Anadolu Agency: News in English, 98-07-01

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From: The Anadolu Agency Home Page at <http://www.anadoluajansi.gov.tr/>

01 JULY 1998

CONTENTS

[01] PARLIAMENT EXTENDS NORTHERN WATCH FOR SIX MORE MONTHS

[02] AUSTRIA TO UNDERTAKE EU TERM PRESIDENCY ON WEDNESDAY - PRESIDENT DEMIREL TO VIENNA IN NOVEMBER

[03] MAJOR EARTHQUAKE IN ADANA AND SURROUNDING REGION - THE US CANCELS FOURTH OF JULY INDEPENDENCE DAY CELEBRATIONS IN ADANA

[04] CLASH IN SOUTHEASTERN HAKKARI - 10 TERRORISTS KILLED - THREE VILLAGE GUARDS DIE, THREE OF THEM INJURED

[05] AGREEMENT WITH THE IMF ... - PREMIER YILMAZ DISCLOSES AGREEMENT REACHED ON THE IMPLEMENTATION OF 18-MONTH STAFF MONITORING AGREEMENT REACHED WITH THE IMF

[06] MEMORANDUM OF ECONOMIC POLICIES ...

[07] STATEMENT FROM TREASURY: - ''IMF EXPERTS WILL REVIEW EVERY THREE MONTHS THE DEVELOPMENTS CONCERNING THE TARGETS DETERMINED FOR THE BASIC INDICATORS OF THE TURKISH ECONOMY'' - ''DETAILED MEETINGS RELATED TO THE TARGETS FOR 1999 WILL BE HELD DURING THE FORTH QUARTER OF 1998''

[08] TURKISH-IMF MEMORANDUM - IMF: ''WE ARE PLEASED WITH THE STAFF MONITORING PROGRAMME''

[09] PARLIAMENTARY INVESTIGATION MOTION GIVEN AGAINST YILMAZ ADOPTED IN PARLIAMENT

[10] PRESIDENT DEMIREL MEETS WITH IZETBEGOVIC - DEMIREL: ''WE HOPE SUFFERINGS WOULDN'T BE REPEATED AND REQUEST A LASTING PEACE IN THAT BEAUTIFUL COUNTRY''

[11] PAKISTAN WANTS TO INCREASE COOPERATION - PAKISTANI MINISTER OF TRADE ISHAK DAR: ''THERE ARE GREAT OPPORTUNITIES IN THE INFRASTRUCTURAL PROJECTS IN PAKISTAN''

[12] TURKISH-EU PARTNERHSIP COMMITTEE MEETING - TECHNICAL QUESTIONS ON AGENDA WITH THE EU

[13] ''EMERGING MARKETS CONFERENCE'' - CHHIBBER, CHIEF OF WORLD BANK TURKEY DESK

[14] NEW EARTHQUAKE IN SOUTHERN ADANA PROVINCE AND ITS SURROUNDINGS

[15] STATE MINISTER TANER ATTENDS ''EMERGING MARKETS'' CONFERENCE IN LONDON

[16] TURKISH-SYRIAN DIALOGUE - OMRAN, SYRIAN FOREIGN MINISTRY UNDERSECRETARY MEETS HAKTANIR, FOREIGN MINISTRY UNDERSECRETARY

[17] 41 TERRORISTS KILLED IN OPERATION

[18] RASIM ZAIMOGLU, INDEPENDENT DEPUTY FROM GIRESUN, AND IBRAHIM YAZICI, INDEPENDENT DEPUTY FROM BURSA JOIN DYP

[19] REACTION TO THE UN SECURITY COUNCIL RESOLUTION - TRNC: ''WE'LL REVISE OUR ATTITUDE CONCERNING UN PEACE FORCE AND GOODWILL MISSION''

[20] OIL PRODUCTION IN ADIYAMAN - TPAO PRODUCES 6 MILLION BARRELS OF OIL WITHIN THE FIRST 6 MONTHS OF THIS YEAR

[21] TURKISH PRESS REVIEW (1)

[22] TURKISH PRESS REVIEW (2)

[23] PRIVATIZATION REACHES 2.18 MILLION US DOLLARS IN FIRST SIX MONTHS OF THIS YEAR

[24] REACTION TO THE RESOLUTION OF THE UN SECURITY COUNCIL - THE TRNC HUMAN RIGHTS ASSOCIATION: ''A POLITICAL SOLUTION ON CYPRUS CAN BE PROVIDED BY RECOGNIZING THE RIGHTS OF TURKISH CYPRIOTS''

[25] TRNC PRESIDENT DENKTAS: ''EFFORTS WILL CONTINUE TO IMPROVE THE ECONOMY''

[26] PRESIDENT DEMIREL HOSTS A LUNCHEON FOR TURKISH AMBASSADORS WORKING IN AFRICA

[01] PARLIAMENT EXTENDS NORTHERN WATCH FOR SIX MORE MONTHS

The aircraft taking part in the Northern Watch Operation are based at the Incirlik Base in southern Turkey and belong to the US, Turkey and Great Britain.

''The government's request has been accepted'' said Kamer Genc, the Deputy Speaker of the Parliament, after the Parliamentarians approved a government motion in favor of extending the mandate for another six months, starting 30 June.

