Turkish Daily News, 96-05-09

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From: Turkish Ministry of Foreign Affairs <http://www.mfa.gov.tr>

TURKISH DAILY NEWS
9 May 1996

CONTENTS

[01] Turkey's chase after PKK militants turns into a cross-border operation

[02] Turkey may visit Eurobond market by early June

[03] World apparel convention ends after two-day focus on business

[04] Parliament to vote on Ciller inquiry today

[01] Turkey's chase after PKK militants turns into a cross-border operation

TDN staff with Wire Dispatches

ANKARA- Turkish troops have intensified their attacks on Kurdistan Workers' Party (PKK) bases since Sunday, turning their mission into a cross-operation.

Fifteen militants were killed on Wednesday during assaults by Turkish troops backed by U.S.-made Cobra helicopter gunships, the semi-official Anatolia news agency reported.

Quoting regional sources, Anatolia said operations had been underway for several days, but that troops had penetrated up to 10 kilometers inside northern Iraq while chasing a number of PKK militants on Tuesday.

Also on Tuesday an Iraqi group, the Kurdistan Democratic Party (KDP), accused Turkey of damaging a village and forcing scores of civilians to flee their homes due to long-range artillery shelling and bombing by planes.

The KDP said that the Turkish artillery had rained more than 60 shells on the Iraqi side of the border near Terwanish over three days.

Turkish authorities remained silent about the operation, although Chief of Staff General Ismail Hakki Karadayi is currently on a visit to the Emergency Rule region along with many other high-ranking military officials.

Karadayi paid a visit to Necati Bilican, governor of the Emergency Rule region in Diyarbakir, to congratulate Bilican on his new post and wish him success.

"The second purpose of our visit is to be briefed on the latest developments in the region," Karadayi was quoted as saying.

Anatolia did not say how many troops were involved in the operation.

"Security forces began a cross-border operation three days ago. They went about eight or ten kilometers into northern Iraq," a military official based in eastern Turkey told Reuters.

He said about 35,000 troops had been deployed for some time along the Iraqi border, concentrating on short-range missions.

"But now Cobra helicopters are also supporting the troops' operation (further into Iraq)," the military official said.

Around 35,000 Turkish troops spent six weeks in northern Iraq last spring but failed to oust PKK forces there.

(TDN, 09.05.1996, page 1)

[02] Turkey may visit Eurobond market by early June

ANKARA- Turkey may visit Eurobond markets with an issue of some $300 to $500 million by early June, despite prolonged economic problems and low credit ratings, Turkish bankers said on Tuesday.

They say the maturity of the issue could be between three and five years. Turkey, which tapped samurai markets with 75 billion yen worth of five-year bonds in April, is expected to give a mandate for the Eurodollar deal soon.

It is also expected to raise some 30 billion yen this month under a Medium Term Note (MTN) program set up last year, government officials said.

Turkey is planning to borrow $2.5 billion on international capital markets this year. It has already raised about $1.1 billion through the samurai and two earlier Euro issues -- a 500 million mark and a 10 yen billion issue.

"Sentiment is positive. It will be more positive if Turkey reaches an accord with the International Monetary Fund (IMF)," said an official from a state-owned bank.

Turkey is expected to resume negotiations with the IMF for a new stand-by arrangement later this month. An IMF team is expected to arrive in Turkey on May 14 for consultations.

Turkey's sound record in debt servicing, despite economic ills and low credibility, helps it borrow abroad. Turkey repaid its debts on time in 1994 with no international financial support when its economy was hit by a severe economic crisis.

Turkey currently has a B-plus rating with a stable outlook from Standard &amp; Poor's and Ba3 from Moody's.

Bankers and officials expect no upgrading in these ratings in the near term and say Turkey first needs to make progress in key structural reforms to curb big deficits and high inflation.

Economists say political instability, sparked by general discord between the partners of the uneasy conservative coalition, and a lack of consensus on structural reforms within the ruling alliance, is the major obstacle facing the country's efforts to further improve its foreign borrowing performance.

Prime Minister Mesut Yilmaz said on Monday the coalition would send a series of draft laws to parliament in the coming weeks to increase state revenues through taxing unregistered gains and reform loss-making social security institutions.

