SOCIAL RELATIONS IN TURBULENT TIMES 10th Conference of the European Sociological Association 7th to 10th September 2011, Geneva,

Switzerland.

The Transformation of Political Power in Turkey

by Sonay Bayramolu zuurlu

Gazi University, Ankara, Turkey

GENEVA 2011

The Transformation of Political Power in Turkey by Sonay Bayramolu zuurlu Gazi University, Ankara, Turkey

Paper was presented at the Social Relations in Turbulent Times

10th Conference of the European Sociological Association 7th to 10th September 2011, Geneva, Switzerland.

Introduction The neo-liberal transformation since the 1980s in Turkey has largely attained its initial objectives after a convoluted itinerary and radically re-shaped the foundations of the political regime. In this study, we will focus on the structure, functioning, and the transformation in the power sources of the state, rather than on the scope of the neo-liberal agenda. The neoliberal intervention in the political organization of capitalist social relations, reorganized the class character of the capitalist state towards a more direct and instrumentalist direction, as well as strengthening the capitalist character of the social relations. In other words, the class character of the political power has not changed, but the state apparatus is demoted to being an instrument of the capitalist class, composition of which has become more complex. This instrument, which is facilitated by various projects of the international organizations such as the OECD, WB, IMF and the EU, is called as the regulatory state. It is possible to analyze the actual decision-making model of the regulatory state by way of a method called regulatory impact analysis. Here, first of all, a conceptual framework will be discussed in general terms in order to delineate this process
(1)

. Then, the transformation of political power in Turkey will be

discussed in to sections dealing with the transition and the building processes.

(1) For a detailed account of the analysis framework suggested here, please refer to Sonay Bayramolu zuurlu (2005).

Analytical Framework There is a large literature that deals theoretically and empirically with the notion of governance. This study, however, will suggest the centralization and concentration of political power as tendency concepts for the analysis of governance model. These concepts are derived with reference to the concepts of centralization and concentration of capital produced by Marx. Centralization and concentration concepts represent two distinct appearances of capital accumulation in the expanded reproduction process of capital. The centralization tendency of capital refers to the ownership of the means of production and the concentration tendency refers to the structures and processes that deal with the organization and control of production (Bottomore, 2001, p.513)
(2)

. When we speak of the centralization

and concentration of political power, centralization refers to the scale of political power, whereas concentration refers to the political realm or scope of political power. In the regulatory (governance) state model, the tendency that the legislative and to an extent judiciary power is being absorption in the hands of the executive power causes an concentration of political power. We can explain this intensification of political power with reference to Russell as an increase of the ruling power of the rulers over the ruled (3). Contemporary democracies can be defined as a type of political power centralizing on the scale of the nation-states and intensifying depending on the type and level of the political participation of the people. In representative democracies, there is a controlled political power practice, which has lower degrees of power concentration. In controlled concentration of political power, the realm of political power is composed of a matrix formed by procedural autonomy (division of powers) and functional totality (representative institution of the national will). It must be emphasized that under conditions of global capitalism, as the nationstates and the controlled balance between the powers have been shaken off their foundations, the representative democracies fell into a structural crisis. The most concentration of political power is founded in both direct democracies and non-democratic governments. The former has participatory form of political power. The latter has exclusionist forms of power concentration.

(2) As one of the fundamental conceptual couples of Marxist political economy, centralisation and concentration are applied to analyse contemporary dynamics of global capitalism by Bennett Harrison (1997, p.8-9) who offered the concept of concentration without centralisation to define fundamental tendency of contemporary capital accumulation. In his book, titled Lean and Mean non-centralisation refers organisation of production far away from host corporation. The term of concentration, on the other hand, refers power of company for controlling production resources. (3) I derive the concept of concentration of political power by referring Russells (2002) concept as power concentration.

