Table 2. Turkey: Structural Policy Conditionality, 2001

Action	MEP Ref. ^1/	Type of Action	Timing	Status, Nov. 20, 2001
Banking Sector Reform
1. Reduce the SDIF and state banks’ overnight position by at least two-thirds from the March 16, 2001 level	&8	Condition for the completion of the 6th and 7th reviews		Done
2. Eliminate the SDIF and state banks’ remaining overnight position	&8	Condition for the completion of the 8th review		Done
3. The stock of repos of the SDIF and state banks with the CBT not to exceed TL 7 quadrillion	&8	Condition for the completion of the 8th review	By end-May 2001	Done
4. Establish a common and politically independent board for Ziraat and Halk reporting to the treasury and appoint new management	&10	Condition for completion of the 6th and 7th reviews		Done
5. Complete financial restructuring of state banks	&10	Condition for completion of the 6th and 7th reviews		Done
6. Close Emlak Bank and transfer its liabilities and some of its assets to Ziraat Bank	&11	Condition for completion of the 8th review	By end-May 2001	Done before 8^th review
7. The SDIF to recapitalize Shmerbank to cover its negative net worth	&12	Condition for completion of the 6th and 7th reviews		Done
8. Recapitalize the remaining seven SDIF banks to cover their negative net worth	&13	Condition for completion of the 6th and 7th reviews		Done
9. Organize in a second transition bank or put into liquidation the four banks for which there were no bidders	&13	Condition for completion of the 8th review		Done (3 banks merged; one bank entered into voluntary liquidation)
10. Sell, put into liquidation, or otherwise resolve the remaining SDIF banks	&13	Condition for completion of the 12th review	End-2001	Expected to be completed by end-2001
11. (a) Presentation by all capital-deficient banks of detailed capital strengthening plans (b) Finalization of commitment letters by the banks on recapitalization plans agreeable to Fund staff	&15 &12 ^2/ &16 ^3/	Prior action for 6th and 7th reviews Condition for completion of the 8th review	By end-Apr. 2001	Done Done
12. Parliamentary approval of amendments to Banking Law	&16	Condition for completion of the 6th and 7th reviews		Done
13. Adopt connected lending regulation	&17	Benchmark	Within 1 month of approval of Banking Law	Done
14. Bring accounting standards for banks in line with international standards	&17	Benchmark	From the beginning of 2002	Under preparation
Fiscal Transparency and Management
15. Close the remaining 15 BFs (except DFIF) and 2 EBFs	&19	Benchmark	End-June 2001	Done
16. At least halve the number of revolving funds	&19	Benchmark	End-2001
17. Submit to parliament a Law on Public Finance and Debt Management	&19	Benchmark	End-June 2001	Done
18. Accompany the draft 2002 budget by accounts and financial outlook for EBFs and SSIs, revolving funds, contingent liabilities, SEEs, and local authorities	&19	Benchmark		Done
19. Submit to parliament a Public Procurement Law in line with EU standards	&19	Benchmark	By October 15, 2001	Done
Increasing the Role of Private Domestic and Foreign Capital in the Turkish Economy
20. Parliamentary approval of legislation to facilitate Türk Telekom privatization	&21	Prior action for 6th and 7th reviews		Done
21. Appointment of new professional board and management team for Türk Telekom	&21	Condition for completion of 8th review		Done
22. Contract advisors to develop a corporatization plan for Türk Telekom	&21^3/	Benchmark	End-October 2001	Done
23. Complete privatization plan for Türk Telekom	&21^3/	Benchmark	End-2001
24. Parliamentary approval of Tobacco Law	&21	Condition for completion of 8th review	May 2001	Done (law vetoed by President, but was re-submitted to Parliament in November.
25. Passage by parliament of a law fully implementing the constitutional amendment on international arbitration	&22	Benchmark	Before parliament’s summer recess	Done
Fiscal Policy and Public Debt Management
26. Approval of tax measures: (a) increase petroleum consumption tax by 15 percent in early May; (b) increase VAT rates (except the reduced 8 percent rate) by 1 percentage point; and (c) increase, as of April, the minimum contribution base relevant for social security payments in line with the existing regulations	&30	Prior action for 6th and 7th reviews		Done
27. Approval of supplementary budget in line with program expenditure figures and offsetting budgetary measures listed in &6 of the June 26, 2001 Letter of Intent.	&34	Condition for completion of 8th review		Done
28. Enact tax regulation to extend the use of tax identification numbers	&34	Condition for completion of 8th review	End-May 2001	Done before 8^th review
29. Reduce the stock of private sector tax arrears from the end-2000 level of 2 percent of GNP (including interest and penalties)	&34	Benchmark	End-2001
1/ Unless indicated otherwise, this refers to relevant paragraphs in the May 3 Memorandum on Economic Policies (MEP). 2/ Refers to the paragraph in the June 26, 2001 Letter of Intent 3/ Refers to the paragraph in the July 31, 2001 Letter of Intent