Turks unruffled by worries over lira and EU

Crisis? What crisis? Like many in this prosperous, conservative city, businessman Adem Ozcan Gundogdu is sure Turkey will weather the turbulence rocking its economy, resolve the tension between secularists and Islamists and stay the course to European Union membership.

"This is not the old Turkey...We saw many crises in the past, but I am more optimistic now. People are wiser, more tolerant," said Mr Gundogdu, general manager of cable producer Hes.

From city hall to the historic covered bazaar, his optimism is widely shared in Kayseri, about 350 km southeast of the capital Ankara in sun-baked central Anatolia, at the foot of snow-capped 3,916-metre Mount Erciyes.

The industrial powerhouse of nearly a million people is famed in Turkey for its traditions of self-help and thrift and also for a conservative, religious outlook that has made it a bastion of Prime Minister Tayyip Erdogan's ruling AK Party.

"I am not myself an AKP supporter but you have to give them credit. They lopped six zeroes off the lira and cut inflation to single digits. Nobody thought that possible," said Mr Gundogdu, whose company exports cables to 95 countries.

The mood of confidence contrasts sharply with the sense of anxiety in Ankara generated by a 20-per cent fall in the lira in recent weeks, big rises in interest rates, growing political tension and fears of a looming clash with the EU over Cyprus.

Kayseri's AKP mayor, Mehmet Ozhaseki, said that even the lira's fall had given a boost to his city's many exporters because it made Turkish products more competitive overseas.

"Some people are happy with the depreciation," he said. "Of course we watch the market volatility closely, but people do not believe there will be a real crisis."

Kayseri is home to many big manufacturers, such as furniture makers Bellona and Istikbal and clothing firm Mavi Jeans.

Mr Ozhaseki said unemployment in Kayseri, at about six per cent, was half the national average and noted as many as 200 new factories were under construction in the city.

Support for the AKP is holding firm and it remains well ahead of its rivals, Kayseri's mayor quoted local opinion surveys as showing.

Nationwide, too, the centre-right AKP, with Islamist roots, is tipped to win the next general election, due by November 2007.

Mr Ozhaseki said some issues that caused heated debate among the political elite and the media in Ankara and Turkey's commercial hub Istanbul had little resonance in the provinces.

"My wife, for example, is a lawyer and wears a headscarf. My daughter, who is a pharmacist, does not. We have no problems with this. It is normal," he said.

The AKP has tried to ease Turkey's strict ban on the Muslim headscarf in public offices and universities but has faced fierce resistance from secularists who dominate the country's military, academic and judicial establishment.

They see the headscarf as a threat to Turkey's secular order. Their opposition to the idea of Mr Erdogan, a pious Muslim, running for president in next year's election stems partly from the fact that his wife also wears the headscarf.

"For 90 per cent of Turkish people this is not a problem. But some politicians use the issue to stir up fears," said Mr Ozhaseki.

"We do not say religion is under threat if a president's wife does not wear the headscarf. So why is secularism suddenly under threat if we have a president whose wife does wear the headscarf?" he added.

In Kayseri's Ottoman-era bazaar, tradesmen expressed strong backing for the AKP's mix of Muslim piety and pro-market economic policies and were critical of what they see as an unrepresentative, secularist elite in Ankara.

"The AKP is just following the wishes of the people. The petty bureaucrats who have run the country for 70 years represent just 10 per cent of Turks but they don't want to give up power," said Sarset Dagdelen outside his clothing store.

In its dealings with the EU, too, the people of Kayseri - home town of Abdullah Gul, Turkey's foreign minister and number two in the AKP hierarchy - are firmly behind the government's refusal to bend on the vexed issue of Cyprus.

"We want to join the EU... but the EU shows double standards in dealing with Turkey, especially on Cyprus," said Hasan Ali Kilci, head of the Kayseri Chamber of Commerce. Turkey is under EU pressure to move towards recognition of Cyprus under its internationally accepted Greek Cypriot government. Mr Erdogan says the EU must first end a trade ban against a breakaway Turkish Cypriot enclave backed by Ankara.

Mr Kilci said Turkey's EU reforms were undermining its ability to fight Kurdish rebels in the poor southeast. Ankara views them as terrorists responsible for the deaths of more than 30,000 people in the past 22 years.

"If the EU keeps putting obstacles before us, we will conclude that the EU is basically a Christian club that does not want a majority Muslim country in its midst," he said.

On Thursday, EU Enlargement Commissioner Olli Rehn again warned Turkey its EU entry talks could be suspended over Cyprus - but few in Kayseri are losing sleep over the prospect.

They know Turkey will not join the EU for many years and it faces many more hurdles, including a possible veto by French and Austrian voters whose politicians - largely cool on Turkish membership - have promised to hold referendums on the issue.

"The EU does not seem to want us. But there will be no crisis. The AKP is on the right path. We trust our government," said housewife Melek Zirhli.