TURKEY RELATIONS WITH INTERNATIONAL FINANCIAL INSTITUTIONS (IMF/WORLD)

Toward the end of the Second World War II in July 1944, representatives of the United States, Great Britain, France, Russia, and 40 other countries met at Bretton Woods, a resort in New Hampshire to lay the foundation for the post-war international financial order. Such a new system they hoped would prevent another worldwide economic cataclysm like the Great Depression that had destabilized Europe and the United States in the 1930s and had contributed to the rise of Fascism and the war. Therefore the United Nations Monetary and Financial Conference, as the Bretton Woods conference was officially called, created the International Monetary Fund (the IMF) and the World Bank.

The International Monetary Fund (IMF) is today an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth and reduce poverty around the world. While on the other hand, The World Bank is a United Nations International Financial Institution that provides loans to developing countries for capital Programmes. The World Bank is a component of the World Bank Group, and a member of the United Nations Development Group. The World Bank’s official goal is the reduction of poverty. According to its Articles of Agreement, all its decisions must be guided by a commitment to the promotion of foreign investment and international trade and to the facilitation of capital investment.

Turkey is one of the largest middle-income partners of the World Bank Group (WBG).  With a Gross Domestic Product (GDP) of $786 billion, Turkey is the 18^th largest economy in the world. However, her economy is now deteriorating with Turkish Lira recording a fall to about 2.57 to USD this March as against 2.6 in February.

Turkey Membership

Turkey became member of IMF in 1947 with a present contribution of 1.45 million SDR (Special Drawing Right) which represent 0.61 percent of total contribution of the Fund. Turkey benefitted from the fund with signing 19 stand-by agreements since membership between 1961 to May 2008 worth about 50 million USD. However, the money so disbursed to Turkey did not yield any positive impact in her Economy. This was attributed by economy experts to the series of transitions undergone by Turkish polity and general economic policies almost throughout her membership with the fund.

Despite the fact that Turkey has not sign a new stand-by agreement with the Fund after paying off the debt it signed in 2008 last year which was her last debt, that does not mean that Turkey – IMF relations have come to an end. In fact, the World Bank Group pledged to continues to support the government of Turkey in achieving its development goals through the implementation of a program that is highly focused on results, through lending and the provision of technical advisory services. Strategic areas of engagement include private sector development, public finances, energy, climate change, health, education, environmental management and municipal services.

IMF/World Bank and TFP

The IMP Structural Adjustment Programmes and World Bank credits affects the direction of Turkish Foreign Policy to some extent because some critics are of the view that the current limitations and dilemmas of Turkish Foreign Policy resulted from the many structural problems of the Turkish economy which are deeply rooted in the policies implemented under successive IMF/Worlds Bank-led structural adjustment programmes (Beiza C. Tekin and R. Baris Tekin: 2015).

While also, the IMF and World bank-led neoliberal reform and structural adjustment programmes continued almost incessantly from 1980 to the end of 19^th century (and last) Turkey-IMF stand-by agreement on the 10^th of May 2008. Moreover, Turkey is one of the few developing countries which has remained almost continuously under the influence of neoliberal policy prescriptions of the International Financial Institutions. This continuity and the resilience of neoliberal economic policies are among the primary factors which limited not only the economic and development policy space in turkey but also and equally importantly, the conduct of Turkish Foreign Policy. The highly narrow economic and development policy space of the state in Turkey is a major factor shaping Turkish Foreign Policy making and implementation. This is due to the fact that Turkey ties her foreign policy towards Middle East and Africa in particular with economic incentives and or financial aid. As such, IMF/World policies affect the generosity aspect of Turkish Foreign Policy towards African countries and Middle East.