Bayırbag - Pro-Business Local Governance - Antep

Business and Politics
Volume 13, Issue 4 2011 Article 6
Pro-Business Local Governance and (Local)

Business Associations: The Case of Gaziantep
Mustafa K. Bayirbag, Middle East Technical University,

Department of Political Science and Public Administration
Recommended Citation:
Bayirbag, Mustafa K. (2011) "Pro-Business Local Governance and (Local) Business
Associations: The Case of Gaziantep," Business and Politics: Vol. 13: Iss. 4, Article 6.
DOI: 10.2202/1469-3569.1355
Available at: http://www.bepress.com/bap/vol13/iss4/art6
2011 De Gruyter. All rights reserved.
Pro-Business Local Governance and (Local)
Business Associations: The Case of Gaziantep
Mustafa K. Bayirbag
Abstract
The article investigates how major changes in national economic policies, and in associated
forms of state-business relations, produce pro-business local governance arrangements. It places
the emphasis on the politics of state-business relations that revolve around the distribution of
public resources. It aims to explain, in particular, how these dynamics unfold in the developing
countries where neoliberal reforms are implemented under conditions of political instability and
weak policy capacity of the state. The article focuses on the political mobilization of the local
bourgeoisie through local business associations, as the major force behind the rise of pro-business
local governance. It indicates that the emergent form a pro-business local governance scheme,
especially when led by local business associations, will depend upon a) the degree of political
autonomy of the local bourgeoisie from the national political actors (i.e, their distance to party
politics); b) the composition of its constituency/supporters (or the class coalition behind it); c) the
degree of their dependency on public resources. The arguments are elaborated in the case of the city
of Gaziantep, Turkey.
KEYWORDS: pro-business local governance, local business association, forms of business

representation to the state, Gaziantep
Author Notes: The author gratefully acknowledges the rich feedback received from two
anonymous reviewers, Necmi Erdoan, Rianne Mahon, Michael Moran, Jamie Peck, Tark engl
and Ylmaz stner on the earlier versions of this work. Usual disclaimers apply.
Bayirbag: Pro-Business Local Governance and (Local) Business Associations
Introduction
This article investigates how major changes in national economic policies, and in
associated forms of state-business relations, could alter the face of local politics
and governance. It is important, but not enough to acknowledge that adoption of
neoliberal policy agendas by most nation states have led them to favor market
dominated urban governance arrangements over other alternatives.1 In that regard,
the article examines the dynamics that produce pro-business local governance
arrangements. It is argued that one needs to concentrate on a) the changing forms
of state intervention to capital accumulation, especially through distribution of
state benefits; b) and how the institutional forms of business representation to the
state facilitate state-business politics. It is further claimed that these two
dimensions are even more crucial to look at in developing countries where the
state plays a central role in capital accumulation process. The article concentrates
on the story of local business associations as the interface between those
contextual changes and the changing dynamics of local governance, employing
the logics framework developed by Schmitter and Lanzalaco.2
The arguments are developed in the case of the city of Gaziantep3 located
in the underdeveloped Southeastern Anatolia region of Turkey. Gaziantep offers
1
Clark et al. 2001, 51.
2
Schmitter and Lanzalaco 1989.
3
The data presented and employed in the article comes from the field research of a doctoral thesis
that investigated the rise of Anatolian Tigers, in the example of the city of Gaziantep (Bayrba
2007). Gaziantep was chosen for four reasons: a) The city is located in one of the most
underdeveloped regions of Turkey; b) The local election results (especially from 1989 onwards)
suggest that there has been a sustained consensus in local politics, especially around pro-business
mayors; c) The city cannot be readily associated with a particular political movement/party
playing a critical role in national politics, unlike the examples of Kayseri and Konya; d) Top
policy-makers (national and supra-national), and many scholars, repeatedly bring the example of
Gaziantep to the fore as a success story of the new economic order of Turkey. This, in particular,
makes Gaziantep a good case to examine the mainstream policy proposals and academic accounts
of local development.
The thesis main thrust was that the story of industrialization and economic development
in these cities could not be explained by the innate entrepreneurial capacity of its business people,
especially given that the economic success of such cities came in a political and economic
atmosphere quite hostile to industrialization. Hence, if there is a success, it is a political one. And
this success could be understood by investigating the political mobilization process and
representation strategies pursued by the representatives of the local bourgeoisie. This endeavor is
about enhancing the economic and political credibility of their city in the eyes of the national,
supra-national and regional public authorities, and also to attract public resources needed to
protect and support the local accumulation process there. There were three empirical questions
addressed, in that regard: a) How do the entrepreneurs of Gaziantep, and the leaders of its local
politics, explain the economic performance of their own city?; b) What was the role of state
support in the economic development of the city?; c) What kind of political representation
Published by De Gruyter, 2011 1

Business and Politics, Vol. 13 [2011], Iss. 4, Art. 6
us an intriguing case as the city began to get industrialized rapidly from the 1980s
onwards, following the end of Keynesianism in Turkey, in an economic
environment quite unfavorable to the industrial sector. This industrialization
process has been initially financed by local resources, mainly through transfer of
commercial capital to industry, especially during the 1980s and the early 1990s.
The process then gained further momentum from the mid-1990s onwards through
local industrialists efforts to capture selectively distributed central government
incentives to the industries. As discussed elsewhere, the politics of scale adopted
by the local business associations (and the local chambers of industry and
commerce in particular) has been an important reason behind the citys
entrepreneurs success in securing the public benefits, and bringing the states
attention, as well as that of the EU and other key public institutions, to the city.4
Before I proceed to analyze the case, in the following section, I will
elaborate on my analytical focus by examining the mechanisms that translate
those contextual changes into political activism of the local bourgeoisie.
Political mobilization of the bourgeoisie and local business associations
The departure point of the article is Brenners observation that the rise of pro-
business local governance is in fact a part and parcel of the rescaling of the
capitalist state.5 Cities and regions serve as the arena of state rescaling, which is a
product of the transition from spatial Keynesianism to the Competitive state.
Brenner argues that post-Keynesian accumulation strategies pursued by neoliberal
states involve radical changes in both the spatial forms of intervention into
economic development (state spatial strategies) and in the spatial forms of
institutional structure of the state (state spatial projects). Of these two dimensions
to state rescaling, the former has been characterized by introduction of spatially
selective state interventions. This means channeling increasingly scarce public
resources to competitive localities in a selective manner6 while leaving behind the
strategies were developed and pursued by the business associations of Gaziantep to promote the
economic development of their own city?
The field research was conducted in 2003 and 2004, which included 34 formal interviews with the
business leaders of the city of Gaziantep, the top bureaucrats from the business associations, other
business related institutions, local government officials, the politicians from the city and the
academics and bureaucrats working for the central government agencies. Empirical data about the
economic performance of the city was gathered from public agencies and business associations in
Gaziantep and Ankara, between 2003 and 2006. The interviewees were selected on the basis of
their own institutional affiliation. What is more, those interviewed were also asked to suggest new
names familiar with local politics in Gaziantep. The interviews were semi-structured, posing
questions that revolved around the key empirical questions of the research
4
Bayrba 2009.
5
Brenner 2004. Also see Peck and Tickell 1995, 76.
6
See Cochrane et al 1996.
http://www.bepress.com/bap/vol13/iss4/art6 2
DOI: 10.2202/1469-3569.1355
Keynesian concern with taking care of the laggard cities and regions. The latter
involves establishment of scale or place specific governance structures as well as
the transfer of authority from the nation state to existing supra-national and sub-
national levels of government, fostering the participation of local business
concerns in decision-making.7 In this process, the central government plays an
active role to organize the local business interests, and thus to introduce pro-
business local governance.8
There remains, then, an important question to be answered: How does
neoliberal rescaling of the capitalist state lead to political mobilization of the local
bourgeoisie, and thus bring it to the center of pro-business local governance? To
answer this question, there is a need to understand: a) how an accumulation
strategy shift and associated changes in the (spatial) forms of intervention -
affects the interest definition and composition of the (local) bourgeoisie;9 b) and
how institutional restructuring of the state alters organizational forms and
strategies of political representation of business interests to the state,10 thereby
leading to reshuffling of the locations of power among the institutions of the
state, capital, and civil society.11
An important caution is due here. Available accounts of this neoliberal
transformation mainly concentrate on the developed capitalist countries. In the
developing world, where the state's ability to enforce laws is weak and
institutional capacity is constrained,12 and where transfer of public resources to
the private sector is a vital source of capital accumulation, the story is a bit
different. Obviously, the ultimate target of neoliberal policies are uniform across
the capitalist world. The policy capacity and instruments needed to achieve this
target, however, vary remarkably. In particular, while the developed countries are
characterized by a rather stable political scene with institutionalized
representation schemes, in the developing countries like Turkey conditions ...
[such as] the formation of the new bourgeoisie and state apparatus, fast urban
growth, migration, high birth rate, and short cycles of economic boom and bust ...
make the fabric much more susceptible to confrontation and constitutional
changes.13
Given the crisis-prone nature of free market economy and the necessity
of a coherent and long-termed policy approach to neoliberalization, weak policy
capacity (and its further erosion) renders such policy reforms a source of further
7
Brenner 2004.
8
Peck 1995.
9
Cf. Jessop 1990, 160.
10
Cf. Jessop 1990, 122.
11
McCann 2003, 179.
12
zcan 2006, 121.
13
zcan 2006, 134.

