by Michael Roberts
The explosion of protest over the last week
in Turkey began when people tried to stop the pulling down of trees in
Gezi Park as part of a government plan to replace the park with yet
another shopping centre that would include yet another mosque, the
demolition of the secular Ataturk cultural centre and its replacement
with an Ottoman-era military barracks. This was no accident of history
really, because the loss of green spaces to development has been
increasingly objected to by wide layers of Turks – working class and
middle class.
According to the OECD, 33% of Turks feel they lack
access to green spaces, much more than the 12% average of OECD European
countries and the highest level of dissatisfaction in the region.
But Turkish capitalism has been on the move and, as far as the ruling
AK party and domestic and foreign capital is concerned, nothing must
stand in its way (including trees). Turkey wants to move up the ladder
of the rich club of the OECD and is still vying to join the EU by the
end of decade. At the same time, the government is autocratically
trying to impose an Islamic style state superstructure onto this
capitalist expansion, with strict rules on alcohol, religious
observance, dress and the subjugation of women, Iran-style.
Up to now,
the AK party has been riding high, winning election after election,
enabling it to cut the former Ataturk secular military down to size and
disperse the secular opposition of corrupt middle-class parties. The AK
was backed in this by the huge urban poor of the cities where it had
carefully built a base over a decade or more. But, of course, on
obtaining unchallenged power, it has now become the tool of big business
and foreign capital (despite the occasional rift over policy). The
government increasingly sees itself as a regional power able and willing
to intervene in the various clashes of the region: Iran. Palestine and
more recently, Syria.
On the surface, it would appear that Turkish capital is moving on and
up without much problem. And it is true that economic growth has
accelerated in recent years while foreign investment has flooded in to
exploit a labour force coming into the urban areas from the impoverished
countryside – a classic emerging capitalist development. But this
apparent economic success is still founded on the shaky young legs of a
weak capitalism and is also weighed down by corruption, religious
backwardness and scant regard for human rights and laws. Inequality of
income, as measured by the gini coefficient, according to the IMF, is
around 40, making it higher than the US, the most unequal of the
advanced capitalist economies and the highest in emerging Europe, apart
from Russia.
It’s no surprise that Turkey is ranked 154th in Reporters Without Borders’ Press Freedom Index.
Not only is the country “currently the world’s biggest prison for
journalists”, media bosses fire journalists because of pressure from the
government. And prosperity is a relative thing and of course, not for
all. More than 48% of the working-age population aged 15 to 64 has a
paid job, a figure much lower than the OECD employment average of 66%
and the lowest rate in the OECD. People in Turkey work 1 877 hours a
year, more than the OECD average of 1 776 hours. In Turkey,
however, 46% of employees work very long hours, by far the highest rate
in the OECD where the average is 9%.
Around 67% of people say they are satisfied with their current
housing situation, much less than the OECD average of 87% and the lowest
level amongst OECD countries. On Turkey, the average home contains 0.9
rooms per person, less than the OECD average of 1.6 rooms per person and
one of the lowest rates across the OECD. In terms of basic facilities,
87.3% of people in Turkey live in dwellings with private access to an
indoor flushing toilet, less than the OECD average of 97.8% and the
lowest rate across OECD countries.
The best-performing school systems manage to provide high-quality
education to all students. In Turkey, the average difference in results,
between the 20% with the highest socio-economic background and the 20%
with the lowest socio-economic background is 106 points, higher than the
OECD average of 99 points. This suggests the school system in Turkey
mainly provides higher quality education for the better off.
Total health spending accounts for 6.1% of GDP in Turkey, more than
three points below the average of 9.5% across OECD countries. At $913 in
2008, Turkey’s level of health spending per person is the lowest in the
OECD, where the average is of $3268. In Turkey, only 61% of people
say they are satisfied with water quality. This figure is the lowest in
the OECD, where the average satisfaction level is 84%, and suggests
Turkey still faces difficulties in providing good quality water to its
inhabitants.
The Great Recession hit Turkish capitalism just as hard as
elsewhere. The answer of the government (against IMF advice) was to let
loose a huge credit boom to fuel domestic demand. This pushed the
inflation rate to double digits and widened the current account deficit
to 10% of GDP (the second largest in the world in dollar terms) in 2011,
exposing Turkey to the risks of capital flow reversal at a time of
continued global uncertainty. External financing needs are around 25%
of GDP so that Turkish banks rely on short-term foreign borrowing.
Turkey has jumped from an agricultural to services economy within two
decades and the recession weakened the manufacturing base.
Conglomerates like Eczacibasi and Zorlu have built huge shopping malls
in the past few years rather than investing in their core businesses.
In the last two years, the economy slowed, driven by weakening
domestic demand. Turkey remains prone to boom-bust cycles driven by
foreign capital flows. The health of global imperialism is still the
overriding factor in Turkey’s own growth. The national saving rate has
fallen dramatically over the last 15 years, from 25% of GDP in the late
1990s to less than 15% now. This decline has been larger than in any
G-20 country over this period and stands in stark contrast to the
experience in peer emerging economies. So Turkey is forced into making
its labour force competitive to attract more FDI flows into the tradable
sector. At around 2.0% of GDP, FDI inflows are still below the G–20 EM
average , with most flows tilted toward unproductive sectors such as
banking and real estate.
Between 2003 and 2011, real GDP growth averaged 5.3% a year, but the
unemployment rate remained in double-digits, thus creating a reserve
army of labour to exploit. The deficit on trade and income with other
countries was over 5% of GDP on average. But these were the good years
for Turkish capitalism. Economic growth is expected to slow to less
than 4% a year for the rest of this decade, at best, while the external
deficit will widen to 7.5% of GDP. The boom of the last decade was
partly based on real estate, credit and services and construction and
less and less on manufacturing, exports and investment.
That’s because the profitability of Turkish capital has declined as
the expansion of the labour force began to slow. The decline was
visible during the 1990s. It was no accident that the AKP won landslide
victory with the backing of big business in the 2002 elections just one
year after its foundation. Under the AKP, profitability made a
dramatic recovery (albeit based partly on unproductive investment). The
Great Recession brought a new reversal and this time the recovery in
profitability has faltered. Although profitability recovered to the
previous peak by early 2010, since then it has taken a tumble and is
still below the peak before the Great Recession.
The green shoots in the woods of Turkish capitalism are not so healthy that the government can continue to pull up the trees.
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