The Economic Transformation of Turkey: Neoliberalism and State Intervention 9780755608683, 9781780768830

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To my family

ACKNOWLEDGMENTS

This book is the product of my long, continuous research on neoliberalism, globalization, and the Turkish political economy. Its groundwork was laid in my doctoral dissertation. Its ideas were further explored and developed through more research, which led to the publication of a series of articles on the Turkish political economy. The book offers a theoretically grounded analysis of the neoliberal restructuring of the Turkish economy from the perspective of state – labour relations. I am grateful to the Turkish labour union leaders, business associations, and state officials who kindly agreed to be interviewed for my research. My sincere thanks are also due to the Turkish labour union confederations DISK, Hak-Is and Tu¨rk-Is for providing me their published and unpublished reports and documents. Finally, I thank my family for their support and love. I owe the greatest intellectual debt to my father who taught me the value of inquisitive and independent mind. ¨ nder, and my I dedicate this book to my parents Hu¨seyin and Necla O daughter Alise Hewson, who is growing into a bright scholar. Nilgu¨n O¨nder University of Regina

LIST OF ABBREVIATIONS

AAFLI AFL-CIO BRSA CACC DISK DLP EBF EC ECOSOC EEC ETUC EU FTZ GBI Hak-Is ICFTU IFIs ILO ILO FAC IMF ISI ITSs JDP

Asian-American Free Labour Institute American Federation of Labor and Congress of Industrial Organizations Banking Regulation and Supervision Agency Collective Agreement Coordination Committee Confederation of Revolutionary Trade Unions Democratic Left Party extra-budgetary fund European Community Economic and Social Council (of Turkey) European Economic Community European Trade Union Confederation European Union free-trade zone general budget institutions Confederation of Pro-Justice Trade Unions International Confederation of Free Trade Unions international financial institutions International Labour Organization Freedom of Association Committee International Monetary Fund import-substitution industrialization international trade secretariats Justice and Development Party

LIST

JP Kamu-Sen KESK MISK MP ¨ SIAD MU NAP NDP NSC NSP OECD PEA PP PSCACC RPP SAL SBA SDP SDPP SEEs SII SIS SMEs SPO TESK TISK TOBB TPP TSI TUI Tu¨rk-Is ¨ SIAD TU TZOB WCL WFTU WP

OF ABBREVIATIONS

xi

Justice Party Confederation of Public Employees’ Unions of Turkey Confederation of Public Employees’ Unions Confederation of Nationalist Trade Unions Motherland Party Association of Independent Industrialists and Businessmen Nationalist Action Party Nationalist Democracy Party National Security Council National Salvation Party Organization for Economic Cooperation and Development public employers’ association Populist Party Public Sector Collective Agreements Coordination Committee Republican People’s Party structural adjustment loan Supreme Board of Arbitration Social Democracy Party Social Democratic Populist Party state economic enterprises Social Insurance Institution State Institute of Statistics small and medium scale enterprises State Planning Organization Confederation of Shopkeepers and Artisans Confederation of Employers’ Associations of Turkey Union of the Chambers of Commerce, Industry and Commodity Exchanges of Turkey True Path Party Turkish Statistical Institute Trade Unions International Confederation of Trade Unions of Turkey Association of Turkish Industrialists and Businessmen Union of the Chambers of Agriculture World Confederation of Labour World Federation of Trade Unions Welfare Party

LIST OF TABLES

Table 1.1. Trade Union Membership 1950– 80 (in Thousands).

13

Table 2.1. Economic Composition of Total Public Expenditures as % of GNP (Old Series) 1980– 91. Sources: 1980– 3 from Orhan (1994, 86); 1984–8 from SPO (1989, 78); 1989–91 from 1992 Annual Programme.

48

Table 2.1.1. Total Interest Payments as % of GNP (Old Series). Source: Orhan (1994, 87).

49

Table 2.2. Consolidated Budget Expenditures (Yearly Realizations), Economic Distribution (%) and as % of GNP 1977 –91. Source: SPO (1996, Tables 5.6 and 5.7; 1998, Tables 5.6 and 5.7). 50 Table 2.3. Functional Distribution of Central Government Consolidated Budget Expenditures (%) 1978– 94. Source: IMF (1986, 1995).

53

Table 2.3.1. Consolidated Central Government Budget Expenditures on Education, Health, Social Security, and Welfare. Sources and Explanation of Data Used: Consolidated government budget expenditures are from IMF (1986, 1995). Note that the IMF does not give decimals after 1985. I used the SIS’s GNP series, as given in SPO (1996a), for calculating the ratios and the Istanbul Chamber of Commerce’s Wholesale Price Index for calculating real expenditures. The index is given in SPO (1996a, 89). 55

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Table 2.3.2. Total Public Health Spending as a Percentage of GNP (Current Prices). Source: SPO (2004, Table 8.19).

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57

Table 3.1. Employment in SEEs and General Budget Institutions in Relation to Total Civilian Employment and Entire Wage/Salary Earners (in Thousands). Sources: Turkish Statistical Institute (TSI, formerly State Institute of Statistics), Household Labour Force Surveys, www.turkstat.gov.tr; SPO, Main Economic Indicators (various issues), and SPO, Economic and Social Indicators 1950–98; SIS (1995, 307). Other years are from SIS (1987, 1998b) and TSI, Household Labour Force Surveys, www.turkstat. gov.tr; State Personnel Directorate (Devlet Personel Bas¸kanlıg˘ı), www.euygulama.dpb.gov.tr/Dpb.../Dpb_Istatistik.aspx. 68 Table 3.2. Wages (TL/Day) (Basic Wage þ Social Payments) According to Official and Employer Sources. Source: 1982– 9 from 1992 Annual Programme (1992, 342, Table 284); 1990–3 from SPO (1994, 231, Table 207).

