Eight Moslem countries set up trading bloc

Eight Moslem countries set up trading bloc

Moslem countries are overcoming mutual differences to set up
their own trading bloc. Dilip Hiro of Inter Press Service
examines the progress.

LONDON: Defying skeptics, disparate Moslem nations that make
up the newly founded group of eight developing countries (D-8)
have set themselves on the path to form a single trading bloc of
Moslem states.

A meeting of foreign ministers of Turkey, Iran, Pakistan,
Bangladesh, Indonesia, Nigeria and Malaysia and a deputy foreign
minister from Egypt, in Istanbul early this month ended with the
agreement to set up a secretariat to carry the idea forward.

Two of the specific tasks assigned to the Istanbul-based
secretariat, funded by Turkey, are to identify the areas of
economic cooperation between the member states, and to fix the
date for a summit conference within the next six months.

In his opening speech to the gathering in Istanbul, Turkish
prime minister Necmettin Erbakan, the leader of the Islamist
Welfare Party, stressed the universally valued concept of social
justice and described the initiative as "a historic step".

He said the D-8 would seek a dialogue with the Group of Seven
(G-7) richest nations, and have their say in setting the terms of
the "New World Order". But he said the D-8 would not accept
industrialized nations' habit of holding down commodity prices
while selling their own industrial products at high prices.

"That makes the poor nations poorer and the rich even richer.
This development must stop," he said. Close cooperation between
the Moslem-majority countries was needed, he said.

Turkish foreign minister Tansu Ciller said the D-8 group would
not be a body based on religion even though the current members
were all Moslem nations. "This organization will grow in time and
admit as members many other states," she said.

But the gaps are wide the eight founders of the D-8 --
Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan
and Turkey. There is a lot of difference between the per capita
income of Malaysia, the richest member, and Bangladesh, the
poorest.

"The great potential of these countries, which altogether have
a population around 800 million, has not been reflected in trade
relations among each other," Ciller said. "This organization will
boost south-to-south trade."

The idea for the recent, preliminary meeting emerged from the
proceeding of an international business conferences in Istanbul
last November, which was attended by some 2,000 Moslem
industrialist and government officials from 20 countries. The
calls for the setting up of a Moslem trading bloc were
accompanied by a suggestion by the conference's chairman, Erol
Yarar, that it should be formed by 2020.

Backing the proposal vigorously, Erbakan urged that the Moslem
states should aim at increasing the level of mutual trade from
the current 10 percent of exports to 90 percent. He also
criticized the practice of conducting foreign trade in dollars,
arguing that the U.S. dollar was the currency of only one
country.

Erbakan, a 70-year old veteran politician, has been a
proponent of an Islamic Common Market for more than 20 years. As
the secretary-general of the Union of Chambers of Commerce and
Industry, he opposed Turkey's 1963 association agreement with the
European Economic Community (EEC) now the European Union (EU).

At the time describing the EEC as "a product of new Crusader
mentality", he argued that Turkey's association with it would
merely perpetuate its role as an economic underling of Western-
Christian capitalism.

As a result, Suleyman Demirel, the Turkish premier from 1965-
1971 and head of the ruling Justice Party, got Erbakan sacked
from his job at the Union of Chambers of Commerce and Industry,
and denied him the Justice Party ticket for the 1969 general
election.

But Erbakan won a parliamentary seat as an independent, and
continued his political career.

When in 1974, Erbakan ended up as deputy premier and minister
of industry in a coalition government led by leftist Bulent
Ecevit, he aired the concept of an Islamic Common Market with
Turkey's Arab neighbors,several of whom now found themselves
fabulously rich due to the quadrupling of oil prices in 1973-
1974.

But the Turkish government as a whole did not adopt this
policy. It was the same when Erbakan became deputy premier in the
coalition cabinet under Demirel from 1975-1977.

Now, some 20 years later, as the prime minister of Turkey
since July 1996, Erbakan has lost little time in advancing his
vision of an Islamic world united by strong ties of trade and
economic cooperation.

During his two extensive foreign tours -- one eastward, which
took him to Indonesia via Iran, Pakistan, Bangladesh and
Malaysia, and the other westward, which extended to Nigeria via
Egypt and Libya -- he tried to win support for an Islamic Common
Market. He seems to have succeeded.

The eight founding members, which include some of the most
populous countries in the world, account for 760 million people.
Of these 640 million are adherents of Islam, forming about two-
thirds of the global Moslem population.

Nonetheless, the project has its critics in the Islamic world
and elsewhere. They note that not a single country from the
Moslem Central Asia was invited. More seriously, they have grave
doubts about the viability of the Islamic Common Market.

The critics argue that while Bangladesh is one of the least
developed economies, Malaysia is a thriving capitalist economy,
and to attempt to integrate them into a single market is fool-
hardy.

Though both Iran and Nigeria are rich in oil and gas, they are
currently ostracized by the West.

There are wide differences in the government systems of the D-
8, the critics point out. There are pro-Western authoritarian
regimes like in Egypt whereas the military administration in
Nigeria is being shunned by Washington and London. Iran is an
Islamic state by constitution, whereas Turkey is constitutionally
secular.

No matter what the views of Erbakan are regarding the European
Union, in January 1996 Turkey signed a customs union with the EU.
Moreover, in the absence of a statement to the contrary, Turkey
remains committed to seeing its associate membership of the EU
upgraded to full membership.

The contradiction in aspiring to become a fully-fledged member
of the European Union while at the same time trying to foster an
Islamic Common Market is too blatant to be over-looked.

The participants in the Istanbul meeting this month were aware
of the pitfalls and drawbacks in their enterprise, and of the
widespread skepticism that exists in many quarters. Egypt -- the
only nation among the eight which chose not to send its foreign
minister to the conference -- is the most skeptical. It is also
cautious of acts that might undermine the Arab League's role.

Contrary to expectations, the meeting did not announce a fixed
date for the summit of the D-8 leaders, which indicated to some
the shakiness of the project. But this had more to do with the
impending parliamentary election in Pakistan, now being governed
by a caretaker government, than anything else.

Furthermore, the founders do not see themselves as the
exclusive members of an Islamic Common Market, and the organizers
of the Istanbul meeting said that it would be open to new
members.

Finally, Erbakan has insisted from the start that economic
cooperation should be fostered actively among all Moslem
countries irrespective of their governmental system. In his
foreign policy he has stuck firmly to this principle.

Whether Erbakan will be able to win the active support of the
seven Moslem-majority states, scattered across Africa and Asia,
to see his vision of an Islamic Common Market realized, remains
an open question.

-- IPS