The minority coalition needs suport from the left-wing Democratic Left Party (DSP) to pass the drafts from the general assembly. The DSP hindered efforts to privatize state firms and reform pension funds in the past.

Turkish banks, which borrowed about $1.5 billion via one-year syndicated loan deals last year at spreads of more than 100 basis points, are active in the markets again this year. They have pulled down their borrowing costs below 100 bps and are trying to extend maturities to two years.

They have signed or launched deals worth over $530 million so far this year, despite political uncertainty that began when the right-left government collapsed in September, leading to inconclusive December polls and weeks of alliance talks.

Three of the deals had a final maturity of two years with put options. A $100-million one-year syndicated loan for the state-run Halk Bank, which will close on Friday, is expected to be oversubscribed, bankers say.

Some other Turkish banks are likely to go into the loan markets in coming weeks.

(TDN, 09.05.1996, page 2)

[03] World apparel convention ends after two-day focus on business

ISTANBUL- The 12th World Apparel Convention concluded Wednesday at Ciragan Palace with the final session on "the place of fashion in our lives." The convention, entitled "The Winds of Enterprise," was organized by the International Apparel Federation (IAF) and was attended by 600 Turkish and foreign delegates.

The government interest in the convention was noted by both the participants and the media. President Suleyman Demirel sent a message of goodwill and welcomed the foreign participants to the convention. At the opening ceremony of the convention on Tuesday, Prime Minister Mesut Yilmaz delivered the introductory speech, in which he pointed to the growing potential of the Turkish textile and clothing industry and invited foreign textile investment in Turkey.

The convention was chaired by Hasan Arat, the chairman of the IAF, and Turan Sarigulle, the chairman of the Turkish Clothing Manufacturers' Association (TGSD).

The first session of the convention chaired by Peter G. Brown of Kurt Salmon Associates was on "Global Consumer Behavior" in which world-famous trademarks and consultant firms presented theses on the subject with the participation of Vitali Hakko of Vakko, Vakifbank General Manager Fehmi Gultekin, J.A.M. Kamp of C &amp; A and Gaetano Marzotto of the Marzotto Group.

In the afternoon session on "A Detailed Analysis of the Developing Markets," chaired by Jerry J. Weinfuss of the EDS, the effects of the new age of communication and transport industries and the role of politics in the new markets were discussed. This session had the participation of Herbert Hein of Karstadt AG, Mustafa Taviloglu of Mudo, Onder Eren of Quiksilver, Peter A. Jacobi of Levi's International, Mehmet Ali Babaoglu of Orta Anadolu and Dr. J. Adamicek of Textilwirthshaft.

In the last session of the first day of the convention the subject of "Strategic Cooperation in the Developing Markets" was discussed. Speakers of this session, which was chaired by IBM's Daniel J. Sweeny, included John Adams of Russell Corp., Frans Van der Velde of Scotch &amp; Soda BV, Ted Wachtmeister of H &amp; M, Safa Ocak of TSKB and Karl H. Schwarz of Textilwirthshaft.

British young stylists win the IAF prize

In the evening of the first day of the gathering, the prizes in the first IAF Young Stylists Competition were presented.

British designers Ren Pearce and Andrew Fionda were voted the winners of the competition, winning the IAF Prize while Umit Unal of Turkey, who came second, was presented with the TGSD Prize and Jaana Seppa of Finland won the Beymen Prize for coming third.

The second Young Stylists Competition will take place in May next year in Hong Kong.

World Forum of Clothing Manufacturers

In the second day of the International Apparel Convention, the World Forum of Clothing Manufacturers was held with the participation of the Central Asian republics, the Czech Republic, Hungary, Poland, Tunisia, the Russian Federation and Pakistan.

Russian Deputy Minister of Textile, Valentine Lebedev, said the Russian apparel industry can only survive with foreign investment and supply of raw materials from abroad while Turkmenistan's Deputy Minister of Textile Ahmet Calik declared their target as $2 billion textile exports for next year. The Kyrgyzstan deputy minister of industry and trade, Ergesh Tilekmatov, informed the forum about the privatization of the Kyrgyzstanian textile industry, and in his address the Kazakhstan representative, Kiara Amreeva, pointed to the role of outdated machinery as a factor in limiting Kazakhstan's success in the textile industry and also invited foreign investment.

