Interview with Professor Ayşe Buğra: Turkey’s Government-Business Relations in 2014 and Beyond

Interview with Professor Ayşe Buğra: ;
Turkey’s Government-Business Relations in 2014 and Beyond

Assessment of a Turbulent Year in Turkey Series – II

Much has been written about the causes and consequences of the rise of Justice and Development Party (Adalet ve Kalkınma Partisi (AKP)). Following the economic crises of the early 2000s and the AKP’s 2002 election victory, wide-ranging changes have taken place in Turkey. These changes have been particularly evident in the realm of state-business relations. One scholar who has made tremendous contributions to the social science literature on Turkey’s modern government-business relations is Ayşe Buğra. The Centre for Policy and Research on Turkey (Research Turkey) spoke with Professor Buğra, who is an expert on the intersection of politics, business, and religion as well as Turkey’s welfare and social policy.

The interview focused on what has changed (and what has remained the same) in Turkey’s political economy and what may lie ahead. Prof. Buğra, a Professor of Political Economy at Boğaziçi University and a member of Research Turkey’s Advisory Board, discussed her new book and the current government’s strategies for economic management. Furthermore, she gave her analysis of the effects of religion and geography on business development. Finally, Prof. Buğra commented on the effects of the Gezi protests one year on and how the demonstrations related to economic development.

Ayşe Buğra completed her Ph.D. in Economics at McGill University. She is Professor of Political Economy at the Atatürk Institute of Modern Turkish History of Boğaziçi University in Istanbul and is the co-founder and the current director of the research centre Social Policy Forum at the same university. Her current research interests include business history, comparative social policy and gender relations. Her last book is entitled New Capitalism in Turkey: The Relationship between Politics, Religion and Business (co-authored with Osman Savaşkan, Edward Elgar publishing 2014). This book has been published in both Turkish and English languages. Her other books in English include State and Business in Modern Turkey (State University of New York Press 1994), Reading Karl Polanyi for the 21st Century: Market Economy as a Political Project (co-edited with Kaan Ağartan, Palgrave MacMillan 2007), and Trajectories of Female Employment in the Mediterranean (co-edited with Yalçın Özkan, Palgrave MacMillan 2013). Her articles in the area of social policy in general and female employment patterns in particular have been published in such journals as Social Politics, European Journal of Social Policy, International Journal of Middle East Studies, Development and Change, Middle East Studies, International Journal of Urban and Regional Research and New Perspectives on Turkey.

Synopsis of the Interview

“What we had, at least until 1970s, was a rather timid group of business people who preferred to represent their interests not through business associations but through particularistic relations with political authorities.”

“Through the developments during the AKP rule, we could witness another round of politically supported processes of capital accumulation and a new vintage of state-created bourgeoisie.”

“Through time… the government has begun to change or circumvent the existing regulations in a way to significantly shape the business environment and to contribute to capital accumulation in the hands of a group of newly emerging business people with privileged relations with the ruling party.”

“The nature of particularism also seems to have changed. Political networks around the ruling party now include business actors who at times act or are in a position to act politically.”

“It would be a mistake to forget that under the AKP government, small and medium enterprises have benefited from very significant government-provided incentives and currently government is a more important actor than it ever was in the realm of small and medium business activity.”

“I think that religion in Turkey appeared as a very important network resource bringing together business enterprises of different sizes in different sectors and regions.”

“It might be useful to approach religious identity as the outcome of initiatives taken to shape the place of religion in people’s lives and in business activity, rather than as an exogenously given fact.”

“The discretionary government interventions in the economy have continuously expanded through the last decade and the vulnerability of the economy has greatly increased.”

“The lessons that can be drawn from Soma mine disaster are many and extremely important. We saw that the absence of proper regulation in Soma case could indeed reach criminal dimensions.”

“The protests have also revealed how effectively the opposition could use social media and alternative channels of communication. This has led to an exacerbation of the attempts to control dissent, especially by curbing freedom of communication and information dissemination.”

