Crushing Foreign Debt, Soaring Inflation : Turkey Paying Stiff Price for Pell-Mell Growth

This hinterland capital is the kind of town where a taxi driver from the airport meanders fitfully in search of Ankara’s only five-star hotel, open a few weeks, while a taxi driver from the hotel gets lost seeking the new headquarters of the Foreign Ministry, open a few months.

Ankara’s bustle is Turkey’s hustle. Things are moving, but not everybody’s sure the direction is right.

A year after winning impressive reelection, Prime Minister Turgut Ozal is under stiff political and economic attack from left and right.

Potentially Crippling Debt

Ozal is fostering rapid economic development, but with it has come potentially crippling foreign debt, and inflation that strikes hardest against a new urban middle class. Ozal defends a young Turkish democracy, but his opponents charge that he also abuses it.

Generals who ruled Turkey until 1983 are quiet in their barracks, but security forces still tread heavily. They are accused of systematic human rights violations, reinforcing Turkey’s “Midnight Express” image most at a time when the country can afford it least.

Ozal has high ambitions for Turkey and is pushing the country westward with a rush. A brawny nation of 52 million that is a major NATO partner, Turkey has formally applied for membership in the European Communities.

“Whether we are in the Common Market or not within the next 10 years, we will be a competitive power in this part of the world, and probably a strong competitor in Europe,” Ozal said recently.

Process of Stretching

Europe is in no hurry for Turkey, but few, Turks or Europeans, quibble with Ozal’s analysis. Like the horizons of Ankara cab drivers, Turkey’s muscles are stretching. Every load of fresh concrete for swelling Turkish cities is another irreversible step away from the poor, agrarian roots of a country that is at once old and new, Muslim and secular.

In Turkey, change comes one day to the next, swift and pervasive in its impact on the national social and economic fabric. In 1980, illiteracy was 32%. There are millions more people today, but only 12% of Turks cannot read or write. Plans are being drawn for Ankara’s first subway to meet a population that is expected to double to 6 million in one generation.

“When he created the modern Turkish state in the 1920s, Kemal Ataturk chose Ankara as the capital mainly because it is where the rail line from Istanbul ended,” said Dankwart A. Rustow, a political scientist at the City University of New York who was back in Ankara recently to promote his book entitled “Turkey: America’s Forgotten Ally.”

“When I first knew the city in the 1936, it extended 10 or 12 blocks in one direction and four or five in the other,” he said. “People assigned here thought of themselves in exile. You couldn’t buy a decent suit of clothes.”

Americans who are among a growing number of first-time visitors often come away impressed with Turkey.

‘Undervalued Ally’

“I am convinced that Turkey is our most undervalued ally,” observed Sen. Timothy E. Wirth, a Colorado Democrat, after a visit last month.

Today, Istanbul, capital of the storied Ottoman Empire that preceded modern Turkey, is a clogged and dreadfully polluted metropolis of 6 million. Millions of newcomers throng Turkish cities: 65% of Turks live in urban settings today. In 1964, about 70% lived in villages of less than 2,000 people. Turkey’s economy was 75% rural 10 years ago. Today, it is 70% industrial.

In promoting modernization and westernization of a country that is at once European and Asian, Ozal has the support of the overwhelming majority of the Turkish political universe. In a country where 99% of the people are Muslim but the state is starkly secular, Islamic tracts coexist at newsstands alongside sex magazines, and there is not much electoral support for yesterday. Turkish women, in fact, are by far the best educated and most assertive in the Islamic world.

“Traditionalists are at a loss to know what to wish for,” observed former Social Democratic Prime Minister Bulent Ecevit in an interview at his modest apartment on the outskirts of the capital.

Performance Criticized

Ecevit and other opponents challenge free-market devotee Ozal less for his ideas than for his performance.

Impressive growth, about 7% last year and this year, has been stoked by massive foreign borrowing. Turkey’s debt, $31 billion at the start of 1986, now approaches $42 billion; yearly payments of principal and interest are $7.2 billion. Inflation, which Ozal has repeatedly pledged to control, has instead risen sharply since he took office in 1983. It is now running at 86% on an annual basis, although the government assumed only 38% for its budget purposes.

“We understand there can’t be prosperity and happiness overnight, but Ozal cannot stand before the Turkish people and tell them they are better off,” said four-time former Prime Minister Suleyman Demirel in an office here festooned with glass, plaster, onyx and brass statues of prancing horses, his party’s symbol.

“Life is very expensive. Millions are suffering. Inflation destroys societies from within; it destroys values,” he said.

Demirel, a conservative whose differences with Ozal are more personal than philosophic, says Turkey’s development is jeopardized by a worsening inequality in the distribution of income. With middle-class real income eroded by inflation, the richest 20% of Turks now share 80% of the national wealth, Demirel said.

Ozal’s Party Trailing

Overdue austerity to trim the inflation will now wait until after nationwide municipal elections in March. Ozal was rebuffed in an attempt to advance the elections, and opinion polls now show his Motherland Party trailing opposition Social Democrats headed by a physics professor named Erdal Inonu. Ozal has no problems in Parliament, though, where Motherland won 65% of the seats last year with 36% of the national vote.

The electoral legerdemain that made such disproportion possible rankles Ozal’s foes.

“This is not a representative regime,” snapped Demirel. Like many other Turks, Demirel bristles at Ozal’s highhandedness: buying prime ministerial jets, burying his mother at a tomb for national heroes.

“Motherland is not a political party; it’s a company,” said a scowling, inflation-pressed businessman in the provincial capital of Diyarbikar.

Poor Human Rights Record

In the political flux, a national search for democratic development is marred by a poor human rights record. After eight years, the last vestiges of military rule were recently lifted in Istanbul, but Amnesty International said “systematic and brutal” violations of human rights have continued under Ozal’s government. Political arrests have declined this year, but five prisoners died after torture in the first six months of 1988, Amnesty International charged.

Privately, government officials acknowledge that Turkey’s human rights record is scarred but insist that abuses are waning under Ozal.

“Democracy is not settled, but it is sufficiently developed so that living without it is unthinkable,” said Ecevit.