The financing of terrorism and the Kurdish issue

The Turkish Parliament started debating a draft law to introduce new measures on the financing of terrorism yesterday, Feb. 6. The draft had been submitted to parliamentary commissions over 2011, but despite Turkey already being criticized for being late in 2011 it still took two years under international pressure for the draft to finally reach the general assembly.

The International Convention for the Suppression of the Financing of Terrorism was announced in December 1999, following U.N. Security Council resolution 1267 in October of the same year, which came due to the rising threat from radical armed groups even before the 9/11 attacks by al-Qaeda in 2001. Turkey, which was under relative relaxation with the arrest of Abdullah Öcalan, the leader of the outlawed Kurdistan Workers’ Party (PKK) in February 1999 and distracted by the worst financial crisis of its history in early 2001, could have approved the convention in March 2002 and put it into effect the next month. But the implementation law regarding the move took a bit longer than that, since we are in 2013 now.

“Turkey is an important member of the Western alliance,” one ranking official of a major ally of Turkey told the Hürriyet Daily News during a conversation last week. “It has a working economy and the government wants to make Istanbul one of the biggest financial centers of the world. We can not understand how this will happen without adopting this law, which means transparency more than anything else.”

Perhaps that is the reason why the staunchest supporter of adopting the law in the ruling Justice and Development Party (AK Parti) government is Ali Babacan, Prime Minister Tayyip Erdoğan’s deputy in charge of the economy. Being the silent master of the Turkish economy, which managed to survive the economic crisis that has been shaking Europe for a number of years, Babacan is in full knowledge of the importance of this law in Western financial circles.

Then why has Erdoğan been reluctant so far, despite Turkey itself suffering from being unable to stop the financial sources (allegedly with some involvement of drug trafficking) of the PKK and smaller armed organizations? The answer partly lies in Turkey’s chronic Kurdish problem.

The suppression of the financing of terrorism law faces an individual rights problem all around the world; so it is natural that people, especially investors, might have some legitimate concerns regarding privacy. But Kurdish origin investors in Turkey have an additional and never openly mentioned problem. In the east and southeast, where the PKK is influential, it is practically impossible for any investor to do business without paying some sort of a protection money, or some sort of an illegal taxation, by the PKK. Otherwise, the cost might not be limited to fining by the Finance Ministry. This also applies to Kurdish investors in the big cities of Western Turkey like Istanbul, İzmir, or Antalya. They are afraid that if this law passes, their assets might be frozen or confiscated. That is why not only the Kurdish problem focused Peace and Democracy (BDP) members in Parliament - but also Kurdish origin deputies within the AK Parti - are not very comfortable with the law.

There are other reasons, such as small and medium size industrialists of Anatolia already not being happy with paying regular taxes and adhering to transparency, but the Kurdish problem linked dimension of the issue is the main headache for the government.

If the Kurdish problem can be put onto a political solution track through the talks between the government and the PKK, this could automatically enhance Turkey’s international cooperation on the financing of terrorism.