Gov't persecution of businesses bodes ill for overall economy

The Finance Ministry's profiling of 100,000 companies owned by businessmen with affiliations to the Hizmet movement was one of the hottest debate topics last month, and the latest remarks from Confederation of Turkish Industrialists and Businessmen (TUSKON) Chairman Rızanur Meral revealed that the profiling has been followed by persecution.

The government is forcing companies to turn their backs on the Hizmet movement or face consequences such as exorbitant fines and being blocked from taking part in tenders, among many others.

Talking to Sunday's Zaman on the condition of anonymity, some businesspeople said the harassment is not only confined to Hizmet-related companies or businesspeople, as anyone who is known to have some critical political stance against the government is being subjected to practices of maltreatment. This harassment is coming from many different sources, including state officials, such as the tax auditors of the Finance Ministry and inspectors of the Financial Crimes Investigation Agency (MASAK), as well as local administrations of the ruling Justice and Development Party (AK Party). Even pro-government businessmen are pestering their colleagues to obey the government and stay away from the Hizmet movement, saying that otherwise they will be threatened by the unchallengeable state power.

Sharing his views in a written statement on Thursday, Meral complained about the government's attempts to expose entrepreneurs to “ferocious intimidation and pressure policies.” He went on: “There has been heavy pressure on businesspeople who don't share the same worldview as the government, including biased and targeted tax audits, prevention from entering public tenders and termination of existing licenses and permits, and they are still continuing.” Meral said the arbitrary practices have reached such an extent that tax auditors are openly calling on the owners of companies they are inspecting to sever ties with business organizations with Hizmet movement connections in order to get their account books back and be immune from fines. Meral asserted his hope that those who are responsible for these discretionary practices and discrimination will have to give an account before the courts one day.

The TUSKON chairman said the pressure on businessmen to deter them from supporting the Hizmet movement will be futile, as they will not show any weakness or shy away from their commitment to their values, no matter how ferocious and agonizing the arm-twisting of the government becomes.

The persecution of non-compliant companies might damage the companies' image, which is already fragile due to ongoing ambiguities in the global economy, problems in the domestic economy, such as the slowing down of industrial performance, deteriorating debt figures and worsening current account numbers, as well as the rising geopolitical risks amid escalating regional tensions.

Turkey has been extremely occupied with political controversies, with little attention being paid to the economy. Business organizations' messages after the presidential elections found common ground in inviting the political actors in the country to start spending more of their energy on the economy again, since the persistent global ambiguities render it imperative for emerging countries, particularly Turkey, whose economy is described as “fragile,” to adopt more prudent and cautious policies. Short-term debts in particular must be heeded properly, as this issue seems to be becoming one of the gravest problems, he noted. Turkey needs to pay a total of $240 billion to foreign lenders each year, much higher than the central bank's total sum of reserves.

Meral believes the government must shift its priority to the provision of confidence for businesses to ensure and prop up stability and that profiling businesses apropos of their connections encourages nothing but the creation of an uncertain environment for investments. But the segregation and rising oppression of businessmen is working to the detriment of the economic climate of the country, Meral asserted, going on to liken firms to bricks that make up the building of the economy, as pulling some of them out will cause an unavoidable collapse.

Meral's messages placed special emphasis on the urgent necessity to propagate the democratic culture, proposing that the democratic deficit is potentially the most serious risk factor that will deter possible investors from investing in a country. “We have an operating parliamentary democracy that needs further development,” he said, underlining that the separation of powers, the main pillar of a democratic system, has come almost to the brink of extinction recently and therefore needs to be urgently reinstated.

The operation against Bank Asya, Turkey's leading interest-free lender, by the government is one of the dirtiest acts of intimidation against Hizmet-related companies, part of a war waged by Prime Minister Recep Tayyip Erdoğan against the Hizmet movement, which he declared his arch-enemy as a way to deflect popular attention away from serious corruption allegations against him and his government. In one his public rallies he even pledged to start a witch hunt against the Hizmet movement.

State institutions and pro-government companies assaulted the bank in an orchestrated action by withdrawing their money from the bank early this year, even risking a loss of profit accrued on their deposits due to prepayment. The pressure has increased even more since then, but the bank has been able to thwart the menace so far.

Despite the fact that all derogatory or defamatory actions against banks are strictly forbidden by law, the Banking Regulation and Supervision Agency (BDDK), the Capital Markets Board (SPK) and MASAK have all remained idle so far, stoking suspicions that the law is being downtrodden in order to indirectly help the political authorities in its attempt to derail the corruption investigations.

Published on Today's Zaman, 16 August 2014, Saturday