May 14 to archive IMF's 10-year history
By Cabir Turğut
Election day is the 10th anniversary of Turkiye's liberation from the financial yoke by paying the last installment of its debt to the IMF. Turkiye will not only elect a president on May 14 but will also choose between the production and employment-oriented independent economy model of the People's Alliance and the pro-IMF economic policies of the Seven Tables.
Most of the programs prescribed by the International Monetary Fund (IMF), which is often criticized for producing policies under the guidance of countries such as the USA and England, were shelved without being implemented. A significant part of the IMF's programs, which generally included harsh conditions and imposed policies that undermined the domestic production of countries, went bankrupt. IMF-indexed policies, on which 7 Table partners rely, are also remembered with bad experiences in Turkiye.
19 stand-by agreement
May 14, 2023, besides being one of Turkiye's fateful choices, is also the 10th anniversary of the IMF book being closed, never to be opened again. The first debt from the International Monetary Fund was taken by the Cemal Gürsel Government with the stand-by agreement made in 1961. Signing 19 stand-by agreements between 1961 and 2005, Turkiye borrowed a total of $56.5bn. Turkiye refused to sign a new agreement with the IMF after the last agreement expired in 2008.
It has a role in the 2001 crisis
Turkiye experienced the 2001 crisis, which is defined as the deepest economic crisis in the history of the Republic while trying to implement the imposing policies of the IMF. Especially during the unstable coalition governments in the 1990s, Turkiye had to sign different agreements with the IMF covering tough economic rules or wait at the institution's door for debt. At the end of 1999, the Prime Minister of the time, Bulent Ecevit, realized that he could no longer walk with the budget in his hand, signed a stand-by agreement with the IMF, and borrowed $4bn. However, the faulty program crashed in a short time. Turkiye once again borrowed additional money from the IMF. In November 2002, when the AK Party came to power, it took over the debt of $23.5bn to the IMF. Turkiye got rid of this financial yoke by paying the last installment of its debt to the IMF on May 14, 2013.
Riding interests mean bankrupcy and unemployment
The 7-party coalition led by the CHP and the IYI Party and the HDP participated as a shadow partner; It is noteworthy that the whole world seeks help from IMF-indexed policies. The economic staff of the parties in the Table of Seven, which advocates that it is necessary to raise interest rates in order to reduce inflation, openly state that they are planning to end the low-interest rates Turkiye is currently implementing and to reduce inflation by cooling the economy. The high-interest rate policy, which brings with it corporate bankruptcies, layoffs, and austerity, is the main theme of the IMF's financial programs.
Bad marks on finance
However, the financial report of the IMF, which is at the center of the economic model they will implement, is full of fractures. The economic programs offered by the IMF under the name of 'rescue' to countries in financial difficulties result in much larger financial crises. The International Monetary Fund, in return for the loans it gives, instead of correcting the economies of these countries with bitter prescriptions, makes them dependent on themselves by placing them in a foreign debt spiral. Many countries, from Argentina to Mexico, from Greece to Indonesia, and from Chile to Malaysia, which was prisoners of IMF-guided economy programs, could not straighten out. Due to the IMF's programs, which prioritized austerity policies and high-interest rates, businesses and large companies were shuttered. While social state practices were destroyed, there were intense layoffs. Poverty in the countries has deepened due to the policies of destruction imposed.
Greece is still in debt
Greece, which was affected by the 2008 global crisis, was dragged to the brink of bankruptcy after 2 years. The European Union partners and the IMF gave the country a 288 billion euro loan in return for a bitter prescription. IMF program: Debt to be paid by 2060 and led to an austerity policy that forced the Greek people. Greece, where the anti-IMF has reached its peak, could not get rid of the title of Europe's most indebted country. Greece exited the recovery program on August 20, 2018. However, public debt, which reaches 180 percent of the national income, is still among the biggest problems of Athens. Nobel Prize-winning economist Paul Krugman expressed the view that the IMF's austerity program has plunged the Greek economy into an inextricable spiral of slow growth/high unemployment.
Record inflation in Argentina
Argentina, which signed a $57bn stand-by agreement with the IMF in 2018, has not been left behind. After the stand-by agreement was made, inflation reached 100 percent from 34 percent. Interest rates rose from 26 percent to 78 percent. The debt ratio climbed from 57 percent to 80 percent. The average growth rate in the last 5 years has been 0 percent.
Without IMF Turkiye has grown by 4.5 times in 20 years
The AK Party, which rejects the IMF policies, has grown the Turkish economy by 4.5 times in 20 years. Contrary to the austerity policies prioritized by the IMF and Western central banks, Turkiye, which prioritized production, investment, employment, and exports, successfully overcame the troubled period in which the epidemic and the Ukrainian war rapidly dragged the world economies. While world economies are struggling with recession, unemployment, and strikes. Turkiye, which implements a low-interest policy, showed its difference with its strong growth. Thanks to the improvement brought about by the domestic and national economic policies implemented, the ratio of Turkiye's public debt to national income has decreased by 40 points in the last 20 years. The ratio of debt to national income, which was 71.5 percent in 2002, decreased to 31.7 percent.
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