Anatolia rising

By bne IntelliNews July 29, 2008

Nicholas Birch in Gaziantep, Kayseri and Konya -

"Tell me where Allah is and I will give you an orange. Tell me where Allah is not and I will give you an orange grove." The sentiment wouldn't go amiss on a mosque wall. This particular Koranic phrase, though, graces a whiteboard at the entrance to the third biggest company in Gaziantep, a city of 1m close to Turkey's border with Syria.

Naksan Holding exemplifies what Turks call the "Anatolian Tiger" economy. Set up 40 years ago by a successful local tradesman, it is now the largest producer of plastic bags anywhere in the Balkans or Middle East, with a worldwide franchise on Pierre Cardin carpet production.

Its rise has been phenomenal, dwarfing even the 7% per annum growth of Turkey's economy between 2001 and 2007. A decade ago, Naksan was the country's 480th largest company, according to statistics from the Istanbul Chamber of Industry. Now, with a turnover of $450 million, it ranks 136th. "We've done very well, and our future looks bright," says Taner Nakiboglu, describing how the company has just invested $300m to build a 270-megawatt power station in western Turkey.

Plump and loquacious, the US-educated dauphin of the family empire shares another characteristic widely associated with the new generation of Anatolian businessmen: he's as pious as the "thought of the day" at the entrance downstairs. Like the wives of most deputies in the ruling Justice and Development Party, or AKP, his wife covers her head. Like the daughter of Prime Minister Tayyip Erdogan, his cousins are studying in the US to avoid a ban on headscarves in Turkish universities.

"That ban has opened us up to the world", he says, before bemoaning what he calls "the breakdown of morality" in the West - "all western youngsters think about is having fun, good cars, and girls." Run by an Islamic-rooted government, today's Turkey meanwhile strikes him as capable of repeating the successes of the early Ottoman Empire. "Our ancestors worked to bring peace via the values of 'true Islam' - no forced conversions, only a good example", he says. "Look at Turkey today: leading talks between Israel and Syria, for no reason other than to see peace spreading around us."

Islamic Calvinists

Coinciding with the growth of conservative political parties, the rapid rise of industrial Anatolia has attracted widespread attention, not least because its apparent combination of piety and worldly success contradicts many Westerners' and westernised Turks' equation of modernity with the rolling back of a monolithic Islam they see as unreformable.

One Berlin-based think-tank even titled its 2005 study of the wealthy Anatolian city of Kayseri "Islamic Calvinists," a reference to the German sociologist Max Weber's theory that capitalism sprang from Protestantism. "Economic success has created a social milieu in which Islam and modernity coexist comfortably," the European Stability Initiative (ESI) concluded. "It is the Anatolia shaped by these values that is now pressing its case to join the European Union."

A sociologist in Konya, a conservative city 500 miles west of Gaziantep, Yasin Aktay agrees that the growth of conservative capital has changed religious life-styles. "Frugality has been replaced by what you could call 'comfortable' religiosity," he says. "Consumerism used to be seen as extravagance. Now, owning a big house isn't a luxury, it's a display of [God's] blessings."

A doctor in Islamic theology whose spare parts factory in Konya now has an annual turnover of $50m, Huseyin Ciftci has seen the transformation closer to home. "Look at my family: two brothers married to Europeans," he says. "Just 20 years ago, that would have been out of the question around here."

Yet ESI's talk of "Islamic Calvinism" pushes it dangerously close to the cliche it seeks to correct - of an Anatolia united in its religious conservatism. That is far from true. While Konya and Kayseri have long been strongholds of political Islam, both Gaziantep and the western Anatolian textile hub Denizli have traditionally voted for secularist parties. If AKP won 51% of Gaziantep's votes at the general elections in July, it's because "people here vote with their pockets," says Murat Ozguler, owner of an ultra-chic pastry shop in the city centre.

"Antep has been a major trading and artisanal centre since the Middle Ages," adds Mehmet Kaya, Gaziantep's gruff Chamber of Trade boss. "We are not new to money."

Saban Copuroglu, Kayseri head of a business association close to the AKP, puts the point differently. "Where is Sabanci from, where is Tuncay Ozilhan from?" he asks rhetorically, referring to Turkey's second-biggest business family and the owner of the country's biggest brewery. "Kayseri. If they are conservative then, yes, we are conservative too."

The key to the transformation of Turkey's heartlands is implicit in his words. In the past, Anatolian businessmen went to Turkey's industrialised west to make money. Now they stay put.

The Boydak family is the best example of this. Kayseri-based owners of Turkey's two biggest furniture companies, with a turnover of $2.5bn, they decided last week not to move their head office to Istanbul. Owner of a factory near Gaziantep that exports cooking oil across the Middle East, Erhan Sayin has faced a similar decision. "Turkey's best olives are on the Aegean coast," he explains. "But I want to benefit my hometown - I love Turkey, but I love Gaziantep above all."

Such local feeling is all very well. But what makes it realisable is cheap local labour, and an industrial infrastructure in Anatolian cities that dates back to the 1970s. By 1976, when the Dutch economist Leo van Velzen visited Kayseri, there were already 1,150 small workshops churning out furniture. Gaziantep's thriving small parts industry began at the same time. "Simply put, that means you don't have to send off to Istanbul when one of your machines breaks down," says Filiz Hosukoglu, a Gaziantep engineer.

But the biggest motor behind Anatolia's development has been Turkey's move from a state-centred to a liberal economy. Liberalisation began under Turgut Ozal, the personal friend of Margaret Thatcher who was Turkey's prime minister for most of the 1980s. Yet while he began the process of privatisation that the AKP is continuing today, rampant inflation encouraged Turkey's banks to cleave even closer to the state. "Until the 2001 banking crisis, banks didn't need to get off their backsides to make money," remembers Deniz Gokce, a Gaziantep-born economist. "They got rich buying and selling government securities at 90% interest. They were closing down regional branches left, right and centre."

With government finances in better order today than at any time in Turkey's recent history, and interest rates down to 13% in 2006, banks had to start doing what banks are supposed to do: lend. All the sector leaders now set aside roughly 20% of their balance sheets to small company loans. The stronghold of small and medium-sized enterprises, Anatolia has jumped on the change. In Gaziantep, commercial loans rose from $450m in 2004 to $3bn last year. "In the past, only state banks gave loans, and that depended on political contacts", says Deniz Gokce. "Now, capital is available to everybody. Getting a letter of credit is all it takes for a small tradesman to become a fully-fledged exporter."

Small wonder then that Kayseri considered applying to the Guinness Book of Records in 2004 for laying the foundations of 101 new factories in one day.

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Anatolia rising

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