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AHI Sends Letter To President Regarding Turkish Financial Crisis
March 12, 2001 No. 12/01 (202) 785-8430

AHI Sends Letter To President Regarding Turkish Financial Crisis

On March 12, 2001 AHI General Counsel Gene Rossides sent a letter (copy enclosed—click here) to President George W. Bush regarding the present financial crisis in Turkey with suggestions as to how the U.S. and IMF should respond to the situation in the best interests of the U.S.

Mr. Rossides highlighted the fact that the Turkish financial crisis has important implications for overall U.S. relations in the Eastern Mediterranean region and particularly with Turkey, Greece and Cyprus.

Mr. Rossides noted that the current emergency is only the latest in a string of Turkish economic crises and that past efforts by the U.S. and the IMF to stabilize the Turkish economy have failed because they have not identified and addressed the root cause of the financial instability: "the Turkish military, which controls foreign and domestic policy under the constitution." Mr. Rossides further stated that: "The Turkish military's political control is augmented and supported by (1) its ownership of substantial financial assets, and (2) its control of its own budget -- amounting to one-third of state revenues."

Using numerous sources, including the recent Foreign Affairs article on Turkey by former French Ambassador Eric Rouleau, Mr. Rossides describes how the Turkish military controls state functions, and lists the military's control of arms production and procurement companies and a leading industrial conglomerate. These companies are highly profitable because are all exempt from duties and taxes, "a unique form of official corruption." As a result, the Turkish military has amassed a fortune amounting to "tens of billions of dollars" in a "reserve fund," which should be used in the current financial crisis. Thus far, the IMF bailouts, seventeen since 1961, have primarily benefited the military.

Mr. Rossides states that the Turkish military have created a political culture of endemic corruption, financial mismanagement and have blocked genuine democratic reforms. He called on President George W. Bush to critically review U.S. policy toward Turkey and to pressure Ankara's military elite into instituting wide-ranging reforms to bring genuine democracy to the Turkish people.