TRKNWS-L Turkish Daily News excerpts (January 12, 1996)

From: TRKNWS-L <trh@aimnet.com>

Turkish News Directory

CONTENTS

TURKISH DAILY NEWS / 12 January 1996

[01] Ciller cold shoulders Erbakan

Turkish Daily News

ANKARA- Welfare Party (RP) Chairman Necmettin Erbakan on Thursday received a cold shoulder from True Path Party (DYP) Chairwoman Tansu Ciller in his first attempt to form a government after President Suleyman Demirel gave him the duty.

Erbakan stated he will meet Ciller once more despite the futile "courtesy call," after completing his first round with the leaders.

Erbakan waited for Ciller's statement after the meeting before addressing the press himself. Both leaders stated the meeting was one where issues were taken up in general terms. However, Ciller said DYP had "very different" views regarding social policies, foreign policy and priorities of the country when compared with those of the RP. Erbakan in his statement contradicted Ciller saying there wasn't any major differences.

In her statement Ciller said: "We explained that it would be very difficult to bring solutions to the country's problems when there are major differences in the approach to basic issues. We said such an effort would only waste the country's time." Responding to a question as to whether she will go to the RP when\if she is given the duty to form the government, Ciller said her party's responsible organs will decide on a work program and disclose this to the public if such a duty is given to her.

When asked whether Erbakan offered the position of the prime minister to her if she agreed to form a coalition with the RP, Ciller replied no details were discussed during the meeting.

Erbakan, on the other hand, argued the differences would be overcome with negotiations. "We should not be prejudiced," he said. He gave the customs union as an example and said the RP is not against the ultimate goal of the customs union but "we oppose certain articles of the March 6 agreement, which we see as being against our country's interests." The RP chairman also advised political parties to be able to change gears "because no party has the right to act with prejudgement and say a coalition with a certain party is out of the question." Erbakan said the RP is ready to form a coalition with any party, adding that they also proposed (to Ciller) a coalition between three parties -- the RP, the DYP and the Motherland Party (ANAP). He also said a "no" answer will not cause the RP any losses. "The RP will be the party that gains in any situation," he claimed.

The RP chairman said his efforts to form an RP-led government aimed to find immediate solutions to people's problems. "If there is another government possibility, the DYP and ANAP could try this," he said.

Erbakan's second meeting will be with ANAP Chairman Mesut Yilmaz on Saturday. He will continue his meetings with Democratic Left Party (DSP) leader Bulent Ecevit on Monday and Republican People's Party (CHP) Chairman Deniz Baykal on Tuesday. If he fails in his efforts, Erbakan will return the duty to the president.

CHP Chairman and Foreign Minister Baykal meanwhile stated that the subject of who will form the government wasn't very important. "What will be done and which will be the priorities of the government are more important issues," he said.

Baykal on Tuesday chaired the CHP Party Assembly which met to assess the situation after the Dec. 24 election. He said the political groupings that emerged from the election require "real coalitions" in Turkey from now on. He said there are pluralist groupings in Turkey and it is therefore not correct to see just one or two groupings. "The indisputable prime minister period is over, team work has become essential with the new picture the elections gave," he said.

Baykal pledged that his party will pursue the murder of journalist Metin Goktepe. He said, "This unfortunate incident shouldn't be eclipsed by terrorist attacks against famous personalities."

[02] Foreign businessmen calm about Refah government

Turkish Daily News

ISTANBUL- "I always believe you get what you deserve, so probably Turkey deserves a Welfare Party (Refah) government," one foreign bank manager who wished to remain anonymous told the Turkish Daily News. "If the elections were fair, Refah Chairman Necmettin Erbakan should be appointed to form the new government." Members of the foreign banking and business community were surprisingly unruffled and optimistic as they contemplated the possibility of a Refah- led government. One pointed out that Erbakan would have to temper his rhetoric, and perhaps some of the campaign promises he made, because he would be unable to govern if he did not form a coalition with another party.

"Basically, I don't see that, if they are in a coalition, there's much they can do to change things," said Jonathan Blythe, a Scottish senior consultant with Jura Consultants, associated with the British commercial law firm Ledingham and Chalmers. "Despite all their promises about establishing a 'just order', I don't see a big change in policy, because they can't really do much." As a business consultant, "I'm advising people what's happened, but the basic thing is this, once you explain the limitations Refah's working under, they're more reassured." "There are other Islamic societies where banking exists," said a foreign banking executive who preferred to remain anonymous. "One big issue is, are you going to charge interest?" In Islamic countries with foreign banking, Pakistan, for instance, he said banks simply rename "interest" "profit- sharing" to comply with the letter of Islamic law.

"My bank's commitment to Turkey is for the long term," he stated. "Most foreign bankers would expect things'll change, but it'll be minor. You ask foreign bankers, do you want to do business in Turkey, the answer still is 'Of course, yes'." He said what would be far more damaging to Turkey's economy than Refah come to power as part of a coalition government would be for the current leaderless instability to continue.