political and economic crises, as proven by the the early 1990s - the early 2000s
period in Turkey. zcan observes that (especially in the 1990s):
The populist multiparty experience in Turkey forged a patron -

client relationship with short-term political gains, and the state
institutions have thus been subject to the political mobilization and
militarism of the public service. As the state institutions suffered
constant confrontation, as well as manipulation by conflicting party
and group loyalties, the state's legitimacy and its credibility [key
components of its policy capacity] were gradually eroded.14
In other words, political instability and subsequent erosion of policy capacity

become most acute at times of coalition governments.
Keeping those insights in mind, six hypotheses could be put forward about
the rise of business activism in Turkey (as a developing country) under
neoliberalism:
1) When capital accumulation is (still) dependent upon capturing public

resources channeled by the state (be in the form of direct provision or
tapping the rents created by the state)15 direct involvement in (national)
party politics becomes a risky strategy for the bourgeoisie to improve their
access to those resources. In other words, political parties do not constitute
a reliable institutional interface to facilitate business state relations. This
risk is emphasized especially when such resources are distributed on an
increasingly selective basis, i.e., once neoliberalism is introduced;
2) Yet, the urge for collective (political) action on the part of the bourgeoisie
especially for those who do not enjoy direct access to the apex of the
state becomes even stronger at times of political instability. It is
necessary to recall Jessops reminder that capital in general is not an agent
in itself, and neither is the local bourgeoisie, as such.16 Business
14
zcan 2006, 135. Here I should note that I would disagree with zcan on her conception of the
state as a potentially benevolent actor, who, once institutionalised and isolated from the
interventions of party politics and clientelism, could serve as a democratising force and a leader of
economic development. As the remainder my discussion indicates, I follow the line of Poulantzas
(1978) and Jessop (1990), who conceptualise the capitalist state its forms of internal
organization, representation and intervention as an (institutional) condensation of class relations.
Hence, its own institutional structure and policies inevitably bear the marks of those political
power (im)balances, and it constitutes an arena of political struggles.
15
ni 1997, 752.
16
Jessop 1990.
DOI: 10.2202/1469-3569.1355
associations, in that regard, could be seen as a key form of collective

action whereby the class in itself turns into the class for itself.
3) When the neoliberal reforms fail to establish institutionalized, non-

political channels of communication between business and the state, the
bourgeoisie takes the initiative to push for the construction of a stable and
institutionalized interface. This requires an organized effort to unify local
business concerns around a discourse of local autonomy, in an attempt to
enhance the political credibility of the locality in the eyes of the top
policy-makers (of the nation state and supra-national institutions).
4) Yet, this political mobilization process, and the associated economic

progress, are likely to create further divisions within the bourgeoisie,
ultimately destabilising their political unity. These conflicts become acute
when the existing business associations (like the chambers of industry and
trade established by the state) prove unfruitful for a particular fraction of
the local bourgeoisie in improving access to the state resources. Political
mobilization of the bourgeoisie, thus, becomes most visible at times of
organizational splits in their representative organizations.
5) Once political stability is reestablished, especially when a strong single

party government comes to the Office (just as in the case of the Justice and
Development Party Adalet ve Kalknma Partisi), party politics can
become a more attractive option for the weaker fractions of the (local)
bourgeoisie, which are now organized under their own (local) business
associations, such as the MSAD.17 This amounts to a new form of
engagement with party politics. Unlike the past experience, ties with party
politics are now established not through individual/informal contacts, but
by employing a formal/institutional interface, namely business
associations.
6) Therefore, once hypothesis five is read in conjunction with hypothesis

three, it could be argued that while (local) business associations are
established/mobilized to have unfettered access to the state resources, they
could adopt two different attitudes towards party politics: i) to observe a
safe distance from party politics, and to emphasize their autonomy (and
thus local autonomy) to enhance their bargaining power; ii) or to establish
institutional (not informal) ties with political parties, subcribing to a rather
top-down policy and representation scheme. If there exists different local
17
Cf. ni 1997, 757-61; cf. okgezen 2000, 538-9.

business associations subscribing to either of those strategies, we can

expect a (local) hegemonic struggle to break out to control key the local
institutions that serve as the infrastructure of the emergent local pro-
business governance scheme. What pulls the trigger is the return of the
single party national government, which is expected to facilitate political
and economic stability at the national scale. That was the case in
Gaziantep during the 2000s.
To give the reader a better sense of the rise of the local bourgeoisie as a
political actor, I would like to further discuss the first three hypotheses. H1 and
H2 aim to explain why the political significance of local business associations in
Turkey increased recently, in the midst of a crisis-ridden political economic
atmosphere. This is especially true for the cities like Gaziantep, characterized by
the emergence of an up-and-coming industrial bourgeoisie. I follow King to argue
that political representation, and open engagement with (party) politics, is a less
preferred form of action on the side of the entrepreneurs. According to King, If it
is accepted that organized political representation is a less preferred source of
influence for capital than individual action in the market, this suggests that formal
association occur when economic power is weakened and is no longer sufficient
for controlling the political process.18 From this perspective, we can see business
association as a means of representation, being established in response to the
threat of losing power, or of being excluded from the policy-making process.19
Therefore, even when they are established by law - with compulsory membership,
we should expect to see the increased significance of business associations when
parliamentarism and party politics fail, or while the state-business relations are
severed especially when the state has a tight control over the prospects of
accumulation for certain fractions of capital.
Regarding H3, it should be noted that introduction of neoliberal reforms in
Turkey involved establishment of a new type of institutional interface between the
state and local business, namely metropolitan municipalities. They were basically
designed to facilitate a national economic strategy promoting investment in built
environment (along with commerce) as a way of past economic crisis. And they
served well to establish the ideological/political superiority of business in local
government and politics.20 The use of this interface, however, was restricted
especially for the up-and-coming industrialists across Anatolia. The resources
they distributed were not of type sought by industrialists. What is more, their
internally centralized decision-making structure (the strong mayor system)
restricted access to the mayor. Therefore, unlike the case with the developed
18
King 1983, 111.
19
Also see Langille 1987, 46-7; Silva and Durand 1998; Carroll and Shaw 2001, 196-7.
20
For the case of Gaziantep see Bulut 2000.
DOI: 10.2202/1469-3569.1355
countries21 stronger local governments in such cities could only serve as a

supportive mechanism to promote the interests of industrialists in general, but not
as a decentralized form of a pro-business economic governance mechanism.
To summarize, one can list three alternative institutional interfaces
between the state and business that could contribute towards the rise of a pro-
business local governance arrangement: political parties, decentralized economic
governance structures, and (local) business associations. Preceding discussion
indicates that, in the case of Turkey, the first two would not come to the fore as
reliable alternatives. This article claims that, for the reasons listed above, business
associations remain the most reliable and necessary alternative for the local
bourgeoisie, even when party politics is seen as a strategic channel of interest
representation. Below, I will discuss how the (local) bourgeoisie turns into a
political agent through business associations, as a response to the changes in
national accumulation strategy and forms of political representation.
The agency of the local bourgeoisie:

Local business associations and the logics framework
The logics framework can help us to analyze how the changing economic
strategies of the state and the politics of state-bourgeoisie relations could lead the
(local) bourgeoisie to emerge as a central actor in local politics. As a form of
collective action, business associations intra-organizational dynamics are shaped
by two major logics: those of membership and influence (Schema 1).22 The logic
21
As in the UK: see Peck 1995; and Peck and Tickell 1995.
22
Here, a brief note of caution is needed before we proceed to discuss the implications of this
framework for our case analysis. As long as we are concerned with the question of interest,
contrary to the arguments of Valler and Wood (2004), I think the emphasis on logics and
especially on that of membership does not necessarily render an analytical framework of the sort
discussed here an exercise in methodological individualism. Here, I would agree with the authors
in that losing from an economic restructuring process will not necessarily push individual
entrepreneurs to get mobilized in political terms, and that political representation is not always a
preferred course of action on the side of individual entrepreneurs, even if they are able to develop
a sense of common interest (Wood et al 1998, 22). Yet, this observation does not necessarily lead
us to conclude that this will be the case with all entrepreneurs. How to make sense of the political
engagement strategies of existing business associations, then? Moreover, the criticism Valler and
Wood (2004) (also see Raco, 2003) direct against the logics perspective rests on the assumption
that the studies employing this framework prioritize, and problematize, the voluntarism of
business associations, which is not necessarily the case, again depending on the national context.
This criticism might hold true for the works that look at the British case, where association
membership is not compulsory, but up to the free choice of the individual entrepreneur (cf.
Coulson, 1999). Yet, in those countries where membership is compulsory in business associations
(i.e., chambers) established by the state and where private business associations allied with
different political movements in the country are established (such as the Islamist MSAD in
Turkey), for other political, ideological and cultural reasons, there is a whole different story. Thus,