74

Table 3.2.1. Official Real Wage Index (1981 ¼ 100). Source: 1995 Transition Programme (1994, 204).

75

Table 3.2.2. Wages TL/Day Petrol-Is Union Yearbook. Source: Petrol-Is (1995, 245). This wage series is based on data of the SPO, Prime Ministry, High Board of Auditors, and SII and pay raises agreed in collective labour contracts during the period. It uses the SIS consumer price index in calculating real wages.

76

Table 3.3. Share of Wages in Total Value Added in the Manufacturing Sector. Sources: 1979 from SIS (1991), as provided in Tu¨rk-Is (1992a, 20); the rest are from the SIS’s Statistic Indicators 1923– 91, as provided in Koray (1994, 152). 77 Table 3.3.1. Share of Wages in Value Added (%). Source: SIS (1995, Tables 2.18 and 2.19).

77

Table 3.4. Civil Servants’ Salaries (TL/Month) (Weighted Averages). Sources: 1978– 9 from Dereli and Zeytinoglu (1993, 697); 1980– 91 from 1992 Annual Programme (1992, 343); 1990–4 from SPO (1994, 232). 78

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Table 3.5. Employees in SEEs According to the Status of Employment. Source: Undersecretariat of Treasury (2013).

82

Table 8.1. Trade Union Membership 1984– 2009 (in Thousands). Sources: SPO, Main Economic Indicators (various issues), and SPO (1998, Table 8.7); TSI, Household Labour Force Surveys, www.turkstat.gov.tr.

186

Table 8.2. Number of Workers’ Unions and Employers’ Associations. Source: Ministry of Labour and Social Security, C¸alisma Hayati Istatistikleri (1996, 83, 86; 2009, 113).

188

Table 8.3. Organizational Structure of the Trade Union Movement in the 1970s. Source: SIS (1983, 207). 189 Table 8.4. Labour Confederations, Their Affiliates, and Membership. Source: Ministry of Labour and Social Security, C¸alisma Hayati Istatistikleri (1993, 1996, 1999, 2007, 2009, 2011). The table uses the July statistics.

191

Table 8.5.1. Lawful Strikes in the Public Sector 1984– 2011. Source: Ministry of Labour and Social Security, “Strikes and Lockouts” (Grev ve Lokavt Uygulamalari), http://www.csgb. gov.tr/csgbPortal/csgb.portal?page¼grevlokavt.

206

Table 8.5.2. Lawful Strikes in the Private Sector 1984–2011. Source: Ministry of Labour and Social Security, “Strikes and Lockouts” (Grev ve Lokavt Uygulamalari), http://www.csgb. gov.tr/csgbPortal/csgb.portal?page¼grevlokavt.

207

Table 10.1. Reported Labour Actions Other than Legal Strikes 1984–93. Source: Compiled and classified from Sen (1993), which provides a chronological list of labour actions in Turkey.

242

Table 10.2. Workers Participating in Labour Actions Other than Lawful Strikes. Source: Petrol-Is (1993, 279; 1995, 297).

244

Table 11.1. Foreign Debt and Short Maturity Debt as a Percentage of Current Account Revenues in Millions of US$. Sources: SPO (2012, Tables 3.9, 3.10; 2013, Tables 5.1, 5.24).

280

Table 11.2. Public Sector Borrowing Requirement (PSBR) as % of GDP. Source: SPO (2012, Table 5.4).

285

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xv

Table 11.3. Economic Composition of Total Public Expenditures as % of GNP 1990–97. Source: 1995 Transition Programme (73); 1997 Annual Programme (Table III.25); 1998 Annual Programme (Table III.24). 288 Table 11.4. Central Government Consolidated Budget Expenditures (Yearly Realizations), Economic Distribution (%) and as % of GNP 1992– 2000. Sources: SPO (1996, Tables 5.6 and 5.7; 1998, Tables 5.6 and 5.7; 2002, Table II.3; 2012, Table 5.7).

290

Table 11.5. Real Net Wage Index (1994 ¼ 100). Source: SPO (2006, Table 8.4).

295

CHAPTER 1 INTRODUCTION AND HISTORICAL OVERVIEW

Introduction This book starts from the argument that there was a break with the developmental inclusionary state of the 1960s– 70s and the institutionalization of a new form of state in the 1980s in Turkey. The new form, which is here called “the neoliberal exclusionary state”, was associated with transformation of the Turkish economy away from interventionist import substitution industrialization (ISI) to an exportled development strategy in an open market. The pivotal aspect of the neoliberal exclusionary state was the exclusion of organized labour from the political process and its disciplining in the economic sphere. This disciplining was not left to market forces but accomplished through direct political means that aimed to shift markedly the balance of power against labour in favour of capital. In its capacity as the maker and enforcer of laws and public policies as well as in its role as the single biggest employer in the country, the state was at the centre of this process. The disciplining of labour entailed not only direct state intervention in labour – capital relations but also extensive juridification and bureaucratization of the industrial relations system. The book thus highlights the irony of the era: the official discourse and policy of liberalizing the Turkish economy and opening it to the global market along neoliberal principles went hand in hand with a highly interventionist policy in the area of industrial relations. An integral feature of the restructuring of the Turkish economy toward an