Northern Watch has been active in the region since January 1997, when it became the succesor to Operation Provide Comfort (OPC). After France withdrew from the OPC, and the Turkish parliamentarians expressed their doubts about the force's mission, both the name and the structure of the operation were changed.

The no-fly zone has been active in the airspace over Northern Iraq since April 1991.

[02] AUSTRIA TO UNDERTAKE EU TERM PRESIDENCY ON WEDNESDAY - PRESIDENT DEMIREL TO VIENNA IN NOVEMBER

Austria will give priority to the struggle with unemployment and the expansion of the EU towards the east during her presidency of the EU.

Viktor Klima, the Austrian Chancellor, stressed that ''Austria has the second lowest unemployment rate and the third lowest unemployment rate for young people in Europe. Thus, our main target is to employ at least one million people among the 18 million unemployed people in the EU.''

Austria earlier gave signals not to make any changes in the Cyprus issue and the membership of Turkey during her Term Presidency.

Klima had said that the acceptability of the membership of Turkey and the European perspective were never cross-examined, adding, ''I think the financial package would be re-opened and a common course would be found for the fair arrangement of the Customs Union,'' he had stated.

After the contacts in Vienna of Rauf Denktas, the President of the Turkish Republic of Northern Cyprus (TRNC), Walter Hagg, the Chairman of the Austrian Foreign Ministry's Department of Northern Europe, said, ''we will pursue the decisions of the UN and the policy which was followed by the former term presidents, including the European Union (EU)-Greek Cypriot membership process. We have no secret plan. We will do our best to enable the EU to continue negotiations with both communities on the island.''

Thomas Klestil, the President of Austria, will host the Presidents of Russia, the Ukraine, Germany, Italy, the Czech Republic, Poland, Hungary, Slovenia in the autumn when the EU schedule will become intense.

President Suleyman Demirel will pay a visit to Austria between 17-19 November 1998 as the official guest of the Austrian President Klestil, who paid the first presidential-level visit from Austria to Turkey two years ago. The visit of President Demirel to Austria will also be the first presidential-level visit from Turkey to Austria.

[03] MAJOR EARTHQUAKE IN ADANA AND SURROUNDING REGION - THE US CANCELS FOURTH OF JULY INDEPENDENCE DAY CELEBRATIONS IN ADANA

The US Embassy said in a written statement that Mark Parris, the US Ambassador, expressed his deep sorrow about the people who died in the earthquake and the victims of the earthquake.

Recalling that the US President Bill Clinton had sent a letter of condolence to President Suleyman Demirel, Parris said that the ''Fourth of July Independence Day Celebrations'' were cancelled.

''It will be more appropriate to use the fund, which was formed by the American business circles in Turkey, as an aid to the victims of the earthquake through Oguz Koksan, the Governor of Adana,'' Parris stated, offering his condolences.

[04] CLASH IN SOUTHEASTERN HAKKARI - 10 TERRORISTS KILLED - THREE VILLAGE GUARDS DIE, THREE OF THEM INJURED

The separatist terrorists ambushed a group of village guards, who staged an operation in the rural area to find the sheep stolen by the separatist terrorists from Bagisli Village.

Enver Aydin (45), M. Ali Kaya (50) and Sefik Oztunc (35), died and three other village guards were injured in the clash.

Later, security forces launched a large-scale operation, killing ten separatist terrorists.

The operation is underway in the Doganyurt, Akcali and Bagisli triangle.

[05] AGREEMENT WITH THE IMF ... - PREMIER YILMAZ DISCLOSES AGREEMENT REACHED ON THE IMPLEMENTATION OF 18-MONTH STAFF MONITORING AGREEMENT REACHED WITH THE IMF

Noting that this agreement wouldn't provide a financial support to Turkey, Yilmaz said ''but it is expected that the signal which the IMF would give about the reality of this program and the determination of the government to implement this program will give very positive outcomes for the Turkish economy.''

The agreement is composed of a total of 19 articles under the name of the Memorandum of Economic Policies for which the main points are given below:

MEMORANDUM OF ECONOMIC POLICIES
1-Chronic high inflation has plagued Turkey for over two decades. Past programs designed to fight inflation have never been successfully carried through, or were subsequently reversed. Inflation imposes a heavy burden on the eocnomy and society, worsening the inequality of incomes, exacerbating social tensions and distorting the planning horizons of investors and savers.

2- Large budget deficits lie at the heart of the inflation process. The financing of these deficits has accelerated money growth, as well as imposing high real interest rates. The pressure of government borrowing, in turn, has locked in inflation expectations and projected them forward in the form of high interest rates. Basing increases in public sector wages and agricultural support prices on past inflation has contributed to inflation inertia.

3-Since taking office, the government has applied measures to rebalance the economy and reduce inflation and has devised a three-year program that is designed to bring down inflation on a lasting basis. With the announcement of the 1998 program, and in light of the first and second quarter results, we are confident that the program is operating as designed. The autonomy of the Central Bank is fully respected. The Treasury has ceased to borrow from the Central Bank and the Central Bank, Treasury and the Ministry of Finance have published their respective quarterly program targets. To date, all targets have been met and in some cases surpassed. Support for the program from the private sector and the labor and employers' unions continues, with an ongoing dialogue maintained at all times. The government is strongly committed to ensuring transparency and adhering to market policies.