of membership refers to the associations responsiveness to the varying interests

and demands of its members. It corresponds to the sectoral composition and scale
of the member firms and their interests, mainly defined in relation to/shaped by
the broader economic policies implemented by the central government in general,
and to the particular sectoral incentives distributed by the state. The logic of
influence refers to the pressure on the shoulders of those associations leaders
caused by the need to influence those actors/institutions that could provide their
membership with the benefits sought, in return for political compromises and
cooperation with those interlocutors, who could well force those leaders to act in
ways that sometimes might contradict the wishes of the membership. Thus, in so
far as business associations intermediary role between the public and private
spheres is important, this creates a basic tension between the logic of influence
and the logic of membership for business associations.23
By concentrating on those tensions in the major business associations in
Gaziantep, we could begin to discuss how neoliberalization of the state might
have shaped the face of local politics in Gaziantep. Here, to understand what sort
of political strategies could be pursued by those associations in response to those
changes, we need to discuss a second axe of logics: Drawing upon the insights of
earlier studies, Streeck argues that there is a second source and axis of intra-
organizational tension: between the logic of goal formation and the logic of
effective implementation. These organizational logics
operate independently from, and can in fact be seen as running

orthogonal to, the logics of intermediation [ie those of
membership and influence]. The Logic of Goal Formation
informs the process by which, both through membership
participation and through consultation with, or imposition by,
external interlocutors, an intermediary organization selects its
manifest and latent objectives. The Logic of Efficient
Implementation, on the other hand, relates to the way that
specified tasks or outcomes, both vis a vis institutional targets and
the membership, are attained with certainty and economy.24
The tensions on those two different axes can be understood as

determinants of the interest formation process and can, therefore affect the forms
of representation that a fraction of capital would choose to adopt. Indeed, it is
the framework employed here, the logics approach, does not necessarily have to depart from a
conception of an entrepreneur following a pure market rationality.
23
Grant 1983; Streeck 1989; Schmitter and Lanzalaco 1989; Williamson 1989; Lanzalaco 1992;
Schaede 2000.
24
Streeck 1989, 60.
DOI: 10.2202/1469-3569.1355
through such choices that a class in itself turns into a class for itself (cf.
Lanzalaco 1992, 173-174). In this context, Schmitter and Lanzalaco provide us
with a heuristic schema of the types of business associations and political
representation strategies that can emerge out of such processes25 (Schema 1), i.e.,
how they respond to the changes in economic policies and to the interlocutors
changing wishes/pressures on them.
According to the schema, if a business organizations public status assigns
it a considerable number of administrative functions (such as the monopoly for
providing certain state services to firms) and if the management of that business
organization becomes preoccupied with the provision of those services and tends
to alienate its membership, then, it is effectively transformed into a state agency.
At the other extreme, in the upper section of the schema, such associations can
become mere service providers effectively acting as private agents, just like any
firm producing certain services to customers for an annual fee. In both cases,
there is no longer any concern for political mobilization in defense of a
constituencys interests.
The lower part of the schema looks more interesting in terms of the ability
of such associations to define and represent various bourgeoisie interests. In cases
where the association is in direct contact with and has direct official access to -
important interlocutors (especially the state) it can function as an effective
representative of its members concerns and interests. Yet, the schema suggests
the possibility that in extreme cases the leaders of such business associations can
co-opt the representatives of the state or other interlocutors, especially in
situations where a powerful actor, like a holding company or business group,
dominates a local economy. In such cases, business associations can be used to
serve the interests of a few strong firms within them. Yet, such domination can be
challenged if the other constituent firms grow and become more actively involved
in the organization, thus lessening the dominance of the founder or influential
names, groups, etc.26 This amounts to a change in the logic of membership.
Such challenges follow the changes threatening the status quo, such as
broader accumulation strategy shifts and the changes in political opportunity
structure, and reflect an increased political consciousness among the associations
wider constituency, thereby moving from being a class (fraction) in itself to
becoming a class (fraction) for itself. These newly mobilized elements could use
their voting power to facilitate the transformation of their political
representation.27 If the challenge is not successful, then, depending on the
institutional flexibility of the umbrella business association, new specialized
25
Schmitter and Lanzalaco 1989, 214.
26
Laothomatas 1992.
27
Laothomatas 1992.

sectoral or territorial sub-units28 that break away from the original representative
organization can achieve an increased capacity to represent their sectors or
locality as independent actors.29
Roots of Gazianteps bourgeoisies political activism:

Contradictions of Keynesianism in Turkey
As long as we are concerned with the question of how political activism of

Gazianteps bourgeoisie is related to the evolution of national accumulation
strategies and associated forms of business representation to the state, we can
identify four major historical stages: 1) Traditional, and informal, control of local
affairs by the mainly commercial business elite (older strong families control
from the late Ottoman Period to 1960);30 2) The political mobilization of the local
bourgeoisie, as a response to the contradictions of a Keynesian national
accumulation strategy and the associated form of political representation (the
1960-1980 period); 3) The increasing strength of industrialists and the emergence
of local business associations (the chambers of industry and commerce) as key
political actors in Gazianteps governance, in the context of roll-back
neoliberalism31 in Turkey (1980-2000); 4) destabilization of the pro-business
governance scheme in Gaziantep due to the internal contradictions of those local
business associations (2000s), and the increasing significance of party-politics,
once again. Below, we shall concentrate on the last three periods.
In our case, the period of 1960-1980 laid the grounds for the emergence of
local business associations as the major venue of business representation and as
the institutional center of an increasingly pro-business local governance scene in
Gaziantep, after 1980s. The national accumulation strategy based on Import
Substituting Industrialization (ISI)32 resulted in the birth of a new fraction of
industrial bourgeoisie located in non-metropolitan centers of the country (like
orum, Kayseri, Denizli, Konya and Gaziantep) with a strong interest in pro-
industrial policies and active state support. On the one hand, their emergence
marked a watershed in the logic of membership of the national bourgeoisie,
changing the political face and intra-bourgeoisie relations in Turkey irreversibly.
Establishment of a corporatist representation system by the longest serving prime
28
Cf. Grote 1992, 122.
29
Kingsbury and Hayter 2006.
30
Authors interview with Asm Gzel, Gaziantep 2004 (Ex-president of the local branch of
national chamber of architects; Candidate for Mayorship of the Greater Gaziantep Municipality at
the local elections of 1999); Authors interview with Mustafa Geylani, Gaziantep 2004 (Ex-
president of the GTO; ex-president of the GTO assembly). Also, see Bianchi 1984, 184-5.
31
Cf. Peck and Tickell 2002.
32
nder 2003, 271. Also see Keyder 1989, 200-3; Zrcher 1993, 278; Erder 2003, 48; ngen
2003, 174.
DOI: 10.2202/1469-3569.1355
minister of the era Sleyman Demirel,33 on the other hand, emphasized the logic
of influence, while bringing the intra-bourgeoisie struggles closer to party-politics
in the country, politicizing the business associations in Turkey especially during
the 1970s.
By controlling the Union of Chambers of Turkey (Trkiye Odalar Birlii
TOB) the national - and official - umbrella organization of local chambers of
commerce and industry, and by distributing import quotas much needed for
industrial investments through the TOB, Demirel hoped to strengthen his political
control over the bourgeoisie. Yet, this political representation system, and its
underlying economic strategy brought their own undoing along, ultimately
leading the local business chambers to get politicized. These new local industrial
bourgeoisies emerged as a major rival to the large scale multi-sectoral capital, as
well as smaller scale local commercial capital, in getting the lions share from
state benefits. Thus, local industrialists had to wage their struggles at two scales.
At the local scale, they had to establish themselves as the dominant voice in their
local chambers of commerce and industry. This meant challenging the
superiority of the commercial fraction. As we shall see later, this struggle, which
was waged in the Gaziantep Chamber of Commerce and Industry during the
1970s,34 was settled in favor of the industrialists towards the end of the 1980s.
The second struggle had to be waged at the national scale against the stanbul-
based large scale capital.35 In fact, Demirel was seen as a major ally to those
fractions, and the political tensions surfaced with the challenge of this younger
industrial bourgeoisie to Demirel in 1969. Despite his opposition, they were
successful in getting Necmettin Erbakan elected to the post of the general
secretary of the TOB, in 1969. Of course, Demirels retribution was bitter,
affecting all TOB members including the large scale capital - and led to the
alienation of different sections of the bourgeoisie simultaneously. He withdrew
the state support to the industry, while also legally stripping the TOB off many of
its semi-public authority.36
It did not take long before these tensions were transferred onto the plane of
party-politics during the early 1970s. The results of the intermingling of intra-
bourgeoisie struggles with party-politics were threefold: 1) Birth of a new type of,
private, business association outside direct state control. The TSAD (Trkiye
Sanayici ve adamlar Dernegi - The Industrialists and Businessmens
Association of Turkey) was established in 1971 as the big bosses club for
explicitly political reasons,37 whose local replicates were to mushroom across the
33
Bianchi 1984, 142.
34
nc 1980.
35
Barkey 1990; nc 1980, 458-61.
36
Barkey 1990, 150-3.
37
See Bianchi 1984, 259-71; Barkey 1990, 112.