"There's a vacuum now, nothing's being done, and that's far worse" than a Refah coalition, he explained.

Some thought that it was possible that one or another of the major political parties would swallow their "openly expressed revulsion" for a coalition with Refah if it suited their longer term political interests. Even Prime Minister Tansu Ciller, who is perceived by Istanbul's foreign business community as changeable under different circumstances, might change her mind if it meant playing a leading role in the new government.

One businessman said he was looking forward to "business as usual" were Refah to form a government. He pointed out that the late Turgut Ozal's tenures as prime minister and president had opened Turkey's horizons to new opportunities and possibilities, and doubted very much that Turkey could go back on that. While most businessmen would be prepared to accept "some minor moderations in this or that," they doubted Erbakan would be able to effect major changes of direction.

A different note was struck by English international transport executive Adrian Traher, who said "Our business is slightly unique, in that [a Refah government] would have absolutely no impact on our business whatsoever." As an international corporation located in Turkey, Traher explained that his business responds to fluctuations in the world economy more than any domestic shifts.

"I've spoken with some Turkish executives who are concerned from a stability point of view, but they don't feel Refah would make any policy changes hostile to business, they're actually quite confident that Refah has the best interests of the country in mind," he said, adding that "it would take an awful lot of time for any changes they made to be effective." As Blythe correctly noted, "protocol demands that Refah should be allowed to form the government. Time will tell exactly where they will lean," he said, "if they move towards their stated aims, or towards the one the center-right has been following.

"They will have to follow center-right policies if they want the coalition to last." Asked if other businessmen were as sanguine, Blythe said "I've heard from some bankers who are a little nervous, they feel Erbakan isn't qualified to run the government. My impression is that people are cautious, they're not sure how things are going to go, but they're not overly worried, because from a practical view there isn't that much they can do." While admitting that Refah is "very well organized as a party," Blythe said he figured they're "sensible enough to realize there are things they can do, and can't do," with the specter of the army hanging over their shoulders. "I'm sure they have thought through what is possible, and what is not possible." Still, regardless of their election promises, Blythe is telling his foreign clients that since Refah will be forced in a coalition government, they'll probably be forced into a pattern close to the present government. "There will be an austerity program, and speeded up privatization." A foreign banking executive who spoke on condition of anonymity said "Is this the best possible coalition? Probably not. Most businessmen would prefer an Anayol partnership much more." But he said he would not advise his superiors to curtail any operations in Turkey should Refah form a government, as "the fact is, no one knows what they would do."

[03] Foreign community shocked by murders

Turkish Daily News

ISTANBUL- Members of the foreign business and banking community in Istanbul expressed their shock and dismay Tuesday over the fatal shooting of businessman Ozdemir Sabanci, Toyotasa General Manager Haluk Gorgun and Sabanci Holding staff member Nilgun Hasefe on Monday. Sad, shocking and extremely disturbing were some of the ways in which the event was described.

Two theories are being bruited about. One thesis accepts the claims made by callers to the media that the killers were members of an outlawed leftist group who were protesting the way the recent unrest in the prisons was handled by the authorities. "The way the police handled the prison issue was revolting," said the general manager of one of the foreign banks in Turkey. "Turks have to learn the difference between terrorists and legitimate protestors. It is only natural for a mother to want to know what was happening to her son in prison.

But for the police to rough her up is unconscienable. It doesn't do anything good for Turkey."

The second thesis is that in spite of what the callers claimed there is no logical connection apparent. In fact several of the foreign businessmen pointed out that this was obviously planned three or four months ago since the woman who prepared tea on the executive floor and who has been implicated started work three months ago. Moreover some were struck with the thoroughly professional way in which the act was carried out. One expressed surprise at how easily it was done, pointing out that for all the much vaunted security at Sabanci Center, it had been in vain.

The second thesis continues that the killers had wanted to create headlines and had certainly succeeded in doing so. One businessman believes that the murders were planned to coincide with the appointment of one of the political party leaders to form a new government. If this was the reasoning behind the event, then they truly succeeded because many of the Turkish newspapers relegated the Welfare Party story on the back page which is euphemistically called the second front page.

The Sabanci killing reminded another of the bad old days of 15 years ago when terror was rampant until the army stepped in.

He continued, "From my point of view the perpetrators of the act got what they wanted, shock and worry in the business community. This was a great loss for the Turkish business community. I sincerely hope that it doesn't put people off investing in Turkey in the long term. It doesn't affect my personal perception of doing business in Turkey. It was a very unfortunate event but an isolated one." Two of the bankers commented also on the reaction of the Istanbul Stock Exchange where the index in fact went up, contrary to what might have been expected. "I called around to some of my colleagues in the afternoon just to get a reading of the situation," said one of them. "They reported that everything seemed to be calm. The index even went higher in the trading session Tuesday morning."

Yet another of the businessmen who had fairly extensive dealings with Ozdemir Sabanci and had good relations with him was very upset. He had found him a very sincere and sympathetic person. He really felt very sorry about the whole incident.

