The Political Economy of Inequality, Redistribution, and the Protests in Turkey

Gezi Park Resistance Article Series – No. 12

The Political Economy of Inequality, Redistribution,
and the Protests in Turkey

The obvious injustice and police brutality in Gezi Park was the last drop in a long process of accumulation of discontent against an authoritarian government, their social policies pushing for a conservative Islamic life style threatening in particular women and the youth, criminalization and imprisoning of oppositional groups ranging from seculars to Kurds, socialists, and trade unionists, and last but not least neoliberal policies which increasingly commercialized public services, created areas of rent for large corporations, destroyed the ecological environment, and increased insecurity for a significant part of the working people. 27 May and the mobilizations that have followed will mark a historic moment for the collective memory of the movements in Turkey. This has been the spontaneous mobilization of a new generation, who has been brought up by the conservative neoliberal authoritarian AKP regime for a decade. It has been a source of inspiration with the creativity and sense of humour of the young people involved. It has been a broad movement bringing together first time activists of all ages -young and old-, trade unions, civil society organizations, and political groups from a wide spectrum. Despite police brutality, and systemic criminalization of the protestors, the movement is nowhere close to disappearing. It has now spread out to local parks, and taken the form of neighbourhood assemblies.

Despite the mass persistent ongoing protests, it is also true that Turkey is very divided in terms of the sentiment about the AKP regime, and there is still a significant, albeit possibly declining, support for the government. A lot has been said about the democratic aspirations of the protestors. But less attention has been paid to the distributional dynamics in the background of the discontent about the regime as well as the support for it. AKP has initiated a redistribution towards the poorest of the society via both crony in kind transfers of food and fuel, in particular in the eve of the elections, as well as some institutional pro-poor changes, e.g. in the health services increasing access for the poor and the informal sector workers. Share of social transfers, in particular transfers other than pensions and survivors’ benefits, have doubled as a ratio to GDP from 0.9% in 2006 to 1.8% in 2010.[1] Relative poverty rate (the ratio of individuals below %50 of the median value of the consumption expenditures per equivalent individual) declined from a level of 18.5% in 2002 to 16.0% in 2011.[2] Minimum wages have also received a significant boost in real terms, and increased from 0.61 as a ratio to the median wage of full-time workers in 2002 to 0.71 in 2011, and minimum wages as a ratio to average wages increased from 0.32 to 0.38 in the same period.[3]

However, the source of this redistribution was income scrapped from the organized blue collar and white-collar/professional working people rather than taxes on corporate profits and the rich. This redistribution helps to increase the profits of the employers without hurting the poorest further. This may also partly explain the diverse class composition of the mass, albeit shaky, electoral support for the party.

In the last decade insecurity has increased for all segments of the working people bare the poorest. Share of wages in national income, which had decreased dramatically after the 1994 and 2001 crises, went on decreasing under the AKP rule until 2008. Despite some increase   since 2008, the wage share has still not recovered back to its pre-2001 crisis level in 2000; it is still 1.4% lower in 2011 compared to 2000, and dramatically lower than the wage share in its peak in 1991 by a rate of 9.6%.[4] Furthermore, between 2006 and 2011 the share of the bottom 40% as well as the top 20% within the total wage income has increased, whereas the share of the middle 40% decreased.

During a decade of AKP rule the amount of workers working for outsourced companies has more than tripled reaching to above 1.5 million. Union density has almost halved from 9.5% to 5.8% and is the lowest among the OECD countries –lower than in Eastern Europe or Mexico and Korea.[5] Almost a thousand workers died in workplace accidents. Dr. Ahmet Tellioglu, a workplace doctor at a major factory in Istanbul, who has been sacked recently because of his objection to serious health hazards in the practices of the factory, says that “anyone who is just above the poorest or earning just above the minimum wage, thus any working person, who has something to loose, feels increasingly more insecure in Turkey today”.

Interestingly, this dynamic of redistribution under a conservative neoliberal regime shows a remarkable resemblance to the trends in Brazil. In the case of Brazil, the governing Labour Party, a progressive party quite different from AKP, has implemented some pro-poor policies such as child benefits to the poor families and an unprecedented increase in the minimum wage. However, this was coupled by an unwillingness of the government to discontinue some of the crucial neoliberal policies such as fiscal discipline and tight monetary policy, or engage in a major land redistribution to address the origins of poverty. This has brought together an erosion of the public services, and income and working conditions of large groups of industrial and public sector workers, and hence alienated the original supporters of the party.

Can neoliberal speculation and finance-led growth be a role model of development, social cohesion and regional convergence? No, this model is neither socially nor economically stable, as the recent events as well as the recent history of Turkey, which is marked by regular boom and bust cycles, and crises in 1994, 2001, 2009, show. In the recent global crisis, Turkey had one of the severest recessions in 2009 –deeper than other major emerging economies. Indeed Turkey’s growth model dependent on cheap labour and speculative financial capital inflows and a high trade deficit, would have experienced a crisis sooner or later even without the global recession (Onaran, 2009). The recovery since 2009 is as fragile as before. The share of industry in Turkey’s production is decreasing and becoming increasingly more dependent on the imports of intermediate and capital goods (Yeldan, 2013a). A genuine developmentalist industrial policy is remarkably missing in AKP’s economic policy mix.

