Special interest groups in Turkey

Perhaps Prime Minister Recep Tayyip Erdoğan did not articulate the concept very well when he said that an “interest rate lobby” was fuelling the escalation of what was originally a small green protest to preserve Gezi Park in the Taksim district of İstanbul into nationwide protests. He probably concluded that the unexpected escalation of the protests is part of a covert attempt to take down his popular ruling Justice and Development Party (AK Party) government. Erdoğan was brought up in a political environment that is prone to conspiracy theories. After all, he was the mayor of İstanbul when the İstanbul-based Turkish Industrialists and Businessmen’s Association (TÜSİAD), Turkey’s elite and richest business club, supported the Feb. 28, 1997 post-modern military coup that ousted the Welfare Party (RP), to which he belonged, from power. According to an indictment accepted by the Ankara 13th High Criminal Court last month, it was a military junta that was behind the trial and four-month imprisonment of Erdoğan, who was convicted of Islamist sedition for reading a poem at a political rally.

From his jail cell, Erdoğan watched how fat cats made money off the back of skyrocketing interest rates amid the political uncertainty while all the state-owned banks were left to the mercy of the pro-coup lobby that embezzled some $60 billion in national assets. It sent the national economy on a downward spiral and collapsed the banking industry, triggering one of the worst economic crises in the nation’s history. The state paid billions of dollars to cover the deficits of bankrupted banks, while the Treasury had to take out foreign loans with exorbitantly high interest rates to fund these deficits. A study conducted by the Economy Ministry found that the state had to pay a total of $142.8 billion to compensate for the losses the postmodern coup had left behind. During the crisis, the fat cats had gotten fatter.

We do not know yet what evidence, if any, Erdoğan has against some businesses and banks that are allegedly involved in fanning the Gezi Park protests. But there is no doubt he is trying to make a public case by sparking people’s memories of those dark days of the ’90s and trying to link them to the events that we have seen in the last two weeks.

That brings us to another key question that we are facing in Turkish politics today: the lack of transparency and the absence of a legislative framework under which special interest groups operate and pursue their agenda. In every democratic society there are special interest groups that are poised to advance their agenda using various instruments to influence the legislative process and public policy. This is no different from that seen in almost every election campaign in the US where politicians from both the Republican and Democrat ranks vow to vigorously fight to protect the interests of working men and women against the encroachment of special interest groups. Yet they fail to deliver because of the quid pro quo benefits that politicians receive in return for favors. As Turkey declared its intention to address its democratic shortcomings, it is now time to develop a productive political environment whereby special interest groups, pressure groups, public advocacy organizations and others can lobby without being accused of engaging in illicit, unethical and subversive actions.

Having special interest groups is not necessarily as bad as Erdoğan is trying to portray, as long as you have the legal instruments and regulatory bodies in place to check the power of overzealous lobbyists and punish those who cross the legal and criminal lines. Portfolio investors and stock market dealers are primarily motivated to increase their profits and avoid risks that may land them in the red on their balance sheets. They do not care about the overall well being of the economy nor the concerns expressed by the government. They are profit-seekers and do not mind taking their businesses elsewhere, though it may cost them to exit from the stock market of a given country.

The same is true for the business lobby in Turkey. TÜSİAD has tried to preserve the interests of its own members using any and every means necessary, which may border on criminality as was the case in 1997. The only question for some members of TÜSİAD is whether they were actively and deliberately involved in fomenting a chaotic environment that was conducive to a military takeover. The fat cats in TÜSİAD also lobbied unsuccessfully against the customs union agreement with the EU in the mid-’90s because they were making huge profits from uncompetitive businesses that were heavily protected by high tariffs and customs barriers. They supported undemocratic forces and sided with the military on every interference and interruption of democratic governance in the country until 2007 because their interests were advanced under the military-dominated political landscape in Turkey. But now the landscape has changed partly thanks to sweeping EU-oriented reforms made in the last decade and the assertion of civilian supremacy over military affairs.

The difference between Turkey and those who regulate lobbying like the US, Canada and the EU is that the very concept of lobbying and special interest groups has some negative perception and as such they are not regulated by law. That means, however, that special interest groups operate under the radar, dealing a blow to transparency and accountability in politics. The AK Party, supported by the majority of the electorate, fought hard against these groups in the early stages and actually prevailed over them to some extent. The special interest groups in a traditional sense have lost their unhindered access to power in the state, and their privileges were axed significantly. They did not disappear, however, and instead boosted their profits under the stable political and economic environment, fueled by a spike in consumer demand and the diversification of Turkish export markets.

In the meantime, however, the AK Party has created its own special interest constituency that tapped into lucrative state contracts and public tenders in a booming economy. Hence we have ended up with more or less the same problem in Turkey even though the situation is not comparable to previous periods where the rule of law was discarded and fundamental human rights were repressed. What the AK Party government should have done was adopt a series of regulations to level the playing field for everyone and strengthen the framework for free and fair competition under which interest and advocacy groups could vie for influence. Be it in education, health, industry, banking or finance, the government should avoid being seen as favoring one group at the expense of another. In other words, the system must be democratic enough to ensure that everyone gets a fair shot at getting what they want, changes in government notwithstanding.

The lack of a lobbying law regulating the modus operandi of special interest groups makes the bleak outlook in that respect worse. There is nothing wrong with members of society organizing and lobbying for their legitimate interests and seeking access to the law-making and decision-making processes. In a way, society has brought about a new set of tools for effective checks and balances against the power of the government. Otherwise, unregulated or secret lobbying may be a danger and can undermine democratic principles and good governance, as we saw during the military interventions in Turkey. It also wrongly places the blame on some interest groups that have nothing to do with a specific policy that the government is pursuing but are finding it difficult to make their case under the not-very-transparent political system. A law on lobbying would reveal the identities of special interest groups as well as the issue-specific positions they hold, removing the shadows cast over various groups in Turkey. Overall, this would help to contribute the citizens’ confidence in the political system.

In Parliament we know that the drug industry lobby, the corporate lobby and the lawyers’ lobby have tremendous influence in drafting bills and proposing amendments. Since there is no rule banning officials from joining these interests groups for a certain amount of time after leaving office, we often see senior bureaucrats or former parliamentarians working on behalf of these groups with large salaries. Previously, we used to see former generals joining the board of directors of major corporations that wanted to be on good terms with the then-powerful military. Today, we see businesses hiring people who have close ties to the ruling party to keep their interests from being damaged. Since democratic traditions are not deeply rooted in Turkey, adopting lobbying rules that are fair, equal and transparent becomes much more important.

The citizens of this country are entitled to know what special interest groups are up to on issues that impact everybody just as much as what their government is doing. This may also help to alleviate the public’s concerns over allegations of corruption, nepotism, tender-rigging, illegal campaign financing and favoritism. Otherwise the growing feeling of being disenfranchised and marginalized among citizens will deal a major blow to democracy, as was seen in the waves of protest over Gezi Park.

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