country during the post-1990 era; 2) Establishment of a pro-Islamist political

party - The National Order, later Salvation, Party, Milli Nizam/Selamet Partisi -
under Necmettin Erbakans leadership, with an openly pro-industry and pro-
Anatolia discourse, which eventually came to power during the 1990s under the
name of the Welfare Party. This party played a key role in the coalition
governments of the era, and considerably contributed to the political deadlocks
that paralyzed the political system; 3) Split of local chambers of commerce and
industry into separate sector-based chambers.
Thus, political mobilization remained the only option for the local
industrialists in a context characterized by severed relations with the apex of the
state, the reign of unstable coalition-governments during the 1970s and the
continuing significance of the state as the most important provider of benefits that
the Anatolian industrialists needed (cf. King 1983). Yet, party-politics was not the
best channel and form of political mobilization, although Erbakans party
provided a venue, of course with a narrower room for maneuver given the heavy
emphasis on political Islam. Growing in numbers, and with an increasingly heavy
dependence on state benefits, those industrialists turned their attention to local
chambers as sites of representation and vehicles of interest promotion. In that
context, a younger group of entrepreneurs, the current business leaders in
Gaziantep, captured the control of the GTSO (Gaziantep Ticaret ve Sanayi Odas
- Gaziantep Chamber of Commerce and Industry) in 1977.38
While industrialists in Gaziantep were gaining in strength, conditions were
still not ripe for the GTSO to emerge as a major defender of their interests.
Because, the diversity of interests and sectors represented under the GTSO,
including both relatively small scale commercial capital and a growing industrial
capital, made it difficult for the chamber to be ultimately dominated by the logics
of membership and goal formation. Moreover, the GTSO did not have a policy-
making capacity, as the chambers organizational structure has been shaped as an
extension of state bureaucracy (See Schema 2).
The rise of local business associations as central political actors in Gaziantep
Dynamics of local industrialization and the need for state benefits
While the state intervention and rescaling process during the 1960-1980 period
triggered the local bourgeoisie activism in Gaziantep, those of the 1980-1990
period brought the local business associations to the center of local politics and
governance there. By triggering a rapid industrialization process, the national
accumulation strategy shift contributed to the emergence of a stronger industrial
38
Authors interview with Mustafa Geylani, Gaziantep 2004.
DOI: 10.2202/1469-3569.1355
bourgeoisie in Gaziantep during the 1980s (see Table 1 and Figure 1) that started
to distinguish its identity and interests from those of the (relatively smaller scale)
commercial capital. With the coming of the third generation industrialists in the
early 1990s,39 this divide became clearer. The result, as we shall discuss later, was
the split of the GTSO in 1989, leading to the birth of the Gaziantep Chamber of
Industry (GSO Gaziantep Sanayi Odas), as separate from the chamber of trade,
the GTO (Gaziantep Ticaret Odas).
Table 1: Manufacturing workplaces established in Gaziantep since 1960 (firms of

all sizes)40
Year # of % of Empt % in total Average
established workplace workplace created empt size41
-1960 96 1.40 595 1.29 6.20
1961-1970 176 2.57 1332 2.89 7.57
1971-1980 556 8.11 4719 10.25 8.49
1981-1992 2775 40.48 23264 50.53 8.38
1993-1996 3253 47.45 16132 35.04 4.96
Total 6856 100.00 46042 100.00 6.72
Figure 1: Gazianteps performance in relation to Turkish economy42
39
Authors interview with Aykut Tuzcu, Gaziantep 2004 (Owner of the local newspaper,
Gaziantepte Sabah; ex-member of the GSO assembly - founding member).
40
zsar 1999, 63. I have calculated and added the values in the last column.
41
Employment created/number of workplaces.
42
Bayrba 2009, 371.

Ironically, Gazianteps industrialization gained momentum increasingly

attaching itself to international markets in the midst of roll-back economic
measures, at a time when industry lost its significance, while the form of state
intervention became indirect and rather selective. The new accumulation regime
was based upon the principle of open, export-oriented economic growth. In this
context, Gazianteps industrialization was an unintended consequence of this
shift. In fact,
the transition to the open economy strategy led the then dominant
commercial capital in Gaziantep to invest in the industrial sector ...
[a]s the scale of capital initially invested in industry was not large
enough to capture the benefits of a risky-rent economy. The
disappearance of trade barriers reduced the rents that the local
merchants used to capture through illegal border trade during the
pre-1980 era. The presence of an already flourishing industrial
sector, thanks to the industrial sites established by the state in
Gaziantep during the 1970s, and the availability of skilled cheap
labour encouraged this process of capital transfer.43
Hence, we should also not rush to conclude that such a strategy

automatically turned Gaziantep into an effective competitor in the national
market, or articulated Gazianteps industry with the global economy. Unlike some
other industrialized/industrializing cities in Anatolia, the industrialists of
Gaziantep did not follow the easier path of establishing subcontracting relations
with the large scale industrial enterprises controlled by stanbul (as in the case of
Bursa), or with international companies (like in Denizli).44 Economic
development in the region was to rely on the locally owned capital and
performance of local entrepreneurs initially, as it was very difficult to attract
investers, and non-local capital to the region.45 Yet, from the mid-1990s onwards,
when Gazianteps industrialists began to turn their faces to the international
markets,46 local resources proved to be insufficient for new investments and
growth. Once again, they had to make recourse to the state benefits distributed on
an increasingly selective basis, and through centralized mechanisms. In such a
context, political mobilization became necessary.47 Yet, how?
43
Bayrba 2007.
44
Eraydn 2002, 169.
45
Mutlu 1993, 16; Tuncer 1990, 17; Authors interview with Aynur Atay, Gaziantep 2004
(General Secretary of the GAGEV; Ex-policy specialist of the GAP-GDEM center in Gaziantep).
46
Eraydn 2002.
47
See King 1983.
DOI: 10.2202/1469-3569.1355
The underlying dynamics of political mobilization of Gazianteps industrialists - I
Despite the pro-business political atmosphere and despite the fact that important
figures from Gaziantep contributed to the establishment of the ANAP - the party
that led the first civilian post-coup government its leaders (Turgut zal)
clientelism48 would not allow the construction of an organized political
connection between Gazianteps bourgeoisie and the ANAP. Moreover, the 1982
constitution had prohibited establishment of direct contacts between business
organizations and the political parties,49 which would otherwise enable
construction of local institutional structures recognizing business as legitimate
political actor. Consequently, in the 1980s, umbrella organizations further lost
their significance as sites and channels of representation, ultimately leading to the
rescaling of the institutional channel of representation to the local level.
The state benefits, on the other hand, were becoming increasingly critical
for Gazianteps industrialists to keep their momentum.50 It was expensive to
borrow from the private banks, and they proved to be unreliable partners
especially in a financially volatile environment.51 Thus, collective action and
increased political mobilization to find access to the apex of the state became an
apparent need. And Gazianteps industrialists pursued that option effectively. The
industrialists of Gaziantep began to receive these state benefits after they finally
succeeded in establishing themselves as a politically motivated and
institutionalized force under the GSO.
The state benefits included universal export and investment credits,
incentives and subsidies, as well as the insurance given by the state when
entrepreneurs borrowed from international financial sources. They made an
important difference for Gaziantep, especially from the 1990s onwards. There
were three main sorts of incentive provided: 1) export incentives that were
introduced as part of the export-orientation of the economic policy; 2) the
investment incentives; and 3) KOB (Small and Medium Enterprises) incentives.
48
Bura 1994; Barkey 1990, 184; cf. Ergder 1991, 165.
49
Cf. sbir 2003, 197; Yalkn 1999, 45.
50
zsabuncuolu et al. 1999, 44.
51
Following the national financial crisis of 2001, the banks forced those who got credits to pay
early, and confiscated the machinery and the workplaces of the enterprises who failed to re-pay
their loans in time The entrepreneurs themselves, Gaziantep Chamber of Commerce (GTO), and
Gaziantep Chamber of Industry (GSO) and other institutional representatives, as well as the local
media - Gaziantepte Sabah in particular - fiercely resisted this pressure. The social tension
heightened to such an extent that a lawyer representing a bank was killed. The tension receded
after the banks decision to stop the legal procedure. Local branches of the banks were in the
forefront of the dispute, and the decision to stop the procedure was taken by their headquarters, in
recognition of the urgency of the situation and tension in the city (Authors interview with Aykut
Tuzcu, Gaziantep 2004).

The export and investment incentives were introduced by zals Motherland

Party to support the new national economic strategy. To analyze the trends in use
of export and investment incentives Figure 2 has been created.
300
250
number of incentives
200
150
100
50
year
investment incentives (1980-2002)
export incentives (1985-2002)
Figure 2: Number of export incentive certificates and investment incentive

certificates given to the firms in Gaziantep52
As Figure 2 shows, it was only in the early 1990s (especially from 1992
onwards) that the firms in Gaziantep started to apply for export incentives. There
is a striking parallel between this trend and the growth trend of the large scale
enterprises in Gaziantep. It could be argued that large scale enterprises in
Gaziantep used these incentives to jump the league, and it was actually the
52
Printed data received from the Undersecretariat of Foreign Commerce (the directorate of
incentives implementation-the branch of monitoring). These values refer to the number of export
and investment incentive certificates received by the firms in Gaziantep. For export incentives,
2002 refers only to the mid-year value.
DOI: 10.2202/1469-3569.1355
manufacturers themselves who used these incentives, rather than the intermediary
export and import firms53 unlike the case in the rest of Turkey.54 In other words,
the industrialists have preferred to play it alone, and export incentives mainly
contributed to the flourishing of the industrial sector in Gaziantep.
In fact, the incentives provided by the undersecretary began to drop after
mid-1990s. Then, the big industrialists changed their target. This is especially true
for the KOB incentives that were introduced as a result of the post-1980
goverments efforts to support small and medium enterprises, which were
believed to contribute to the export-based economic growth strategy. There are
two lessons from the story of KOB incentives in Gaziantep: 1) that entrepreneurs
in Gaziantep fared much better than the entrepreneurs of other industrialized
localities in receiving the state benefits (Figure 3 and footnote 5); and 2) that
larger scale enterprises were at the forefront in receiving such benefits, especially
after their chances of getting the investment and export incentives lowered
(compare Figure 2 and Figure 3).
ISTANBUL
GAZIANTEP
4.000.000 BURSA
ORUM
IZMIR
3.500.000
KAYSERI
ADANA
3.000.000
DENIZLI
Amount of incentive
2.500.000
2.000.000
1.500.000
1.000.000
500.000
0
1997 1998 1999 2000 2001 2002
Year
Figure 3: Total Amount of KOBI incentive given by the KOSGEB in selected,

industrialized provinces55
53
See Bayrba 2007.
54
Cf. lkin 1992.
55
Based on Table 2. In 2001, a severe national economic crisis brought the financial activities of
the state to a halt.

