Necdet Sezer Friday vetoed the law
that liberalizes the tobacco sector.

The veto is yet another blow to Turkey's International Monetary Fund plan,
as the law was a key performance criteria for a set of IMF loans.

The combined $3.3 billion IMF and World Bank loans were blocked early this
week due to Turkey's failure to keep pledges to reform troubled sectors.

Ironically, the tobacco law was in June considered among the commitments
that had been delivered.

Speaking on the veto, Sezer said the law fully liberalizes the market and
that this isn't backed by the constitution. He said the new law doesn't
assure any supplementary income to tobacco producers that would lose
assets as a result of the liberalization. The president warned that this
could lead to social unrest.

"The constitution states that national interests are above everything
else," Sezer said.

Turkey's tobacco market is government-controlled - retail operations are
under a government monopoly, and producers are backed by subsidies.

The tobacco law created a minor crisis back in May, when State Minister
Yuksel Yalova raised objections to the IMF-backed draft and was forced to
resign as markets plunged.

-By Selim Atalay, Dow Jones Newswires; +90212 2313355;
selim.atalay@dowjones.com