4- The government's three-year program will reduce wholesale price inflation from over 90 percent at the end-1997, to 50 percent by end-1998 and single digits by end-2000. Our program is already begining to show results: cumulative wholesale price inflation during January-May was reduced to 24.4 percent, lowering the twelve month rate to 80 percent. This memorandum explains the framework of the disinflation program and the policies being employed to reach our targets.

ECONOMIC POLICIES
5- The main policies to achieve the planned reduction in inflation are a- an increase in the primary surplus of the budget, that will be sustained during the disinflation process, b- a shift in the management of key variables such as public sector wages and agricultural support prices so that they are raised in line with targetted, rather than past inflation, c- a supportive and closely coordinated monetary policy, d- structural reforms to ensure the progressive strengthening of public finances over time, and e- stepped up privatization to lower the domestic borrowing requirement and enhance economic efficiency.

6- The yields demanded on government securities reflect inflation expectations and a high premium to protect investors from the risk of an increase in inflation. In a process of disinflation, when expectations lag and the risk premium remains high, the real interest burden rises sharply with falling inflation, increasing the size of the primary fiscal adjustment needed to keep the overall deficit on a downward path. For this reason it is essential to lower inflation expectations quickly as well as to use alternavite ways of domestic borrowing to minimize this effect and reduce the need for additional primary adjustment.

7- In the area of fiscal policy, the primary surplus of the budget will be increased to above four percent of GNP in 1998, from near balance in 1997. This increase is needed to face the heavy burden of interest payments that is now unavoidable, as was already evident in the budget submitted to the Parliament last October.

8- Improved tax revenue performance is a key element strengthening the primary fiscal position in 1998. In the first five months of 1998, tax collections have been strong, with real tax revenue increasing by 18 percent to (3.2 trillion TL by May) for the whole year, tax revenue is targeted to increase to at least 9.3 trillion TL (17.7 percent of GNP).

9- A tax reform bill was submitted to the Parliament early this year. This bill will shorten the lag between the accrual of tax obligations and their payment, while lowering tax rates in expectation of a widening of the tax base. These aspects of the tax reform are expected to be applicable as from the beginning of 1999, and will have an initial effect in boosting revenue because of the reduction in collection lags. There is a danger that the lowering of tax rates could jeopardize the achievement of the program targets unless compliance improves.

10- In implementing the budget, the government will strictly restrain primary outlays to ensure the attainment of the targeted improvement in the primary surplus. Non-interest expenditure will be limited for the year as a whole to no more than 9,255 trilion TL (17.5 percent of GNP). Transfers will be much lower this year than last, reflecting the lower need for tranfers to the extrabudgetary funds, tight controls on agricultural subsides, and the on-off nature of the capital injections to state banks made in 1997. For the first time in many years, there will be no supplementary budget in 1998.

[06] MEMORANDUM OF ECONOMIC POLICIES ...

12- With the high level of built in interest payments from the domestic debt contracted on conventional terms, and the stickiness of long-term interest rates, the financing of the budget defict is of critical importance. As already noted, the effective interest burden rises as inflation falls.

13- Privatization has a key role to play in the disinflation strategy. Major progress has already been made, with a total of 1.8 billion US dollars in privatization proceeds already realized through the sale of GSM licenses, shares in IS Bank, and other operations. Before the end of this year, we plan to sell share holdings in POAS, Turkish Airlines, Erdemir and a number of other companies, with substential additional sales scheduled in 1999. The Council of Ministers has given approval for the sale of 49 percent of Turk Telekom, a transaction that will be completed in 1999. Once the approval of the High Administrative Court (Danistay) has been secured, it will be possible to move quickly in finalizing the transfer of operating rights for the generation and tranmsission of electric power, covering an initial nine power stations and the first 15 of the eventual 20 distribution districts.

14- A sweeping reform of the social security system is obviously needed. The Turkish economy can simply not afford a system that permits workers to retire workers to retire in their forties. And retired workers cannot afford to live on the benefits now provided by the system. The government will continue its efforts to forge a consensus for major reforms that will eliminate the deficit of social security within a relatively short period through appropriate increases in the minimum retirement age and minimum contribution period and an expansion of the reference period for calculating pension benefits coupled with an increase in the ceiling on wages subject to contributions. As a first step, the government will request early parliamentary approval for raising the minumum retirement age for existing workers to 50 for women and 55 for men and to 57 for women and to 60 for men for new entrants to the labor force, while requiring that new entrants contribute a minumum of 7,200 days for women and 9,000 days for men to be eligible for full benefits.

15- Monetary policy will be directed at sustaining the disinflation effort and in the second half of 1998, the exchange rate will be managed in a manner consistent with the target of 50 percent wholesale price inflation by end year. Given the difficulty of projecting the behaviour of demand for base money in a period of disinflation, the monetary framework under the program will place greater emphasis on control over the growth of net domestic assets of the Central Bank. The foreign exchange surrender requirement has been suspended for two months starting in June 1998. The Central Bank will consider extending this suspension in light of market developments.