“My expectations about the future of democracy and human rights in Turkey are not very brilliant, at least for the short run. The good news is that there is a very serious opposition that challenges the negative developments in these areas.”

Full Text of the Interview

Interview with Professor Ayşe Buğra: Turkey’s Government-Business Relations in 2014 and Beyond

Assessment of a Turbulent Year in Turkey Series – II

Professor Buğra, thank you very much for taking the time to interview with the Centre for Policy and Research on Turkey (Research Turkey). You recently published a book, with Osman Savaşkan, New Capitalism in Turkey: The Relationship between Politics, Religion and Business. In this volume, you discuss the ways in which the Turkish business community was shaped by international changes, religious discourses, and domestic economic development. What led you to research and write on this topic in particular?

I already worked on government-business relations and published a book on this subject in the 1990s. I initially found the topic interesting because the Turkish bourgeoisie seemed to be a largely state-created one, which affected its political outlook and its impact on the process of democratization. What we had, at least until 1970s, was a rather timid group of business people who preferred to represent their interests not through business associations, but through particularistic relations with political authorities. After the 1970s, this began to change. And one could have the impression that there was now a more autonomous bourgeoisie which could better be qualified as ‘a ruling class’. This is where my early research on the subject ended, but then through the developments during the AKP rule, we could witness another round of politically supported processes of capital accumulation and a new vintage of state-created bourgeoisie.

You have researched the results of how the AKP’s economic and political strategies were born out of the crises of the 1990s and early 2000s. What were the ramifications of the party taking power following a major economic crisis?

These crises were important to create a widespread disillusionment about the existing political actors and created an important opportunity space for a new political party, one which had its formation in political Islam. It should be remembered that this was in an international context where religion had become a salient element in political and social life, a context where there were intense debates around ‘post-secularism’ or ‘the return of public religion’. In addition,  it is important to point out that  the market reforms in Turkey were introduced after the crisis of 2001. These reforms and the market discipline that they introduced implied important economic difficulties for large segments of the population, whose discontentment was also a factor leading to the electoral victory of the AKP. Moreover, the economic stability, especially the economy’s resistance to financial crises, largely owing to the regulatory framework of the market reforms, contributed to the good economic performance of the AKP government, even though the government cannot be said to remain fully committed to the framework in question.

“Through the developments during the AKP rule, we could witness another round of politically supported processes of capital accumulation and a new vintage of state-created bourgeoisie”

What was the AKP’s position toward the management of the economy?

When it first came to power, the AKP declared its commitment to the economic reform process, which first and foremost was designed to limit discretionary political intervention in the functioning of the market. Through time, however, the government has begun to change or circumvent the existing regulations in a way to significantly shape the business environment and to contribute to capital accumulation in the hands of a group of newly emerging business people with privileged relations with the ruling party.

Turkey has seen various iterations of state-created bourgeoisie in its history. What are some of the current types of political mechanisms for granting advantages to the favoured business people?

It is true that the nation building agenda of the Young Turks in the beginning of the 20th century and that of the early governments of the Republic involved the creation of a national bourgeoisie at that time to replace the non-Muslim minorities that were important in the economy. One could say that a similar transfer of capital was attempted during the AKP rule considering especially certain cases of punitive tax inspection against established big business people that were not on good terms with the ruling party. It would be misleading to say, however, that we are faced with a case of history repeating itself. Some of the mechanisms such as import quotas or cheap inputs from the state-owned enterprises are no longer available in an open market economy. Nevertheless, in investments in various sectors such as infrastructure and construction or in privatized energy sector or for the opportunities of private business in sectors such as health, government continues to be an important actor and government-business relations continue to significantly affect business success. It is in these sectors that we can trace the trajectories of business development of new business actors close to the government. At the same time, the nature of particularism also seems to have changed. Political networks around the ruling party now include business actors who at times act or are in a position to act politically. Their presence in the media sector might help to illustrate this point.

