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Turkey in Crisis: Some Contradictions in the Kemalist Development Strategy

Published online by Cambridge University Press:  29 January 2009

Özay Mehmet
Özay Mehmet
Affiliation:
University of Ottawa
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Extract

The recent crisis in Turkey has been described primarily as a political crisis caused by an unworkable political system under attack from organized terrorism from both the right and the left. While this may be valid as an immediate cause, there are some structural and ideological contradictions in the Turkish economic system which must also be highlighted. These contradictions have evolved gradually over the last half century in the course of Turkey's efforts to achieve industrial and economic growth. They have been exacerbated in particular by a process of lopsided industrialization after 1960 which, as in most other developing countries, has resulted in increased poverty and unemployment while achieving overall growth rates of 6 percent or better.

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Articles
Information
International Journal of Middle East Studies , Volume 15 , Issue 1 , February 1983 , pp. 47 - 66
Copyright
Copyright © Cambridge University Press 1983

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References

NOTES

Author's Note: Previous versions of this paper were commented upon by several readers. In particular, the author gratefully acknowledges helpful comments and suggestions by Metin Heper, Ayşe Trak, Eleazar Birnbaum, William Hale, and an anonymous referee, but of course the author alone is responsible for all opinions expressed.

1 For a detailed elaboration of this theme, see Kemal, H. Karpat, “Turkish Democracy at Impasse: Ideology, Party Politics and the Third Military Intervention” International Journal of Turkish Studies, 2, 1 (Spring-Summer 1981).Google Scholar Another useful account is Mackenzie, Kenneth, Turkey under the Generals, Conflict Studies no. 126, London (01 1981).Google Scholar For a revealing statement of the rise and fall of the Turkish socialist movement since 1960, see Samim, Ahmet, “The Tragedy of the Turkish Lefṭ,” New Left Review, no. 26 (03–04 1981).Google Scholar On the emergence of Turkish terrorism, see Osman, Güvenir, “Turkiyede Terör ve Güvenlik Kuvvetlerinin Durumu’ in Türkiyede Terör, Istanbul. 1980 (papers presented at a seminar organized by the Newsmens' Association of Istanbul in the memory of the well-known newsman Abdi Ipekçi, assassinated in 1979).Google Scholar

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12 İnönü himself was a contributor to Kadro, which was owned by Yakup Kadri Karaosmanoğlu and edited by Moscow-trained Sevket Aydemir.

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18 In 1932, 1,473 establishments were operating under the provisions of the 1927 law; by 1939, only 1.144 were covered, despite the fact that this law granted new industries setup under it a twenty-five-year monopoly. These figures are from Tokin, I. H., Türkiyede Sanayi (Ankara: Istatistic Müdürlüğü, 1946), p. 34,Google Scholar quoted in Robinson, , First Turkish Republic, p. 106.Google Scholar For a discussion of the reasons for the failure of the 1927 law to promote private enterprise, see Thornburg, et al. , Turkey, pp. 34–35,Google Scholar and The Economy of Turkey, a Report of a Mission sponsored by the I.B.R.D (Baltimore: The Johns Hopkins University Press, 1951), pp. 6–7.Google Scholar

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24 Originally the SEEs were expected to operate as profit-making (if not profit-maximizing) entities comparable to private business, enjoying a level of management autonomy. In fact, law no. 3460 provided for the possibility that SEEs could be reconstituted as joint-stock companies in which shares, either wholly or in part, could be transferred to the private sector. However, this provision was in fact a dead letter until the Menderes era in the 1950s. In practice, the SEEs were so prone to political interference, red tape, and in particular demands for political graft and patronage, that both the management and the technical staff were demoralized (Walsted, , op. cit., pp. 76–77);Google Scholar a typical comment was: “What is the use of an engineer working for a politician? If the answer matters, he tells you what it is. If it doesn't matter, he doesn't want to know it” (Thornburg, et al. , Turkey, p. 203).Google Scholar

25 İnönü regarded self-sufficiency as a matter of national defense and justified on this ground the state investments in large, capital-intensive projects (e.g., railroads) as well as his popular catch- phrase “three whites and three blacks”—that is, self-sufficiency in flour, sugar, and cotton textiles and in coal, iron, and petroleum (Walsted, , State Manufaciuring Enterprises, p. 66).Google Scholar

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29 Menderes used to argue that “the Budget is a plan,” and one of his ministers of finance used to justify the official distaste for planning by saying:“Let's get on with the job: the plan can follow on later” (Hale, , Political and Economic Development of Modern Turkey, p. 88).Google Scholar See also Malcolm, D. Rivkin, Area Development for National Growth, the Turkish Precedent (New York: Praeger, 1965), pp. 96–123.Google Scholar

30 Süreyya, Aydemir, Menderes' in Drami (Istanbul: Remzi Kitabevi, 1969).Google Scholar

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32 See references in note 1.

33 World Bank, Turkey–Policies and Prospects, p. 31.Google Scholar

34 This reform package, hailed by the Demirel government of 1979–1980 as “a major change in the orientation of economic policy” (Milliyet, 06 21, 1980)Google Scholar included a substantial devaluation of the TL, deregulation of prices in the SEE and private sectors, and of the interest rates. In an Annex to the Stand-by Agreement with the IMF on June 2, 1980, the government undertook to abide by these measures for two years. For a brief discussion of these matters see Hale, , Political and Economic Development of Modern Turkey, pp. 257–258.Google Scholar

35 Krueger, Anne, Foreign Trade Regimes and Economic Development: Turkey (New York: NBER, 1974). Reviewing the industrialization strategy under the first and second five year plans, Krueger has estimated that under a more labor-intensive and export–oriented alternative strategy,at identical levels of investment, the Turkish economy could have done substantially better, realizing a total of 300,000 additional jobs, lower imports, and higher output.Google Scholar

