September 6, 2014

TUSKON's Meral says AK Party replaced Kemalist parties of the past

Rıza Nur Meral, who heads one of Turkey's most influential business confederations, the Turkish Confederation of Businessmen and Industrialists (TUSKON), has said the Turkish state, after suffering for many years because of Kemalist policies, has returned to the same old ideology under the rule of the Justice and Development Party (AK Party) government.

The Kemalist philosophy is known to give priority to some approaches such as statism, the powerful role of the army and little room for opposition and dissent.

Since President Recep Tayyip Erdoğan launched a battle against the faith-based Hizmet movement after senior members of his party were implicated in a graft probe which became public on Dec. 17 of last year, TUSKON, a Hizmet-affiliated organization, has gotten its share of a backlash from Erdoğan's crackdown on Hizmet.

Erdoğan accuses the Hizmet of establishing a “parallel structure” or “parallel state” to undermine his political power, but he has provided no sound evidence to prove his claim.

Accusing the movement of having orchestrated the graft probe, the government is waging an overall war against Hizmet-affiliated schools, banks and media organs as well as other institutions and individuals.

Similar to the practices of the Feb. 28, 1997 military coup, when pious people were subjected to discrimination in all fields of life including education, individuals and organizations who are thought to be affiliated with the Hizmet movement are being subjected to extensive discrimination today.

“There is an atmosphere in Turkey that is similar to the atmosphere of the Feb. 28, 1997 military coup. At that time, there were many fears about religious fundamentalism, and $22 billion evaporated behind the scenes. Now, the so-called ‘parallel structure' has replaced religious fundamentalism, and the country continues to be burgled. There is a graver situation today than there was in 1997. Things have not changed; only the actors have changed. Only the individuals who steal and tyrannize others have changed. There is nothing that has changed on the part of the state. The state has returned to its default settings. The Justice and Development Party [AK Party] has replaced the Kemalist parties of the past,” Meral said.

TUSKON has even been threatened by the government with being "wiped off the market" after it made critical statements about government policies.

Meral spoke to Sunday's Zaman on how the government's war on Hizmet has effects on TUSKON and said they have faith that the current oppression will eventually come to a halt and that leading business confederations like TUSKON will survive to serve Turkey.

Is it just TUSKON that is raising its voice against government policies in the business world? Everyone has been silenced. What is the reaction of those who are silent?

They say: "May God be pleased with you. You have voiced our feelings. We can't speak up, but you do. We have been very uneasy [with government policies] and your words make us feel relieved." There is really significant tension among people caused by being silent. It is the same with the business world. Problems have been piling up. People are unable to voice their problems due to various concerns. As an institution that talks about these problems and frequently reflects the feelings of the business world, we receive a significant number of messages of support and appreciation.

In economics it is said the most dangerous thing is a customer who does not speak. You say, "A customer who does not speak is a lost customer." We have become a country of people who keep silent.

Yes, it is desirable for a customer to speak out. It is the same for the public. The problems of the business world are like bales of cotton burning from the inside out. There is a fire, but it is not seen from the outside. When these problems grow too big, it becomes impossible to hide them. They will appear in front of us as economic problems. We are now giving an early warning.

Have you discussed these issues with other business organizations -- the Turkish Industrialists and Businessmen's Association (TÜSİAD) and the Independent Industrialists and Businessmen's Association (MÜSİAD)?

We have not discussed the issue of determining a joint position to take, but TUSKON has already had contact with every part of the society of businessmen and continues to do so. For instance, I was at a breakfast with the presidents of MÜSİAD and the Turkish Exporters Assembly (TİM) before I came here for the interview. When we come together, we talk about the problems of the sector, but we do not talk of taking a joint position because every institution is independent and each has its own priorities, style and strategy.

You travel all around the country and TUSKON members give you information. How huge is the pressure on you?

