Turkish prime minister bashes rating agency outlook decision

ISTANBUL - Hürriyet Daily News

Without specifically naming it, Turkish Prime Minister Recep Tayyip Erdoğan (R) has hit out again at the rating agency Standard and Poor’s, which recently downgraded the outlook of the Turkish economy before meeting with IMF chief Lagarde who hails the Turkish economy for achieving extraordinary success. AA photo

Without specifically naming it, Turkish Prime Minister Recep Tayyip Erdoğan has hit out again at the rating agency Standard and Poor’s, which recently downgraded the outlook of the Turkish economy.

It was not possible for Turkey to welcome the assessment of some international rating organizations, when keeping in mind that the country had achieved record growth, raised its foreign trade, reduced its unemployment, and had never made concessions on stability and confidence, Erdoğan said during the Investment Advisory Council meeting in Istanbul on May 11.

“Economic circles should seriously discuss the non-objective stances of international rating organizations. It should not be this easy to cause doubts and hesitations about an emerging country that has such a successful performance, and to make assessments that can hamper flow of investments,” the Anatolia news agency quoted Erdoğan as saying.

Deputy Prime Minister Ali Babacan, Economy Minister Zafer Çağlayan, IMF Managing Director Christine Lagarde, and World Bank Managing Director Sri Mulyani Indrawati, as well as the senior executives of 17 firms, all attended the event. The combined annual turnover of participating firms is about $500 billion, according to the daily Hürriyet.

The prime minister said rating organizations were not visiting Turkey and were making assessments based on hearsay. “We will build a Turkey that is one of the ten giant economies of the world, with a $2 trillion national income in 2023,” he said, adding that Istanbul was becoming the management center for many multinational firms, and that the government would support this process.

Apology

Çağlayan told the reporters after the event that the IMF head had told him that Standard and Poor’s should have apologized to Turkey, according to the Anatolia.

“We do not expect [any apology from the rating agency],” he said, adding that the credibility of the agency had been damaged by its decision on Turkey. “[Lagarde] told me that ‘Turkey does not need the IMF, but the IMF does need Turkey,’” he said. The IMF is often mistaken about its forecasts on Turkish economy, he added.

IMF Managing Director Christine Lagarde said during her speech at the event that Turkey’s economy had achieved extraordinary success with its positive macro economic performance and structural adjustments. Turkey should play a bigger role in the IMF, she said, noting that reform, which will make Turkey have more say within the IMF, will end bay the end of 2012. “I would not want to be in S&P’s shoes these days,” she told the reporters before the event according to daily Hürriyet, adding that the rating of Turkey was much higher in her heart.

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