16- The government will take measures to strengthen the banking sector and supervision through more stringent enforcement of capital adequacy requirements and of the ceiling on banks' net open foreign exchange positions. In addition, it intends to effect a phased reduction of the net foreign exchange exposure ceiling from 50 percent of capital to 30 percent by end-December 1998. In order to reduce distortions, the government plans, before the end of the year, to subject repos to the same reserve requirements as bank deposits and to equalize the taxation of interest income from repos and deposits. The gap between the average cost of funds and the average rates charged by the Agricultural Bank (Ziraat Bank) on its loans to the agricultural sector has been susbtantially reduced over the past year, and the recent further decline in deposit rates will make possible a reduction of 5 percentage points in the average rate changed on agricultural loans as from July 1, 1998.

17- The Draft Law for Regulation and Supervision of the Financial Markets was submitted to the Council of Ministers on June 18, 1998. The aims of the draft law are: a- to bring the regulation and supervision of banks, insurance and reinsurance companies, and other financial institutions under a single set of rules and a single law, b- to strenghten the financial structure of financial institutions, c- to strengthen and increase the efficiency of the supervision and oversight authority, and d- to keep supervision standards in line with international norms. The draft law was prepared taking due account of the laws and regulations of the European Union and other accepted international practice. The government intends to secure passage of the draft law as soon as possible.

18 - Under the three year program, the government is committed to cutting inflation further in 1999 to 20 percent. To this end, it will continue to follow a tight fiscal policy to generate an adequate primary balance, forward indexation of public sector wages and agricultural support prices, a closely coordinated and supportive monetary policy, further structural reforms and stepped up privatization.

TARGETS AND MONITORING
19 - It is important that our policies are fully understood both inside Turkey and abroad, so that all can see that our program is consistent and will produce its intended results. In this spirit, the government has already begun the practice of announcing quarterly targets for the budget, domestic borrowing, privatization and the expected behaviour of base money. This policy memorandum takes this process a step further by explaining the broader context of the program, and how the inflation targets will be achieved, not only in 1998, but further in the coming year. This program will also be monitored on a quarterly basis by the IMF staff over the next 18 months. In this context, a detailed quarterly macroeconomic framework for the budget, the monetary accounts and the balance of payments in 1998 have been established and will serve as a guide to policy for the remainder of this year. Indicative annual objectives for 1999 have also been identified. The main policy actions remaining to be undertaken in 1998 and 1999 are attached.

[07] STATEMENT FROM TREASURY: - ''IMF EXPERTS WILL REVIEW EVERY THREE MONTHS THE DEVELOPMENTS CONCERNING THE TARGETS DETERMINED FOR THE BASIC INDICATORS OF THE TURKISH ECONOMY'' - ''DETAILED MEETINGS RELATED TO THE TARGETS FOR 1999 WILL BE HELD DURING THE FORTH QUARTER OF 1998''

The Treasury said that the detailed meetings with the IMF related to the targets for 1999 will be held in the last quarter of 1998.

The Undersecretariat of the Treasury said in a written statement that Turkey and the IMF had reached an agreement for the implementation of an 18- month Staff Monitoring Programme, recalling that the ''Memorandum of Economic Policies'', which was prepared within that framework, was signed by Gunes Taner, the Minister of State, and by Gazi Ercel, the President of the Central Bank, and submitted to the IMF officials on 26 June 1998.

Pointing out that the memorandum was prepared by the 55th government by taking into consideration ''the three-year economic programme and the successful implementation of that programme up until now'', the statement said, ''the reliability and the existing successful implementation of that three-year economic programme were confirmed by the IMF officials during the talks.''

''The IMF experts will review every three months the developments related to the targets determined for the basic indicators of the Turkish economy within the scope of the 18-month Staff Monitoring Programme. The evaluations of the IMF experts will be publicly announced,'' the statement added.

The statement said that the budget and monetary programme policies, which are necessary for decreasing inflation to one-digit numbers, and the targets for the balance of payments were determined in the Memorandum of Economic Policies.

Noting that the indicative economic targets for 1999 were also mentioned in the Memorandum, the statement added that within this framework, the detailed meetings related to the targets for 1999 will be held in the fourth quarter of 1998.

[08] TURKISH-IMF MEMORANDUM - IMF: ''WE ARE PLEASED WITH THE STAFF MONITORING PROGRAMME''

The IMF said in a written statement that the Turkish economy authorities and the IMF are in dialogue for the implementation of the policies, which were designed to cut inflation and to protect the macroeconomic stability in Turkey.

The statement said that the Turkish high-level economy delegation led by Gunes Taner, the Minister of State, gave information about the policies, which were and will be pursued by the Turkish government to reduce inflation, during their meeting with Michel Camdessus, the Chairman of the IMF, between 25-27 June.

Pointing out that inflation entered into a declining trend due to the economic policies followed by the Turkish government in the first half of 1998, the statement said, ''the Turkish government aims to achieve a considerable decrease in inflation within the next one and one half years. There is a need for a strict financial policy, monetary policy and structural reform, which are closely coordinated, including the acceleration of privatization to achieve this goal.''

Noting that the IMF administration will support Turkey's efforts in the struggle against inflation, the statement stressed that inflation will decrease if the programme is completely fulfilled.

[09] PARLIAMENTARY INVESTIGATION MOTION GIVEN AGAINST YILMAZ ADOPTED IN PARLIAMENT

The motion, given by the True Path Party (DYP) and backed by the opposition parties, accuses Yilmaz of corruption in the development of a tourism centre in Istanbul, thus he caused partisanship to be made.

It is the third corruption inquiry to be set up involving the prime minister since he took office a year ago.