It must be emphasized that as Turkey approaches towards a renewed and deep integration with global capitalism, decentralization of political power on the national scale goes hand in hand with centralization on the supra-national scale. The tendentious concentration of political power is being realized both as power concentration in the executive and strengthening of governance apparatuses that are allegedly independent from the state. In Turkey, the tendency to centralize is at the forefront as the dominant tendency since 1980. The tendency of concentration of power, however, is less visible. Political power tends to concentrate in an accelerated fashion especially after 1999, parallel to the parliamentarian system. While some of the national powers are transferred to the local governments as a result of decentralization, most of these powers are transferred to supra-national actors. These developments became more visible after 2006. Now, we can have a look at the building of the regulatory state in Turkey.

Transition to the governance state model: Neo-liberal Ozal Era. The regulatory state model in Turkey is built on political and social life shaped by the January 24, 1980 Decisions and September 12, 1980 military coup. The neo-liberal program which started to be applied in 24 January had a totality that determined the national economy until 1988. 12 September military coup and the subsequent 1982 Constitution completely changed the political and social life to the disadvantage of labour. (Boratav, 2006, pp.145-6). The military regime put the labour market under strict control by non-economic and legal means until 1983. After 1983, the incoming ANAP (Motherland Party) government under the leadership of Ozal followed the principles of the military regime in wages and agricultural subsidies. Nevertheless, after the end of the martial law period, the policy instruments have changed (Boratav, 2006: 152-3). The close relationship between the neoliberal economic policies and the 12 September coup era, which was the bleakest era in Turkish history, must be emphasized. As Aye Bura (1997, p. 206) argues, it is extremely important that the leader of the military junta explained their export oriented development strategy during his first televised speech after the coup. When we examine the constitution, it can be said that the executive became stronger in the political system after 12 September (Sabuncu, 2003, p.202). The power of the Prime Minister increased with the 1982 Constitution. The Council of Ministers was given many regulatory functions such as issuing decrees (Eroul, 1993, p.256; Sabuncu, 2003, p.199). The establishment of extra budgetary funds that are under the supervision of the parliament also
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among significant changes that increased the power of the executive vis a vis the legislative. (Bura, 1997, p.209). The political atmosphere created by the military coup started to change together with the expiration of the political ban on the former political parties and their leaders in 1987. The party in government in this period also started to weaken as a result of its clientelistic relations with the rentier sections of capital started to be more visible and criticized by the other sections of capital and the people in general. As a result of these rising criticisms, Sosyaldemokrat Halk Parti (SHP, Social Democratic Peoples Party) wins the 1989 local elections. Strengthening of the financial capital has gone hand in hand with the financial liberalization. Together with the law stipulated in 1989, the convertibility of Turkish lira was recognized, and all restrictions for the financial capitals entry into and exit out of Turkey were abolished. (Yeldan, 2001, p.129). This is followed by the Customs Union Agreement signed with the EU in 1995. Liberalization of financial transactions and the rise of financial capital stimulated each other (4). The neo-liberal policies created a deep recession in 1994, in which production in Turkey almost halved. After that, there were also serious economic crises in 1999 and 2001, and these crises created the economic conditions conducive for the governance model. Together with the stand-by agreement signed with the IMF in 1999, the influence of the international organizations over the administration of the economy turned out to be dominant, and this agreement is followed by others in 2002 and 2005. As a result of the neoliberal policies implemented by the governments until 1999, a structure with chronic problems such as concessions in energy and public works, privatizations, financial profiteering and siphoning of the public banks was created topped off by mafia-like relationships. It is observed that after 1999, regulatory reform policies started to put their imprint on the neo-liberal agenda and the governance model started to come to the forefront.

