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THE ROLE OF THE STATE IN THE NEOLIBERAL RESTRUCTURING IN TURKEY -1-
Opinion(A. H. Yalaz)

Contents

Preface
Introduction

Chapter 1
Theoretical framework and methodology
1.1. Theoretical framework
1.2. Methodology

Chapter 2
Legacy of the Ottoman Empire and the emergence of state capitalism
2.1. The economic situation after the First World War and the national liberation war
2.2. The economic strategy in the 1920s: promotion of private capitalist sector
2.3. The emergence of state-led import-substitution industrialisation

Chapter 3
Socio-economic and political developments after the Second World War
3.1. The economic situation after the Second World War
3.2. Political developments immediately after the war
3.3. Socio-economic and political changes in the 1950s
3.4. Climax of the import-substitution industrialisation

Chapter 4
Neo-liberal global restructuring and crisis in Turkey
4.1. Crisis and restructuring the world economy
4.2. Crisis of the import-substitution industrialisation strategy in Turkey

Chapter 5
The neo-liberal restructuring of the economy of Turkey
5.1. A comprehensive economic package: The 24 January 1980 Decisions
5.2. The military dictatorship and political restructuring
5.3. Political developments and interest representation after 1983
5.4. Domestic and global cultural environment and neo-liberal restructuring
5.5. Neo-liberal ‘reforms’ in the 1980s and 1990s

Conclusion
Bibliography



Introduction

The late 1970s were the historical turning point regarding the attempts by the transnational corporations and the state in the core capitalist countries to restructure the world economy. Fordism or mass production as the dominant mode of capital accumulation was in crisis. The late 1970s marked the beginning of a new period in order to deal with the severe economic crisis: restructuring the capitalist world economy according to the principles of the so-called neo-liberalism.

The worldwide economic crisis and the crisis of the import-substitution industrialisation (ISI) have forced the ruling fractions of capital (industrial capital and bank or financial capital are closely interwoven in Turkey) and the state to restructure the already dependent economy of Turkey. In the 1980s and 1990s, Turkey’s economy has undergone profound changes. Until the late 1970s, ISI (private as well as state capitalist) was the dominant mode of capital accumulation in Turkey. Because of the developments in the world economy in general and the crisis of this economic strategy in particular, the ruling fractions of capital and the Turkish state were compelled to implement the International Monetary Funds (IMF)-imposed so-called ‘stabilisation program’ in January 1980. This marked the beginning of the process of transformation of the economic strategy from ISI to export-oriented industrialisation (EOI) or neo-liberal export model in Turkey. The neo-liberal restructuring of the economy of Turkey is an ongoing process with its economic, political, social and cultural dimensions. Alongside such measures as economic liberalisation and deregulation, privatisation or denationalisation has been regarded by the economic and political rulers as a remedy for the problems of Turkey’s economy.

The Turkish state, especially those state institutions that are controlled by neo-liberal representatives of the internal as well as international big capital, played a crucial role in the so-called neo-liberal economic restructuring. In this study I investigate the role played by the state in this process. Why is the state’s role in the neo-liberal restructuring process in general and the transition from ISI to EOI in particular a relevant research subject? I am of the opinion that having a clear insight into the role of the state in the economic life of a country is essential for a proper understanding of the transition from one economic strategy to another. A good understanding of the economic as well as general functions of the state is also of vital importance in understanding the economic and political power relations.

The state is an economic actor as well as a political one and plays an indispensable role in the economic life of society. Maintaining and protecting the capitalist ownership of the means of production or the bourgeois relations of ownership in general is the most fundamental task of the capitalist state. The state functions, inter alia, as a promoter and protector of the capitalist system. It plays an indispensable role in the allocation of the resources. Direct state involvement in the processes of capital accumulation, production and distribution is indispensable in comparison with, for example, the state’s role in the highly advanced capitalist countries. The state, as the most important agent of subjective restructuring , has been at the centre stage of the neo-liberal restructuring process. Not only has the dominant mode of capital accumulation been transformed, but also the restructuring of the state has taken place. The changing role of the state has far-reaching consequences with regard to the economic, social and political relations in Turkey. Therefore, without a proper understanding of the state’s intervention in the economic system, changes in the economic model in general and in the mode of capital accumulation in particular could not be properly investigated, analysed and understood. By this research I aim at finding out what role the state has been playing in the restructuring process from the import-substitution mode of capital accumulation to export-oriented mode of capital accumulation in Turkey and what relationships it has with the international economic and financial organisations in the age of the so-called neo-liberalism.