Under Article 100 of the Constitution, after a decision is given to open an investigation, a 15-person commission will be established to carry out the investigation. The Commision will submit its report to the Parliamentary Chairmanship within two months.

[10] PRESIDENT DEMIREL MEETS WITH IZETBEGOVIC - DEMIREL: ''WE HOPE SUFFERINGS WOULDN'T BE REPEATED AND REQUEST A LASTING PEACE IN THAT BEAUTIFUL COUNTRY''

Speaking prior to a meeting with Alija Izetbegovic, the Chairman of the Bosnian Presidential Council, who was awarded with an ''honorary doctorate'', Demirel said that the legend of Bosnia was written with the blood of the Bosnians, adding ''Alija Izetbegovic is the leader of this determined struggle which happened in front of the whole world.''

Meanwhile, Izetbegovic refrained from responding to the questions of reporters related to the Kosovo question.

[11] PAKISTAN WANTS TO INCREASE COOPERATION - PAKISTANI MINISTER OF TRADE ISHAK DAR: ''THERE ARE GREAT OPPORTUNITIES IN THE INFRASTRUCTURAL PROJECTS IN PAKISTAN''

Ishak Dar and Sehbaz Sharif, the Prime Minister of Punjab Province, who arrived in Istanbul to participate at the Turkish-Pakistani Business Council meeting, gave a conference at the Ciragan Palace, giving information about the general economic situation in Pakistan and cooperation opportunities between Turkey and Pakistan.

Ishak Dar stated that a regression had occurred in the trade volume between the two countries in recent years, adding that this should be removed as soon as possible.

Pointing out that the build-operate-transfer and the build-operate models will intensely be taken up in the realization of the infrastructural projects in Pakistan, Dar said, ''there are great opportunities for foreign entrepreneurs in several fields, especially the infrastructural projects in Pakistan. These opportunities are valid also for the Turkish entrepreneurs. Our private sectors have the responsibility to further develop our relations.''

The Punjab Province Prime Minister Sharif said that they want to make use of the information and technological experience of Turkey, adding that joint investments can be realized in several fields, especially agriculture, in addition to the infrastructural projects.

Sharif stated that some new motorway networks can be put onto the agenda and a new field of cooperation can be formed with a huge dam named ''Pakistan'' whose construction was planned, showing as an example the Islamabad-Peshawar motorway, which was constructed by the Turkish Bayindir Group.

[12] TURKISH-EU PARTNERHSIP COMMITTEE MEETING - TECHNICAL QUESTIONS ON AGENDA WITH THE EU

The Partnership Committee which was established under Article 24 of the Ankara Agreement, continues its function as an executive organ to investigate all problems it receives and to determine the agenda of the Partnership Council.

During the committee meeting Britain, the EU Term President, for the first time gave an official information to the Turkish side about the Cardiff Summit held between 15 and 16 June and made explanations about some parts of the Final Communique of the Summit related to Turkey and about the activities and measures foreseen to improve the Turkish-EU relations.

Also, on the subject of Turkey's meat and livestock, the import arrangements were discussed that were applied with the justification of health regulations. The EU requested that these arrangements be abolished, which it regarded as contrary to the agricultural agreement signed between the two parties. Turkey only made a note these views and pointing out that there are several problems within the EU on the same issues, added that they would continue the dialogue.

The EU side stressed that it closely followed the statements of the Turkish Ministry of Agriculture with this objective and pointed out that the implementation was in fact based on trade reasons, not health problems.

The Turkish participants said that the EU should abide by the soul of the Customs Union and fulfill its obligations.

It was reported that the Turkish side expressed readiness to get involved in consultations on technical issues aimed at improving the partnership relations and gave the message that it would continue the dialogue.

The next meeting of the Turkish-EU Partnership Committee is expected to take place in the autumn.

[13] ''EMERGING MARKETS CONFERENCE'' - CHHIBBER, CHIEF OF WORLD BANK TURKEY DESK

Recalling that he knows Turkey closely, Chhibber said that high inflation was balanced with the high growth rate in the recent period. Stressing that this was not a coincidence, Chhibber said that Turkey would again overcome all the problems with which she is confronted.

Recalling the predictions that the Turkish economy would be destroyed during the Asian crisis, Chhibber said that those who said these words had to accept their mistakes in the end.

Chhibber stressed that Turkey has a problem like ''high inflation'' adding that the Turkish government was working on an economic program, but this wasn't a ''shock program'' or ''step by step program'', Chhibber said this will be a program which is coming in a shock and implemented step by step.

Chhibber noted that Tureky's new economic program required several structural reforms.

[14] NEW EARTHQUAKE IN SOUTHERN ADANA PROVINCE AND ITS SURROUNDINGS

The Bogazici University Kandilli Observatory Earthquake Research Institute officials said that minor tremors continue in Adana following the major earthquake which was 6.3 on the Richter Scale.

On Tuesday evening another quake measuring 3.6 shook Adana at 4:30 p.m., 2.9 at 4:31 p.m., 2.7 at 04:39 a.m. Wednesday morning, 3.2 at 8:29 a.m., and 3.8 at 9:25 a.m. and the number of tremors shaking the province since the major earthquakes increased to 64.

Officials said the minor tremors will continue at least one week and will decrease in time.

