Renewed Kurdish conflict chokes economy in southeast Turkey

Burak Akinci

Diyarbakir (Turkey) (AFP) - Just a few months ago, the Hasan Pasa caravansary in southeast Turkey was teeming with visitors, but now the market in the converted inn is deserted as scared shoppers stay away amid fresh violence in the Kurdish conflict.

"The resumption (of fighting) has hit us hard," says Ahmet Onen, who has a boutique selling souvenirs and traditional Kurdish outfits in the 16th-century Ottoman building in the city of Diyarbakir.

"Our revenue has fallen by close to 80 percent compared with last year," he adds, sighing: "The tourism heart no longer beats here."

The 1.5-million inhabitants of the majority-Kurdish city are not venturing out much, particularly after night falls.

For the past three months, life here has moved instead to the beat of deadly clashes between Turkish security forces and fighters of the outlawed Kurdistan Workers Party (PKK).

After 30 years of violence, Diyarbakir had hoped for a reprieve in 2012, when rebel Kurds and Turkey's Islamic-rooted government began peace deliberations to end a conflict that has killed more than 40,000 people.

The business community had even believed the area could one day catch up with national economic growth levels.

But in July, when the truce broke and the government launched air strikes against PKK camps in northern Iraq, the region braced for a return to the brutality and bloodshed of the conflict's 1990s peak.

"People are afraid," says Umut Baci, a 24-year-old jeweller. "Clients call us before they come shopping to know if anything has happened," he said at his shop, which neighbours a police post recently hit in a rocket attack.

"For the past two years, work was good. People went for walks in the streets," he says. "But today, nobody comes out anymore."

About 100 metres (110 yards) down the road in the Surici area, at the foot of the old city fortifications, violent clashes have erupted where militants have erected barricades and dug trenches to prevent security forces from coming in.

- Fear closes wallets -

According to Sah Ismail Bedirhanoglu, head of an influential business association in southeast Turkey, the worst-hit sector is tourism. His hotel alone has seen guest numbers plummet by more than half.

"At the first detonation, people cancel travel to this area," he says.

Like many others, Bedirhanoglu looks back with nostalgia at the early, optimistic stages of the peace negotiations.

"From that moment, local and foreign investors arrived. We experienced a real boom," he says.

But when it came to a sudden end, wallets snapped closed again. "When you don't know what the future holds, you don't go and buy a factory, a building or house," he adds.

According to informal data, the unemployment rate has jumped to close to 30 percent in the investment-starved region, compared with the national figure of 11 percent.

And the bad news here reflects a slowing in the country's overall economic outlook. Weighed down not least by financially draining crises in warring neighbouring countries, Iraq and Syria, the Turkish economy has lost its shine.

Growth slowed to 2.4 percent in 2014 -- from 4.0 percent in 2013 -- inflation at seven percent is on the rise, the deficit is growing and the Turkish lira is on the decline.

For many locals in Diyarbakir, the one to blame is the country's president, Recep Tayyip Erdogan, who has vowed to root out all those belonging to the PKK, which Turkey has designated a terrorist organisation.

"Who is to blame? It's not these poor kids," says 58-year-old Sinan Savci, referring to youngsters who support the rebellion and get caught up in skirmishes in parts of the city.

"It's not the organisation (PKK), the only one responsible is him," he insists about Erdogan.

And he's not the only one to think so. The results of the hotly awaited general election of November 1 are already a given: defeat for Erdogan's party -- at least in the Kurdish fiefdom of Diyarbakir.