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