Meanwhile, it was reported that the death toll of the major quake increased to 144.

[15] STATE MINISTER TANER ATTENDS ''EMERGING MARKETS'' CONFERENCE IN LONDON

Addressing the ''Emerging Markets'' conference organized in London by the Deutsche Bank, Taner said that most of the economists, one year ago, accepted Turkey as the most risky market before the Asian crisis and while they had exalted the Asian markets, but they collapsed following the crisis.

''If you evaluate today's conditions, you can see that the economies of those countries are facing a collapse while Turkey, which was accepted as the most risky market, became an emerging star.''

Recalling that Turkey, like all of the world countries, adopted a free trade economy instead of the state-controlled economy after observing the world economies, Taner said that now a global economy was emerging in the world, adding that Turkey adopted new rules and realized new implementations for her integration to that new world market.

Pointing out that the Asian crisis badly affected all of the powerful or poor world economies, Taner said that the world became a single market and that everybody was curious about the results of the emerging European market.

Noting that a total of 350-400 billion US dollars in investments were made throughout the world last year, Taner said, ''however, the Asian crisis worried the markets and dampened the investment enthusiasm. ''The markets will re-orientate investments and Turkey will become a part of that activity,'' Taner added.

Recalling that the Turkish government was working on legal arrangements for a tax reform, banking laws, monetary markets and social security system, Taner said, ''inflation is again the largest problem. I can say that it will decrease to 20 percent after the arrangements.''

Taner stated that the new agreement between Turkey and the International Monetary Fund (IMF) was publicly announced in detail within the framework of the perception of ''openness and transparency'' that can only be observed in Turkey.

[16] TURKISH-SYRIAN DIALOGUE - OMRAN, SYRIAN FOREIGN MINISTRY UNDERSECRETARY MEETS HAKTANIR, FOREIGN MINISTRY UNDERSECRETARY

During the visit of Omran and the accompanying delegation, problems between the two countries will be negotiated and ways to improve dialogue will be sought.

Sermet Atacanli, the Deputy Spokesman of the Foreign Ministry, addressing a weekly news conference, said that Omran's visit was a step taken to normalize the Turkish-Syrian relations.

Aykut Cetirge, the General Director of the Middle East Department of the Foreign Ministry, held contacts in Damascus in February, aimed at initiating dialogue with this objective.

Omran may hold a visit with Ismail Cem, the Foreign Minister on Thursday.

[17] 41 TERRORISTS KILLED IN OPERATION

Emergency Regional Rule Governor's office statement said that 35 terrorists were killed in Bagisli village in Hakkari, and six others were killed in other regions. Three people from security forces died during the clashes.

Meanwhile, two terrorists who fled from the separatist organization surrendered to the security forces in southeastern Sirnak Province.

Operations are underway in the region.

[18] RASIM ZAIMOGLU, INDEPENDENT DEPUTY FROM GIRESUN, AND IBRAHIM YAZICI, INDEPENDENT DEPUTY FROM BURSA JOIN DYP

Zaimoglu and Yazici became independent after they resigned from the Motherland Party (ANAP) on 17 June.

Following the joining of Zaimoglu and Yazici to the DYP, the number of the DYP deputies increased to 95 while the number of the independent deputies regressed to 16 in the Parliament.

The most recent distribution of seats in the Parliament is as follows:

FP (Virtue Party).............. 145

ANAP (Motherland Party)........ 138

DYP (True Path Party)........... 95

DSP (Democratic Left Party)..... 62

CHP (Republican People's Party). 56

DTP (Democratic Turkey Party)... 20

BBP (Great Unity Party).......... 8

MHP (Nationalist Movement Party). 3

DP (Democratic Party)............ 1

DEPAR (Democracy Party).......... 1

INDEPENDENT..................... 12
VACANT........................... 9

[19] REACTION TO THE UN SECURITY COUNCIL RESOLUTION - TRNC: ''WE'LL REVISE OUR ATTITUDE CONCERNING UN PEACE FORCE AND GOODWILL MISSION''

The TRNC Foreign Ministry and Defense Ministry said that the UN Security Council repeated its mistake, which has been going on for years by referring to the ''Cyprus Republic'' in its resolution extending the term of office of the UN Peace Force for another six months.

Noting that the existence of the UN Peace Force is only possible with the ''consent of two peoples and states which are parties to the conflict,'' the statement stressed that there isn't a legitimate ''Cyprus Government'' on the island since the Cyprus Republic was overthrown by the Greek Cypriots in December 1963.

''Therefore the TRNC won't accept any decesion which refers to the Cyprus Republic. We'll determine the conditions valid for the existence and activities of UN Peace Force within the borders of the TRNC and we'll continue to monitor these conditions,'' the statement added.

Stressing that the TRNC thinks that the UN Security Council didn't harshly react to the armament madness of the Greek Cypriot side, the statement added ''the attitude of the UN Security Council which refrained from condemning the Greek Cypriot side, which decided to deploy the S-300 missiles on the island, encourages activities of the Greek Cypriot side and it doesn't give confidence to the Turkish Cypriot people.''

''The TRNC won't negotiate the sovereignty of her people. If the proposals of the Greek Cypriot side are accepted, then the negotiations between the two sides on the island will be meaningless,'' the statement added.

