COMMENT: Economic divisions shadow Turkey's ideological polarisation

By bne IntelliNews May 2, 2007

Nicholas Birch in Istanbul -

With the dust still far from settled on a dramatic week in Turkey's political history, objective analysis remains difficult.

For Turkey's handful of liberals, horrified by the army's Friday night memorandum, Tuesday night's Constitutional Court decision was a victory for an authoritarian secularist tradition that associates democracy with counter-revolution.

There is some truth in this. By annulling a parliamentary vote on the grounds that less than two-thirds of deputies were present, the court has made future presidential elections dependent on the will of a minority. That's pretty much the way Turkish democracy has always worked, despite the slogan on parliament's walls proclaiming that "sovereignty is unconditionally in the hands of the people."

Others think the huge rallies of the past two weeks show secularists have changed too. In the past, they turned to the army to cover up their numerical weakness. Now, the shout is, "No to shar'ia, no to a coup."

Most analysts see the moderate, religious-minded party of Prime Minister Tayyip Erdogan, the AKP, as a paradigm of Turkey's maturing democracy. Yet it would be absurd to dismiss the fears of the protestors out of hand.

It is now clear that a significant – and probably growing – proportion of Turks do not trust the government's claims to have left political Islam behind. Middle-class women in particular are terrified that their way of life is under threat. The government made a grave mistake in choosing, without consultation, a candidate married to a woman who covers her head.

What all the endless debate about Turkey's deepening ideological polarisations masks, though, is that an important part of the stand-off between secularists and government is an economic one.

It's the economy, stupid

The AKP is the most economically liberal government Turkey has ever seen. Elected out of an economic crisis, and with the IMF and World Bank twisting its arm, it put the country's stuttering privatisation programme into overdrive and has passed a series of laws that cut away at Turkey's bloated public sector.

The results are well known. Run-away interest rates are (more or less) under control. Five years ago, annual foreign direct investment (FDI) of more than $1bn was an event; in the last three months, $11bn of FDI has flowed in. And Turkey's average growth rate over the past five years was above 7%.

However, in a country that was a fair copy of a Soviet-controlled economy 25 years ago, what one wag calls AKP's "market fundamentalism" has unsurprisingly failed to win everybody over.

Despite claims of a growing gulf between rich and poor, reduced unemployment appears to have brought differences of income distribution down. But wealth distribution is changing rapidly in Turkey, and it's Turkey's 2m-plus state employees who are losing out most.

While private sector salaries boom, they have to make do with inflation-indexed pay rises. Their current pensions almost twice as juicy as the ones the state gives to non-state sector workers, they stand to lose out from a radical IMF-backed restructuring of Turkey's pension system. In a liberalised economy, the days when policemen, soldiers and senior bureaucrats are assured of a car and free housing are numbered.

Unsurprisingly, state sector workers (who historically tend to be leftist and secular) make up a significant proportion of the people turning out at the anti-government rallies.

Their hero is current President Ahmet Necdet Sezer, who hasn't just blocked 100s of AKP-backed candidates for bureaucratic positions, but also dozens of vital laws liberalising the economy.

Before AKP came to power, he vetoed the privatisation of state-owned banks, tobacco and telecoms. In 2003, he blocked airport privatisations. In 2004, he ruled against efforts to permit foreigners to buy 100% stakes in Turkish media companies. Last year, he forced changes to a law easing sale of real estate to foreigners. Most crucially, and again last year, he blocked the pension law that would have brought all state pensions under one roof. State-sector workers, he ruled, could not be considered the same as workers in the private sector.

Evidence of this economic nationalism was not hard to find at the secular protests. At the April 14 meeting in Ankara, crowds roared their approval as speakers ordered "imperialist IMF" to get its paws off Turkey. In Istanbul this Sunday, one of the most popular slogans was a play on the horticultural meaning of presidential candidate Abdullah Gul's surname – "No to an American Rose."

A highly popular secular nationalist columnist with the mass market daily Hurriyet, Emin Colasan has taken to capitalising the first three letters of Gul's name: ABD is the Turkish for USA.

Boiling all secularist protest down to economics would be absurd. But it is no coincidence that Turkey's secularist heyday coincided with a period when state controlled both politics and economy. Nor is it a coincidence that the rise – and increasing moderation - of political Islamic parties accelerated after economic liberalisation began in the 1980s.

Send comments to The Editor

Related Articles

Turkey approaches day of reckoning on economic reform

Kivanc Dundar in Istanbul -   The unexpected success of President Recep Tayyip Erdogan’s Justice and Development Party (AKP) in this month’s general election should bring much-desired political ... more

Macedonia kept on hold as Balkans edges towards EU goal

Clare Nuttall in Bucharest -   Macedonia’s EU accession progress remains stalled amid the country’s worst political crisis in 14 years, while most countries in the Southeast Europe region have ... more

Turkey and America seen on course for confrontation in Syria war

John Davison of Exaro - Military action by Turkey against Kurdish rebel forces in Syria raises the prospect of a direct clash with the ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.