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open-market, export-oriented model was further expansion of the state into the area of industrial relations in favour of capital interests. In Turkey of the 1980s, “centrally organized interventionism” was applied against organized labour to discipline and weaken it. Throughout the 1980s, the state actively intervened in labour–capital relations to control, weaken, or dismantle institutions, above all labour unions, strike activity, and collective bargaining, which political authorities and employers claimed interfered with functioning of the market economy. The book examines the state – labour relationship with respect to both the state form and the political regime. The form of state is defined by the specific configuration of social forces that constitute the main support base of the state, the particular organization of state apparatus as well as the type and nature of functions that the government performs. An adequate understanding of the concrete modalities of the relations between social classes and the state, and of the interactive and structural dimensions of these relations, requires an analysis of both the form of state and the type of political regime. The military regime of 1980–3 created the political conditions for the implementation of neoliberal economic reforms and established the institutional foundations of the neoliberal exclusionary state. The subsequent democratic transition to a multiparty civilian regime did not create a rupture in the neoliberal exclusionary state, characterized by exclusionary and disciplinary policies toward labour. Most existing literature on transitions from authoritarian to more democratic regimes in various countries in the past several decades neglects to investigate continuities in state policies and the class nature of the state’s economic and social role despite a democratic regime transition. Transition from authoritarianism can take place without disintegration of socio-political coalitions that supported the authoritarian regime. The substance of state policies and the particular nature of the state’s economic role do not necessarily transform with the transition from an authoritarian regime to a more democratic one. But the type of political regime still matters. It can have an independent impact on the development of social forces in struggle and their particular interactions with, and strategies toward, public authority. Thus, this book first probes the continuity of the neoliberal restructuring of the Turkish political economy and the accompanying exclusionary and disciplinary government policy toward the working

INTRODUCTION

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OVERVIEW

3

class in the 1980s and early 1990s despite the political regime change. However, it also explains that, though restoration of the parliamentary regime did not bring about a fundamental move away from anti-labour policies implemented under the military regime, it ushered in important changes in the interactive dimension of the relations between the state and the trade union movement. The book thereby investigates the relationship between organized labour and the government, first under the military regime of 1980– 3 and then under the following multiparty civilian regime in the 1980s and 1990s. Corporatism provides a useful theoretical framework for analyzing relations between the state and organized labour in Turkey during the period covered. The literature on corporatism makes a basic distinction between authoritarian corporatism (alternatively labelled state corporatism) and liberal corporatism (or neocorporatism).1 This distinction is particularly useful for analysis of the Turkish case. Neocorporatism refers to cases in which trade unions voluntarily enter into institutionalized cooperation with state officials and employers’ associations. They retain their relative autonomy and remain free to terminate cooperative arrangements even though these arrangements have been sanctioned by the state. Authoritarian corporatism, in contrast, involves the subordination of labour organizations to the state predominantly through coercive means. There is no cooperation or concertation in the real sense between labour unions and employers’ associations, and the former is subordinated principally through coercive means. The book’s analysis and arguments are informed by the view that the form and behaviour of the state and the actions of organized social and economic interests in a specific society are conditioned by the constraints or permissiveness of the world politico-economic system. In other words, especially in the current era of globalization, a country’s politics and economy cannot be adequately understood in isolation from the global economy and the international state system. This principle also applies to the Turkish case. My investigation of the Turkish political economy tries to identify the complex networks of interaction between global capital and international economic institutions, on the one hand, and the state and domestic social forces in Turkey, on the other. It also systematically takes into account the pressures originating from major foreign governments with which Turkey has close relations in explicating the Turkish state’s actions and policies.

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Most publications in the fields of International Relations and International Political Economy ignore international labour organizations even though the origin of international trade union organizations goes back to the late nineteenth century. Besides, the policies and actions of international labour organizations can have political consequences for specific states and domestic social forces, and for other international organizations, at particular moments. In examining Turkish stateorganized labour relations, I include international trade union organizations and the ILO both as a source of external pressure on the state and as a (potential) international ally for the Turkish labour union movement. I explain that, under certain conditions, international labour organizations, notably the ILO, were able to exert some influence in shaping the Turkish state’s policies concerning collective labour rights and freedoms. The book offers both synchronic and diachronic analyses of the Turkish political economy from the standpoint of state –labour relations in the 1980s and 1990s. A synchronic study reveals the coherence of different elements of a politico-economic whole and identifies the mechanisms by which the coherence of different parts of the system is made possible. A diachronic analysis takes as its starting point contradictions and conflicts that can undermine coherence of the whole with the possibility of its transformation. The analysis is based on the assumption that different elements of the whole interact in a dynamic and reciprocal way rather than in a manner of unilinear determinism. The book is divided into four parts. Part 1 investigates the qualitative transformation of the Turkish state in relation to the neoliberal restructuring of the economy in the 1980s. Many studies of Turkey’s neoliberal economic restructuring agree that the role of the state in this process was very important. But few scholars inquired into the transformation of the state itself. In Part 1, I analyze changes in functions of the state, its institutional structure, and the configuration of social forces underpinning state power in the 1980s. While Part 1 identifies fundamental continuities in state policies and functions, Parts 2 and 3 introduce the variable of the political regime. The guiding hypothesis is that, despite continuity in the substance of state policies toward the working class, the transition from a military regime to a parliamentary civilian regime had important consequences for relations between organized labour and the state. The type of political regime had

INTRODUCTION

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OVERVIEW

5

an independent impact on the development of social forces in struggle and their particular interactions with public authority. The focus of Part 4 is on the political project of a more inclusive inter-class settlement and the structural limits imposed by the neoliberal economic strategy on this project in the 1990s. I argue that there was an important attempt to create a new social settlement inclusive of labour interests in the early 1990s. But this attempt failed mainly because the neoliberal economic model in Turkey did not allow enough room for the state to mediate labour – capital relations in such a way as to offer concessions to both economic and democratic demands of labour without undermining the interests of capital. Instability of the neoliberalized economy restricted the state’s ability to respond to the working class’s economic demands without risking capital’s interests within the existing economic order. The book covers the period of the 1980s and 1990s because it was then that most neoliberal reforms in the economy and functions of the state were carried out. The neoliberal transformation of the Turkish political economy was mostly completed by the turn of the 2000s. My analysis extends to the 2000s only when it is necessary for the adequate development and support of my arguments.

