strongly endorsed the program, the former by approving for turkey a three - year standby arrangement, and the latter by extending project credit. the prospect of membership negotiations with the european union pursuant to the helsinki decision provides an additional strong incentive to implement the program forcefully. there is a strong autonomous ownership of the program. the government, the parliament, policymakers, and the social partners all understand the great rewards, particularly in terms of reduced interest costs and stable growth, that will follow the program ’ s successful implementation. the markets ’ reactions to the program have also been very positive. interest rate declined from 100 % last october to the 30s recently. i expect that these positive attitudes on the part of all participants in the program will continue until turkey has achieved the long - sought and much desired goal of durable price stability.

already started as we speak. deterioration in risk perceptions has increased the risk premia of developing countries, including turkey. so far, the rise in turkey ’ s risk premium was in line with that of other developing countries, although more recently the current political uncertainty has started to put turkish financial markets under considerable strain. i believe turkey ’ s risk premium would be even higher in the absence of improvements in macroeconomic conditions and institutional reforms implemented in recent years. dear guests, one can label the last two decades as the era of globalization, deregulation, and privatization. it is not a coincidence that this period has overlapped with the rise of attention paid to good governance. one may just look at the number of occurrences of the word “ governance ” in academic search database ( econ - lit ) over time. it occurred just five times from 1970 to 1979, 100 times in the 80s, 4000 times in 1990s, and more than 10000 times since 2000. globalization of economic activity and greater reliance on private sector in economic decisions has created an environment in which the pursuit of efficiency has acquired utmost importance. globalization has increased the likelihood of international financial crisis in countries where the governments do not function properly. economic crisis in south eastern asia in late 1990s showed that even countries with considerable success in economic development may easily collapse into turmoil if they do not follow good governance practices. quite paradoxically, as the control of governments over the economy decreases, the quality of governance becomes more critical and decisive. with greater mobility of capital, countries have become more vulnerable to negative assessment of investors. today, financial markets are facing the most acute crisis they have experienced since the emergence of globalization. it is not surprising that good governance is once again at the center of public debate at this juncture. the seeds of current problems may be traced to past governance practices of governments, monetary authorities, financial institutions, and corporate sector. but before that, let me first introduce some conceptual issues. this may help us understand how we ended up here. it is not easy to give a short and comprehensive definition for economic governance. for the sake of our discussions, let me define it simply as the nature and practice of economic management, regulation and development. economic governance is in fact part of a larger picture that combines political governance, corporate governance and legal governance, which continuously interact with each other. the term “ economic governance ” is explained as “ the study of arrangements, and organizations that arise and evolve to govern economic activity. ” these institutions underpin