Table 2: Number of KOB incentive certificates given by the KOSGEB56

1997 1998 1999 2000 2001 2002 Total
stanbul 198 182 94 110 10 38 632
Gaziantep 36 66 86 98 10 10 306
Bursa 97 34 45 35 4 14 229
zmir 101 43 38 20 3 15 220
orum 31 40 48 29 10 16 174
Kayseri 37 23 27 16 3 14 120
Adana 42 18 18 28 1 11 118
Denizli 11 5 4 4 - 10 34
In sum, the state support schemes played a critical role in Gazianteps

industrialization, and that this effort has increasingly been shaped and led by
larger scale enterprises whose owners comprise the stronger section of the
industrial bourgeoisie of Gaziantep. In that regard, being visible to the states
apex required employment of alternative channels of representation, like business
associations.
The underlying dynamics of political mobilization of Gazianteps industrialists

II
As indicated above, political mobilization was necessary to find access to the key
decision-makers. But why should that happen through local business chambers,
but not through party politics? Beside the structural features of the state-business
relations at the national scale, local dynamics of party politics were also crucial.
Other local political actors, including the local MPs from different national
political parties and those parties local branches also proved ineffective in
promoting the interests of those industrialists. In fact, the distance between the
local bourgeoisie and party politics further increased during the 1990s. The crisis-
laden economic atmosphere and the part played by coalition governments in
paralysing the economic policies was an important reason.57 Partisan politics had
completely lost its credibility and attractiveness as a channel of representation for
the local bourgeoisie. Politicians were harshly criticized by the leaders of
Gazianteps business associations. In such a context, for example, it is not
surprising to see that Celal Doan, who identified himself as a project-oriented,
pro-growth mayor above all parties, became very popular in Gaziantep during the
56
Adapted from
http://www.kosgeb.gov.tr/Ekler/Dosyalar/BilgiBankas/13/Tesvik%20istatistikleri.xls. The list has
been sorted according to the last column.
57
Cf. Sayar 2002; and Kalaycolu 2002.
DOI: 10.2202/1469-3569.1355
1990s. For example, in 1996, during the celebrations of the 7th anniversary of the
establishment of the Gaziantep Chamber of Industry, Doan touched upon the
political instability and urged Gazianteps industrialists: If you industrialists had
put your weight behind the political parties, today, you would not be condemned
to the 5th class politicians.58 He maintained that he was happy with the entry of
business into politics, and personally encouraged this.59
Another important factor that prevented the local business people from
taking an active part in political parties was the dynamics of intra-party politics.
The delegate system played a critical role in determination of the power structure
inside the local branches. The leaders of the local party branches are elected by
designated delegates, who were earlier elected by the party membership. To be
influential inside the local party organizations, what matters most is how many
party delegates support the candidate. In such a context, local-branch politics is
permeated by clientelism. This process makes the intra-party election process
very conflictual and renders local party organizations quite difficult to control by
non-party members. This was the case with the elections in local branches of the
CHP, the major opposition party (Cumhuriyet Halk Partisi - the Republican
Peoples Party) in Gaziantep.60 Moreover, sometimes party headquarters intervene
in the elections of their local branches to suppress intra-party competition, as in
the case of the AKP, the party in office (Adalet ve Kalknma Partisi The Justice
and Development Party). Such interventions could make things worse in terms of
the representation of the local bourgeoisie, as certain MP candidates for Gaziantep
could be chosen from outside Gaziantep. Ramazan Toprak, a local political
columnist cites the case of Krat Tzmen, the state minister responsible for
foreign trade, then. Although Tzmen is not from Gaziantep, he was elected as an
MP from Gaziantep, and was in a position to take critical decisions about
Gaziantep, while not being aware of the local balances.61
Hence, especially the Gaziantep Chamber of Industry, along with its sister
chamber of commerce, emerged as a key political venue to articulate and promote
the interests of Gazianteps industrialists (as we shall later see, the split did not
create a visible political tension between those two chambers). The split of the
GTSO was the first step in the politicization of Gazianteps bourgeoisie in
general, and its industrialists in particular.
58
Yorum 1996, 17 (Local journal, Gaziantep).
59
The journals interview with Doan in Gaziantep BSB Kltr Dergisi 1997, 110-27 (Local
journal, published by Greater Gaziantep Municipality).
60
See Gaziantepte Sabah 23 July 2003 (Local Newspaper, Gaziantep).
61
Oluum 31 July 2003 (Local journal, Gaziantep).

Results of the split for the political dominance of the industrialists and the GSO-
GTO relations
In fact, birth of the GSO gave leverage to the big industrialists of Gaziantep to
successfully establish themselves as the spokepersons of Gazianteps bourgeoisie
in particular, and Gaziantep as a locality in particular.62
The membership base of the GTO and the GSO combined constitutes
around one third of the entrepreneurs in Gaziantep. The rest, composed of petty
traders and artisans, i.e., the Esnaf, are organized under a separate local union of
numerous sector-based chambers, namely the Gaziantep Union of Chambers of
Petty Traders and Artisans (Gaziantep Esnaf ve Sanatkar Odalar Birlii -
GESOB), which is represented by the TESK (Trkiye Esnaf ve Sanatkarlar
Konfederasyonu - The Confederation of Tradesmen and Artisans of Turkey) at
the national level. Despite the fact that the GESOB has a large membership base
with a strong guild tradition and sense of sectoral solidarity, and that such micro-
enterprises considerably contribute to the employment in the city, Esnaf remains
at the periphery of the local political arrangements and the local policy-making
scene for a number of reasons: a) Given their economic insecurities, they have
constituted the section of the bourgeoise most vulnerable to political
manipulation;63 b) The institutional and legal separation of Esnaf (micro
entrepreneurs, be artisan or petty-trader) from other sections of the bourgeoisie
especially through the creation of a separate umbrella organization for Esnaf, the
TESK; c) The dominance of informal relations as a form of collective action over
formal (and political) organization;64 and d) The representational structure of
Esnaf associations:
An important difference between the TOBB chambers and the TESK
chambers is that, in the case of the TOBB (having the GSO and the GTO as its
members), there is a single (provincial or sub-provincial) chamber of commerce
and/or industry with a single chamber assembly where all sectors are equally
represented. Sector specific issues are dealt with initially at the level of sectoral
committees but the decision-making organ is the assembly. Thus, a local chamber
of trade and industry could speak with a single voice on behalf of all sectors. In
the case of the TESK chambers, however, there are two levels of local
representation: first the sectoral local chambers, then the provincial union under
which the sectoral chambers operate. The sectoral dimension of organization
makes the local unions of petty traders and artisans more effective in keeping the
informal links with their own constituency alive. Yet, this also creates a rather
dispersed decision-making structure and renders it extremely difficult to form a
62
Also see Bayrba 2009.
63
Bianchi 1984, 248; Weiss 1988.
64
Cf. King 1983.
DOI: 10.2202/1469-3569.1355
common political front among different sectoral chambers. Thus, the political
representation of Esnaf interests, especially the Artisans and Smaller scale
industries and the services to address their needs began to be mostly undertaken
by the GSO.65
Indeed, the split did not lead to the emergence of a political rivalry
between the GTO and the GSO, but further strengthened the political dominance
of Gazianteps local bourgeoisie led by the industrialists. Why? In fact, the group
currently ruling the GSO had already become dominant inside the GTSO before
the split.66 Yet, the successful attempt of these powerful industrialists to establish
a separate chamber did not lead the GTO to pursue a different political agenda,
despite the fact that certain industrialists fiercely opposed the split on the grounds
that this could well prepare the conditions for potential rifts between these two
chambers, if controlled by rival groups.67
There are two possible reasons for this. First, the cross-membership
between these organizations68 was an important factor that gave coherence to the
policies of the GSO and the GTO. This was inevitable given the fact that the
current industrialization process was initiated by traders who invested in industrial
production. What is more, those industrialists who produce for the non-local
markets tend to directly export their own products by-passing intermediary trade
companies. Approximately, more than 1/3rd of the GSO members are also
member of the GTO.69
Secondly, the internal representation structure of the GTO and the nature
of its membership would not allow the chamber to be as effective as the GSO in
formulation and determination of a specific agenda. Although the GTO assembly
is made up of representatives from each sector, each represented equally by two
members, communication between the GTO and its constituency is not as
effective as it might be.70 The communication problem narrows the intra-
organizational goal-formulation process onto a smaller group of people in charge
of the administration. This makes the emergence of a proper sectoral view,
capable to being defended on the platform of the GTO assembly, quite
65
Authors interview with Krat Gnc, Gaziantep 2004 (General Secretary of the GSO).
66
Authors interview with Turgut Ercan, Gaziantep 2004 (Industrialist; Member of the GAGAD
management board).
67
Authors interview with Ali Burnukara, Gaziantep 2004 (Industrialist; Ex-member of the GTSO
assembly).
68
Authors interview with Krat Gnc, Gaziantep 2004.
69
Bayrba 2007.
70
An ex-president of the GTO - and also of the GTO assembly - stressed that even though they try
to do their best to stay in contact with their membership, it is still difficult to reach them. He, for
example, complained about the lack of interest on the side of the membership, and mentioned that
they did not even bother to respond to a small questionnaire (Authors interview with Mustafa
Geylani, Gaziantep 2004).

