Market observers have recently said government pressure on companies, market regulators and businesspeople have intensified, particularly after last year's corruption probe which implicated President-elect Recep Tayyip Erdoğan, his family, ministers and businessmen. Experts have since voiced concerns that Turkey is experiencing a political pressure on all aspects of economic life and that increased government interventions dent confidence in the country's markets.
Doğan Cansızlar, the former head of the Capital Markets Board (SPK), is one of these market experts who are deeply concerned about the future of markets under an apparent government ‘iron fist'. “There are no longer rules but directions from the top of the government, economy management is in total chaos and key officials seem to be controlled and monitored by a single decision maker rather than laws and regulations,” he asserts. Cansızlar says foreign colleagues and investors have serious concerns regarding the current picture in Turkish markets.
These interventions have turned into an open campaign against certain businesses and financial institutions which Erdoğan sees as a threat to his single party rule. Separate tax fines on firms as well as purges of officials in public institutions are examples to government pressure. Experts say, by doing so, Erdoğan's government is breaking the laws that regulate and protect firms and private entrepreneurs.
Cansızlar left office as SPK head in 2006 and is given much credit for reforms made during his tenure that regulated Turkey's capital markets with measures to fend off domestic and external shockwaves. Earlier this year, Erdoğan confirmed a “witch hunt” carried out by his government against certain businesses and public officials.
In April, three deputy chairmen and 11 department heads at SPK were removed from duty after they were targeted by certain pro-government media outlets. The 14 SPK officials were told there were no legal charges or investigations against them but they were purged due to “management necessity.” “This [SPK purge] has no excuse, nor was it made on legal grounds. …the government is sidelining experienced and capable bureaucrats at the expense of bringing inexperienced loyalists to key posts,” Cansızlar asserted. He adds that the SPK has never seen such a large-scale purge in its 32-year history.
Many other senior officials within the Finance Ministry, including the Head of the Finance Ministry's Financial Crimes Investigation Board (MASAK), were also removed from their posts without an excuse by the government earlier this year.
Targeting of Bank Asya is a crime
One of the examples to a government-led campaign against local firms is Bank Asya. Observers agree that recent statements from top government officials, including Erdoğan, confirm allegations of a government operation to force the Bank Asya to close as part of its fight against the Hizmet movement.
Cansızlar says the officials who are responsible for ensuring the smooth operation of the markets have remained silent over attacks against Bank Asya. “I wonder what the Banking Regulation and Supervision Authority (BDDK) and the SPK wait for? They must have taken action against the alleged illegal operation to sink Bank Asya,” he says. He adds that public officials cannot turn a blind eye to what happens with Bank Asya and will be committing a crime if they do not act to protect the lender.
Deputy Prime Minister Ali Babacan said earlier this month that state-run Ziraat Bank, which is looking to launch its own Islamic banking unit, could buy Bank Asya, but an advisor to Erdoğan subsequently denied such a plan.
Shares in Bank Asya were temporarily removed from the benchmark stock exchange Borsa İstanbul (BIST) last week after Turkish authorities cancelled key contracts with the bank, including a tax collection deal.
Cansızlar says officials' contradictory reactions to interventions in Bank Asya confuse market players, adding that it is uncommon for the finance sector in Turkey to sit and watch as a lender is being forced to shut down.
Published on Sunday's Zaman, 17 August 2014, Sunday
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