Yaşar: TÜSİAD, TOBB cannot survive if reform package approved

    Yaşar’s words stemmed from TÜSİAD’s refusal to lend support to a set of constitutional amendments that will be submitted to a referendum in a week. The public referendum slated for Sept. 12 has turned into a test of consistency for TÜSİAD, as the association has remained silent about long-awaited changes to the current Constitution, which was drafted under military rule established after a violent coup in 1980.

Many other business associations and trade chambers have already acknowledged how important the amendments will be for Turkey once they are approved.

One of those changes concerns freedom of travel for businessmen who will no longer be banned from traveling abroad due to tax debts. Currently, a revenue officer can write to the immigration office without any judicial warrant and ask for a ban on a businessperson’s departure from the country if he or she has a tax debt.

Yaşar discussed another benefit of the package, again from the business point of view.

“If the reform package is approved, the judiciary will no longer be able to check the benefits of investments for society. This duty, which should not fall upon the judiciary, will be under the jurisdiction of economists,” he said.

One example Yaşar gives concerns disadvantages of the old system in which the judiciary reviewed development agencies, obstructing their establishment.

“Many development agencies could have been operational in 2006, but the Republican People’s Party [CHP] took the law regarding their establishment to the Constitutional Court, which overruled it because their board did not include a governor of the province in which they are supposed to be established,” he said.

Yaşar’s reference was to the top court’s practice of exceeding its authority to review the substance of a law although it is not supposed to do so.

Because of that rule, Yaşar said the eastern province of Van was not able to implement its solar power projects although the city has about 9,000 megawatts of solar energy generating capacity.

But what made TÜSİAD refrain from voicing support for a reform package expected to bring such positive changes that it would contribute to a more business-friendly environment? It is about how top business circles view themselves in the political system, Yaşar said.

According to Yaşar, TÜSİAD desired to create a “budgetary tutelage” on the government that rejected a stand-by deal with the International Monetary Fund (IMF) despite TÜSİAD’s lengthy attempts to convince the government to forge a deal with the body.

“The pro-status quo forces in TÜSİAD have long been benefiting from government protection and subsidies in addition to customs protections as opposed to Anatolian capital, which has become increasingly competitive since the 1980s,” he said, adding that many businesses that belong to TÜSİAD claimed that they would have to close their factories if the government did not get $35 billion from the IMF, but their prediction did not come true and they survived.

The government was right not to make a deal with the IMF that would have given the IMF great control over the government’s public spending if it awarded a loan to Turkey, Yaşar pointed out, because Turkey’s short-term debt was only $3 billion and a stand-by deal was not actually a “matter of life and death” for the Turkish economy.

“On the contrary, Anatolian businessmen do not want money from the IMF but desire the elimination of the tutelage system,” Yaşar said. “If TÜSİAD does not integrate with Anatolian capital and does not restructure itself, it will perish.”

The Turkish Union of Chambers and Commodity Exchanges (TOBB) is facing a somewhat similar controversy to TÜSİAD as some of their members voiced support for the reform package.

Following a meeting with Prime Minister Recep Tayyip Erdoğan, TOBB Chairman Rıfat Hisarcıklıoğlu said that they are in favor of the changes but will not announce an official stance on the issue. Many leading TÜSİAD, TOBB and İstanbul Chamber of Industry (İSO) members have criticized the “unusual” silence of their organizations and announced they will endorse the package on Sept. 12. This standpoint is a result of a decision made by TOBB in a bid to preserve a balance between its 1.2 million members, Hisarcıklıoğlu said.

“If the reform package is approved, TOBB will not be able to survive as it is, either,” Yaşar said.

TOBB is already having difficulties as there are revelations that it had $3 million it did not use for its members when they needed it most during the US-originated financial crisis.

“They need to be accountable,” Yaşar said, adding that their members started to ask what TOBB did with their membership fees.

‘Goverment should hear voices of people in Van’ 

Yaşar points out that Van is suitable for agriculture, husbandry, tourism, electric generation and international trade as it has borders with Iran and Armenia. “Van’s Kapıköy gate, which is located at the Iranian border, should be opened to motor traffic as soon as possible. There is currently only rail traffic. If motor traffic starts, the border trade will benefit the region. Although Turkey authorized the opening of motor traffic, the Iranian side delayed the process. … People of Van want the border gate, Alican, with Armenia opened even if it is for short-term visits such as the historic religious service on Sept. 19 at the Holy Cross Church on the Island of Akdamar. If the border gate is closed, Armenians will have to travel 840 kilometers via Georgia to reach Van, although it is only 240 kilometers away from Armenia via the Alican border gate. People of Van will open their homes to Armenians who are expected to visit the area soon.”

DPT: underground economy 40 percent 

Turkish Finance Minister Mehmet Şimşek recently said the informal economy has become an unsustainable burden for Turkey and the country must get rid of its high rate of unregistered economic activity as the country is no longer able to live with this problem.

Süleyman Yaşar, who recently published the book “Deep Economy, Republic’s Financial Codes,” points out that the State Planning Organization (DPT) estimates that the unregistered economy is about 40 percent of total economic activity. According to a survey carried out by the Turkish Confederation of Employers’ Unions (TİSK) in 2003, Turkey’s unregistered economy increased from 36 percent of the registered economy in 1985 to 66 percent in 2003. According to a 2004 Turkish Central Bank study, the unregistered economy was between 16 to 50 percent of total economic activity, with 52 percent of total employment and 37 percent of private sector employment, excluding agriculture, estimated to be unregistered. A report released by the trade union Türk-İş in 2005 claimed that over half of the Turkish labor force was engaged in the unregistered economy.

“Turkey is trying to fight it. First of all, capital that is sent abroad by businessmen to save taxes should come back to Turkey. Now cross-checking is easier as traffic records, tax records and deed records are online. Most importantly, global forces encourage control over the unregistered economy because it is seen to be related to many undesired activities like terrorism and financial crises,” Yaşar said.

‘Turkey not damaged by global crisis’ 

Yaşar said while there were many European states that could not pay workers’ salaries and there were people in the United States who could not pay their mortgages, in Turkey banks were operational and people received their salaries.

“We can confidently say that Turkey was not damaged by the global financial crisis. Public debts are proportionally low against the national income, and the budgetary deficit is around 4.5 percent of the budget. It has been hard to fix the current account deficit because of the private sector’s back-to-back loans. The economic growth of Turkey is healthy. In the first quarter of the year, it has grown 11.7 percent. And it is expected to grow by 10 percent in the first half of the year. When it comes to the question of a second dip, I don’t expect it as the US secretary of the treasury has given positive signals about the American economy. The German economy is also in good standing. And the economies of China, India, Brazil and Russia are showing growth. Therefore, a second dip is unlikely, although there could be short-term regressions.”