Hayrettin Somun, the ambassador of Bosnia-Herzegovina to Turkey, asked those who wish to trade with his country to bring their investments, at least in part into Bosnia-Herzegovina itself.

The Azerbeijan ambassador, Mehmet Aliev Nevruzoglu, pointed out in his speech that although Azerbeijan is known for its rich oil industry, his country is also rich regarding textile products.

Polish Ambassador Heusel Wojciech elaborated on the economic problems of Poland while highlighting the signs of recovery in the Polish economy at the same time.

Pakistan Consulate General Rahat Ulain said that 60 percent of Pakistani exports are textile products while the Tunisian representative, Hedi Charfi, said that that country had realized $2.5 billion worth of textile exports last year, placing Tunisia fifth in textile exports to Europe after China, Hong Kong, Turkey and India.

(TDN, 09.05.1996, page 2)

[04] Parliament to vote on Ciller inquiry today

DSP says its own research indicates an investigation of Ciller is necessary

TDN Parliament Bureau

ANKARA- Parliament will vote today on a second motion introduced by the main opposition Welfare Party (RP) for an investigation of True Path Party (DYP) Chairwoman Tansu Ciller's alleged corruption in the automotive concern TOFAS.

Ciller has been accused of irregularities in the bidding process in the privatization of TOFAS.

Besides the RP, other parliamentary opposition parties, namely the Republican People's Party (CHP) and the Grand Unity Party (BBP) will back the motion. After making the necessary examination in regard to the issue, the opposition Democratic Left Party (DSP), which backs the coalition but is not a partner, has decided that the inquiry should go ahead.

The passage of a parliamentary motion late April regarding the launching of an inquiry into Ciller, concerning the alleged corruptions at TEDAS, led to a crisis of confidence between the coalition partners. The motion, which was also introduced by the pro-Islamic RP, was passed by 232 votes to 179 in the 550-seat Parliament in a secret vote, during which 32 deputies from Mesut Yilmaz's Motherland Party (ANAP) apparently voted in favor of the investigation. Reportedly, the number of ANAP deputies who will vote in favor of the TOFAS inquiry during today's parliamentary session might number up to 60. The total number of votes in favor of the motion is expected to be exceed 300.

Although Ciller had earlier announced that she would vote for the TOFAS probe, her DYP colleagues are expected to vote against the motion. However, Ciller's intraparty opponents may reportedly either not attend the vote, as was the case during the TEDAS vote, or some might vote in favor.

Prior to the vote of the TOFAS inquiry, the DYP Parliamentary Group Administration distributed a booklet to all DYP deputies attacking the legal basis for an inquiry. Professor Zeki Hafizogullari gave legal advice in which he said that the motion against Ciller should be rejected. Hafizogullari said in the booklet that the issue cannot be made the subject of a parliamentary inquiry because there already exists a finalized court ruling in regard to the disputed matter.

However, an investigation carried out by a committee set up within the DSP parliamentary group has yielded an opposite opinion. Briefing his group about the outcome of his studies, Zekeriya Temizel said that the court ruling had related to the TOFAS bidding commission. "The investigation of the alleged irregularities may bring to the surface the reasons which led Ciller to open the sealed bidding envelope," Temizel said.

Pointing out that he and his colleagues had carried out their investigations by listening to all concerned, Temizel said that under existing Turkish legislation, the opening of the sealed bidding envelopes by the prime minister could not be accepted.

Temizel noted that the bidding was opened for selection of a firm which would market $600 million dollar state shares in TOFAS. He said that the sealed envelopes which contained the final offers of two competing firms, requested by the tender commission, were opened by Ciller at the prime minister's residence. He said that under the law, the envelopes should have been opened in front of the tender commission.

Temizel said that although it was the Interbank-Schroder group which had won the tender by making the lowest bid, the Finansbank- Lehman group was also given the tender, in violation of bidding conditions. He added that both groups were given excess payments ranging between $550,000 and $750,000.

(TDN, 09.05.1996, page 5)

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