In your book, you also raise certain questions concerning the overwhelming emphasis placed on ‘Anatolian tigers’. In which ways did you find this emphasis misleading? Based on your research, are the emerging Anatolian businesses in far-flung provinces enough to challenge the primacy of İstanbul and the surrounding area as Turkey’s economic hub?

The debates around ‘Anatolian Tigers’ are often referred to small and medium business enterprises in provincial towns and the conservative outlook of the provincial business people is mainly emphasized. Many researchers have, in fact, suggested a causal relationship between the provincial business development and the rise of the AKP to power. The dominant picture was one of conservative business people forming the constituency of the AKP, a moderately Islamic and market-friendly political party that unleashed their competitive potential.

I see several problems with this picture. I think, first, that it overestimates the economic significance of regional business development and overlooks the on-going significance of big metropolitan cities, Istanbul in particular, which remain the engines of economic growth. Second, it presents the provincial business scene as a homogenous one and overlooks the presence of ‘non-conservative’ business people who are not necessarily close to the line of political Islam that the AKP represents. Third, the relations between the government and newly emerging business groups whose development has taken place at the national  – not at the local level – are not taken into account through the emphasis of ‘the Anatolian Tigers’. Finally, it would be a mistake to forget that under the AKP government, small and medium enterprises benefit from very significant government-provided incentives and currently government is a more important actor than it ever was in the realm of small and medium business activity.

In New Capitalism you also describe how religion can create solidarity between disparate people, groups, and organizations.  What is the role of religion in the business environment in Turkey today? And what is the most important difference religion can overcome in the Turkish business context – regional, sectoral, size of the enterprise, etc.?

I think that religion in Turkey appeared as a very important network resource bringing together business enterprises of different sizes in different sectors and regions. This was especially important in the context of ‘the post-Fordist’ relations where subcontracting, outsourcing and contract-sharing between different enterprises are widespread practices. Business associations with Islamic references, Müstakil Sanayici ve İş Adamları Derneği (Independent Industrialists’ and Businessmen’s Association – MÜSİAD) in particular, played an important role in emphasizing religious identity as a basis of trust to promote such relations among their members. I think this process is important to consider as a factor that explains the making of the Muslim bourgeoisie of Anatolia. In other words, it might be useful to approach religious identity as the outcome of initiatives taken to shape the place of religion in people’s lives and in business activity, rather than as an exogenously given fact. Religion was also important to alleviate the potential tensions or even conflicts among different actors within the AKP’s constituency. For example, there were some business people with an Islamic outlook who were not particularly happy about the power and influence of the Gülen network. Nonetheless,  again the shared emphasis of Muslim identity helped to keep such tensions under control until the recent outbreak of serious conflict between the Gülen network and the AKP.

“I think that in Turkey religion appeared as a very important network resource bringing together business enterprises of different sizes in different sectors and regions”

You have written that the established business associations without an Islamic character, such as  Türk Sanayici ve İş Adamları Derneği  (Turkish Industrialists’ and Businessmen’s Association – TÜSİAD), “called for a regulatory framework that would minimize the scope of political discretion”1 by maintaining close ties with the European Union and Western countries. Has their advocacy had any success or can we expect Turkey to look for alternative global economic ties in lieu of strong relations with the EU?

I do not  think that they were very successful. The discretionary government interventions in the economy have continuously expanded through the last decade and the vulnerability of the economy has greatly increased. At the same time, the regional direction of trade and investment clearly moved towards non-OECD countries, those in the Middle East in particular. This might have helped to alleviate the impact of the crisis of 2008 on the Turkish economy, but given the instability in the new regions of economic interest to Turkey, the shift in the regional orientation might prove to involve serious risks.

Is it fair to say the ongoing corruption investigations that began in December are connected to the state-business relations perpetuated by the AKP?

It is generally believed to be so. However, I think that the current government-business relations, to which the wealth and fortune of a group of a newly emerging business people owe a lot, cannot be reduced solely to corruption in the strict sense of the term. What enabled these relations to take the dimensions that they did was also a frenzy of legislative activity, which introduced legal changes that eliminated the barriers against politically supported capital accumulation. Of course, partial treatment of certain actors and especially personal involvement of politicians and their family members in business must be considered as corruption and in Turkey, there were serious allegations of such corruption that we cannot say were properly investigated.