Investigating the role of the state in the restructuring process is also socially significant. The Turkish state and the state enterprises have always played a prominent, active and crucial role in the economic life of Turkey concerning distribution and redistribution of the national income among different social classes and strata, employment, social security, etc. since the 1930s.

Besides, Turkey is regarded as an emerging market economy and an important regional economic power and a model of the state-led economic growth strategy and a regional pioneer in adopting the transition from ISI to the export-oriented neo-liberal economic strategy in the Middle East, the Caucasus and the Central Asia. It has served as a kind of laboratory for the so-called structural economic changes of international capital, especially the financial fraction of it and its international organisational representatives such as the IMF and the World Bank (WB) since the end of the 1970s. The top state officials in the 1980s and the 1990s have had a close relationship with those organisations and the economic policies of the Turkish state have basically been determined by them. For these reasons studying the above-mentioned restructuring process in Turkey would also be very helpful in order to understand the economic changes in those countries with strong state capitalist sector in relation to private capitalist sector.

The focus of my research will be the state’s role in the neo-liberal restructuring of the economy of Turkey, particularly the transition from the ISI strategy to the EOI strategy. On the basis of preceding I formulate the following central research question: What role has the state been playing in the neo-liberal restructuring process of the economy of Turkey since 1980?

The central research question is accompanied by a couple of sub-questions each of which will be dealt with in separate chapters and sub-chapters. The research is mainly limited to an investigation of the developments since January 1980. Since a historical background is indispensable in order to put the developments into a historical perspective, the main body of the research is to be preceded by a historical account of the emergence and development of the ISI strategy.

Chapter 1 deals with the theoretical framework within which this study is conducted and the methodology.

Chapter 2 examines the legacy of dependent incorporation of the Ottoman Empire into the capitalist world economy and the further incorporation of Turkey after the disintegration of the Empire following the emergence of the Turkish ‘nation-state’. Furthermore, the emergence of ISI strategy based on the state sector is investigated. This chapter seeks answers to the following sub-questions: How did the legacy of the Ottoman Empire affect the future developments in Turkey? Which internal and international factors did lead to the emergence of a state-led import-substitution industrialisation in the 1930s?

Chapter 3 deals with the socio-economic and political changes after World War II (WW II) till the mid-1970s. The sub-question this chapter searches an answer for is: What were the internal and international factors after WW II that led to the emergence of a new stage of ISI based on the private sector and what role did the state play in this process?

Chapter 4 investigates the neo-liberal global restructuring and crisis of ISI in Turkey. This chapter seeks an answer to the following sub-question: What were the internal and international factors that made the neo-liberal restructuring of the economic and political structures imperative?

Chapter 5 is about the process of neo-liberal restructuring of the economic and political structures in Turkey. Without losing sight of the strategic relationships between labour, capital and the capitalist state, this chapter attempts to integrate the economic, political and cultural aspects of the whole social formation in their interaction with each other as well as with the ongoing neo-liberal restructuring of the world economy and the global cultural practices. This chapter aims at providing an answer to the following sub-question: How has the process of neo-liberal restructuring in Turkey developed?

In Conclusion I summarise the findings of the research and answer the sub-questions and the central research question.

Read more... Chapter 1


1 The term ‘subjective restructuring’ refers to conscious regulation of the economic relationships between human beings. In sub-chapter 4.1, I shall deal with the terms objective and subjective restructuring in detail.