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Turkey Taps World Bank Executives

Editorial Department




ISTANBUL -- Turkish Prime Pinister Bulent Ecevit Friday announced that World Bank executive Kemal Dervis has been appointed state minister in charge of the Treasury, with additional responsibility for reforming the economy.

'With his extensive international knowledge and deep experience I am sure Dervis will succeed,' Prime Minister Ecevit said.

Mr. Dervis also will supervise the banking regulatory body, the central bank, the Capital Markets Board, and three state banks: Ziraat Bank, Halk Bank and Turkiye Kalkinma Bankasi.

Prime Minister Ecevit said he has secured President Ahmet Necdet Sezer's verbal consent to the appointment through a phone call and said a cabinet decree on Mr. Dervis' appointment will be sent to the president when the necessary signatures are completed.

The prime minister also announced that Sureyya Serdengecti has been appointed central bank governor and Ferhat Emil as acting undersecretary of the treasury. Mr. Serdengecti had been a vice governor of the central bank, while Mr. Emil had been deputy undersecretary of the treasury.

The former head of the Treasury, Selcuk Demiralp, joined Central Bank Governor Gazi Ercel in handing in his resignation recently, following the country's financial earthquake last week.

Investors and rating agencies have been warily awaiting Turkey's response to the situation. Many have said the crisis may not last as long as the country's previous setbacks - if Turkey can find a firm hand to limit the crisis. Mr. Dervis has been seen as one such person. Currently the World Bank's vice president for poverty reduction and economic management, he had been negotiating with the government for a high-level post. The ruling coalition had reportedly offered him the central-bank governorship, but he was said to be holding out for a ministerial post that would give him broader authority. There is growing pressure from both the media and markets for the current ministers with economic portfolios to resign. The local Star newspaper reflected popular sentiment Thursday with the headline 'Dervis's name alone means [international] credit.'

On Thursday, markets staged a slight recovery from the impact of last week's currency devaluation. Stocks rose 7% and the lira strengthened slightly, to 920,000 to the dollar. That represented a 25% devaluation from its pre-crisis level.

The devaluation also has derailed a 14-month-old plan backed by the International Monetary Fund to end decades of chronic inflation. The IMF and the U.S. have pledged to maintain support for Turkey, but the government has been slow to formulate a new strategy. It promises an announcement after next week's Muslim holiday.


Copyright (C) 2001 Dow Jones & Company, Inc. All Rights Reserved.

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