problematic. The professional groupings under the GTO bring together competing
groups whose interests can clash.71 In addition, with the exception of the
industrialists who are also members of the GTO, the economic power of the
members represented under different sectoral groups is less than that of the GSO
members. The GTO performs a rather different function. It serves as a source of
cohesion among different fractions of Gazianteps bourgeoisie due to its
historical role in Gazianteps political economy. Of course, the size of its
constituency is a significant factor in enhancing the legitimacy of the GTOs
claim to be the Elder Brother of Gaziantep.72 Currently, there are 24,683
registered members (9,977 of them are active members),73 who are organized
under 36 different sectoral committees.
To summarize, the economic power of the industrialists, especially of
those leading the GSO, the cross-membership between the GTO and the GSO,
and the respective structure of those chambers sustained organic ties between the
two, while leading their leaders to maneuver freely in defining the interests of
Gazianteps bourgeoisie under the leadership of the big industrialists. Moreover,
their control over local politics, relative independence from party politics and the
scalar strategies of representation they have pursued to find new interlocutors to
bring in new (state and extra-state) sources to finance Gazianteps
industrialization helped them lessen the significance of the logic of influence
inside the GSO and the GTO. Yet, this central political position enjoyed by the
GSO turned the chamber into the site of local political struggles, especially with
the changing composition of the industrial community of Gaziantep (logic of
membership) from the early 2000s onwards, and due to a major come-back by
party-politics changing the face of state-business relations in Turkey about the
same time (logic of influence).
The local bourgeoisies dominance in Gaziantep and the limits to a coherent local
governance arrangement
The political activism of Gazianteps bourgeoisie resulted in direct political

engagement with local (government) politics and a local governance arrangement
where the chambers, the GSO in particular, began to serve as its
neural/institutional center. In fact, in 1989 two critical developments marked the
dawn of a new era in Gazianteps local politics: a) Birth of the GSO; b) and
establishment of Gaziantep Metropolitan Municipality in 1989 with its first
71
Such as the construction sector where the housing cooperatives, builders, architects (owner of
architecture companies) are brought together (Authors interview with Asm Gzel, Gaziantep
2004).
72
Authors interview with Mesut lal, Gaziantep 2004 (General Secretary of the GTO).
73
GbF 2005, 39.
DOI: 10.2202/1469-3569.1355
mayor, Celal Doan assuming power after the local elections in the same year.
Metropolitan municipalities were also an invention of the first zal government,
in an attempt to decentralize the urban planning powers and to support the
construction and infrastructure sectors to boost the economy.74
Celal Doan served until 2004 during three consecutive terms. His entry
into Gazianteps politics was timely for the consolidation of the local business
political dominance in Gaziantep, and coincided with the split of the GTSO. An
astute observer of Gazianteps local politics emphasized that Doans coming to
office marked the watershed in this transformation, whereby the business
communitys agenda became the center of local politics, and the weight of
Gazianteps bourgeoisie in local politics became more visible.75 Doans policies
contributed to the formation of Gazianteps entrepreneurialism in two ways: a)
intervention into the urban physical development in Gaziantep; and b) the role he
played in the promotion of a pro-business agenda.
Given the priorities of the new national accumulation strategy, one would
expect to see emergence of an entrepreneurialism shaped by urban-rent politics. In
Gaziantep, this did not happen, partly thanks to the land development policies of
the Greater Gaziantep Municipality. This involved expanding the area coverage of
the mater urban development plan, and thus lowering the attractiveness of urban
rent.76 Doans interventions were timely as the 1990s were characterized by
domestic and international financial crises that could well have pushed local
commercial and industrial capital towards the construction sector. It can be argued
that this policy contributed to the primacy of industry as a field of investment by
inhibiting the flow of capital to the construction sector.
As for the latter, Doans interventions cleared the political obstacles to
the local bourgeoisies coming to the center of local politics during the 1990s. In
fact, despite his popularity amongst the grassroots, he chose to work with a
narrower set of people, mainly the leaders of the local chambers, which
legitimized their involvement in local politics. So, it was not surprising to read
that the relations between the local branch of his party (the CHP) and Celal Doan
had been full of tension,77 as Doan was not responsive to the clientelist demands
of the grassroots. Moreover, Doan openly, and continuously, encouraged direct
involvement of the local business people in party-politics.78 Another critical
aspect of Doans political discourse was a strong emphasis on localism and
further decentralization of government.
74
engl, 2001.
75
Authors interview with Asm Gzel, Gaziantep 2004.
76
Cf. Ay 1997, 44-5.
77
See Gaziantepte Sabah 9 August 2002; 23 July 2003.
78
Yorum 1996, 17; Journals interview with Doan in Gaziantep BSB Kltr Dergisi 1997, 110-
27.

In fact, ties between Doan and the GSO were quite strong. The GSO
assemblys unusual move to take an official decision to support Doan at the local
elections in 1999 is a striking instance in this regard.79 In fact, Doans success in
staying power depended very much upon the support by the industrialists.
Because, as we shall see below, the changing power balances inside Gazianteps
industrial bourgeoisie, resulting in the leaders of the GSOs losing control of
certain key institutions like the huge Organized Industrial District of Gaziantep to
the challenging smaller scale industrialists; soon translated into Doans losing
against the other mayor candidate supported by the latter group of industrialists in
the local elections of 2004.
The contradictions of, and limits to, pro-business local governance
Simultaneous moves to mobilize the GTSO in political terms and to reinvent its
service orientation located the splinter GSO at a middle point on both axes
(Schema 2), thereby turning the GSO into a true arena of intra-bourgeoisie
struggles in Gaziantep. The local bourgeoisie activism in Gaziantep was about to
reach a new level, towards the end of the 1990s, having gained enough experience
in political activism through chambers. In a context characterized by
heterogenization of industrial capital (both in terms of scale and sector) and the
change in the representational structure in national politics, once again, the logics
of membership and goal formation began to gain importance. This resulted in the
proliferation of a sort of business association new to Gaziantep, namely SADs
(Sanayici ve adamlar Dernekleri Industrialists and Businessmen
Associations) and GADs (Gen adamlar Dernekleri - Young Businessmen
Associations) in the 1990s. Unlike the GSO and the GTO, such business
79
The following account of a verbal exchange between Asm Gzel and Abdlkadir Konukolu
(the president of the GSO assembly and the owner of the SANKO Holding, the leading business
conglomerate of Gaziantep) gives us an idea about the degree of consensus between the business
leaders and Doan. Gzel, the ex-president of the Gaziantep Chamber of Architects, was a
candidate from the left-leaning DSP of Ecevit- for mayorship of the Greater Gaziantep
Municipality in the 1999 elections, when Doan was also competing for his third term. During the
election campaign, Gzel was invited to an open forum broadcast live from a national television
channel (NTV). During the forum, he raised the following criticism of the powerful names of
Gaziantep: The present institutional structure does not allow the presentation of all sections of
society. There are trade unions, other NGOs. There are neighbourhood beautification
associations We want to change this structure. The response of Konukolu was that
(according to Gzel): We are happy with our balance. We work in harmony with our governor,
our police chief, our mayor, our chambers of commerce and industry (Authors interview with
Asm Gzel, Gaziantep 2004).
DOI: 10.2202/1469-3569.1355
clubs/associations had a private status (Schema 2) and they aimed to influence the
intra-GSO politics.
I argue that these associations are established to address one of (or both)
two major concerns: 1) to ferment new ideas, so as to contribute to the goal
formation process and to freely promote political agendas, sometimes with the
purpose of capturing the control of the mother association; 2) to create a sense of
class (fraction) solidarity, and to organize other civil society organizations in the
city around the (specific) policy agenda pursued. As noted earlier, TSAD
established in 1971, was the forerunner to that sort of a bourgeoisie mobilization
in the countrys history. Given the lessons from the TSAD experience, the
increasing popularity of such associations in Gaziantep indicates that the
dynamics of Gazianteps entrepreneurialism are now more likely to be determined
by intra-local struggles to maintain a hegemonic position in Gazianteps political
economy, while the axes of struggle are determined by non-local references.
There are four important private business associations in Gaziantep: the
GAGAD (Gaziantep Gen adamlar Dernei Gaziantep Young
Businessmens Association), the MSAD (Mstakil Sanayici ve adamlar
Dernei Independent Industrialists and Businessmens Association), the
HRSAD (Hr Sanayici ve adamlar Dernei - Free Industrialists and
Businessmens Association), and the GAPGAD (Gaziantep Paylamc Gen
sadamlar Dernei Gaziantep Sharing Young Businessmens Association)
(Schema 2). Of these associations, especially the GAGAD and the MSAD
play key roles in Gazianteps politics and local intra-bourgeoisie affairs. The
GAPGAD and the HRSAD, respectively, are splinter organizations of the
former associations. They are relatively new associations, and their impact on
local political-economy is still limited.
How to reproduce the pro-business local governance scheme?
The GAGAD (in 1993) reflects the changes in the socio-economic composition
of the local bourgeoisie in Gaziantep. Its membership comprises the third
generation industrialists in Gaziantep, who mainly become true professional -
industrialists, unlike their fathers who started up their industrial enterprises using
the capital accumulated via commercial activities.80 In fact, the GAGAD has
become the place where the leaders of the GSO and the GTO chambers are
educated and prepared for leadership, around a heavy localist discourse.81 This
includes the president of the GSO, Nejat Koer, himself an ex-president of the
GAGAD (who recently became a member of parliament from the Justice and
Development Party, in June 2011). Mustafa Topuolu, another ex-president (4th
80
See Paksoy 2002, 58.
81
See Bayrbag 2009, 375.

