Politics heat up in Turkey

(Fortune Magazine) -- With parliamentary elections scheduled for July 22, Turkey has been embroiled in political crisis. Talk of constitutional amendments and a military coup is in the air, and the country's secular nationalists, who want to keep Turkey from adopting a more Islamist course, have taken to the streets.

The secularists, who have backing from the military, fear that the ruling Justice and Development Party (AKP) will choose Foreign Minister Abdullah Gill, whose wife wears a headscarf, as President.

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The AKP, under Prime Minister Recep Tayyip Erdogan, has angered many Turks by raising taxes on alcohol, adding more religion to state schools and trying to criminalize adultery.

But the party has also delivered on the economic front - GDP growth last year was 5.2 percent - and is seen as pro-Western and pro-reform. Erdogan has privatized industries ranging from tobacco to energy and has been a darling of the IMF and the World Bank, as well as of the rising business elite. He also has been willing to compromise on territorial disputes with Greece over Cyprus, hoping to gain the trust of the European Union and secure Turkey's admission to it.

The nationalist secular parties fear that further privatization, especially of the oil-refining industry, will put Turkey on an irreversible Western course.

More demonstrations are planned in the coming weeks in the hope of persuading voters to narrow the ruling party's majority and force it to choose a compromise candidate. But the AKP is betting that a majority of Turks will be thinking of their pocketbooks, not the Koran, come election time.