They [government officials] went to a butcher and harassed him, asking why he buys a certain paper and not another one. This is a real incident; I was informed about it. Certainly, the case is much larger than this. For instance, an official from the Finance Ministry goes to a business place and asks about the records of expenditures and revenues. Then, he or she says, "If you drop your membership in TUSKON or another [Hizmet-affiliated] organization, I will give your records back." In one place, they inspected 81 business people, 80 of whom were our members. They returned the records of the one, saying that he was mistakenly included in the inspection.

What can TUSKON members do in such a situation?

They will try to get the rights [they are entitled to], and mostly will do so under the auspices of an organization. There are now preparations by organizations our members are affiliated with to take legal action against officials who give them treatment like this, because this is abuse of public duty and it runs contrary to many articles of the Constitution, particularly the 10th and 25th articles. The Constitution says everyone is equal before the law regardless of their political views, beliefs, religion, sect and other features. The Constitution also says nobody shall be condemned or accused for their ideas and views. This is what is being done today. Constitutional crimes are being obviously committed. The order for this is being given by the person at the top of the state. And they [the finance officials] are saying, and there are witnesses to this, that, "These lists [of the business places that will be sanctioned] are prepared by a group of 40 people at the AK Party headquarters and sent to us." They can say this without responsibility.

What have your members been facing since the Dec. 17 graft probe?

Fairs organized by TUSKON abroad are being cancelled. The Economy Ministry had opened a tender for the organization of fairs, mostly in foreign markets. Three organizations won this tender. TUSKON gained the right to organize 14 fairs abroad as a result of this tender. The ministry later cancelled this tender and granted the right to hold these fairs to two other organizations. They did not allow TUSKON to hold the fairs.

How do they explain this to you?

They change the rules, the regulations and do it.

This reminds one of the practices of a tribal state...

We always defend the idea that Turkey is not a tribal state but practices both in national politics and the economic administration, in addition to in the area of foreign policy look like those of a tribal state.

What else have your members faced?

They are not allowed to take part in tenders. They are deprived of their payments or they face delays. There is also the issue of the cancellation of licenses they had been granted in the sectors of mining, energy, construction etc. They also face unnecessary obstacles when they want to do business.

Much has been written about the profiling of 100,000 small and medium-sized enterprises (SMEs).

The Turkish Union of Chambers and Commodity Exchanges (TOBB) has around 800,000 active, registered members; 100,000 makes up 15 percent of this organization. When so much pressure is being imposed on such a large business circle, it is very disturbing that no voice is raised from the trade and commerce chambers and TOBB. These people have been paying their subscription fees regularly for years, they fulfill their duties. It is very natural for the members to expect to receive services from these organizations and have their rights defended. Unfortunately, there is not the slightest reaction from the heads of the unions and similar organizations these members have voted for in the wake of the policies of heavy tyranny, pressure, intimidation and discrimination faced by these people. This is very unnerving.

You established World Trade Bridges with various countries and continents. What is their situation now?

They continue to exist. The Turkish Foreign Ministry has made attempts to prevent buyers from being involved in the trade bridges. This is like Turkey shooting itself in the foot. I mean, some Turkish embassies create problems for investors who want to receive visas, and as a reason, they say the electronic system is down. Does this befit a country like Turkey? This is very humiliating for a country like Turkey and it tarnishes the image of this country.

It is said that there is a direct relationship between democracy and economic development. How can this relationship be explained?

The supremacy of law and its functionality is very important here. Investors would like to believe that their rights will be protected and will not be violated. They make more investments in countries where they believe there is the supremacy and functionality of law. They prefer to make investments in countries where laws are not frequently changed and there are not unwritten rules. Now, there are many arbitrary and unwritten practices in Turkey. Beyond this, there are violations of the Constitution, as we have just mentioned. Turkey is now in a situation in which the Constitution is being violated at the top level. In such a place, people do not think their investments will be safe and Turkey is not the only place in the world where one can make investments. There are many alternatives. This is the main reason for the lack of foreign investors over the past years, in particular for industries that are starting from scratch.

Foreign investors no longer show interest in new construction projects which have begun or are about to begin. Why not? Because they see that even if a construction project has already begun, the license can be cancelled. Turkey is the only country where a license can be cancelled one or two years after the construction began. I have not heard of a second country like this. Licenses are granted for construction after thorough examinations throughout the world and depend on compliance with laws, plans and rules. After the license is granted, a construction project begins.

