BobW --- Doug Henwood <dhenwood at panix.com> wrote:
> Financial Times - July 23, 2007
>
> LEX
> Turkish elections
>
> The victory of the Justice and Development Party
> (AKP) in Sunday’s
> parliamentary elections got a cheery welcome from
> Turkey’s financial
> markets. With good reason.
>
> The AKP has presided over impressive economic gains
> in Turkey since
> 2002. The economy has grown about 7 per cent a year
> on average, and
> the budget deficit has been reduced from nearly 15
> per cent of gross
> domestic product to just 0.7 per cent of GDP last
> year. Backed by an
> IMF programme, inflation has fallen from more than
> 70 to less than 10
> per cent. Meanwhile, the domestic stock market has
> quintupled in
> value. Even if serious economic concerns remain –
> the yawning current
> account deficit, for one – investors should be
> pleased that Turkey
> will remain under the same management.
>
> The AKP is likely to use its strengthened electoral
> mandate – it won
> nearly 47 per cent of the vote – to pursue reform.
> Pension
> legislation will be revived and more big-ticket
> privatisations,
> including the country’s highways, are on the cards.
>
> Investors may also be encouraged that the AKP does
> not have the two-
> thirds majority necessary to change the
> constitution, although it
> could perhaps garner it with the help of independent
> members of
> parliament. It may again choose to put forward
> Abdullah Gul for the
> presidency, the candidate who caused the military so
> much disquiet,
> or may choose to build consensus around a more
> widely acceptable
> candidate. What seems clear is that the army, seeing
> the level of
> popular support the AKP has just received, will be
> less enthusiastic
> about confronting it.
>
> Assuming that the presidential elections do happen
> smoothly, domestic
> interest rates of 17.5 per cent will fall. That is
> one reason bank
> shares leapt on Monday. And declining political risk
> should allow
> investors to focus, once again, on Turkey’s
> attractive economic
> fundamentals.
> ___________________________________
>
http://mailman.lbo-talk.org/mailman/listinfo/lbo-talk
>