Theoretical Framework The overall theoretical framework that underlies the analyses of this book is based on a synthesis of several theories on state-society and political economy. The major influences are Marxist state theories (Miliband 1973; Poulantzas 1978; Jessop 1990, 2002) and the Gramscian analyses of political economy (Hall 1988) and international political economy (Cox, 1986, 1987; Gill 1993, 2003). My reading of Marxist state theories underlies my conception of state as 1) having an institutional materiality in the sense of a state apparatus defined by modes of political representation or intermediation and modes of intervention; and 2) being grounded in particular constellations of social relations and representing condensation of social forces in struggle. This view of state belies two major opposing approaches: state as a unitary, autonomous subject and state as an instrument of dominant social forces. It also invites and allows for distinguishing different forms of state diachronically within a particular national social formation as well as

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synchronically across national social formations. The form of state is distinguished on the basis of 1) the configuration of social forces underlying state power and purposes; and 2) the “internal articulation of state apparatus”, modes of representation or intermediation and intervention. The ways in which the state apparatus is internally articulated and the modes of representation and intervention are structured create differential sets of constraints and opportunities for various social forces to pursue their interests or causes in and through the state apparatus, and condition the strategies they adopt.2 The perspective of state form is distinguished from those state theories that emphasize an unchanging essence of state through historical eras as in the terminology of “the capitalist state” or “the nation-state”. The theorization of state as a distinct ensemble of institutions that reflects the condensation of social forces and the approach of diachronically distinct state forms underlie this book’s analysis of the Turkish state and its role in the process of neoliberal transformation. The analysis integrates the perspective of corporatism and probes the emergence of different types of corporatist arrangements in specific politico-economic contexts as significant modes of state intermediation of labour– capital relation. Corporatist arrangements can constitute a significant feature of the modes of political intervention and representation that distinguish the form of state. Studies of corporatism have tended to identify the different types of corporatism with different levels or forms of capitalist development. They have defined authoritarian corporatism as an element of late dependent capitalism and neocorporatism as a feature of advanced capitalism (e.g., Jessop 1979; Panitch 1977; Schmitter 1974). The identification of variants of corporatism with different stages of capitalism by definition ruled out the possibility that both authoritarian and liberal corporatism could develop in the same country at different historical moments without a fundamental transformation of its socio-economic development. In the book, I explain that both types of corporatism emerged in Turkey at different political moments of the neoliberal restructuring of the Turkish political economy. Authoritarian corporatism was established under the military regime of 1980 –3 to control and discipline organized labour. There were serious efforts to create neocorporatist arrangements in the context of a structural crisis of the neoliberalized economy in the 1990s. The prevailing balances of class forces and particular politico-economic

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OVERVIEW

7

conditions must be examined to account for the emergence of one or the other type of corporatism in the same country at different times. Many Marxist state theories focus on the state’s role in securing the politico-juridical conditions of capital accumulation and guaranteeing the dominance of the capitalist class. They often neglect civil society as the sphere through which the supremacy of the dominant social class(es) is created and reproduced. Gramscian theory provides a set of conceptual tools to analyze the dual role of civil society in a capitalist order: civil society where capitalist hegemony is built, and civil society where counter-hegemonic forces rise and lead collective struggles against existing politico-economic order. Gramscian theory also seeks to overcome the dichotomous view of material capabilities and ideas, which is common to many social theories. My application of several key Gramscian ideas such as hegemony, counter-hegemony and historical bloc provides important insights into the ways in which the material and ideational forces of the neoliberal politico-economic project were articulated to construct popular consent in civil society for the neoliberal restructuring of the Turkish political economy.3 Most political theories of state, including many Marxist theories despite their particular attention to the socially and spatially expansive nature of capitalism, focus on the determinants of state within territorial borders. When international influences are taken into account, they are often treated as “external” to the territorial state-society complex. While the focus of this book is on the Turkish state-society complex, it systematically investigates the reciprocal dynamics between international forces and factors internal to the Turkish state-society complex. It postulates that although one can make an analytical distinction between the national and the international or the global, the reciprocal dynamics are not simply between ontologically separate entities. The particular configuration of domestic politico-economic institutions and conditions does not necessarily exist prior to the set of constraints and opportunities that emanate from the global and international power structures. Thus, in analyzing the neoliberal transformation of the Turkish political economy, the book pays particular attention to the transnationalization of national political forces and the internalization of international or global influences as well as “external pressures”. My approach to the relationship of national social formations to the world political economic order has been greatly influenced by the

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Gramscian theory of international political economy developed by Robert W. Cox (1986, 1987, 1996) and expanded on by Stephen Gill (1990, 1993, 2003). Cox’s Gramscian theory posits three levels of activity: the social relations of production; forms of state; and world orders. It conceives of each level as constituted of material capabilities, ideas, and institutions, which together form a historical structure (Cox 1986, 220–2). A particular mode of social relations of production gives rise to certain social class forces that can constitute the bases of power for a specific state form and shape world order. Forms of state are also expressed as state-society complexes. Cox’s conception of state forms as state-society complexes underlines the social relational nature of the state and thus the absence of strict demarcation between the state and civil society.4 For instance, in this book, corporatism exemplifies the absence of clear boundaries between the state and civil society. According to Cox, the construction of various forms of state in specific national contexts is determined by two principal forces: the power bloc of leading social forces and the nature of their relationship to contending social forces; and the pressures emanating from world order. World order is the integrated whole of politico-economic structures and power relations of the international state system and the world economy. There is no predetermined hierarchy among the three levels of the social relations of production, forms of state and world orders. Their relationships are reciprocal and mutually conditioning. The Gramscian perspective is concerned with how a particular world order has come into existence and how it might be transforming. Transformations in forms of state and world order are causally connected and often mutually reinforcing through the rise of new social forces resulting from changes in the social relations of production. In explaining the construction of a new form of state in the process of neoliberal economic restructuring in Turkey, I draw on the Coxian version of Gramscian approach to international political economy. My analysis of the political, institutional underpinnings of the neoliberal politico-economic project also benefited from Gill’s idea of “new constitutionalism for disciplinary neoliberalism”. “New constitutionalism” refers to the creation of political and juridical institutions that aim to insulate the neoliberal economy and neoliberal economic polices from democratic participation and accountability and lock in neoliberal reforms. It is the counterpart to “disciplinary neoliberalism” by which Gill means the intensification and expansion of

