Kemal Dervis, economist called to solve Turkish fiscal crisis, dies at 74
Mr. Dervis’s personal roots were in Turkey, but his professional life was in international economic affairs in support of globalized trade and finance to lift developing countries. As Turkey’s economy modernized and grew in the 1980s and ’90s — along with its aspirations for possible European Union membership — Mr. Dervis watched from afar in executive roles at the World Bank, where he spent more than two decades.
That distance became Mr. Dervis’s strength. He filled a specific niche in Turkey, seen as someone above the political clashes that had helped push Turkey’s economy over the brink.
For years, Turkey’s growth had been underpinned by massive foreign investment, seeking to ride an expanding economy bridging Europe and the Middle East. But a series of rise-and-fall governments, each leaving the economy a bit more frayed, fed international jitters.
Investment money started to pour out of Turkey. Turkish stocks plummeted and the banking system was effectively paralyzed with interest rates hitting 3,000 percent or more. Inflation pushed beyond 55 percent, bringing steep devaluations of the Turkish lira.
In 1990, $1 brought about 2,500 lira. By 2001, the exchange rate was more than 1.2 million lira for a dollar.
“We all should tighten our belts,” Mr. Dervis said at a news conference in April 2001 shortly after accepting the call for help from Prime Minister Bulent Ecevit. “Don’t expect me to produce policies to save us just for today. We can’t dynamite our future in order to save today.”
Some Turkish columnists called him a “savior” in his new role minister of economic affairs. He quickly became known for his blunt, and often dire, assessments of what was needed to rebuild the economy. He cut state subsidies in agriculture and other industries. Government spending was rolled back and hiring for civil service jobs slowed to a trickle. “We just have to tell it like it is,” Mr. Dervis said in 2001.
The biggest lifeline came from the International Monetary Fund. Mr. Dervis negotiated an $8 billion loan package. It came with strict IMF rules on management of the Turkish economy and public spending, which would open the door to further funding from institutions such as the World Bank.
Mr. Dervis threatened to resign if Ecevit’s government stalled on the IMF-ordered changes. The rescue plan was put in place even as Ecevit and Mr. Dervis became the target of protests.
“IMF equals unemployment and hunger,” demonstrators chanted in Istanbul. When Agriculture Minister Husnu Yusuf Gokalp was asked about slashing wheat subsidies, he took a dig at Mr. Dervis. “You should pose that question to those having breakfast at the Hilton [with foreign bankers],” he said.
The political fallout collapsed Ecevit’s government in 2002, but the changes spearheaded by Mr. Dervis widely stayed in place and were credited with underpinning the growth that lasted until the global economic crisis in 2008. (Turkey’s central bank introduced a “new lira” in 2005 that lopped off six zeros, making the former 1 million lira a new 1 lira.)
Mr. Dervis was elected to the Turkish parliament in the 2002 elections. He had always deeply embraced the secularist values of the founder of modern Turkey, Mustafa Kemal Ataturk. Mr. Dervis often said he preferred to be called a “pro-secular figure” instead of a politician.
Yet Mr. Dervis and his political allies were increasingly challenged by the rising Islamist-style populism of Recep Tayyip Erdogan, who became prime minister in 2003 and president in 2014. Mr. Dervis left parliament in 2005 to head the U.N. Development Program, which oversees anti-poverty and community-building projects.
Mr. Dervis saw an advantage in his perspectives from Turkey, growing up during military coups and political upheavals and later confronting corruption and mismanagement of the economy. Previous heads of the UNDP were American or European.
“Crisis, lack of security, failure in government mechanisms breed disease, breed terror, breed environmental degradation,” he told a Yale University forum in 2005. “Increasingly, the citizens of the world realize — I think the young people more than the others perhaps — that their future is interlinked.”
Kemal Dervis was born on Jan. 10, 1949, in Istanbul and spend part of his boyhood on Buyukada Island near the city. He father was involved in business and his mother fled Europe during the Nazi rise to teach English in Turkey.
He graduated from the London School of Economics in 1968 and stayed to earn a master’s degree in economics in 1970. Mr. Dervis received his doctorate from Princeton University in 1973.
At the World Bank from 1977 to 2001, he served in roles including vice president for the Middle East and North Africa and vice president for poverty reduction and economic management.
After leaving the United Nations, Mr. Dervis joined the Brookings Institution, leading the global economy and development program from April 2009 to November 2017.
Throughout his career, he remained steadfast in his support of international institutions and globalization. He noted, however, that there can be an image problem with groups such as the IMF or World Bank, which can be seen as arms of the global powers and their policies.
“Whether it’s in Turkey or in Brazil or in Argentina or in Indonesia or in India, there’s no real trust,” Mr. Dervis said. “And for these institutions — which have resources, which have staff, which have technical knowledge — to really be useful, fully, and to do what they could do, I think we have to make them more legitimate.”
Mr. Dervis’s marriage to Neslihan Borali ended in divorce. He married Catherine Stachniak in 1997. In addition to his wife, survivors include two sons from his first marriage.
When Mr. Dervis dove into the Turkish economic crisis, he shared a family story about another attempt to straighten out the books. An ancestor with a flair for economics was asked by Ottoman Sultan Abdul Hamid I to help turn around a sagging economy in the late 18th century. The sultan then felt that plots were brewing to topple him. Mr. Dervis’s forebear was beheaded.
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