Ariel Cohen of the Heritage Foundation -

Turkey, for so long the darling of emerging market investors, is on the cusp of major political turmoil, which will have economic repercussions for both foreigners and Turks alike. Even so, while investors are taking note, the long-term outlook remains positive.

Sometime in August or September the Turkish Constitutional Court will consider a petition from the state prosecutor to ban from politics the ruling Justice and Development Party (AKP) and many of its leaders, including Prime Minister Recep Tayyip Erdoğan, President Abdullah Gül, and several dozen other leading AKP politicians. Since its establishment in 1962, the court has heard no fewer than four other petitions to prohibit political parties; it has granted all of them.

Turkey's capital markets are down 30% for the year, while the forecast for foreign investment in 2008 is down more than 20% from $22bn in 2007 to $15bn-16bn this year. Yet the AKP, which has Islamic roots, is surprisingly calm. Ali Babacan, Turkey's foreign minister and a possible PM if Erdogan is banned, confidently talks about his party's economic achievements since it came to power in 2002. Turkey has since almost tripled its GDP from $230bn to $600bn, increased foreign direct investment (FDI) from $1bn a year to $22bn in 2007 and has inflation under control. Babacan also credits the AKP with allowing media, especially numerous TV channels, to flourish. Others disagree, pointing to the persecution of the AKP and Erdoğan's media opponents.

Babacan recently spent dinner with a small group of Turkey-watchers in Washington and promised that his party would respect the law. "Whether we like it or not, what the court decides, we will obey," Babacan says. Yet banning the political activities of AKP and lifting immunity from its politicians could open the door for the criminal prosecution of some. Corruption charges in Ankara are rampant; this is the same corruption that the AKP promised to stamp out when it came to power.

The trigger for the latest petition to the court, filed by Abdurrahman Yalçınkaya, the Turkish state prosecutor, was the AKP's push to allow the wearing of the hijab (head scarf) in Turkish universities. The hijab row has caused deep concern among the secular, mostly nationalist elite and state bureaucracy, who believe that the AKP is instigating a creeping "Islamisation" of the Turkish Republic. Most Turks do not want to live under sharia law and do not want their country to become another Iran. The extremist wing of the AKP, along with 9-10% of the Turkish population, probably does.

However, banning the party would provoke a massive controversy. First, there is the issue of popular legitimacy. The AKP won 47% of the vote in the last parliamentary elections, giving it a broad popular mandate. It may be easy to ban a small radical party, but it is very difficult to ban a ruling party with a second-term cabinet, a popular prime minister and a newly elected president. Second, a judicial crackdown would undoubtedly prompt AKP supporters to howl about the "persecution of Muslims," creating an image of an Islamic victim - a powerful mobilizing factor for the next elections. Third, there is the issue of southeast Turkey. In this region, the AKP is splitting the vote with the Kurdish DTP party, which has ties to the PKK terrorist group. Banning the AKP would help the DTP perform well in the 2008 municipal elections, scheduled for this coming fall.

The Turkish state prosecutor would have a stronger case against the AKP if clear evidence of a conspiracy existed, such as documents outlining a coup plan, tape recordings of a plot to overthrow the secular republic, or blatantly subversive links to foreign regimes or terrorist organizations. Instead, the AKP has an amorphous agenda: parts of its platform smack of Islamization, but a Western court would lack a clear evidentiary base to banish it from politics.

Repercussions

The international repercussions of this case are enormous. Babacan's recently remarked that Turkey's EU process would be dealt a serious blow if the party's banned. This triggered harsh criticism from opposition parties, and he was blamed for putting his party above the country.

The vast majority of elite Turks still want the country to join the EU. The AKP has done much to promote Turkey's accession, despite resistance from many European quarters. The EU and European governments have criticized the Turkish judiciary's plans to ban the AKP, hinting broadly that it would set back Turkish EU membership for years, if not indefinitely.

As France is the incoming EU president, a ban may give Paris a needed pretext to postpone Turkey's EU accession indefinitely. At the same time, preserving the republic and repulsing threats both external and internal is the top priority for Turkey's state guardians: lawyers, judges, military officers, and security commanders. They will ignore foreign protests if they feel their country is in peril.

In deciding the AKP case, the Constitutional Court may opt for a laser scalpel, not a sledgehammer. It could place sanctions on the AKP and block its efforts at Islamisation, yet not ban the party in toto and thus not destroy the democratic foundations of the Turkish state. The court could bar a handful of the most notorious AKP politicians, but not the popular Erdoğan and Gül. It could deny the AKP state funds for implementation of its Islamization agenda. It could also warn the cabinet not to ignore the country's secular spirit and legacy.

Turkey will be lucky to dodge the bullet, and survive the court decision without massive demonstrations and violence. Islamists believe that, taking into account Turkish demographics, the future is on their side. A recent trip to Istanbul indicated that the educated, upper-middle class secular Turks - the backbone of its economy - detest the widely popular Islamists. Many secularists are losing hope in parliamentary politics. But so far, they failed to come up with attractive political options for the Turkish "street."

To ensure the long-term victory of secularism, Kemal Ataturk's political heirs need the new and attractive vision of a secular Turkey integrating into Europe and the world, not with Iran and the Arab Middle East. Secularists need to take their case in the streets and the working class neighbourhoods, and win there - not only in the courtrooms and the military barracks.

Ariel Cohen is a senior research fellow at the Heritage Foundation.

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