A member of the foreign banking community however expressed a dissenting view point which it seems is not represented elsewhere. Stemming from the illogical claims which were made, there seems to be some, as yet unknown, reason why Sabanci was killed. If the killers were really protesting the handling of the prison unrest, then it would make more sense to kill someone directly involved such as the police chief or the governor. After all, if a person really wants to kill another, there is virtually no way to stop such an event from happening.

No one however will know the right of the story until the killers are caught.

[04] Iraq's demarche raises eyebrows in Ankara

Turkish Daily News

ANKARA- A demarche given to Turkey by Iraq on the water question was interpreted in Ankara as "a delayed attempt to voice its views on the water question." Turkish diplomats said that the Iraqi demarche was very similar to that given by Syria last month, as it also claimed that Turkey polluted the waters of the Euphrates, which first passes through Syria, then through Iraq.

But according to a senior Turkish diplomat, who is in charge of the water file, it is possibly Syria that is polluting the water downstream.

"The primitive irrigation technologies used by Syria are polluting the water," he said.

Under an agreement signed between the two countries, Syria uses 42 percent of the water which Turkey lets out from the Euphrates and the remaining 58 percent is used by Iraq, which is further downstream.

The Iraqi demarche contains no new ideas nor anything different than the one issued by Syria, according to Turkish officials, hinting at the belief that the move was "encouraged" by Syria.

Syria has been fervently lobbying to put international pressure on Turkey on the water question, and Arab countries, mostly downstream states in terms of regional water resources, have been receptive to this pressure. Last December, the Arab League, largely through the efforts of its Syrian deputy secretary-general, warned Turkey to respect Syria's "rights" on water. A week later, several Ara

[05] "That is the way to a solution and that is what we are ready to do"

The meeting between Denktas and Spring was the first ever official contact in the Turkish Republic of Northern Cyprus by a foreign minister from one of the European Union (EU) "Troika" countries (the immediate past, present and next-term presidents of the EU).

The Greek Cypriot administration is due to start accession talks with the EU six months after the end of an intergovernmental summit due to start during the Italian presidency in March. The Turkish Cypriot administration wants to negotiate a settlement to the Cyprus problem before accession to the EU.

"We can talk about the EU with Clerides, but the EU comes on to the agenda when we have agreed on a settlement and the status of the Turkish Cypriots is underlined and accepted by all concerned," Denktas said.

Clerides has stated he will only sit down to talks when common ground has been reached on some basic issues such as security and territorial matters.

Spring, who had had contacts with officials of the Greek Cyprus government on Wednesday, has expressed his view that negotiation talks between southern Cyprus and the European Union could act as a catalyst in efforts to settle the dispute on the divided island.

"I think it concerns all of us, when there are problems, to use our energies to find a solution," Spring said in a statement outside Dentkas' office.

The Greek Cypriot National Council, a political advisory body to Clerides, which met on Tuesday to plot strategy before an international diplomatic push to resolve the island's decades-old crisis, said on Tuesday they would never agree to Turkish Cypriot separate sovereignty, one of the key conditions of Turkish Cypriots for a settlement on the island.

U.S. Assistant Secretary of State Richard Holbrooke, the diplomat who brokered Bosnia's peace deal last year, is expected in Cyprus in early February to try and mediate a solution to the Cypriot problem.

Holbrooke, who was due to visit the island on Jan. 22-23, is now expected to visit the island in the first week of February.

U.S. sources attributed the delay to the government problem in Ankara and the uncertainty prevailing in Greece because of the continued hospitalization of Prime Minister Andreas Papandreou.

[06] Garanti Bankasi to tap international markets

ISTANBUL- Turkish Garanti Bankasi, a leading private sector bank, closed on Jan. 9 a seven-year financing placed in international capital markets.

The financing involves a securitization of Garanti's future U.S. dollar receivables due from Visa International, Europay International and Master Card International. The transaction was structured by Citicorp Securities, Inc. and placed by Citibank, N.A.

The securitization was privately placed with institutional investors, including life insurance companies and pension funds, in the United States and Japan. The transaction was oversubscribed with strong demand for the trust certificates from America, Japan, Europe and the Middle East.

Trust certificates with a combined face value of $97,245,322, backed by Garanti's future credit card receivables and which carry a fixed rate of interest, were issued from a U.S. trust.

The yield to investors is 2.40 percent over the 5-year U.S.

Treasury rate equal to 7.83 percent per annum.

The trust certificates are rated "A" by Duff & Phelps. The final maturity of the transaction is seven years with a five- year average life and includes a one-year grace period in the repayment of principal. This transaction represents the second such financing concluded by Garanti Bank and represents the only securitization originating from Turkey to have been successfully brought to the international capital markets in 1995. Garanti Bank closed its first seven-year future receivables securitization transaction in December of 1994.

This financing enables Garanti Bank to further diversify its funding base and to extend the term structure of its liabilities on a fixed rate basis.