Articles in the big-business media report that working people, whose standard of living has already been in a downward spiral, lost one-third of their buying power last week, as the Turkish currency, the lira, plunged 36 percent against the dollar after the government allowed it to float on the world market.

"Turkey's leaders, struggling to gain control of a financial crisis that threatens the economic and political stability of one of the most important U.S. allies in the Middle East," announced the move after "the stock market plunged 18 percent, its worst single-day loss ever, and interest rates on overnight bank loans zoomed to annualized levels of 7,500 percent," the Washington Post reported.

Turkey, a country of 65 million people and a member of NATO, is strategically located, bordering the Balkans, Russia, Iraq, Syria, and Iran. Washington also relies on Turkey's airbases to patrol the "no-fly" zones in Iraq and for other military operations in the region.

The crisis began February 19 after a stormy meeting of Turkey's National Security Council, a powerful unelected body made up of top civilian and military leaders. At the opening of the meeting, President Ahmet Necdet Sezer accused Prime Minister Bulent Ecevit of blocking his investigation of corruption that has left the banking system in a shambles. The president, brandishing a book containing the country's constitution, tossed it in the direction of the prime minister, charging Ecevit with "humiliating me in the eyes of the public." When Ecevit left the room he told the press that the government faced "a serious crisis."

Investigation of the banks, a number of which are in government receivership and suspected of widespread corruption, is part of a three-year anti-inflation loan package signed by Turkey last year to guarantee a new infusion of $8 billion by the IMF. The imperialist financial institution, which is dominated by Washington, also mandated the country to keep its currency tied to a "crawling peg" against the dollar to curb inflation.

The IMF had to step in again with a $7.5 billion line of credit after a market meltdown in November, when a run on the banks saw investors withdraw $6.2 billion from the country. In exchange for the IMF intervention, the Turkish government pledged to privatize 33.5 percent of Turk Telekom, the telecommunications giant valued at $10 billion, and to sell off a 51 percent stake in Turkish Airlines, the national carrier worth around $1 billion. Parliament was also committed to pass a law selling off the electricity sector to private capitalists early in 2001.

The growing economic crisis was met by a December 1 general strike, in which thousands of workers marched in Ankara, the capital, against unemployment, low wages, and cuts in social benefits. Public employees participated in the march, even though they are banned from striking. With workers' incomes ravaged by inflation, the protests condemned as inadequate a wage increase of 10 percent promised public employees by the government. The strikers also opposed the austerity measures laid down by the IMF in exchange for the "rescue" loan packages.  
 
'Strict adherence required'
Within minutes of Ecevit's February 19 announcement of the government crisis, a new financial meltdown was under way, with wealthy investors concerned about the ability of the government to press forward its austerity program. Markets were hit with a selloff of the lira and of stocks on the Istanbul exchange. Overnight, some $10 billion was withdrawn from the country.

Before devaluing the lira, the government spent one-sixth of its foreign reserves trying to defend the currency. Ecevit consulted IMF deputy director Stanley Fisher, Washington's man in the imperialist financial institution, about what to do. Fisher, according to the Financial Times, told the Turkish prime minister, "Either you agree to float the currency or there is nothing to talk about," adding that it was out of the question to give Turkey more IMF loans.

Just two weeks earlier the Wall Street Journal ran an article entitled, "Turkey's Inflation Plan Wins IMF Praise." Reporter Hugh Pope wrote that the IMF's year-old "anti-inflation program" "is one of the IMF's two biggest, along with that in Argentina, and is central to the IMF's efforts to show that its belt-tightening recipes for economic stability work in major developing countries."

Michael Deppler, director of the IMF's European region, said, "Policy implementation has been most encouraging. This is our conviction. The [Turkish] authorities have lived up to the letter...of what had been agreed." Asked how serious the IMF was about Turkey following its prescriptions, Deppler, speaking for the masters of finance capital on Wall Street and in other imperialist centers, said, "Strict adherence was required."

A number of big-business newspapers have reported on the impact of this ongoing crisis on working people and small shopkeepers. Official unemployment stands at 14 percent and inflation at 34 percent. In the past year, "nearly 14,000 family-run shops, small grocers and other small establishments have closed across the country," the Washington Post reported February 24. "As recently as last year it was virtually impossible for a new shopkeeper to find space" in Istanbul's famous Grand Bazaar, some renting for $72,000 a year, the paper reported. "Today, at least 100 storefronts are vacant, and some rents have plunged to as low as $500 a month--with no takers."

"The situation is terrible," said Zeki Cide, whose family has run a shop of hand-painted ceramics for 120 years in the bazaar. "You become poorer and poorer after every crisis," said Ergun Duran, 54, who runs a small Istanbul newsstand, after learning about the latest economic crisis. "But at some point, you cannot be poorer than you already are--you are on the bottom. This is how most of the people are living now. You work and work for 20 or 30 years, you still can't make ends meet, you still wear the same clothes every year."

Ali Riza Kilic, 43, a small grocer, has been battling to keep his store by taking a second job. He said that 70 percent of his customers buy on credit as they run out of cash. "Five years ago I lived a luxurious life.... Now I can't even take my wife out for a cup of tea; we can't do anything extra," he said.  
 
Seeking EU membership
To try to boost its fortunes, the capitalist class in Turkey has also been seeking the country's entry into the European Union, a proposal that has been resisted by central EU powers. One demand of the European Union is for Turkey to assert control of the civilian government over the powerful military. "In its present military-civilian configuration, Turkey would not be acceptable to the EU," a senior EU diplomat told the New York Times. "The Turks have to find a way to get the pashas [military leaders] out of politics," he added. The IMF is also pushing for a similar change.

EU officials have also stipulated a host of other measures Turkey must comply with to qualify for membership. One top Turkish diplomat is preparing a 900-page outline for the government on steps needed for admission to the European Union.

After the most recent military coup in 1980, the third in four decades, the military-backed government drafted a new constitution for Turkey in 1982, giving the generals broad discretion to intervene in government affairs, including the power to force top officials out of power. They have used this authority to fire public employees suspected of being sympathetic to the growing Islamic movement in the country, and to restrict free speech.

The military, which has the largest number of troops under arms of any NATO country, receives an annual defense budget of about $9 billion, 3.5 percent of the country's gross domestic product, and four times the amount allotted for education. Around $10 billion is budgeted this year for the purchase of new weaponry. The military owns a bank and a supermarket chain, and holds financial interests in a number of commercial enterprises, including the Oyak-Renault automobile factory.

The military has waged a brutal war against the Kurdish people and has played a key role in suppressing their aspirations for national rights. Recently, the mayors of the southeastern cities of Diyarbakir, Siirt, and Bingol were arrested for belonging to the pro-Kurdish People's Democracy Party. They were released after a week in prison. The party won 35 mayoral seats in elections held last year.

The European Union's demands are meeting resistance by some ruling layers in Turkey. Defense Minister Sabahattin Cakmakoglu said in an interview with the New York Times that the "conflicts in the region and relations in the Balkans, Caucasus, and Middle East require us to maintain a strong armed forces and deterrence capability." The instability of the civilian regime and the restiveness of working people across the country provide other reasons why the imperialists and Turkish capitalist class need a strong military in the country.  
 
 
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