Turkey may implement some parts of a long-delayed social security reform immediately while others are likely to take effect around May, Economy Minister Mehmet Simsek said on Tuesday. The government submitted to parliament last week a social security bill that the International Monetary Fund has long demanded but the former president vetoed.
The reform-minded AK Party, which had said it wants to pass the bill by January 1, 2008, has a large majority in parliament. The new president, Abdullah Gul, is a former foreign minister in the AK Party government and is expected to approve the law.
"The social security bill will pass this year. Some articles will take effect immediately and some articles are likely to take effect around May because they require some infrastructure work," Simsek told reporters. Turkish newspapers had speculated on Tuesday that the social security reform bill may be delayed further.
The reform package will raise the retirement age and simplify the welfare system as part of efforts to curb a bulging social security deficit equivalent to around 4 percent of gross domestic product. Simsek also said that once the 2008 budget was passed, Ankara would invite a team from the IMF, Turkey's major creditor, to visit.
"We will invite the IMF when we are ready. We will finalise the review either this year or early next year," he said. Turkey has a $10 billion standby deal with the International Monetary Fund, which is set to expire next May. The government is yet to finish the fourth review of the current standby and also decide on a follow-up agreement.
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