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9

capitalist power and market discipline in organizing political and social orders from the local to the global (Gill 1995, 1998). While drawing on the Gramscian perspective on global political economy, this book also addresses a significant gap in this group of studies. The Gramscian literature has mostly focused on the level of world order and specifically the construction of the international or transnational hegemony of dominant social forces, or in the Gramscian terminology, an international or transnational historical bloc. The focus of this book is on labour as a subordinate social class and the changing modes of state-organized labour relation in the process of the neoliberal restructuring of the Turkish economy. It is also concerned with how the labour movement responded, and was forced to adapt, to neoliberal restructuring and the exclusionary form of state associated with neoliberal transformation. Before investigating the shift to neoliberal restructuring in Turkey, it is important to explain what neoliberalism is. Neoliberalism is defined by several intertwined political, economic and ideological components and objectives. It is a set of economic policies that aim to restrict or rollback state intervention in the market economy on the ground of stimulating private capital accumulation. Neoliberal economic policies typically include trade liberalization, financial market deregulation, privatization of public enterprises and services, introduction of marketbased performance criteria in the public sector, cuts in or limits on government spending on programmes that do not directly contribute to capital accumulation or profit such as welfare. Many neoliberal policies are at the same time aimed at better integrating national economy into the world capitalist economy. Neoliberalism is a politico-economic project that seeks to deepen and extend commodification and capital relation into new social and geographical areas once protected from market forces either through social customs and norms and/or state regulations. It thus increases structural power of capital and shifts the balance of power toward capitalist interests. The neoliberal project is also ideological and normative. It extols the market values of efficiency and cost reduction and intends to cultivate self-reliant, entrepreneurial individuals. Thus, neoliberalism is at once economic, political and normative; it consists of material, institutional, and ideational components. However, the specific formulation and actual implementation of neoliberalism are context-determined. The ways in which the

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neoliberal project is articulated and implemented are shaped by national politico-economic and social contexts and the particular forms of the positioning of national social formations in the global political economy. Like any other political project, neoliberalism is subject to resistance and contestation, as such is likely to be modified and transformed as a result of changes in the balance of social forces. So, this book analyzes the neoliberal restructuring of the Turkish political economy as it was shaped by the particular political and social conditions of the country as well as the form of its insertion in the broader world political economy.

From State-Led Development to Neoliberalism: An Overview State-led industrialization defined the political economy of Turkey until 1980. Its experience of economic liberalism was limited to two short periods, each of which quickly gave way to state-led ISI. After the Republic of Turkey was created in 1923, the state continued the lateOttoman-era policy of liberal foreign trade and primary resource exportation. This liberal economic period ended in the early 1930s with the shift to a new pattern of accumulation characterized by high trade protectionism and public sector-driven industrialization, known as e´tatisme. The policy of e´tatisme was mainly a result of the effects on Turkey of the Great Depression in the world economy.5 The second experiment with economic liberalism took place after World War II. It was also accompanied by a transition from authoritarian single-party rule to a multiparty parliamentary regime (but democracy within narrow boundaries).6 A combination of international and domestic conditions was responsible for both relative economic and political liberalization. First, a new international political and economic order was emerging under the hegemonic leadership of the United States. Second, by the end of the war, the national capitalist class had gained sufficient strength to question the political dominance of the bureaucratic elite and state controls over the economy. Furthermore, the peasantry and small urban working class had been impoverished under the conditions of war economy, and they were greatly discontented with single-party rule. Economic liberalization involved mostly liberalizing foreign trade and abolishing some state controls over the economy. The corollary of trade liberalization was the abandonment of

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state-led industrialization in favour of agriculture-led development. As American experts advised, Turkey was to specialize in agriculture and agriculture-based industry, in which it supposedly had a comparative advantage in the international market. Economic liberal experimentation did not continue long because the rapid worsening of the country’s international trade balance and the resulting shortage of foreign exchange led the government to introduce import restrictions in the mid-1950s. Consequently, ISI emerged as the de facto economic strategy.

Interventionist ISI and the Inclusionary State The strategy of state-led ISI became government policy following a military coup in 1960.7 This strategy entailed a different form of Turkey’s integration into the capitalist world economy from what the international hegemonic power and the Bretton Woods institutions had prescribed in the immediate postwar years. But the “embedded liberalism”8 of Pax Americana could easily accommodate protectionist ISI in strategically important Turkey especially in the international conditions of the Cold War. Besides, Keynesianism was the dominant economic policy in the Western world and the Bretton Woods institutions in the post-World War II decades. The institution of an ISI strategy in the 1960s was not the result of industrial capital asserting its dominance in the class configuration of the society. It was an outcome of historical correspondence between the vision of the developmentalist bureaucracy and the interests of the ascending manufacturing capitalists.9 Moreover, the international politico-economic order was permissive of implementation of this economic strategy. In addition to establishing the regulatory foundations for ISI-based development, the military regime of 1960– 1 devised the institutional framework of a democratic political system. The 1961 Constitution introduced a wide set of political and civil rights and freedoms and created an institutional structure to safeguard them. The constitution adopted the principle of a “social state”, which meant that the state was responsible for the social and economic welfare of its citizens. Accordingly, a number of important social and economic rights were included in the constitution. Workers’ union rights had first been legislated in 1947 as part of the political liberalization process after World War II. But the 1947 legislation did not recognize the right to

