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Headline: Uneasy lies the head Source: Euromoney Date: April 2001
Hamid took radical steps, earning a reputation as a reformer. But he stepped on many toes, including, it seems, those of the sultan himself. After three years he was fired and sent as governor to Mecca, the Ottoman equivalent of Siberia. He never got there. When his ship reached the island of Bozcaada, in the north Aegean, he was taken off board, strangled and beheaded. His body was buried on the island. His head was put into a goatskin filled with honey, one of the most antiseptic of nature’s products, and sent to Istanbul for the sultan’s inspection. Things are not done in quite the same way any longer, but, writes Bardakci, “the coincidence is amazing”. Although the Russians are not about to annex a part of Turkey, as they did when Hamid ruled, Turkey’s economic situation is at its direst since World War II. Dervis was a World Bank vice-president and head of the poverty reduction and economic management network when prime minister Bulent Ecevit, an old acquaintance, asked him to drop everything and return home. Dervis’s father was a rich Istanbul businessman who became wealthy through the connections of his German wife. Dervis junior completed his secondary education in France and went on to the London School of Economics. “He was super-brilliant,” recalls a school friend, professor Asaf Savas Akat. “He was first in class every year and graduated with a first-class degree.” Dervis joined the World Bank’s research department in 1977. In January 1996 he became vice-president for the Middle East and north Africa region, with additional responsibility for the rehabilitation of Bosnia. Then in June last year he became head of poverty reduction and economic management. In all, Dervis spent 24 years in Washington, and he married an American. But those who know him well say that he kept his contacts in Turkey alive. There are probably two reasons why he decided to quit the World Bank in favour of the snake pit of Turkish politics. He was strongly encouraged by his colleagues at the Bank and the IMF who are deeply exasperated with Ankara. In fact, according to some reports, it was these institutions that suggested that he could be a good candidate for the economic chair in the cabinet.. His other motive is explained by Cengiz Candar, a Turkish journalist close to him. “Kemal always had an eye on politics in Turkey with a view to grasping an opportunity,” says Candar. “The politicians in Ankara, who are completely out of touch with the world, gave him one.” Having plunged Turkey into two sharp crises and a recession, the political establishment is in disgrace. Turkey has been governed by the same people and their political clones since 1960 when Ecevit and Suleyman Demirel – who quit reluctantly last year after a record eight terms as prime minister and president – first arose. Now the prestige of political leaders and the legislature has eroded. Devaluation has unleashed a huge wave of unemployment for which the government is being blamed. Recent polls show that no party commands enough votes for the minimum 10% required to gain seats in the legislature. Into this bleak scene Dervis exploded like a star. A Strateji-Mori survey published in daily newspaper Hurriyet shows that he commands a 63% approval rating, which is three times more than the next most popular political leader. Half of the people polled by Strateji-Mori said they supported Dervis’s economic programme although it had not yet been announced. Perhaps more important, for the first time in a decade the number of optimists exceeded pessimists. More than 62% expected the economic situation to be better in 12 months’ time. Perhaps Candar was not exaggerating so much when he wrote: “In the eyes of 65 million Turks, Kemal Dervis is a messiah.” Dervis himself has been measured in his statements and careful not to hold out false hopes. He has been cautious to avoid giving the impression that he covets political power and has projected the image of a hard-working technocrat. The lights of his office at the Turkish treasury – where he became the first minister to queue up and eat with the staff – have been blazing well beyond midnight. To make his point he scheduled his first meeting with financial bureaucrats at 6.30 in the morning, not an hour well known for civil service toil. “My biggest problem is time,” he told Hurriyet editor Ertugrul Ozkok, who ran into him at the Hilton Hotel breakfast room recently and asked how he was getting along. “If I could extend my days by 24 hours I would have no problem.” It remains to be seen whether Ecevit has indeed found the ideal man. Certainly Dervis has something that the government seems to have squandered completely: credibility. “They could not have found a better man than Kemal,” says Akat. “He knows the theory of economics and the practice of it. He knows Turkey and how the world works. He personally knows the people that Turkey needs to talk to and shares the same vocabulary with them. They worked together to help out countries which are in a similar situation as Turkey. Last but not least: he is tough.” In order to succeed Dervis needs unstinting political support from the three coalition partners, and from the west he needs money – lots of money. According to Goldman Sachs’s estimate, Turkey is facing a financing need of $40 billion to meet redemptions falling due and to service the securities it needs to inject into the ailing banking system. The banking system hole alone needs $35 billion to fill it. This money may not be forthcoming from the international financial community. The bank’s analysts are also pessimistic on the political front. They refer to the government’s past record of not doing things on time and point to evidence that Dervis does not enjoy the full support of all coalition partners. Devlet Bahceli, leader of the nationalist MHP, has already shown his teeth. Dervis must remember that “he is not the fourth member of the coalition,” he said. “He is one of our 34 cabinet ministers. It is wrong to portray him as a saviour.”Clearly, Dervis will have to tread carefully if like his ancestor, he is not to step on political toes. The incumbent political leaders are in a quandary. If they block Dervis’s way, the economy will collapse, perhaps sweeping away the political establishment as it did in Indonesia. If they give him leeway and he becomes a success, they will be swept away anyway. There is a growing sense of imminent change. “The forces of globalization may have unleashed deep political transformations in Turkey,” judge analysts at Lehman Brothers. “The numerous corruption probes under way – reminiscent of the ‘clean hands’ campaign in Italy – may result in the transfer of power to a new generation of politicians, better adapted to navigate the complex waters of the global economy.” But it is impossible to predict what will happen. The Turkish economy is unique: while elsewhere long periods of stability are interrupted by crises, Turkey endures long periods of crisis interrupted by stability. And it loves surprise. |
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