Crony Capitalism In Turkey

One does not need to be an economics expert to understand that Turkey is increasingly moving away from a free market economy.

By this I am not referring to sophisticated subjects like how independent the Central Bank is when it comes to monetary policies. Whenever Prime Minister Erdoğan talks about the “interest lobby,” something happens to interest rates. But these kinds of things are not the subject of this article.

We have much more fundamental problems than the autonomy of the Central Bank. These problems are related to the unbelievably favorable or unfavorable conditions created for companies, conditions whose favorability is dependent upon the closeness of a given company to government circles and, especially, to Prime Minister Erdoğan.

If you are close to the government nowadays, you receive favorable treatment at all levels, from easy access to government funding to tax exemptions. If you are on the “black list,” you benefit from neither public funds nor tax exemptions and, very much the opposite, you are subjected to endless waves of tax inspections. What is most surprising is this: None of this is secret. Everyone knows it. These relationships are all very obvious and they operate at quite a transparent level.

The government, for example, is openly and clearly trying to push Bank Asya to bankruptcy, a bank that is close to Gülen movement. When Erdoğan targeted them, all of the public banks withdrew their money from the bank overnight and the bank came close to the edge of bankruptcy. Many businessmen invested their money to save the bank. Now it is being subjected to endless waves of inspections by the Finance Ministry.

All companies whose owners are critical of the government in any way will soon see tax inspectors at their doors.

While newspapers that are close to the government easily receive millions and millions of lira in credit from public banks and publish the advertisements of public institutions, the newspapers that are critical of the government do not receive public credit, do not get advertising deals from public institutions and are under heavy financial scrutiny on the part of governmental institutions. Every single day we hear news or rumors about the imposition of heavy punitive financial sanctions on them.

News is being circulated about a unit that has been established within the structure of the Finance Ministry to inspect all financial activities of companies who are deemed hostile to the government or somehow close to the Gülen movement.

Do I need to mention that no one can win public tenders without having good relations with Tayyip Erdoğan, our newly elected president? If the government had not thrown an atomic bomb on the graft probe (all police officers and prosecutors that investigated the corruption allegations have in some way or another been condemned to professional death) we would have a much clearer picture of how this reward-punishment system works in practice.

I think some economists call what I have been trying to describe crony capitalism. There must be degrees of it. I believe we have a severe form of crony capitalism, and it is getting worse with every passing day.

I therefore have a very hard time understanding how on earth some liberals can support these government policies, which draw a deadly contradiction with the fundamental values of the free market and free entrepreneurship.

ORHAN KEMAL CENGİZ (Cihan/Today's Zaman)