The Turkish economy is bound to be the biggest loser in the event the Turkish Constitutional Court rules for shutting down the Justice and Development Party, which is the ruling Islamic party of Prime Minister Erdogan, for violating the secular principles of the Turkish constitution. The party controls a majority of 340 seats of the 550 parliamentary seats.

Analysts maintain that a decision to ban the Justice and Development Party would generate a major shock to the Turkish economy, perhaps even greater than the economic crisis of2001 which caused the Turkish economy the lose 10% of its value. Even now, the Turkish economy is reeling under the heavy burden of a huge deficit in the country’s current accounts, estimated to increase to $49 billion in 2008 from$38 billion in 2007. Much of the deficit increase is caused by escalating oil prices. The Turkish lira lost 5.5% of its value last Friday. Fearing high inflation, the central bank has raised the interest rates to 16.25 percent.

al-Quds al-Arabi, June 29, 2008