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Turkey outlines $2.3bn budget cut
ANKARA, Turkey (Reuters) -- Turkey's government said on Monday it would make additional spending cuts under its draft 2003 budget including 4,000 trillion lira (some $2.3 billion) in extra savings as it works to convince the IMF to release a delayed $1.6 billion loan tranche. Turkey is struggling to get back on board the IMF's $16 billion loan pact after parliament refused to allow U.S. troops into Turkey, thereby forfeiting a possible $30 billion in linked U.S. grants and loan guarantees. Government spokesman Cemil Cicek told reporters after a cabinet meeting that officials would be directed only to make payments on essential items such as wages and hold back from making 4,000 trillion lira in budgeted expenditure. "A tight cash regime will be followed foreseeing payments only on obligatory items such as wages, costs, defence spending and debts,'' Cicek said. Officials have already floated the idea, which allows often lengthy tender processes for various investments and infrastructure spending to begin but ensures the actual spending will not take place under the 2003 budget. The IMF is demanding that Turkey produce a primary surplus of 6.5 percent of gross national product in 2003, a tough challenge that the country failed to meet in 2002. Cicek said the government was trying to ensure that possible additional spending associated with the war in neighbouring Iraq would not upset the budget targets. Turkey would meet IMF-backed budget targets through "tight management'' of cash spending in government departments and state economic enterprises, Cicek told reporters after a meeting of the cabinet. Prime Minister Tayyip Erdogan on Sunday pledged full implementation of the IMF programme. Cicek said the 2003 budget was proceeding through parliamentary commissions according to plan. Voting is scheduled to finish on Friday. The government would also present a plan to privatise state tobacco and beverages giant TEKEL to the privatisation administration shortly, he said. The plan is a key pledge to the IMF in return for the release of the loan, delayed since October. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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