Building the governance model: Rupture from the parliamentarian system After the stand-by agreement signed with the IMF in 1999, Turkish Grand National Assembly stipulated 15 laws in 15 days in an extremely speedy fashion, and this initiated a period in which conformity of legislation with the interests of the market became the main concern. This political process originally started with the three-party collation government, but became

(4) Has the rise of financial capital stimulated growth? According to the analysis provided by Korkut Boratav, the answer is negative. He argues that the growth rates after 1989 steadily dropped (Boratav, 2006; see also Yeldan, 2001).

fully functional after the AKP (Justice and Development Party) government came to the power in 2002. The regulatory state started to be built primarily by way of independent regulatory agencies that undertook the task of regulating the critical economic sectors. Independent regulatory agencies are integrated structures that unite legislative-executive-judiciary powers in the related sector. They are presented together with cleansing of economy from political interests, yet they have critical repercussions for the quality of the political regime. The de jure principles of division of powers and the functional harmony of legislative-executive and judiciary powers are first separated into sectors, and then in each sector all of these powers are de facto united in the body of these regulatory agencies. It does not come as a surprise that these regulatory agencies create a centralizing tendency. As it happens in all newly forming state types, the new political power model of capital, first liquidates the previous structure by decentralization and then builds its own model by way of emphasizing recentralization. The regulatory state model that led to concentration and intensification of power in Turkey is formed with reference these four axes: (i) Transfer of the administration of the economy to market actors: In most important policy areas such as energy, banking, telecommunications and public contracts, alternative institutions that run parallel to ministerial bureaucracies are formed. Autonomous regulatory agencies such as Banking Regulation and Supervision Agency, Energy Market Regulatory Authority, Competition Authority, Capital Markets Board and Public Procurement Authority directly defend the interests of capital and have strong roles in creating policies in this line. To the administrative positions of these agencies, technicist administrators that are marketfriendly are appointed. (ii) Transition to a development model that is dependent on global capital: The decisionmaking power in determining the developmental policies were transferred to the Investment Support and Promotion Agency, which is accepted to be the direct extension of global capitalism. Policies in these investment agencies are determined directly by the global monopolies. (iii) Determining power of capital in political decision-making: Besides the instruments such as independent regulatory agencies and investment agencies, one of the important novelties in the political realm is the acceptance of the regulatory impact analysis. This method devised by the OECD has transformed the political decision-making process to be in conformity with the interests of capital.
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(iv) The era of public-private partnership: New instruments to guarantee the marketization of public services, such as Build-Operate-Transfer Model, Build-Operate, Transfer of Operating Right, Build- Rent-Transfer, are developed. The service provision model of the public-private partnership era is the Build-Rent-Transfer model. Together with this model, it is almost a necessity for the private sector to undertake large investments of the public sector (see Oder, 2008). The regulatory state model has been built in a fashion to ensure the concentration and intensification of political power to the benefit of capital. While the power of the parliament is limited, a new bureaucracy that moves in line with the interests of capital has been formed. The establishment of the regulatory state in Turkey is parallel to similar developments in the world (see Thatcher, 2002; Gilardi, 2004). Yet, there is a dimension unique for Turkey: Especially after 2007 general elections, the Islamic characteristic of the government became more accentuated and the reforms are realized by an Islamist party. In Turkey, the regulatory state is being formed uniting neo-liberal and Islamic ideologies. While the unmediated governing of capital became established, the competition among different groups of capital becomes even more accentuated because of the very same reason (Ercan, 2009). This process is unfolding to the disadvantage of the traditional large bourgeoisie of Turkey, and other capital groups that have more discernible Islamic orientations gain ground thanks to their close links with AKP.5 In this process of reorganization of capital, Islamic capital that was of small and medium scale started to turn itself into large scale capital.

Concentration of Political Power: New regulatory lords. Independent regulatory agencies are established predominantly between 1999 and 2002. AKP came to power in 2002 and it discontinued its former criticisms against these agencies after coming to power. Probably, because of the need for the support of international organizations, AKP accelerated the establishment of these agencies even more (Bayramoglu, 2009). The two most important institutions of the regulatory states besides the independent regulatory agencies are development agencies6 and the Investment Support and Promotion

(5) See several Turkish journalists articles; (in Turkish) Mehmet Y. Ylmaz, Sra Sermayenin El Deitirmesinde, Hrriyet, October 7, 2009; A. Dilipak, Doandan sonra srada Ko mu var?, Vakit, October 6, 2009; Sabahattin nkibar, Ama Doan Sattrmak m?, Yenia, September 10, 2009; Economist, Hkmet-Doan Grubu Mcadelesi Kzt, October 2, 2009, Net News <http://www.netgazete.com> (date of download October 2, 2009). (6) Law No: 5449 Law on establishment, duties, authorities and coordination of the Development Agencies, RGT: 08.02.2006, 26074.