36 As Okyar has argued, the SEEs were in fact operating under one set of economic rules, while the private sector was subject to different rules of the game (Okyar, Osman, “The Concept of Etatism,” Economic Journal, vol. 75 [03 1965]).CrossRefGoogle Scholar For a recent discussion of operational inefficiencies, including details of political interference, lack of direction and coordination at the top, overstaffing and inadequate staff incentives in SEEs see Walsted, , State Manufacturing Enterprises, pp. 190–192.Google Scholar

37 Sources for these data are Teşkilati, T. C. Başbakanlik Devlet Planlama: Dördüncü Beş Yillik Kalkinma Plani, 1979–1983, table 91, p. 125, and para. 366, p. 126.Google Scholar

38 Ibid., paras. 367–368, p. 126.

39 Computed from World Bank, Turkey–Policies and Prospects, tables 5.4, p. 278, and 5.1, p. 275.Google Scholar

40 There is a large literature on grant economics—a branch of economics which differs from traditional exchange transactions in markets in its emphasis on the role of income and wealth transfer independently of markets. See, for example, Kenneth, E. Boulding, The Economy of Love and Fear: A Preface to Grants Economics (Belmont, Calif.: Wadsworth, 1973);Google ScholarKenneth, E. Boulding, Pfaff, Martin, and Horvath, Janos, “Grants Economics: A Simple Introduction,” American Economist, 16, 1 (Spring 1972).Google Scholar

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42 Henry, Stuart, Hidden Economy (London: Martin Robertson, 1978);Google ScholarWeisbrod, Burton, “The Forgotten Economic Sector: Private but Nonprofit,” Challenge (09–10 1978).Google Scholar

43 Regarding corruption in the SEE sector during the period of hectic investment under the first plan (1963–1967), there was such a considerable graft in the awarding of huge contracts that it led to the creation of several watchdog agencies in the Ministry of Finance and the High Control Board (Walsted, , State Manufacturing Enterprises, p. 77).Google Scholar

44 “The fact that import–quotas for many consumer goods are at zero or near to zero means that, in effect, he only real external competition in many industries comes from smugglers rather than legitimate importers’ (Hale, , Political and Economic Development of Modern Turkey, p. 202).Google Scholar

45 For example, the monthly salary of a top (i.e., grade 15) civil servant in 1980 was about U.S.$200. whereas the typical rate was below U.S. $100, including a vast array of bonuses and allowances.

46 Thus access to hospital and medical services, completion of legal documents, import/export, and commercial transactions often require bribes. As a result of such “informal user-cost charges,” access to essential services becomes a function of ability to pay, increasing the inequality of income and opportunity in the country. Charges of corruption against public officials often makes headlines in Turkish dailies. For examples in recent past, see Hürriyet, 06, 1981Google Scholar (regarding corruption in the distribution of iron and cement in Mardin) and Hürriyet, 03 1981 (regarding corruption in several municipalities in the eastern provinces).Google Scholar

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51 Thus. Art. 50 of the 1961 Constitution provides for free (i.e.. zero tuition) education up to and including university education. For a discussion of Turkish educational and manpower planning, see özay, Mehmet, “An Assessment of Manpower and Educational Planning in Turkey: Shifting from Long–Term Forecasting to Employment Policy,” International Journal of Manpower, vol. 2, no. 2, 1981, pp. 26–32.Google Scholar

52 On excess supply problems, see Mehmet, “Assessment of Manpower,“ and Dördüncü Beş Yillik Kalkinma Plani, 1979–1983, para. 73, p. 29.Google Scholar

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54 World Bank, Turkey–Policies and Prospects, p. 241 and n. 38.Google Scholar

55 Ibid., pp. 66, 132.

56 Krueger, Foreign Trade Regimes, esp. chap. 9; Walsted, State Manufacturing Enterprises, esp. Appendix C.

57 Karpat, , Turkish Democracy at Impasse, esp. pp. 31–42.Google Scholar

58 In explaining the social and political significance of the rural exodus, Karpat has stated: “No other factor contributed as much to social and political change and, indirectly, to political unrest in Turkey as the agglomeration of rural migrant settlements around all the major cities of Turkey”. The estimate in the text is from John, M. Monroe, “Migration in Turkey,” Economic Development and Cultural Change, 22, 4 (07 1974).Google Scholar

59 As Karpat in Turkish Democracy at Impasse has put it: “Alienated youth in the gecekondu and elsewhere in the cities provided a large recruitment pool for every militant, radical, and terrorist group” (p. 19). Karpat cites the results of an empirical study by Doğu, Ergil, Türkiyede Terör ve Siddet, Yapisal ve Kültürel Kaynaklar, (Ankara, 1980), showing very similar educational characteristics among the leftist and rightist militants.Google Scholar

60 This term is borrowed from Heper, Metin, “Recent Instability in Turkish Politics: End of Monocentrist Policy?” InternaUonal Journal of Turkish Studies, I, 1 (Winter 1979–1980).Google Scholar

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64 Since January 1980 some important reforms along these lines have been initiated. There has been a major cut in state subsidies to the SEEs and a freeze placed on employment in the public and SEE sectors. More encouragement is now to be given to the private Sector, export promotion, and foreign investment. In December 1980 a major tax reform package was introduced and the military leaders promised further reforms. Whether these new initiatives will prove adequate or effective only time can tell. What appears to be missing to date in these initiatives is a commitment to employment creation and regional development strategy. By the summer of 1982, there were some encouraging improvements in the Turkish economy, especially in terms of export promotion and inflation controls. However, in the aftermath of the Kastelli affair and the resignation of the Minister of Finance, Turgut özal. there were reports of a possible restoration of a more étatist economic policy.