term), commented that the solidarity between members of the GAGAD turns
them into the infrastructure of the economy, social and cultural institutions of
Gaziantep.82 The GTO, the GSO, Gaziantep Organized Industrial District,
Exporter Unions, political parties and the presidents, and executive board
members, of many social and cultural institutions in Gaziantep are members of
the GAGAD.83 This suggests that the production of solidarity inside the stronger
elements of the local bourgeoisie, as well as the local entrepreneurial governance
scheme has become more formalized compared with the generation that took over
the GTSO in the late 1970s. This new group has stronger roots in the industrial
sector than in the commercial sector. Therefore, the GAGAD also serves as an
institutional locus for the formation of new coalitions across different institutions
which could shape the future economic agendas of Gaziantep, especially around
industrial concerns. While the GAGAD could be seen as a strategic attempt to
establish the existing local governance arrangement on firm grounds, the
MSAD indicates the existence of a serious threat to that state of affairs.
How to challenge the local establishment?
The MSAD was established in 1990 as a voluntary, and highly centralized

national business association leaving its local branches less room to manoeuvre
alone. Owners of small and medium enterprises from industrialising Anatolian
cities constituted its membership. The main ideological concern of the MSAD
was the same as that promoted by Necmettin Erbakan, who raized the flag of
Anatolian capital against mainly stanbul-based big capital in the 1970s. In fact,
the emergence of the MSAD coincided with the rise of political slam in
Turkey in 1990s, under the leadership of Erbakans Welfare Party, and the
MSAD functioned as an extension of this political movement in the business
world.84 Nevertheless, the political success of Erbakans Welfare Party was short-
lived. The military memorandum of 28 February 1997 harmed the political
representation capacity of the business interests affiliated with Erbakans Welfare
Party.85 Yet, the MSAD did not lose their political influence. If anything, they
became more influential.
In fact, their enterprises began to grow in the 1980s, in a context
characterized by zals clientelism, and a set of national economic policies
favoring the TSAD members. MSAD was a move to fight being excluded
from the public resources distributed by the state. Given the scale of their
enterprises, organized action was inevitable. It was established, thus, as an anti-
82
Gen izgi 4(9) (Local journal published by the GAGAD).
83
Gen izgi 4(9), 20.
84
ni 1997, 757; Demir et al. 2004.
85
Cf. zcan 2000, 241-2; Also see pages 240, 225.
DOI: 10.2202/1469-3569.1355
TSAD, and a pro-interventionist/protective policy (East Asian type) business

association.86 The MSAD members join the association for two purposes: to
participate in informal (Islamic) business networks87 and to enhance their access
to the state resources.88 Given that it was established as a business association to
provide its members with selective benefit,89 one could expect it to function as a
sort of a business firm (see Schema 1 and Schema 2, top left corner). Yet,
okgezen also notes that they are not actively involved in the process of public
opinion formation. They have left ideological matters and lobbying activities to
the influential members and the leaders.90 This means that there is no pressure of
the logic of membership on the leaders of the organization. In other words, the
leaders have more flexibility in goal formation, and pursuing their political
strategies. For this reason, the MSAD functions as a centralized business
association, which is able to develop closer ties with party politics (see Schema
2). This political engagement of the MSAD became more visible from the
2000s onwards.
The most important indication of this development was the AKPs (The
Justice and Development Party - Adalet ve Kalknma Partisi) success in
controlling the national government since 2002, as the single ruler of the country.
The striking point is that while MSAD was established by Erbakan, the very
same association played the role of a midwife in the birth of the AKP as a splinter
from his movement. Following the memorandum, a struggle broke out between
the traditionalists and the reformists over the question of whether they were to
integrate with the system or not. MSAD favored the latter option and
encouraged the leader cadre of the reformists to create the AKP.91 Hence, the
AKP was born as a truly neoliberal party, apparently with a heavy conservative
tone. Another crucial point to mention about the AKP is that it has had displayed
a strong interest in controlling the local politics in Gaziantep, given its roots in
smaller scale industrial capital. For example, for the first time in Gazianteps
history, a political party, the AKP, brought an industrialist to the presidency of its
local branch.92
The Gaziantep branch of the MSAD was established in 1993 and has
been led by the Nakpolu Family.93 In fact, the 2003 elections for the managerial
board of the Gaziantep Organized Industrial District brought Cahit Nakpolu to
the top of the industrial districts administration. This victory came against the
86
ni 1997, 757-60; okgezen 2000, 531, 535, 538, 539.
87
okgezen 2000, 540.
88
okgezen 2000, 539.
89
okgezen 2000, 542.
90
okgezen 2000, 538.
91
See Bekarolu 2007.
92
Authors interview with Aykut Tuzcu, Gaziantep 2004.
93
zcan 2000, 239.

candidate of the GSO. It was the first time that a candidate other than the one
supported by the GSO had been elected.94 This was also the harbinger of the end
of the Mayor Celal Doans reign in Greater Gaziantep Municipality, a year later.
Thus, an alternative mobilization has been on the rise, since the early 2000s, to
the disadvantage of the ruling coalition behind Gazianteps older
entrepreneurialism.
All these testify to the birth of another sort of business activism and
approach to local politics in Gaziantep, this time formulated on non-local bases,
and aiming to strip its local bourgeoisie of the autonomy it has established over
two decades. This intervention could also be read as a radical change in terms of
the form of representation adopted by a certain section of the local industrial
bourgeoisie. The boundaries between party-politics and bourgeoisie are blurred in
Turkey, once again, and especially in Gaziantep.
This new competition between two different fractions local industrial
bourgeoisie in Gaziantep is characterized by a clash between a fraction of the
bourgeoisie using party politics and national/hierarchical ties as a channel of
representation, on the one hand, and a faction which is now less dependent on the
party politics, on the other. This distinction could be read as a product of the
differentiation inside the local industrial bourgeoisie: between those who gained a
momentum benefiting from state incentives/subsidies during the 1980s and the
1990s, and those who could not make it thus far or just joined the industrial sector
with the second wave of industrialization (during the 1990s). In this struggle, the
former comprise those members of the local industrial bourgeoisie who have
directly benefited from the local entrepreneurial arrangements, while the latter
constituted those with less spatial mobility, less access to public resources, and in
need of state protection.
Conclusion
The aim of the article, as noted, was to examine the dynamics behind the rise of
pro-business local governance under neoliberalism. The major motive behind the
work was to challenge the mainstream assumption that introduction of neoliberal
policies will naturally result in pro-business local governance schemes. This
assumption has been based upon a false duality between the market and the state.
Introduction of neoliberal policies, from this perspective, would amount to the
withdrawal of the state, letting the market forces to do their job properly. This
conclusion bears a number of problems.
First, introduction of neoliberal policies can become possible only through
stronger and more interventionist governments. What is changing is not the
94
Authors interview with Aykut Tuzcu, Gaziantep 2004; Authors interview with Asm Gzel,
Gaziantep 2004.
DOI: 10.2202/1469-3569.1355
relationship between the state and the market, but the forms of state intervention.
Secondly, such accounts do not explain how national policy changes push the
local entrepreneurs, who produce market relations, to take the initiative. This has
to do with the a-historical approach adopted by this perspective, which misses the
role/place of the broader historical and geographical context in which localities
and their local governance arrangements have been embedded into.95
A third major problem here is the assumption that engaging with the
market is the only form of interest promotion/representation for an individual
entrepreneur. The dynamics of local collective action that produce local
entrepreneurialism remain outside the focus of analysis. This has to do with the
fact that the role of the state, and the politics of state business relations are not
taken into account. As a number of critiques indicate, the rise of pro-business
local governance is a product of the state rescaling. They observe that engagement
of the local bourgeoisie with local governance is arranged through
(administrative) reforms, under the supervision of the nation state.96
Although these arguments would be valid especially for the developed
countries, still, they do not explain the political mobilization of the local
bourgeoisie under the following conditions: a) when the policy capacity of the
state, which is needed to undertake this delicate task of neoliberalization in an
orderly manner, is weak (due to political instability); b) when such administrative
reforms are not undertaken; c) when the local economy and local politics do not
revolve around urban rent; d) when the prospects of capital accumulation continue
to rely on the delivery of public resources to the private sector by the (national)
state. These conditions, albeitly, reflect the situation in the developing countries
like Turkey, and cities like Gaziantep.97
The empirical discussion indicates that what leads the local bourgeoisie to
get mobilized is not their active inclusion by the state into (local) policy-making
process. Rather, they are motivated by their exclusion from the distribution of
state benefits. In other words, political mobilization of a fraction of the
bourgeoisie (be sectoral and/or local) is a product of the intra-bourgeoisie
struggles that are waged and facilitated through state policies. Thus, if there is a
local entrepreneurial spirit that comes out today, it is a product of this dependency
and exclusion, as much as the economic history of that particular locality.
The analysis of the history of local bourgeois activism in Gaziantep also
shows that political parties (and individual engagement with party politics) and
decentralized (economic) governance structures are not feasible/available means
of improving their access to the state benefits, especially at times of political
instability. Local business associations, thus, constitute the major venue of
95
Cf. Austin and McCaffrey 2002, 46; Valler et al. 2000, 418; Pierre 2005.
96
Brenner 2004; Peck 1995; Peck and Tickell 1995; Cochrane et al. 1996.
97
See zcan 2006.