[20] OIL PRODUCTION IN ADIYAMAN - TPAO PRODUCES 6 MILLION BARRELS OF OIL WITHIN THE FIRST 6 MONTHS OF THIS YEAR

Officials told the A.A correspondent that the TPAO which provides the 61 percent of the Turkey's oil production, produces 33.5 thousand barrels of oil daily from the 143 oil wells in Adiyaman.

The TPAO aims to increase its production up to 63 percent, and it carries out oil exploration activities in Gaziantep and Hatay Provinces.

[21] TURKISH PRESS REVIEW (1)

(Derived from the Newsspot of the Turkish General Directorate of Press and Information.)

SUCCESS IN FORESTRY
Turkey ranks sixth among 15 European countries in studies in forestry jointly carried out by the World Foundation for the Protection of Nature and the Association for the Protection of Natural Life. /Cumhuriyet/

US CANCELS FOURTH OF JULY CELEBRATIONS IN ADANA
According to a statement by Mark Parris, the US Ambassador to Turkey, the US won't hold Fourth of July celebrations in the southern Turkish city of Adana where 138 people were killed by an earthquake on Saturday. /Sabah/

DEATH TOLL REACHES 138 IN EARTHQUAKE AREA
The death toll in the earthquake region surrounding the east Mediterranean city of Adana and Ceyhan has risen to 138. Out of 138 killed by the earthquake which registered 6.3 on the Richter scale, 129 have so far been identified. /Sabah/

TURKISH ECONOMY AND POLITICS EXPAND INTO AFRICA
Turkey has completed work on expansion of the Turkish economy and politics into Africa. The Turkish ambassadors to the African countries convened yesterday to complete preparations for this expansion project which aims to strengthen economic and political relations with the African countries. /Sabah/

TURKISH FOREIGN MINISTRY REACTS TO GREEK STATEMENT
Sermet Atacanli, the Deputy Spokesman of the Foreign Ministry, reacted yesterday to statements by the Greek President Stephanopoulos that Cyprus was a part of Greece and that Greece would continue to strengthen her defence doctrines on Cyprus until they reached their aim. Atacanli said that statements made during Stephanopoulos' visit to the Greek Cypriot administration between 25-28 June, confirmed his hostile approach to dealing with problems on the Island. /Sabah/

THREE VILLAGE GUARDS KILLED
Members of the PKK terrorist organization killed three village guards yesterday in Hakkari. During the clashes, 10 terrorists were killed, while five other village guards were wounded. /Cumhuriyet/

DENKTAS WARNS THE UN
Rauf Denktas, the TRNC President, has reacted strongly against the resolution adopted by the UN Security Council on the extension of the Peace Force mandate on the island. Denktas stated that the TRNC government will restrict the operations of the Peace Force in Northern Cyprus in retaliation for the use of the term ''Cyprus Government'' for the Greek Cypriot Administration. President Denktas pointed out that the UN has made a solution to the problem more difficult by turning a blind eye to the realities of the situation on the island. In a statement yesterday, the Turkish Foreign Ministry also protested against the declaration of the extension of the Peace Force mandate because the term ''with the permission of the Cyprus government22 which doesn't have any legal basis is used in the extension resolution./Hurriyet/

[22] TURKISH PRESS REVIEW (2)

(Derived from the Newsspot of the Turkish General Directorate of Press and Information.)

GROWTH RATE REACHES 8.1 PERCENT
The Gross National Product increased by 8.1 percent in the first three months of this year when compared to the same period last year. In a statement by the State Institute of Statistics yesterday it was pointed out that in the first three months of 1998, Gross Domestic Product rose by 7.2 percent in fixed prices./Hurriyet/

PARLIAMENT EXTENDS NORTHERN WATCH FOR SIX MONTHS
The Turkish Parliament on Tuesday voted to extend the mandate of the multinational Northern Watch Operation that patrols a no-fly zone in Northern Iraq. The aircraft taking part in the Northern Watch Operation are based at the Incirlik Air Base in southern Turkey and belong to the United States, Turkey and Great Britain. ''The government's request has been accepted'', said Kamer Genc, the Deputy Speaker of the Parliament, after the Parliament approved a government motion in favour of extending the mandate for another six months, starting in June. /Hurriyet/

TURKEY TO HOST NATO AIR EXERCISES
The air forces of five NATO countries and 10 members of the Partnership for Peace (PFP) are to hold air exercises in Turkey between 15 and 24 July. A statement by the alliance's Southern Europe Command said the exercise, called ''Cooperative Key '98'', is aimed at maintaining standards in peace operations and increasing cooperation among the member countries. The Air Force aircraft from Bulgaria, Italy, Moldova, Portugal, Romania, Slovakia, Turkey and the United States will take part in the exercises, which will mainly focus on humanitarian aid and search and rescue operations. /Milliyet/

MACEDONIAN DEFENSE MINISTER IN TURKEY
Ismet Sezgin, the Minister of National Defense, said while receiving his Macedonian counterpart Lazar Kitanoski, who is in Ankara for a two day official visit, that stability in Macedonia and Albania in the face of renewed tension in the Balkans was very important for Turkey, it was reported yesterday. He assured Kitanoski that Turkey would work hard to prevent the current conflict in Kosovo from spreading to neighbouring Macedonia. The Macedonian minister, also speaking during the joint press conference, relayed his government's condolences concerning the latest earthquake in Turkey's southern province of Adana.

