Washington Report on Middle East Affairs, January/February 1998, Pages 44, 113

Talking Turkey

Despite Inflation and Secular-Religious Gulf, Caretake Yilmaz Government Reducing Turkish Tensions

By James M. Dorsey

Turkey forces one to revisit one's logic.

Near 90 percent inflation should be causing untenable economic disruption, yet despite gaping income differences, Turks have learned to live with it. In fact, State Minister for the Economy Gunes Taner tells everyone who will listen that 70 percent of all Turks have a vested interest in high inflation.

Similarly, political instability should be disruptive. It is, but international business has learned to work around it and has come to view Ankara as a law unto itself, a settlement existing in a netherworld on some other planet. As a result, Turkey may be witnessing the emergence of various competing power centers as business moves to profile itself internationally as an institution. Turkey's foremost business organization, the Turkish Businessmen and Industrialists Association (TUSIAD), recently visited Washington and New York to explore establishing a lobbying presence of its own in the U.S. capital alongside its already existing representation in Brussels.

Turkey furthermore would seem to be a classical case for a strong Islamist threat to its existing order. Rapid urbanization, social dislocation, corruption, an ailing political system in desperate need of a radical overhaul offer a healthy feeding ground for Islamists.

Yet, the opposite may be true. Islamists are fighting in the courts for their very existence and may be lucky if they can hold on to the 20 percent of the vote they garnered in the December 1995 election. In ousting the Islamists from office in June, the Turkish military may have succeeded in neutralizing the pro-Islamic Refah (Welfare) Party as an alternative by identifying it as having a troubled relationship with the armed forces—something of which Turks are apprehensive.

Western fears of a potential Islamist threat in Turkey are shaped in part by fears of many Turks themselves. Those fears, in turn, may to some extent be fueled by ignorance among some Turks of their own cultural legacy.

A young Turkish analyst told an anecdote about her recent visit to an industrial complex in Egypt. At noon, she was startled when a worker suddenly jumped up and began shouting in Arabic.

Only after her host advised her that the man was calling workers to noon prayers, did she recognize the ritual. Returning to Turkey, she said she realized for the first time that there is a distinction between being a religious Muslim and being an Islamic militant, and that practice of one's religion did not necessarily imply political activism.

There is a distinction between being a religious Muslim and being an Islamic militant.

Yet, the current Turkish government came to office in this charged political atmosphere of distrust between various groups in society with a mandate to reverse what the military and the secularist elite perceived as the Islamists' march through the institutions. Half a year later, the question is whether this is a status quo government or whether it can make a real difference in tackling the country's fundamental economic and political problems. The jury is still out.

The government resembles a bit the man who complains to the rabbi that he lives with his extended family in close quarters and cannot stand it. The rabbi tells him to move his farm animals into his house. Within days the man complains to the rabbi that his advice has made things even worse. The rabbi suggests he put the animals back outside. The next time the two men meet, the rabbi asks how things are going. "Much better," the man replies.

Similarly, many Turks can only perceive the Yilmaz government as an improvement over its predecessor. The Islamist-led coalition led by Necmettin Erbakan simultaneously followed populist economic policies, made desperate efforts to cater to both the secular and religious communities, and increasingly strained relations with Turkey's militantly secular military.

Yet pausing to restore a sense of calm and reduce anxiety is wearing thin. The focus is on whether the Yilmaz government can produce true economic and, eventually, political reform. There is little debate over what has to be done. The question is whether Yilmaz and his crew have what it takes to do it. It's a tough call for an ideologically incoherent coalition that does not command a majority in parliament and is dependent on social democrats willing to support it in the assembly, but unwilling to accept administrative responsibility.

On the economic front, the government's performance over the past four months has inspired hope, if not confidence, by making some of the right noises and taking some of the right steps. It is talking about a tough winter to come, a three-year plan to reduce inflation gradually, privatization and social security and tax reform. In projections for fiscal 1998, expectations of revenues from privatization are kept off-budget and borrowing is being restricted by the fiscal deficit. Similarly, public sector salaries and pensions are marked at 30 percent.

Agreeing to Agree

All of this is on the plus side. By the same token, it is hard to find a precedent for a gradual reduction of inflation without hurting significant segments of the population. The International Monetary Fund (IMF) has apparent difficulty endorsing the government program despite indications by Economy Minister Taner that he reached an agreement with the Fund during November talks in Washington. "We have agreed to agree," Taner says, conceding that most of the details of the agreement he envisions being signed when Yilmaz visits Washington in the third week of December have yet to be worked out. In Taner's vision, the agreement with the IMF will be unprecedented and serve as a model for the Fund's relations with other emerging markets.

Meanwhile, in Turkey itself there are hints that the government may have difficulty in delivering on its good intentions. Officials of the Republican People's Party (CHP), the party that supports the government in parliament, insist that they will not support reforms that hurt. CHP leader Deniz Baykal told the trade unions earlier this month that he backed them in their resistance to reform. The watering down of the social security reform bill is another indication. Tax reform may also turn out to be less far-reaching than had been expected. One further indication of which way the wind is blowing will be whether the left gets its way in introducing now, rather than in the year 2000, a capital gains tax on stock exchange earnings.

Most analysts dismiss as a mere blip this month's scare when Deputy Prime Minister Bulent Ecevit of the Democratic Left Party (DSP) said privatization was being temporarily suspended. Yilmaz contradicted Ecevit, who then said he had been misquoted. Yet, it signals the brief surfacing of potential conflict within the coalition. The fact of the matter is that Mumtaz Soysal, the most skilled and most succesful opponent of privatization and a member of Ecevit's DSP, is back on the war path vowing to defeat privatization and Ecevit has yet to speak out against him.

If the Yilmaz government's focus is reform, it is stressing economics rather than politics. There is no indication that it is seeking to channel new blood and energy into the political system or tackling urgent issues such as the war in the southeast, flaws in legal protection of human rights, democratization of political parties and a cleanup in the ranks of the state.

Meanwhile, the Islamist Refah Party is at the moment trying to prevent the courts from banning it. The response to a possible ban is likely to be muted and, if anything, intangible and difficult to assess. The real question is whether it will mark the beginning of a witchhunt against Islamist and non-Islamist members of the Erbakan government, and consequently the beginning of bitter, non-productive and vengeful political discourse in the future. Such discourse could only complicate the effort for reform, further strain relations with the European Union and perhaps result in a push for early elections.