To connect your analysis of state-business relations to a recent and very tragic event, are there lessons we can draw from the Soma disaster regarding the Turkish political economy?

The lessons that can be drawn from Soma mine disaster are many and extremely important. We saw that the absence of proper regulation in Soma case could indeed reach criminal dimensions. This inacceptable situation was to a large extent related to a particular understanding of economic policy, which emphasized growth at all costs. What we saw after Soma mine tragedy was also the very large number of small contractors of public mining enterprises, which made the use of up-to-date, safer technology very difficult. I think it would be possible to suggest that this situation is not unrelated to an attempt made to provide opportunities to a large group of favoured business people.

“The lessons that can be drawn from Soma mine disaster are many and extremely important. We saw that the absence of proper regulation in Soma case could indeed reach criminal dimensions”

It has been over a year since the Gezi Park protests began. With the perspective one year on, do you think that the demonstrations and the Gezi movement have changed politics in Turkey? Has your perception of the protests and their meaning changed at all since last year?

Gezi movement was not only about the economic developments that were geared toward creating profit opportunities for privileged business groups with highly detrimental effects on the environment and the public space, but this was a very important issue problematized by the protestors. I think that the protests were highly effective in revealing the nature of ‘the economic progresses’ under the AKP. The protests had the potential to change the nature of politics in the country. I think this potential was realised at least to the extent that Turkish public now has a much more lucid understanding of the transformations that the AKP government have made in the political economy of the country.

In your opinion, can we view the attempts by the AKP to block websites such as YouTube and Twitter as similar to the efforts to suppress the Gezi protests? Or were these instances of silencing outlets of expression specific to the leaks of information?

Gezi protests seriously scared the government, which until then was not really aware of the dimensions of the existing discontent among the population. The protests have also revealed how effectively the opposition could use social media and alternative channels of communication. This has led to an exacerbation of the attempts to control dissent, especially by curbing freedom of communication and information dissemination. This is a general trend, which naturally would be used to prevent debate on subjects particularly distasteful to political authorities such as the allegations of corruption.

“Gezi protests seriously scared the government, which until then was not really aware of the dimensions of the existing discontent among the population”

You have also written on the contemporary Turkish welfare regime, which you describe as a merging of neo-liberalism with social conservatism. Has this social policy manifested itself in the AKP gaining supporters across Turkey?

Before the AKP government, Turkey did not have a rights based social security system that covered the whole population. Particularly absent in the Turkish welfare system was a modern social assistance scheme. AKP used this very effectively to introduce certain very inadequate social assistance instruments more based on traditional use of charity than on a system of social rights. To answer your question, yes, this helped the party to gain electoral support.

Do you have predictions or thoughts on where you see Turkey’s social policy and welfare regime heading in the coming years?

My expectations about the future of democracy and human rights in Turkey are not very brilliant, at least for the short run. The good news is that there is a very serious opposition that challenges the negative developments in these areas. A very large group of people express their awareness of the problems and manifest a commitment to resist the trend towards authoritarianism and the curbing of basic freedoms.

Professor Buğra, thank you very much for sharing your insights.

***

© 2014 Research Turkey. All rights reserved. This publication cannot be printed, reproduced, or copied without referencing the original source.

Please cite this publication as follows:

Research Turkey (December, 2014), “Interview with Professor Ayşe Buğra: Turkey’s Government-Business Relations in 2014 and Beyond”, Vol. III, Issue 12, pp.94-105, Centre for Policy Analysis and Research on Turkey (ResearchTurkey), London, ResearchTurkey. (http://researchturkey.org/?p=7636)

References

1 Buğra, A. and Osman S. New Capitalism in Turkey: The Relationship between Politics, Religion and Business. Edward Elgar Publishing, 2014: 19.

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