Resenting austerity, Turks want no new IMF deal

By Hatice Aydogdu and Selcuk Gokoluk

ANKARA (Reuters) - Consensus is rare in Turkey, but no one seems to like the IMF.

With the country due to end its loan agreement with the International Monetary Fund on Saturday, a view is building that after 19 standby agreements since 1961, it is time Turkey cut the ties and stood on its own economic feet.

"The IMF forced Turkey to sell its profit-making banks. Soon there will be nothing to sell. What will we leave to our children?" said Mustafa Koc, 47, standing in front of dozens of Turkish flags which he sells in Ankara's central Kizilay area.

Students, trade unionists, civil servants and even businessmen are asserting that the fund's programmes have never been a real help, and with inflation in single digits and growth averaging 6.8 percent in the last five years, they say Turkey no longer needs the IMF's rigors and disciplines.

"Turkey must go its separate way with the IMF and must certainly say 'no' to a new IMF deal," Ankara Chamber of Commerce Chairman Sinan Aygun told Reuters.

"Turkey needs to implement a programme which suits its conditions and serves its own interests. There are no countries which became rich implementing the IMF's economic programmes. They are all in poverty."

That view may be inaccurate -- the IMF has lent Turkey far more than its quota and rescued the country from crisis -- but it is growing at a time when the Fund, like some other post-war global institutions, faces broad challenges.

The institution which has handed out billions of dollars to rescue developing nations from economic peril has long grappled with its changing role, as financial crises have declined and fewer countries have turned to it.

New powers including China, India and the Gulf states offer money without belt-tightening "Conditionalities", an alternative to years of austerity. And now Turks feel wealthier, they associate the IMF with problems more readily than solutions.

THE PINCH

Working-class people in Turkey blame the IMF for high unemployment and depressed purchasing power, while businessmen complain about its tight monetary policies that they say led to the lira being overvalued and hurt their competitiveness.

"The IMF has damaged Turkey more than it benefited it in the last two years. Its policies hurt our competitiveness and forced us to pay high interest," said Omer Bolat, a senior member of business forum MUSIAD, which has close links with the government.

Even some who accept the Fund helped Turkey in improving its public finances during a 2001 financial crisis say the government should now stop following prescriptions from the IMF, which has lent Turkey $45.8 billion since 2000. The trade unionists agree.

"The IMF has implemented programmes in several countries and it failed in all of them. Turkey is one of these countries," said Mustafa Kumlu, the head of the country's biggest labor group Turk-Is.

Even Economy Minister Mehmet Simsek said in March Turkey no longer needed IMF borrowing and would opt for either a precautionary standby with access to IMF cash, or a weaker post-programme monitoring deal with no lending facility.