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strike and imposed substantial restrictions on union activities. The 1961 Constitution guaranteed workers’ rights to strike and bargain collectively. It also granted civil servants the right, for the first time, to unionize but not the right to strike and bargain collectively. A key aspect of the ISI strategy and the accompanying regulatory mechanisms was the inclusion of labour interests. Workers had begun to unionize in the late 1940s. This had led to the establishment of a labour union confederation, the Confederation of Trade Unions of Turkey (Tu¨rk-Is), in 1952. Nevertheless, in terms of its relative weight in the socio-economic structure of the country, organized labour as well as the entire working class were small. They had not yet become an influential political force. In the 1960s and 1970s, the relatively democratic context and rapid industrialization allowed the working class to become a significant economic and political force. The working class grew significantly as a result of industrialization.10 Its proportion to the total economically active population rose significantly. The ratio of wage and salary earners to the total economically active population was 19.4 per cent in 1960. It increased to 33.3 per cent by 1980 (SIS 1995, 307; SPO 1968, 231). Trade union membership also grew significantly (Table 1.1). As a result, the capital – labour conflict began to assume primacy in the dynamics of Turkish social formation. Workers obtained regular wage increases by exercising their collective bargaining rights in the 1960s and 1970s. Both nominal and real wages consistently rose during the period (Kepenek 1984, 384). The trend of rising wages proved compatible with the regime of accumulation based predominantly on domestic market-oriented industrialization, as long as the economy continued to grow. Social security, public health, and education also served working-class interests and helped to expand the domestic market, thus benefiting capital as a whole. The economy sustained high growth rates until the economic crisis in the late 1970s. The growing pie was relatively equitably distributed. Farmers also benefited from agricultural support prices and subsidies thanks to their political weight as a large electoral support base in a multiparty democratic regime (Boratav 1988, 110–13). The labour union movement became more radicalized in the 1970s following the creation of the Confederation of Revolutionary Trade Unions (DISK) in 1967. DISK was founded by a group of leftist unionists who broke away from Tu¨rk-Is. In contrast to the pragmatic

INTRODUCTION Table 1.1

AND HISTORICAL

OVERVIEW

13

Trade Union Membership 1950– 80 (in Thousands)

Year

Total Wage and Salary Earners1

Workers Covered by the Social Insurance Institution2

Unionized Workers3

1950 1955 1960 1965 1970 1975 1980

na na 2,347 3,057 4,173 5,387 6,162

– – – 896 1,314 1,823 2,205

78 190 283 360 2,088 3,329 5,721

Note: Union membership numbers in the 1970s were greatly exaggerated. One reason for this was the possibility of membership in more than one union at a time, with the result that a number of unionized workers were counted more than once. Another reason was deliberate over-reporting by unions because of increased inter-union rivalry. Based on the total number of workers covered by collective agreements and the number of workers covered by the Social Insurance Institution, Koc
(1982, 291) estimates that in 1979–80 total union membership was between 1.5 and 2 million. Sources: 1 Based on population censuses. The 1960 and 1965 censuses include 15 years old and over. The rest include 12 years old and over. The 1960 and 1965 figures are from SPO (1968, 231); the 1970– 80 figures are from SIS (1995, 307). 2 From Tu¨rel (1993b, 243). 3 From Isikli (1987c, 316). Note that the union membership figures do not include public servants. Public servants were legally allowed to unionize during the period 1965–72.

Tu¨rk-Is, which emphasized collective bargaining, DISK promoted the idea that economic class struggle could not be divorced from political class struggle. Its perspective was based on the notion of class conflict. It challenged the existing order as part of class struggle, while Tu¨rk-Is accepted that order as the framework within which workers’ interests were to be defended (Mumcuoglu 1980). DISK’s rapidly growing influence among workers also pushed Tu¨rk-Is toward a more activist stance in the 1970s. The normal functioning of parliamentary democracy was interrupted by an indirect military coup on 12 March 1971. While the Parliament was allowed to function, four successive non-partisan governments

14

THE ECONOMIC TRANSFORMATION OF TURKEY

governed the country until the elections of October 1973. The immediate cause of military intervention was the deterioration of law and order as a result of the spread of political terrorism committed mostly by leftist militants and civil unrest created by the rising workers’ and students’ movements. The non-partisan governments pushed a set of constitutional amendments through the Parliament. The amendments introduced restrictions on some democratic and civil freedoms in the 1961 Constitution, while the overall democratic spirit of the constitution was preserved. Among the amendments was the abolition of public servants’ right to unionize.11 The effect of the legislative changes on the balance of political power and the character of the political system was in fact minimal. A normal parliamentary regime resumed through free elections in October 1973. In short, though it was politically repressive, the indirect military rule of 1971–3 brought about neither a rupture in the ISI-focused development strategy nor major changes in the social bases of the state comprised of broad class alliances. Therefore, the 1960s and 1970s should be treated as forming a whole in the historical evolution of the Turkish political economy.

