Turkey - Domestic policy

Turkey is currently going through a period of reform, largely due to its desire to gain admission to the EU. Changes in the state security law were introduced and subsequently the Parliament voted in 1999, with an overwhelming majority, for the removal of military judges in State Security Courts. In October 2001, Parliament voted for 34 changes to the Constitution, including the abolition of the death penalty except in times of war and for acts of terrorism, ending the practice of torture, and allowing the use of the Kurdish language in broadcasting and education.

The government will need to adhere to anti-inflationary policies and privatization plans of previous governments and work to combat rising unemployment. Turkey sought International Monetary Fund (IMF) backing for a "disinflation program" to cut hyper-inflation to single digits by the end of2001. Social security reform, which is crucial for IMF support, will need to be a priority for Erdogan, as is reform in agricultural subsidies. The IMF has urged Turkey to reform its pension system, which produces losses of around 3% of the GDP each year. Parliament has passed banking laws aimed at making Turkey more attractive to investors.

For a number of years, international investors have been engaged in planning the Ilisu hydroelectric dam, to supply Turkey with irrigation and electricity. In 2001, however, British contractor Balfour Beatty pulled out of the project, as did the Swiss bank, UBS, in 2002, due to claims that the dam would have an adverse social and environmental impact on the region.