INTL 410/ECON 481

Associate Prof. Dr. Caner BAKIR

1
 Buğra, A. and Savaşkan, O. 2010. ‘‘Yerel Sanayi ve Bugünün Türkiyesinde
İş Dünyası’’, Toplum ve Bilim, No. 118, pp. 92-123.

 Main argument: It is a fact that the economic and political power of Anatolian firms
is on the rise, yet it does not refer to a ‘miracle’ or ‘substantial ground shift’ in Turkish
political economy.

 Buğra, A. “Class, Culture, and State: An Analysis of Interest

Representation by Two Turkish Business Associations”, International
Journal of Middle East Studies, Vol. 30, No. 4, 1998, pp. 521-539.

 Main argument: Different business associations represent not only different class
interests but they also reflect different ideological and cultural priorities. In this
context, MÜSİAD and TÜSİAD are two distinctive organizations. Whereas TÜSİAD has
close ties with Kemalist establishment and represents secular values, MÜSİAD is
more conservative and aligns with the “periphery” of Turkish politics.

2
1. Historical background and main dynamics of state-
business relations
2. Business associations in Turkey
3. The rise of “Anatolian tigers”?
4. Review questions

3
 State-business relations in Turkey followed a different trajectory in comparison
to western countries
 State created the business elite in Turkey
▪ Union and Progress Party policies to create “national bourgeoisie”
▪ Nationalization of foreign owned companies before WWI
▪ The establishment of İş Bankası in 1924 by Celal Bayar, the population exchange between Turkey and
Greece and the nationalization of foreign owned firms
▪ The Varlık vergisi case in 1942
 Business elite is heavily dependent on the state resources especially during statism period in
1930-1938 and 1960-1980
▪ For example: Koç holding, Eczacıbaşı, Sabancı holding etc. consolidated under heavy state
protectionism during ISI period
STATISM: The belief that a government should control either economic or social policy, or both,
to some degree. Statism refers to heavy state involvement especially to promote
industrialization.

4
 State’s approach toward business had been ad hoc, non-institutionalized and
produced “tremendous uncertainty”

 “We cannot see what is in the near future. We cannot make any contracts. If we knew that
[the government] would provide us with subsidies, we would act accordingly” (Chairman of
Turk Trade, 1989)

 Formal/Informal-clientilistic linkages and patronage dominated the main

framework
 Example: Public procurement law has been changed 17 times between 2002-2010

 Lack of “embedded autonomy” and “governed interdependence”

 Example: The bureaucratic experts team that prepared the first five year development plan
after 1960 military coup resigned in the second year of the planning era (in 1962) due to the
political and clientelistic pressures on their shoulders. This situation repeated itself many
times over the last 50 years!

CLIENTILISM: The exchange of goods and services for political support. It is a

political system at the heart of which is an asymmetric relationship between
groups of political actors described as patrons and clients and political parties

5
 Although the previous slide draws general framework on state-business
relations in Turkey, one needs to differentiate different policy phases in
Turkey and the transformation of big business in these phases. The post-
WWII era refers to four different period:
1) Liberalization and agricultural-led liberalization
2) Neo-statist era
3) Neoliberal restructuring
4) Regulatory neoliberalism
 The table in the next slide depicts the transformation of big business in
these sub-periods. Over the last 60 years Turkish business developed
and transnationalized, albeit in an uneven and unstable manner

6
7
 There are different interest representation groups in Turkey
 These groups diverge from each other not only in economic terms but also in
cultural and class structure viewpoints as well
 The two leading business groups in Turkey are TÜSİAD and MÜSİAD
Turkish Industry and Business Association: TÜSİAD
 The oldest business association in Turkey is TÜSİAD, founded in 1971
 It was founded to defend the interests of business elite against the state and
lobby for economic and political issues
 TÜSİAD is mainly composed of İstanbul bourgeoisie that have close relations
with the “state establishment”
 TÜSİAD members cover the 65 percent of Turkey’s industrial production and
80 percent of Turkish exports (see next slide)
8
9
Independent Industrialists’ and Businessmen’s Association, MÜSİAD

 The second biggest business association in Turkey is MÜSİAD, Independent

Industrialists’ and Businessmen’s Association
 MÜSİAD was established in 1990. Its membership scale is more diversified and
larger than TÜSİAD.
 It has 5,560 members in 38 cities around Turkey
 It contributes 15 percent of industrial production and 17 billion dollars of exports
 The membership profile is mainly conservative with special emphasis on religious
sensitivities
 Over the last decade the impact of MÜSİAD on the course of economic and
political decision-making increased gradually

10
Mechanisms used by the State to create and
consolidate business power
 Before deregulatory 1980s; access to FX, loans of
public banks, cheap inputs by State economic
enterprises.
 Following 1980s; privatizations, public infra-structure
bids, public bank loans (Bugra and Savaskan,
2010:101).
11
• The state-business relations have been subject to change. It refers to cooperation and conflict
depending on the interests of parties. FOR EXAMPLE:
• TÜSİAD supported Ecevit government in late 1970s when Ecevit rejected European Community
membership because TÜSİAD was supporting protectionism at the time
•However, the same association opposed Ecevit government and published advertisements
against Ecevit government in late 1970s.
•MÜSİAD, for example, had difficulties during late 1990s because of ideological conflicts with
military-bureaucratic apparatuses of the state.
•With the advent of AKP, however, MÜSİAD’s relations with state follows a cooperative trend
12
 Some scholars argue that entrepreneurs in Anatolian cities have
become more visible in Turkish economy over the last decade
 In this context, Konya, Denizli, Antep, Kayseri, Maraş increasingly
became the “new centers of production” in Turkey
 During the AKP era, “new business elites” and holdings emerged from
different provinces such as Fettah Tamince, Kiler Holding, Akın İpek
and Çalık holding
 With an implicit emulation to Asian developmentalist states, these
new actors are called as “Anatolian tigers” Do you agree this
statement?
 We need to reveal the data to test the validity of this argument…

13
 The following three slides compare the “old industry centers’ share” in Turkish
economy with those of “new industrial centers’ share” in terms of certain
indicators
 According to Bugra and Savaşkan (2010: 97) “the overall interpretation of the
data refers to an increase of Anatolian firms, yet it does not refer to a ‘miracle’ or
‘substantial ground shift’”
 Therefore, we should acknowledge the diversification of interest representation
and power relations in Turkish political economy without exaggerating the
degree of transformation
 In the final analysis, due to the lack of institutionalized mechanisms in state-
society relations and the absence of productive “policy networks”, it is not
possible to compare “Anatolian tigers” with “Asian tigers”

14
15
16
17
 What are the major dynamics of state-business relations in
Turkey?
--- Hint: develop a historical perspective ---

 What are major phases of economic policy-making in Turkey and

in which ways did it transform the big business in Turkey?

 Compare and contrast “Anatolian tigers” with “Asian tigers”?

18