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November 1, 2006
Islamocapitalism in Office: Turkey's AKP
In a Wall Street Journal piece titled "Turkish Tiger: Freedom thrives even under an "Islamist" government," Matthew Kaminski, the editorial page editor of the newspaper, evaluates the flourishing free market economy under Turkey's Muslim-minded government led by the Justice and Development Party (AKP). That's really an interesting phenomenon. At a time when Turkey's die-hard secularist generals declare "global capitalism" as a major threat to the country, the country's devout Muslim politicians are embracing capitalism. AKP's leader and Turkey Prime Minister Tayyip Erdogan repeatedly calls foreigners — including Israeli Jews — to invest in the fast-growing Turkish economy. According to Mr. Kaminski,
To the question of whether Islam hinders development, Mr. Erdogan offers one answer: On the economy this "Islamist" government has stuck to the market playbook. The budget deficit is 1% of GDP, down from 16% in 2001; the debt-to-GDP ratio 60%, compared with 110% five years ago. Inflation is creeping up, to 10%, after hot money fled emerging markets early this summer and the lira fell 22% against the dollar at one point; but Turkey weathered that brief storm well. The Islamists have embarked on the most far-reaching privatization program in Turkish history, selling off telephone companies, petrochemical plants and steel makers and lowering barriers to foreign investment — with little opposition. A vestige of state control, dating back to Ottoman times, is its ownership of large tracts of land, but that, too, is on the agenda.As mayor of Istanbul, Mr. Erdogan worked closely with and gained the trust of the city's business class. He was also, unusually for a Turkish politician, a businessman himself, having run a food-distribution franchise. He came into office "with a free-enterprise mindset," says Mr. Esgin, who's not otherwise complimentary. "This is the most economically liberal government Turkey has had."
So, if you think that Muslim countries are modernized by their secularists but held back by their faithful, think again. Islam, like any other major religion, works in mysterious ways.
Posted by Mustafa Akyol at November 1, 2006 2:21 AM
Dear Mr. Akyol,
I would like to think that things in Turkey are getting better and in some ways this is definitely true (for example much of the bureacracy involved with starting a business has been taken out of the system) but there is another, more negative, side to this whole picture, which as a Turkish citizen you may not be aware of. Living here as a foreigner is not nearly as easy as the news article makes out. Let me give you some examples.
1) In 2003 there was a law passed which eased restrictions on purchases of land in Turkey by foreigners. If I am not mistaken this law was actually formulated by the previous government as part of the effort to conform with EU standards but it was revoked in 2004 and an equally restrictive law was put in place. If someone from outside the country wants to come and purchase land outside of a city, without zoning, then as a foreigner they cannot. Having been raised on a farm, one of my dreams was to buy a place in the country (here in Turkey since this is where my business is located) but now this is impossible. What can be wrong with a foreigner like myself wanting to own 20 dönüm in the country, keep a horse (for my 4 children) and plant an apple orchard (because I love agriculture)? To overcome the obstacles, I have applied twice for citizenship and both times have been rejected because I haven't lived here long enough!!! I have been here 10 years. I visit the States to see my family ONCE every two or 2.5 years and have invested my entire savings into a company in this country. I employ anywhere from 5-8 people and yet...
I guess the purpose of the law is to encourage foreign investment. Yani send your money, start companies, but don't live here?!? That is bizarre to me. I don't think there are so many restrictions on Turks buying property in America.
2) As a foreigner, one can easily set up a company but getting permission to work IN HIS OWN COMPANY may not be so easy:-) It seems like a no-brainer but my partner in the translation company I established, an American with a Master's degree in Computer Science, has been denied permission to work in HIS OWN COMPANY now 4 times and this has been dragging on for 1,5 years. This is not an isolated incident either. I have heard similar stories from many people. The distrust of foreigners is growing.
I think the market potential here in Turkey is drawing investors, especially government bonds paying 17-20% interest on a currency that is finally stabilized against other currencies BUT I still think there is prejudice built into the system.
Best Regards,
Posted by: Robert at November 8, 2006 9:07 PM