32. Privatisation of the banks led the reform of
the financial sector. After suffering fund management problems,
ten banks were taken under state control at the end of 2000 when
a financial regulator was appointed. Four banks remain independent.
The banks now under state control will be offered for privatisation
in 2001. The three main state-controlled banks are to be brought
under the auspices of one board, and the central bank is to become
fully independent. The Turkish banking sector remains unsteady;
fluctuating interest and inflation rates render many of its usual
activities almost impossible. As Turkey's economy stabilises,
it would be useful to monitor developments in the privatisation
process. As we heard from out meeting with HSBC in Istanbul, there
is little UK banking involvement in Turkey.
33. When reporting on our visits to other applicant
nations over the last two years we have commented on the dearth
of funding from UK banks for potential investment projects in
these countries. We have remarked that this lack of support results
in lost opportunities for UK companies and perpetuates their exclusion
from these expanding markets.
In Turkey, perhaps due to the size of projects, we found some
UK banking investment presence; for example Natwest's involvement
in the Izmit Dam Build Operate Transfer (BOT) Scheme. We recommend
the Government ensures that the UK banking sector can be made
aware of the potential opportunities in any future public offerings
involving Turkish banks.
34. The insurance sector has changed over the last
decade, conforming to international expectations to a higher degree.
Upcoming legislation, introducing private pensions, is set to
provide unprecedented opportunities for UK firms to enter the
Turkish market. In order to supply private pensions, companies
must obtain a Treasury licence which will only be granted to firms
with qualified actuaries. Turkey suffers from a lack of qualified
actuaries; we were given an estimate of fewer than thirty for
the whole country. DTI and BTI should make companies in the
UK financial services sector aware of the private pensions legislation
and encourage them to explore the potential for offering their
expertise to take advantage of the new situation.
10 2000 Regular Report from the Commission on Turkey's
progress towards accession, 8 November 2000, p 22 Back
11 http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3MQWRL8KC&live=true Back
of Turkey Prime Ministry Privatisation Administration (T 11),
p 12 Back
Industrial and Trade Relations with the Baltic States, Twelfth
Report, Session 1999-2000, HC 835 Back