Turkey now has a president who would be happy if TUSKON members went bankrupt. Does this not intimidate you?

No, this does not intimidate us; it saddens us on Turkey's behalf. It will be Turkey that will lose out in such a situation. TUSKON members will not be bankrupted by this, let me say. In the worst case scenario, they will stop growing or stop making new investments. Then, they may begin to invest their money in real estate and say: "It is enough that I provided employment to the people in this country. My contribution has been ignored." I mean, such an attitude discourages people from producing and investing, providing employment and exporting products.

Do you have a plan B in the wake of all these things?

Our plan is to give more services to our members. The circle around Turkey is getting smaller every day. As a country, we have been in very hot water. We are located in a very active geography where the balances are constantly changing. The business environment becomes more difficult with every passing day. In this atmosphere, we have an obligation to create new markets. Now, our share of Middle Eastern markets in exports is falling rapidly. If we take a look at the figures, we see that exports to the Middle East and Near East were 12.5 percent of our total exports in 2004. It was 27.5 percent in 2012 and 23.4 percent in 2013. Since the beginning of this year, there has been a further fall of 4.5 percent.

What are the consequences of this economic crisis for the ordinary citizen?

We need to explain this first. There is not a crisis in Turkey at the moment. But if the necessary measures are not taken, Turkey may get into trouble if an incident is triggered by a domestic or foreign cause, or an economic and international reason. Because of the increasing tension in the business world, there is intense meddling in the free market. There are efforts to sink private companies that are open to the public and there are interventions in them. All of these are a cause and they have effects on the business world to a certain extent. The biggest effect is that they discourage people from making investments and create the impression that Turkey is no longer a safe country for foreign investors. I regret having to say this, but the rule of law is being seriously damaged in Turkey. There is a big increase in corruption and those involved in the corruption are not punished; they are rewarded and those who try to stop corruption are being punished. These are the factors that shake investors' confidence in Turkey's investment environment. This is an extensively debated issue in the world. We have an economy where the growth is dependent on hot money [flow of capital from one country to another in order to earn a short-term profit on interest rate differences] and needs around $5 billion in hot money every month and will get into trouble if this money does not come for two months. I mean we have an economy that is very dependent.

There is already a problem concerning the current account deficit...

Yes, there are no indications that it will be defeated anytime soon either. It has been reduced, but now the 12-month-long current account deficit is $52 billion. This poses a very great risk.

Are there newcomers to TUSKON?

Yes, certainly.

What about those who quit?

There are people who come and go, but there is not much change in the overall balance. Most of those who quit said, "Our heart is with you but I have to quit for family reasons, business partners or they said things like, ‘My brother-in-law will be elected a deputy, or my father-in-law is a mayor in this place.'" They say they need to part ways with us for some time and ask for some tolerance. Our hearts continue to be united with most of these people.

What do you understand by Erdoğan's frequently mentioned concept of the "New Turkey?"

The New Turkey is a place where corruption and nepotism have reached their peak levels. Neither is punished; those involved in corruption are rewarded, social tension has reached a maximum and people are subject to discrimination and humiliation and punished based on their political or sectarian views. It is a Turkey where the Constitution and laws have been shelved and where arbitrary administration rules. It is a Turkey which no longer has any friends in its foreign relations; it is protectionist. The New Turkey is completely the old Turkey. This is the picture today.

There is an atmosphere in Turkey that is similar to the atmosphere of the Feb. 28, 1997 military coup. At that time, there were many fears about religious fundamentalism and $22 billion evaporated behind the scenes. Now, the so-called “parallel structure” has replaced religious fundamentalism and the country continues to be burgled. There is a graver situation today than there was in 1997. Things have not changed, only the actors have changed. Only the individuals who steal and tyrannize others have changed. There is nothing that has changed on the part of the state. The state has returned to its default settings. The AK Party has replaced the Kemalist parties of the past.

Published on Today's Zaman, 06 September 2014, Saturday