Structural Crisis and Policy Shift The ISI pattern of accumulation encountered a structural crisis in the late 1970s.12 The economic crisis was accompanied by a serious political crisis characterized by ideological polarization and civil unrest. Severe balanceof-payment difficulties and foreign exchange shortages loosened the ISI strategy from its foundation. High inflation and a dramatic decline of capacity utilization exacerbated the crisis. As it deepened, Turkey faced a foreign debt problem. It became increasingly difficult for the Turkish state to service its international debt. It was also unable to obtain new loans as international banks became more risk averse after the lending frenzy of the mid-1970s. Faced with such a stark economic situation, the government found it difficult to resist the far-reaching policy conditions of the International Monetary Fund (IMF) and the World Bank (WB) for loans. These conditions included liberalizing trade, deregulating the financial market, removing restrictions on foreign exchange transactions, and scaling back the public sector. Their implementation would mean a fundamental transformation of the Turkish political economy. Many countries, developing and developed, started to adopt similar policies under the international conditions of the accumulation crisis

INTRODUCTION

AND HISTORICAL

OVERVIEW

15

of world capitalism from the late 1970s. The 1980s witnessed the international ascendance of neoliberalism as a result of the crisis of Fordist capital accumulation in Western developed countries and the exhaustion of ISI in many developing countries. But Turkey became one of the first test cases for the structural adjustment programmes that the IMF and WB began to prescribe for indebted developing countries in the wake of the Third World crisis in the early 1980s. Critical to the shift from the state-led ISI strategy to an international market-oriented and export-driven regime of accumulation was the formation of a strategic alliance between Turkish big capital and international financial institutions (IFIs) at the turn of the 1980s. In the crisis conditions of the late 1970s, the Association of ¨ SIAD), an influential Turkish Industrialists and Businessmen (TU association of large corporations, started advocating a new type of economic strategy to open the economy, encourage the export sector, and remove bureaucratic barriers to private initiative (Baskaya 1986; Kazgan 1988, 340–3; Ulagay 1987). From the perspective of Turkish big business, the national economy’s further integration with the globalizing world economy would create, in the long run, new markets and new sources of finance and joint ventures with transnational corporations. In the immediate term, the Turkish government’s acceptance of IMF and WB policy demands would secure urgently needed credit. IMF and WB conditions for debt rescheduling and new loans bolstered the position of national big capital because it could easily claim that there was no alternative. At the same time, representatives of national big capital internalized policy prescriptions of the IFIs and articulated them as their own. The strategic alliance of Turkish big capital with the IFIs led to a fundamental shift in the Turkish political economy. On 24 January 1980, the centre-right Justice Party (JP) government announced a comprehensive economic package, commonly known as the 24 January Decisions.13 The 24 January Decisions included a set of typical IMF stabilization measures. But it was not just a stabilization programme. Its goal was no less than a fundamental transformation of the Turkish economy. It aimed at a new regime of accumulation based on exports, an open-market economy, and a new economic role for the state. The programme marked the official start of the neoliberal restructuring of the Turkish political economy.

16

THE ECONOMIC TRANSFORMATION OF TURKEY

IFIs and major Western governments welcomed the 24 January Decisions. In June 1980, the JP government and the IMF signed a threeyear stand-by agreement. It provided the largest ever amount of credit granted by the fund at the time (Schick and Tonak 1987, 350). It was later extended one year until the end of 1984 to ensure continuity of the policies. In March 1980, Turkey signed an agreement with the WB to benefit from the bank’s new structural adjustment loans (SAL). The government agreed to heavy conditions concerned with liberalizing trade and foreign exchange regimes, opening the economy to foreign capital, and reducing the public sector (Kazgan 1988, Part 10; Kirkpatrick and ¨ nis 1991). Turkey became the first major test case for the WB’s new O structural adjustment lending in cooperation with the IMF’s stabilization programme. Between 1980 and 1984, the amount of SALs that Turkey received from the World Bank far exceeded the bank’s lending to any other ¨ nis 1991). Thus, the IMF and WB were country (Kirkpatrick and O involved directly in the neoliberal restructuring of the Turkish economy in the early 1980s. Even after the loan agreements expired by the end of 1984, these organizations continued to influence policy making by shaping Turkish officials’ perceptions of what was acceptable and viable. The IMF’s regular surveillance of the country’s economy and consultation visits were important in this regard. The WB was also involved in structural adjustment of the agricultural, financial, and energy sectors through sector-specific loans in the latter half of the 1980s. The new model of economic growth would mean a fundamental transformation in functions of the state. With respect to labour, it would assume primarily a disciplinary role. With the shift to an export-driven regime of accumulation, wages largely lost their functional significance for capital as purchasing power and became primarily a production cost to be lowered for the purpose of international competitiveness. Initially at least, reorientation of the industry toward export required cutting domestic consumption and lowering domestic purchasing power, hence wages. Furthermore, to (re-)create conditions conducive to the reproduction of capital in the immediate term, the state had to find a solution to increased working-class militancy. The number of lawful strikes and workers on strike had reached a record high at the end of the 1970s. In 1980, there were 220 lawful strikes involving 84,832 workers; 1,303,253 working days were lost as a result of strikes (Ministry of Labour and Social Security 1996, 55). There were also frequent illegal

INTRODUCTION

AND HISTORICAL

OVERVIEW

17

strikes, mass labour demonstrations, and other forms of labour action (Sen 1993; Tu¨m Iktisatc
ilar Birligi 1976). In such crisis conditions, the state’s legitimation functions in the form of social benefits for labour ran up against the limits of its accumulation functions. The state could no longer mediate capital – labour relations by providing further social benefits in return for labour peace. The conservative JP government took important steps to establish state control over the union movement and to restrict the rights to strike and engage in free collective bargaining. It drafted a series of bills to amend the Trade Unions Act and the Collective Bargaining and Strike and Lockout Act in a restrictive direction and to curb workers’ gained social benefits, such as severance payments (So¨nmez 1980, 94–5, 101–5). The creation of the Collective Agreement Coordination Committee (CACC) was an important development concerning restructuring of the state’s role in labour–capital relations. The government’s purpose in creating the CACC was to establish centralized control over the collective bargaining system. The committee was set up by a prime ministerial circular dated 5 March 1980. The circular defined the committee’s role as determining the general principles for collective bargaining in both private and public sectors in accordance with the 24 January Decisions (full text of the circular in Tu¨rk-Is 1982a, 166–7). The CACC’s collective bargaining principles were wide ranging and strongly anti-labour in both spirit and letter (full text of the CACC’s principles dated 13 June 1980 in So¨nmez 1984, 46–7; also in Tu¨rk-Is 1982a, 167–9). Although the JP government made important attempts to expand the coercive/regulative powers and apparatuses of the state over the labour union movement, it had to retreat to a great extent as a result of strong resistance from the left-wing opposition in the Parliament and the labour unions. If the government were to succeed, it would take no less than outright suppression of organized labour and hence of democratic institutions. The government’s ability to implement its programme was also significantly constrained by its lack of a parliamentary majority. Deeply divided along ideological lines, ranging from ultra-nationalist, Islamist, and radical left to moderate left and right, the Parliament was virtually incapacitated, and the government ceased to function. No political party had enough seats to form a majority government, but it could block the actions of other parties. The Parliament became paralyzed, and terrorism and political violence continued to escalate.

