European Stars And Stripes (Newspaper) - February 5, 1989, Darmstadt, Hesse                                Istanbul s Takoy District the nation s birthrate creates a population the size of Chicago every two years. Rampant inflation threatens Turkey s political stability by Clyde Haberman new York times s 1988 Drew to a close Turkey s prime minister Turgut Ozal received an unusual and unwelcome package in the mail five men from the Western City of Denizl had sent him the belts to their trousers. The belts were of no use any More they said because they could not be tightened any further. At first the five were rounded up and questioned by the police but then released because they had not committed a crime. But they had vividly expressed the frustration that turks Are feeling As rampant inflation officially put at 75 percent last year hammers the Economy and threatens political stability. Bread prices shot up a month ago by 30 percent. Three Days before new year s Day gasoline prices were raised by 20 percent the seventh increase of 1988. The Cost of mailing those belts from Denizl in december was double what it would have been last summer. These Days a turkish business executive who needs to borrow Money is staring at an interest rate of 85 percent. Turkey s currency the lira has lost More than 80 percent of its value against the Dollar during the last year making it harder to import needed Industrial equipment and other goods. On the other hand the Economy spurred by massive government spending is the fastest growing in Western Europe with an average annual real growth rate of 7 percent for the past three years. Despite soaring inflation foreign capital is pouring in. For most of his More than five years in office Ozal has had two economic priorities growth and More growth. But now his aides concede that they must slash government spending restrain business expansion and otherwise rein in the Economy if they Hope to control inflation which at times last year came close to triple digits. And they had better move quickly they say. Inflation the no. 1 concern for most turks is fast eroding the political strength of Ozal a one time economic Technocrat who has failed repeatedly to make Good on promises to hold prices Down. His Domestic problems underline the broader challenges that lie ahead for Turkey As it seeks membership in the european Community and finds Europe reacting with a mixture of caution and dread. Ankara s relations with the United states have been testy As Well especially because of Turkey s conviction that it is being Short changed on american Aid when compared with what is Given to its archrival Greece. But in the 1988 and 1989 fiscal years the turks have received $92 million in economic assistance while the greeks got nothing. Moreover United states military Aid to Turkey was $990 million for the two years against $693 million for Greece. These funds have been allocated on a formula that gives $10 to Turkey for every $7 sent to Greece. In Ankara officials argue that they should be getting far More Money Given the reality that it contributes Many times As Many troops to nato defense forces As Greece. Even so the turkish focus for now is on Europe which has been Cool to the turkish application for Many reasons. They include fears of a flood of inexpensive turkish textiles and other exports and concern about a possible Rise in the number of turkish migrant workers prime minister Turgut Zal s problems runaway inflation unemployment High interest rates. Particularly in West Germany. Government officials in Ankara recognize that the appearance of rampant inflation does not help their Case. The present Levels Are not sustainable said Ali Terril head of the Pivotal state planning organization. This is going to be a rather critical year for the Economy and it is imperative that we score a few Points against  the slowdown has already occurred. Terril said that the 1988 growth rate projected at 7.2 percent was Likely to be closer to 5 percent. In part the change reflects spending reductions and other Low growth measures imposed Early last year. They were obviously not very effective however and turkish economists and foreign analysts blame a Lack of political will to carry out the announced cutbacks. With 55 million people and a birthrate that creates a population the size of Chicago s every two years Turkey needs annual economic growth of at least 5 percent to absorb All the new entrants into the work Force. As it is unemployment stands at 15 percent. In retrospect government officials acknowledge they May have been too effective in massaging an Economy that was Flat when Ozal took office in 1983. From the Start his emphasis was on promoting exports improving infrastructure and lifting heavy handed government controls. Adnan Kah Veci a state minister ticked off a list of successes Only one third of Turkey s villages had telephones in 1983, and now All do electricity has been extended to every Village and sewer service in Istanbul has been increased fourfold in the last five years. The Ozal government has also loosened foreign Exchange controls and banking Laws to give business More Freedom and it has begun albeit slowly the process of turning Over to private hands a Broad Range of state run enterprises. On Many fronts the results were impressive. The Economy grew in the mid-1980s by 7 and 8 percent a year. Exports in 1988, estimated at $11.5 billion were up by nearly 15 percent from the previous year. Foreign investment in the last year alone about $800 million accounted for nearly one third of the total for the last three decades. This influx of capital coupled with a booming tourist Industry and unusually heavy remittances from turkish workers overseas helped produce a Small current accounts surplus for 1988, tentatively estimated at $100 million. It is the first such surplus since the Early 1970s, and contrasts sharply with a 1987 deficit of almost $1 billion. It also Means that Turkey is less strapped for hard Cash than it once was. At $38.5 billion its foreign debt is still considerable. European officials make Clear that no decision on turkish membership in the european Community will come before 1992, when the dec is scheduled to become a single free Market. Ozal accepts that reality. But he insists that at a minimum negotiations must begin before 1992, and he has hinted that Turkey might reconsider its nato commitment if slighted. Ozal says his country is in better economic shape than Greece was when it joined in 1981, or Spain and Portugal when they entered in 1986. Europe May need convincing though and not just for business reasons. Turkey is moslem and culturally distinct from Western Europe. And its sheer size is overwhelming. Within a decade its population is expected to soar to 70 million which would make it the largest member of the Community. The perception of Turkey As a non european country is pretty important a european Diplomat in Ankara said. The whole culture is very different. I think the scale of the problem is a serious  not surprisingly turkish officials bristle at this attitude which they say lacks even handedness and perhaps reflects religious bigotry As Well. Kamran Inan a state minister who is partly responsible for european relations argues that the Community eventually will discover How indispensable Turkey is. In Inan s View Europe with its declining and aging population will need the vibrancy of a Youthful Turkey. Our population which is a Burden today in terms of development becomes a strength for tomorrow he said. 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