Secular Turkish government to increase clout on Islamic finance

ANKARA, Turkey (AP) — Turkey’s secular government not only wants political restrictions on the Islamic movement — it wants financial ones, too.
The country’s only Islamic party was banned last week, and the government has drafted a law ending privileges for Islamic financial institutions and tightening control on Muslim-owned businesses.
The staunchly secular military says those businesses channel about $250 million to Islamic political groups each year. While the transfers are legal, the generals see them as a threat to Turkey’s secular system and want them curbed.
They also want strict Muslims to diversify their investments, instead of limiting them to Muslim-owned firms.
The military has led a harsh campaign against the movement, forcing the country’s first Islamic-led government to resign last June and prodding the Constitutional Court to ban the Welfare Party — Turkey’s largest — last Friday for violating the constitution’s secular principles.
On Monday, a group of former Welfare officials was on the verge of forming a possible replacement party, Welfare leader and former Prime Minister Necmettin Erbakan said. Turkey’s chief prosecutor has vowed to push for closure of any party that looks like a successor to Welfare.
Erbakan also assured ambassadors from several Muslim countries Monday that the Islamic movement in Turkey will continue to grow.
That is just what the government fears.
Its draft finance law ends tax breaks and federal insurance exemptions for six Islamic financial institutions. Those perks have allowed them to lend cheaply to Islamic firms.
Islam forbids interest earnings, but Turkey’s Islamic financial institutions offer profit-sharing deals to skirt the ban.
The law, which is expected to be approved by Parliament in the next few months, would allow regular banks to offer no-interest accounts as well, opening up the market for strict believers’ savings.
“The officials finally saw the dimensions of threat posed by Islamic banking and businesses to our national security,” wrote Oktay Eksi, chief columnist for the daily Hurriyet.
Islamic companies insist they pose no such threat.
“We don’t select our customers based on their religions. That would not be trade,” Hikmet Guler, general manager of Faisal Finance, an Islamic firm, told The Associated Press.
Customers of such companies are devout Muslims seeking increased religious influence in their daily life.
“I bought all my household appliances from Islamic traders,” said Nevzat Yasar, pointing at an electric heater, a blender and a water-purifier in his kitchen. “I want my money go to Muslims.”
Islamic companies have $2.5 billion in investments in Turkey in textiles, media, chemicals, automotive, food, tourism and transportation.
The six Islamic finance houses targeted by the draft law have estimated total bank deposits of $2.2 billion, roughly 4 percent of deposits in all banks in Turkey. That is up 1 percent from the year before.
Last summer, the military ordered its units to stop purchasing goods or accepting bids from companies known for their Islamic politics.