By CHRISTOPHER TORCHIA
The Associated Press
Monday, April 30, 2007; 3:56 PM
ISTANBUL, Turkey -- Turkey's prime minister appealed for calm Monday after the stock market dropped amid a deepening conflict between his Islamic-oriented government and pro-secular forces backed by the military.
Turkey, a candidate for European Union membership, has been recovering from a 2001 financial crisis, curbing inflation and pushing ahead with banking reform and other initiatives backed by the International Monetary Fund.
But pro-secular forces are locked in a showdown over the presidential aspirations of Foreign Minister Abdullah Gul, whose ruling party they accuse of steering Turkey away from its long secular tradition and toward Islamic rule.
At least 700,000 pro-secular demonstrators protested against the government Sunday, and opposition and business leaders are calling for early general elections to replace the government. The military, which has led several coups in past decades, has hinted at intervention in the crisis.
Amid the turmoil, Turkey's benchmark IMKB-100 index closed down 4.01 percent Monday after opening with a drop of 7.99 percent.
Prime Minister Recep Tayyip Erdogan said Turkey must ensure its stability to safeguard its economic recovery.
"Even four and a half years ago, this country was riven by serious problems, which thank goodness have been overcome one by one," said Erdogan, whose government was elected in 2002 as Turkey struggled to recover from soaring inflation and a declining currency.
"At this point, it's enough that we protect the environment of stability, it's enough that we defend and protect the environment of peace. Enough that we don't harm the environment of confidence we have worked so hard to attain," Erdogan said on national television.
Analysts said the markets will likely recover if the government defuses tension by agreeing to early parliamentary elections, a move that could appease opponents who hope to make electoral gains at the expense of the ruling party. But sustained political uncertainty would likely take a toll.
In his speech, Erdogan made no direct reference to the stock market slide or the challenges to his mandate, instead issuing a broadly worded appeal to Turks to safeguard the economic advances and social stability that they have gained after decades of uneven development and, at times, all-out political conflict.
"There is no magic wand in our hand," he said. "We are working seriously."
Erdogan noted that the average growth rate was a robust 7.3 percent between 2003 and 2006, and said per capita annual income had almost doubled to $5,477 during the tenure of his government.
The candidacy of Gul, a close ally of Erdogan, has triggered an outcry from secular groups who think he would use the office _ a post with veto power over legislation _ to chip away at the separation of state and religion.
The head of Europe's top human rights organization expressed shock at the stance taken by Turkey's military, which threatened to intervene in the selection of the new president _ which is by parliamentary vote rather than direct election _ and urged the government to curb Islamic influences.
"This statement looks like a deliberate attempt by the armed forces to influence the election of a new president," Terry Davis, secretary-general of the Council of Europe, said in a statement. "They should stay in their barracks and keep out of politics."
Both Gul and Erdogan have pledged loyalty to Turkey's secular constitution, and cite their record as reformists.
The United States stayed away from criticizing any of the players in the crisis.
"We have confidence in Turkey's democratic institutions and Turkey's constitutional processes to work out any questions that may surround the election of the next Turkish president," State Department spokesman Sean McCormack told reporters.
Gul was expected to win the presidency because parliament is dominated by his party. But Turkey's Constitutional Court was evaluating an appeal by the opposition to cancel the voting.
The opposition has argued that there was no quorum during the first round of voting on Friday. Gul failed to win that round, and another round is scheduled for Wednesday.
Mustafa Kemal Ataturk, an army officer in World War I, founded the secular Turkish republic after the collapse of the Ottoman Empire. He gave the vote to women, restricted Islamic dress and replaced the Arabic script with the Roman alphabet.
But Islam remained potent among many people, and some leaders with a religious background have portrayed themselves as an alternative to the secular establishment.