No wonder, this is a jobless growth process. As of 2013 March (last available data at the time of writing by TUIK), unemployment in the urban areas (in non-agricultural sector) is as high as 16.5% for women, and 10.2% for men. The rate of unemployment reaches to a remarkable rate of 19.4% for young urban men, and 26.5% for young women (15-24 years old). 18.7% of urban men and 30.2% of urban women have been unemployed for more than a year. Along with high unemployment, the urban female participation rate is still at an extraordinary low rate of 27.6%, which however is not surprising given the dismal supply of affordable and public childcare services. A phenomenal indicator of the anti-women policy stance of the government is its call for women to give birth to at least three children, and its attacks on women’s right to abortion and birth control in an environment where urban female labour force participation is at a level, which bears no resemblance to a developed country.

AKP has recently taken pride in having paid the last instalment of its debt to the IMF. However, in the last decade Turkey has borrowed increasingly more in the international financial markets, and in particular the foreign debt of the private sector has reached unforeseen levels (Yeldan, 2013b). This is a fragile model. When the private debtors go bankrupt, those private losses are socialized. The periphery of Europe is just one recent example of this to add to a series of former crises in Turkey, Latin America and East Asia. The next bust and crisis in Turkey is not a question of “if” but “when”, and the international financial investors will make that decision. The recent foreign capital outflows from Turkey after the rise in political instability was already a signal in this direction. But a further wave of capital outflows came after the announcement of the Federal Reserve Board of the US that they could consider gradually phasing out the quantitative easing programme (the injection of money into the markets), if economic recovery is maintained. The aggressive expansionary monetary policy of the world’s major central banks since 2008 had helped to maintain capital inflows to emerging markets like Turkey, offering high speculative returns. The negative effect of the announcement of the FED on international capital flows has been similar across the world, but the effect has been particularly tougher in Turkey. In the meantime, the government had already labelled the protests as a conspiracy of the international actors and “interest lobby,” and the recent wave of capital outflows has been the tipping point for the government to initiate an official inquiry about the sales of shares in the stock market, particularly by the foreigners. Sadly, this interest in capital outflows is not about a genuine interest in regulating capital flows, but an excuse to support a conspiracy discourse to shed doubts on an authentic social movement.

Fortunately, it is not only the international capital flows, which has a contagion effect. The peoples’ uprisings everywhere from Wall Street to Tunisia to Turkey and Brazil have given a massive expression to the discontent of a silent majority across the world and turned hopelessness into first anger and then hope. Their experiences has been followed and received by solidarity across the world. They have created domino effects, first regionally, but I believe now it is fair to say, also internationally. They have a lot in common. They are all a rebellion against the lack of democracy, voice, and representation as well as rising inequality, joblessness, insecurity, commercialization of the supply of basic needs. The young actors of these mobilizations have been a lot more aware about the multiple dimensions of the crisis -the energy crisis, climate change, ecological crisis and food crisis- compared to former generations. Young men and women, who are mostly not coming from former organized backgrounds, have been in the forefront of all these mobilizations. Not surprisingly, this is happening at a time of record high youth unemployment and increasing precariousness. This is a new generation, who feels insecure about the future, working, if at all, with fixed/short-term contracts, or part time without a choice, at times in the informal sector, most often for low pay, and usually in jobs not matching their education levels and aspirations. Turkey has a long tradition of rebellion, but I feel the recent images of rebellion from Greece or Spain or Egypt has been more alive in the memory of the first time demonstrators in Istanbul, Ankara or Izmir than the history of Turkey which has been persistently erased or discredited or demonized in the collective memory of the young people by the military coup and generations of ruling elite to follow. To overcome fear and to rebel is today something to be proud of. No matter what next, these mobilizations have transformed the social genes forever.

It may soon come to a neighbourhood near you…

Professor Özlem Onaran, Department of International Business and Economics, University of Greenwich

Please cite this publication as follows:

Onaran, Özlem (August, 2013), “The Political Economy of Inequality, Redistribution, and the Protests in Turkey”, Vol. II, Issue 6, pp.20-24, Centre for Policy and Research on Turkey (ResearchTurkey), London, Research Turkey. (http://researchturkey.org/?p=3717)

References:

Onaran, Ö., 2009. “Labor after the crisis in Turkey”, in Turkish Economy in the Post-crisis Era: The new Phase of Neoliberal Restructuring, eds. Şenses, F. and Öniş, Z., Routledge, 243-261

Yeldan, E. 2013a, “IMF Dönemi Bitti Aldatmacası,” Cumhuriyet, 1 Mayıs

Yeldan, E. 2013b, “Talan Ekonomisi,” Cumhuriyet, 5 Haziran


[1] Own calculations based on data supplied by Turkiye Istatistik Kurumu (TUIK).

[2] Own calculations linking the poverty data before and after 2006 supplied by TUIK.

[3] Own calculations based on data supplied by http://stats.oecd.org.

[4] Own calculations linking the national accounts data before and after 2006 supplied by TUIK.

[5] Own calculations based on data supplied by http://stats.oecd.org.

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One thought on “The Political Economy of Inequality, Redistribution, and the Protests in Turkey

  1. Ekonomi

    gerçekten ekonomi alanında farklı bir bakış açısı ile yazılmış bir makale daha önce bu türden konulara özellikle protestanların bir ekonomi politik içinde yer aldığını hatırlamıyorum…

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