| The first step Necmettin Erbakan, Turkey's Islamist prime minister, took was to give a 50% pay rise to civil servants and pensioners. With the public sector borrowing requirement already raised from 8.5% of GDP to 10%, the shocked market wanted to know where the money would come from. "Allah will give us, we will give to them," soothed Erbakan. He went on to promise to double the minimum wage and exempt it from tax, and erase the interest payment on farmers' debts. Under him, he announced, Turkey would become a "waiter state", putting food on the table of the low-income masses who voted for his Welfare Party (Refah). But the doubting Union Bank of Switzerland (UBS), lacking faith that spiritual aid would be forthcoming in the form of hard cash, sent a circular to clients advising them to sell Turkish stock. The visionless Sakura Bank of Japan decided to stop taking Turkish risk until the situation clarified. Before coming to power Erbakan had conjured up the shining image of an Islamic common market which he would establish, and promised to replace currencies in all Islamic countries with the Islamic dinar. |