Agency7. While all institutions of the central state are being reorganized with reference to the principles of marketization, competitiveness and integration to the global financial markets, the local government-central government relationship is redefined. For example, the local government laws stipulated in 2005, and the law of 2007 that closed down one third of the small local governments are important pieces of legislation along this line.

Table 1- Independent Regulatory Agencies in Turkey

DATE OF ESTABLISH MENT 1981 1994 Radio and television Banking Telecommuni cations Electricity, natural gas, oil Sugar market Public procurement Tobacco and alcohol Banking 1994 1999 2000 2001 2001 2002 2002 2003 NUMBER OF PERSONNEL (EXISTING) (AS OF 2004) 449 321 349 323 456 282 26 108 244 (on payroll) 411* 61,6* 12,7 66.313 43.805 54.600 BUDGET FUNDS (THOUSA ND NEW TL) (2007) 58.769 42.251 148.560 93.000 906.179 117.454

THE BOARD

REGULATIO N AREA Capital markets

BUDGET (INCOME) (TRILLION TL) (2004)

Capital Markets Board Competition Authority Radio and Television High Council Banking Regulation and Supervision Agency Telecommunications Board Energy Market Regulatory Authority Sugar Board Public Procurement Authority Tobacco and Alcohol Markets Regulation Agency Saving Deposit Insurance Fund

24,8 86,2 97,6 113,6 326,6

* As of 2008. The regulatory state started to be built first in areas that have state monopoly characteristics and in sectors that naturally have monopoly structures. When we examine the sectors that are regulated in sector, we observe that there are five objectives in establishing regulatory agencies: 1) In sectors such as electricity, natural gas and telecommunications, to privatize public economic enterprises and to regulate these sectors that have natural monopoly characteristics. 2) To create oligopolistic markets that are dominated by private sector as well as global capital by way of supporting mergers and

(7) Law No. 5523 Law on establishment of investment support and promotion agency of Turkey, RGT: 04.07.2006, 26218.

acquisitions. 3) To get rid of agricultural subsidies and to regulate privatized agricultural market. 4) To re-regulate public procurement system, which continues to be one of the biggest markets for the international and national markets, in line with the interests of the international capital. 5) To get rid of public private distinction in regulation. After 2002, in the economic realm there has been significant capital concentration (Akar and iek, 2007). The economic equivalent of this development in the political realm is the establishment of independent regulatory agencies. These institutions can be seen as sectoral oligarchies that unite legislative and executive functions to the advantage of global capital. Thanks to their stable election successes, during the AKP governments, the tendency to strengthen the executive power has reached its maximum level. The relations between the oligarchic structures in national politics and sectoral oligarchs still continue to unfold when we are writing this article. It is still early to assess the outcomes of these new developments, which attempt at getting rid of the autonomy of the sectoral oligarchs to the advantage of mercantilist state organizations.

In place of a conclusion The Turkish regulatory state model experience also proves that while decentralization goes hand in hand with sweeping political power from nationally centralized scale to the supranational scale, political power is being concentrated to the advantage of global capital and new mechanisms for this aim is experienced. How do the international regulatory agencies and global corporations exist in the political decision-making mechanisms of nation-states? Against the indirect and labyrinthine methods, the new model developed as the regulatory state model, provides an extremely efficient and direct intervention. The investment agencies form an example of this mechanism (zdek, 2006). The Investment Support and Promotion Agency has been established in order to determine Turkish investment policies together with the CEOs of global corporations and to develop investment strategies under the directive of them; this is a good example of global capital organizations controlling the society. The role previously played by the WB and the IMF are now directly undertaken by global monopolies.

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