S-300 CONTROVERSY
Referring to the intention of Greek Cyprus to deploy the Russian-made S-300 missiles, Gen. Cevik Bir, the Deputy Chief of General Staff, said on Monday that international common sense would eventually prevail and the S-300s wouldn't be deployed. Ankara has threatened retaliation in the event the missiles are installed on the island. Meanwhile, the Greek Cypriot daily, Semerini, reported on Tuesday that Washington, D.C. had launched a new diplomatic initiative to stop deployment of the missiles and leave the door open for recognition of the TRNC, keeping in mind that it would be an equal element of a Cypriot federation to be established in the future. The report said that the United States, supported by Britain, had persuaded the G7 group to send a letter to Moscow, calling for the cancellation of the delivery of the S-300's. /Cumhuriyet/

YILMAZ EXPLAINS IMF-TURKEY ACCORD
Prime Minister Mesut Yilmaz has been explaining the context and details of the Staff Monitoring Programme agreed on with the International Monetary Fund (IMF). Yilmaz said at a press conference on Tuesday at the Parliament building that the IMF approved the government's goals concerning balance of payments, the inflation rate and budget targets for 1998 and 1999 as well as its present economic programme. He pointed out that the agreement with the IMF means that Turkey will be able to borrow with more suitable conditions from international markets. He added that the economic programme approved by the IMF will be carried out regardless of changes in domestic government leadership. /All papers/

ULUGBAY IN TIRANE
Hikmet Ulugbay, the Minister of National Education, went to Tirane yesterday as the official guest of Ethem Ruka, the Albanian Minister of Education and Science. In a statement at Istanbul's Ataturk Airport prior to his departure, Ulugbay noted that he would hold contacts for further development in educational cooperation between Turkey and Albania and that he would meet with the Albanian President Meidani and Prime Minister Nano. /Hurriyet/

32 PKK TERRORISTS KILLED
During operations carried out near Bagisli Village in Hakkari, 32 terrorists of the PKK terrorist organization have been killed. Two Turkish security officials also died in action. /Hurriyet/

[23] PRIVATIZATION REACHES 2.18 MILLION US DOLLARS IN FIRST SIX MONTHS OF THIS YEAR

The Petrol Ofisi Inc was privatized for 1.16 billion US dollars, Yarımca Porselen for 30.5 million US dollars, Trabzon port for 24.5 million US dollars, Antalya port for 29 million US dollars and the Uskudar building of the Maritime Cargo Lines for 16.2 million US dollars.

The privatization realized by the Privatization Administration Board will exceed 4.5 billion US dollars by the end of this year, if the privatization programme is implemented successfully.

[24] REACTION TO THE RESOLUTION OF THE UN SECURITY COUNCIL - THE TRNC HUMAN RIGHTS ASSOCIATION: ''A POLITICAL SOLUTION ON CYPRUS CAN BE PROVIDED BY RECOGNIZING THE RIGHTS OF TURKISH CYPRIOTS''

The Association noted that the postponement of the political problem that has been continuing for 35 years, is unacceptable. Pointing out that both the Greek Cypriots and the Turkish Cypriots will benefit from the peaceful solution that will be reached on the island, the Association added, ''The United Nations Security Council which mortgages the political problem on the island and the international policy, delays the peace between the two nations living on Cyprus with its unfair resolutions and at the same time forces the Turkish Cypriots to live without the fundamental rights by denying the partnership rights of the Republic of Cyprus of 1960 and the fundamental human rights''.

The statement of the TRNC Human Rights Association stressed that the first duty of the UN Security Council is to recognize the rights of the Turkish Cypriots and respect them.

Requesting the UN Security Council to recognize the partnership rights and fundamental human rights of the Turkish Cypriots, the statement also added, ''the last decision of the Council foresees the negotiations between the two nations to be continued under the same conditions''.

[25] TRNC PRESIDENT DENKTAS: ''EFFORTS WILL CONTINUE TO IMPROVE THE ECONOMY''

The TRNC economy was evaluated in a meeting headed by President Rauf Denktas the same day held among business circles, the Ministries of the Economy and Finance.

Addressing the meeting, Denktas said that the high ranking protocols made with Turkey will be discussed during the meeting.

Rauf Denktas stressed that these kinds of meetings should continue to improve the economy.

''We can't overcome some impediments due to the island economy, but we'll try to solve our problems with these kinds of meetings,'' he added.

[26] PRESIDENT DEMIREL HOSTS A LUNCHEON FOR TURKISH AMBASSADORS WORKING IN AFRICA

The Turkish Ambasadors to Egypt, Algeria, Kenya, Libya, South Africa, Nigeria, Senegal, Sudan, Ethiopia, Zaire, Tunisia and Morocco were invited to Turkey within the framework of the action plan, undertaken by the Foreign Ministry to develop political and economic relations with the African countries.

Ismail Cem, the Foreign Minister, said on Tuesday in the evaluation meeting held with the Turkish Ambassadors to Africa that a political and economic boom will be experienced in 1999 in the political and economic relations of Turkey with the African and Latin American countries. Cem added that steps have been taken with this objective with Egypt and Algeria.

The Turkish Ambassadors participated in many meetings in Ankara during the last three days for the political and economic opening to the Northern, Central and South African countries.

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