interest representation. Local business associations aim a) to attract state benefits

to their locality; b) to institutionalize their own local political hegemony and
autonomy (from party politics); c) and to institutionalize their contacts with their
interlocutors.98
The case of Gaziantep suggests that intra-bourgeoisie struggles also take
place among different fractions of the local bourgeoisie which ultimately result in
organizational splits. The fault line is determined by the political bargaining
power of the individual fractions, and the question of whose interests are served
by that particular business association. As the MSAD case indicates, when the
splinter group is the weaker fraction (and the reverse could also be the case, as
exemplified by the split of the GTSO), they could well make recourse to top-
down oriented party politics at the national scale to enhance their bargaining
position at the local scale. Thus, different fractions of the local bourgeoisie could
develop different attitudes towards party politics and local autonomy.
It could be argued that such splits could change the face of a locally
established local governance arrangement when the conditions that created that
local autonomy orientation, namely national political instability, disappear. That
is to say, the return of stable single party governments, which has been the case in
Turkey since 2002, could harm the bottom-up mobilization capacity and political
unity of the local bourgeoisie in Gaziantep and other similar Anatolian Tigers.
Of course, increased policy capacity of the state in Turkey made
introduction of decentralized local economic governance structures possible, as in
the case of newly established Regional Development Agencies. These agencies
are organized at NUTS2 level (comprising around 3-4 administrative provinces in
most cases), functioning under the supervision of the State Planning Organization.
They are headed by the Governor of the central province, with a development
board where the governors, mayors of the cities from those provinces and the
presidents of local chambers of commerce and/or industry serve as natural
members. In other words, a new, centrally controlled institutional interface
between the state and business was established.
A set of potential developments could follow, such as lessening
significance of private local business associations (mainly lobby organizations),
diverting the attention of the dissenting fractions of the local bourgeoisie back to
intra-chamber politics. Then, we could witness a slowdown in the establishment
of new (private) local business associations, and the return of heated rivalry inside
the chambers of industry, including the GSO.
In the meantime, one should also expect to see the tensions between the
chambers of commerce and the chambers of industry that inhabit the same city to
subside. This is mainly because the cities belonging to a region will have to
98
Also see Bayrba 2009.
DOI: 10.2202/1469-3569.1355
compete for the public resources allocated through that particular RDA. This will
most probably create a pressure on the shoulders of the chamber leaders to reach
broader local compromises.
Given the further centralization of resource allocation during the reign of
the AKP, we should expect to see less organized engagement with party politics.
As there is a quite strong single party government, it would be an unwise move on
the part of the business leaders to develop ties with opposition parties. Direct,
personal engagement with the party in power would come as a natural result. It
should be no surprise that Nejat Koer (the president of the GSO until the June
2011 elections) was elected as an MP from the ranks of the AKP, despite the fact
that his group ruling the GSO was the rival of the local MSAD. Therefore, it is
highly likely that the intra-bourgeoisie struggles will also be transferred into the
party organization of the AKP itself. The lessons from the experience of the
Justice Party of Sleyman Demirel the birth of the Erbakan movement from
within its ranks - tell us that history could repeat itself, when the time is ripe. In
other words, the AKPs policy to dominate intra-business politics could lead to a
party split in future, when a deep economic and/or political crisis hits Turkey.

Become THE LOGIC OF Be-

a IMPLEMENTATION come a
business state
firm agency
Selective Monopoly
goods goods
I
Provide Negative N
services to compliance of T
M members member E
E behaviour R
M L
B O
E C
R U
ORGANIZATIO T
C NAL THE O
H THE LOGIC PROPERTIES LOGIC OF R
A OF OF BIAs INFLU-
R MEMBERSHIP [business interest ENCE C
A associations] H
C A
T R
E A
R Represent C
I Create interests of T
S through members E
T partici- before R
I pation interlocutors I
C S
S T
I
C
S
Solidaris Public
tic goods goods
Become THE LOGIC OF Be-

a club GOAL FORMATION come a
cabal
Schema 1: The diverse (and sometimes competing) logics of associability99

99
Schmitter and Lanzalaco 1989, 214)
DOI: 10.2202/1469-3569.1355
Become a Become a
business THE LOGIC OF IMPLEMENTATION state agency
firm
T T
H GESOB H
E E
(and GTSO
L until late L
O 1970s) O
G G
I GTO I
C (post- C
GSO 1980
O GTSO) O
F F
M I
E N
M F
B MSAD L
E (Until MSAD U
R 2002) (After 2002) E
S GAGAD N
H C
I E
P
Become a Become a
club cabal
THE LOGIC OF GOAL FORMATION
Schema 2: The current institutional landscape of local business associations in

Gaziantep

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Business and Politics

Volume 13, Issue 4 2011 Article 6

Pro-Business Local Governance and (Local)

Mustafa K. Bayirbag, Middle East Technical University,

KEYWORDS: pro-business local governance, local business association, forms of business

Published by De Gruyter, 2011 1

Political mobilization of the bourgeoisie and local business associations

Published by De Gruyter, 2011 3

The populist multiparty experience in Turkey forged a patron -

In other words, political instability and subsequent erosion of policy capacity

1) When capital accumulation is (still) dependent upon capturing public

associations, in that regard, could be seen as a key form of collective

3) When the neoliberal reforms fail to establish institutionalized, non-

4) Yet, this political mobilization process, and the associated economic

5) Once political stability is reestablished, especially when a strong single

6) Therefore, once hypothesis five is read in conjunction with hypothesis

Published by De Gruyter, 2011 5

business associations subscribing to either of those strategies, we can

countries21 stronger local governments in such cities could only serve as a

The agency of the local bourgeoisie:

Published by De Gruyter, 2011 7

of membership refers to the associations responsiveness to the varying interests

operate independently from, and can in fact be seen as running

The tensions on those two different axes can be understood as

Published by De Gruyter, 2011 9

Roots of Gazianteps bourgeoisies political activism:

As long as we are concerned with the question of how political activism of

Published by De Gruyter, 2011 11

country during the post-1990 era; 2) Establishment of a pro-Islamist political

The rise of local business associations as central political actors in Gaziantep

Dynamics of local industrialization and the need for state benefits

Table 1: Manufacturing workplaces established in Gaziantep since 1960 (firms of

Figure 1: Gazianteps performance in relation to Turkish economy42

Published by De Gruyter, 2011 13

Ironically, Gazianteps industrialization gained momentum increasingly

Hence, we should also not rush to conclude that such a strategy

The underlying dynamics of political mobilization of Gazianteps industrialists - I

Published by De Gruyter, 2011 15

The export and investment incentives were introduced by zals Motherland

investment incentives (1980-2002)

export incentives (1985-2002)

Figure 2: Number of export incentive certificates and investment incentive

Figure 3: Total Amount of KOBI incentive given by the KOSGEB in selected,

Published by De Gruyter, 2011 17

Table 2: Number of KOB incentive certificates given by the KOSGEB56

In sum, the state support schemes played a critical role in Gazianteps

The underlying dynamics of political mobilization of Gazianteps industrialists

Published by De Gruyter, 2011 19

Published by De Gruyter, 2011 21

The political activism of Gazianteps bourgeoisie resulted in direct political

Published by De Gruyter, 2011 23

The contradictions of, and limits to, pro-business local governance

How to reproduce the pro-business local governance scheme?

Published by De Gruyter, 2011 25

How to challenge the local establishment?

The MSAD was established in 1990 as a voluntary, and highly centralized

TSAD, and a pro-interventionist/protective policy (East Asian type) business

Published by De Gruyter, 2011 27

Published by De Gruyter, 2011 29

interest representation. Local business associations aim a) to attract state benefits

Published by De Gruyter, 2011 31

Become THE LOGIC OF Be-

Become THE LOGIC OF Be-