The Islamization of Turkey
Two remarkable developments in Turkey on May 29 have increased concern of growing Islamization in the economy and society.
The run-up to Turkey’s June 7 general elections has been marked by President Recep Tayyip Erdogan’s intensive use of Islamic symbols and rhetoric, including rally appearances with the Quran. On May 29, the Constitutional Court announced a controversial ruling removing restrictions on religious marriages, while Erdogan led an inauguration ceremony of both economic and religious significance.
The event in Istanbul, attended by Cabinet ministers and complete with prayers, marked the launch of the first branch of the Ziraat Participation Bank, the Islamic unit of state-owned lender Ziraat, in line with government decisions to expand Islamic banking in the Turkish financial sector. Islamic banks are called “participation banks” in Turkey, a moniker for interest-free banking that refers to participation in profits from certain financial instruments.
Launched on a Friday, the week’s holy day in Islam, the new Islamic bank is planned to have 20 branches by the end of the year and 170 branches by 2018, employing 2,200 people. Deputy Prime Minister Ali Babacan, who oversees the economy, said the two other state-owned lenders, VakifBank and Halkbank, will also inaugurate their Islamic units soon. This will bring the number of Islamic banks in Turkey to seven.
Hours after the inauguration, another remarkable development took place. The authorities seized Bank Asya, the Gulen movement’s Islamic participation bank. The Savings Deposit Insurance Fund, the body that deals with troubled banks, had already taken over Bank Asya’s management and 63% of its shares on Feb. 3 amid simmering tensions between the government and the Gulen movement. Thus, the Turkish state got two new Islamic banks in a single day. Once VakifBank and Halkbank enter the sector, four of the seven Islamic banks will be state-run.
