Sunday, April 08, 2001

Crisis squeezes ordinary Turks

Economic turmoil also stretches overseas, including P&G

By Selcan Hacaoglu
The Associated Press

        MUDURNU, Turkey - Turkey's financial crisis is beginning to take a toll that is so severe that one cash-strapped chicken company fired all 2,000 workers and let 2 million chicks in its hatchery starve or freeze to death.

        Daily price hikes and layoffs are squeezing a working class that was already having problems making ends meet, putting pressure on government leaders who are scrambling to find lenders to help Turkey out of its crisis.

[photo] Workers of Mudurnu Chicken Inc., which went bankrupt, demonstrate in front of a factory in Mudurnu, Turkey, last month. The sign reads, “Help! Where is the state!”
(Associated Press photo)
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        “Time is running out,” warned Ilnur Cevik, editor of the Turkish Daily News. “The more the people feel the economic crisis, the more their anger will turn against politicians.”

        The nation's economic problems also had reverberations in other countries that are the headquarters for multinational corporations. Cincinnati-based Procter & Gamble, for example, blamed currency declines in Turkey, its 12th-largest market, when the consumer products giant announced in February that it wouldn't hit profit estimates for the second half of its fiscal year.

        Unemployment stood at 18.3 percent before the latest financial crisis began in late February following a political dispute between the president and the prime minister. Since then, hundreds of thousands of other people have lost their jobs as well.

        Worst-hit is the shoe-making sector, where nearly 300,000 people — about 75 percent of the industry's workers — were fired, the economic daily newspaper Dunya said. Another 140,000 workers were laid off in the textiles industry.

        In the media sector, more than 3,000 people, about a fourth of the country's journalists, printers and technicians, have been fired in the last month, according to the Journalist's Assembly Initiative, a group of 600 journalists advocating greater job security.

        Emek Platformu, an umbrella organization of 15 left-wing labor unions, has staged nationwide rallies against the government's economic program, which came after a 30 percent devaluation of the lira triggered massive layoffs and price hikes.

        Most people are pinning their hopes on Kemal Dervis, Turkey's new economy minister who is pushing the government to approve drastic economic reforms, including privatizing the state airlines and telephone company and ending the government's ability to funnel cheap loans from state banks to political supporters.

        Mr. Dervis is hoping such reforms will lead to billions of dollars in international loans. Many foreign lenders, however, believe Turkey must first show a willingness to tackle the rampant corruption that helped lead to the crisis.

        “The problem is Turkey's lack of legitimacy — its political elite is so corrupt,” said Hakan Yavuz, a professor of political science at the University of Utah and an expert on Turkish politics. “Why should the U.S. or any other international institution give money to a government which has no legitimacy?”

        There has even been talk of an intervention by the military, which has staged three coups since 1960, and the formation of a new government run by economic experts to deal with the crisis.

        But the military has shown itself reluctant to pressure the government, possibly out of fear that any army moves would hamper the country's chances for building its democracy and eventually entering the European Union.

        Turkey's National Security Council, which groups the country's top civilian and military leaders, dismissed speculation about an intervention as nothing but rumor.

        In Mudurnu, a small town of 6,000 in western Turkey dominated by the chicken company, Hatice Akman, one of the 2,000 workers laid off by Mudurnu Chicken Inc., said that as times got tough, she stopped giving her two children their $10 a month in pocket money.

        Now, she worries that she won't even be able to feed her family. “How am I going to buy bread for them?” she asked.

        Like many people in Mudurnu, Ms. Akman is now baking her own bread to save 10 cents a loaf.

        Mudurnu Chicken's chances of emerging from bankruptcy are bleak. With the lira weaker, the company can neither pay $13 million in loans nor import soybeans and corn from the United States to feed the chicks. It also could not heat the hatchery and had to let 2 million chicks die of hunger and cold.

        The banks have already seized its only cash income from a 54-restaurant chain. The restaurants still operate but serve chickens supplied by another firm.

        The clients have also changed.

        “Our only patrons nowadays are a few court bailiffs,” said Sinan Alabas, manager of the Mudurnu Chicken restaurant in Mudurnu. “I can hear them making confiscation plans over lunch.”

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