18

THE ECONOMIC TRANSFORMATION OF TURKEY

Military Authoritarianism and Structural Adjustment The Turkish Armed Forces overthrew the government and took over administration of the state on 12 September 1980. The generals declared their commitment to the 24 January programme and sought to ensure that the IFIs’ support for it continued. It is ironic that the most nationalist apparatus of the state supported a politico-economic programme that aimed to fully integrate the Turkish social formation into the world economy and to subject it to the exigencies of the global market and that the same apparatus, formerly a defender of the “developmental state”, would endorse a neoliberal programme critical of state intervention in the market. Restoration and protection of the authority of the state and national integrity, which the military historically saw as a fundamental mission (Heper 1985, 95–7, 125–7), required both an urgent solution to the immediate economic problems and a longer-term solution to the structural crisis of the economy. No immediate viable solution appeared to exist without the support of IFIs and Turkish capital. Military leaders also seemed convinced that the 24 January programme was the only option available to lead the economy out of crisis.14 The military regime set out to create a political and institutional structure conducive to restructuring the economy toward export-driven accumulation. As it closed down all political parties, suppressed the labour movement, cracked down on the leftist movement, and severely curtailed civil rights and freedoms, the military regime did not leave much space for opposition to the new politico-economic model. Political power was centralized in the National Security Council, composed of the chief of staff, commanders of the armed forces, and gendarmerie. Management of the economy was entrusted to a small team of neoliberal ¨ zal. He was in charge of the 24 January technocrats headed by Turgut O Decisions as the undersecretary to the prime minister in the JP government just prior to the military coup. He had close relations with both the IFIs and the Turkish business community.15 The military ¨ zal as deputy prime minister in charge of junta’s appointment of O economic affairs ensured continuation of the 24 January programme. A new power bloc was formed and included the capitalist class under the leadership of big industrial and financial capital, generals-turned-state administrators, and a group of economic technocrats. The military regime’s overall anti-labour and pro-capital position secured the political support of the entire capitalist class.

INTRODUCTION

AND HISTORICAL

OVERVIEW

19

The military regime’s mission was not only to restore law and order but also to reshape the entire political system and state–society relations. The new political-institutional structures created by the military regime were meant to ensure reproduction of the economic model and authoritarian and exclusionary features of the restructured state beyond military rule. The restoration of civilian rule took place through “guided” elections for the National Assembly in November 1983. The neoconservative Motherland Party founded by Turgut O¨zal won the elections and formed the first post-military civilian government. The same party again won the national elections in 1987 and governed the country until October 1991 within a political regime based on multiparty ¨ zal electoral politics but “restricted democracy”. The predominance of O and his party in Turkish politics in the 1980s meant, above all, basic continuity of the strategy of export-led development and neoliberal reforms despite the political regime changes. In conclusion, when the ISI strategy of development encountered structural crisis in the late 1970s, transformation of the Turkish economy toward an export-oriented, open-market model was placed on the public agenda by the dominant fraction of Turkish capital in cooperation with the IFIs. The centre-right JP government also adopted this project as a way out of the severe economic crisis. Nevertheless, the new economic model did not have adequate support either in civil society or in the state apparatus. There was strong opposition in society centred on the labour movement. Within the state, parliamentary opposition, especially left-wing opposition, challenged it. Although it was incapable of formulating a viable alternative, the opposition was strong enough to frustrate implementation of the neoliberal programme. Furthermore, the state did not have “the capacity” to carry out the required policies effectively.16 An institutional apparatus necessary for effective implementation of the new economic strategy was largely absent. Systematic pursuit of the open-market, exportled growth strategy required institutional machinery different from what the interventionist ISI policy had used. The particular politicalinstitutional structure of the state, embedded in a relatively liberal parliamentary democracy and an inward-looking ISI strategy, became an impediment to radical restructuring of the Turkish political economy.

PART 1 THE STATE AND NEOLIBERALISM

There was a fundamental shift in the role, institutions and social bases of the Turkish state in the 1980s. Though the country was ruled by different political regimes in the decade, a military regime (1980–3), and then a civilian regime based on multiparty parliamentary system, the qualitative transformation of the state in relation to the neoliberal restructuring of the political economy characterized both regimes in the 1980s. This section analyzes changes in 1) the functions of the state, 2) its institutional structure, and 3) the configuration of social forces underlying state power since 1980. It argues that the key to understanding this process was the marginalization of labour representation in the state, and its disciplining in the economic sphere. Chapter 2 examines the transformation of the economic role of the state, and the changes in the institutional apparatus and policy-formation framework of the state that accompanied the transformation of its economic role in the 1980s. Chapter 3 focuses on the policies and actions of the neoliberal exclusionary state in the sphere of labour-employer relations. It suggests that a principal aspect of the restructuring of the Turkish economy towards an open-market, export-oriented model was the further expansion of the state into the area of industrial relations in order to discipline organized labour.

CHAPTER 2 NEOLIBERAL RESTRUCTURING AND STATE INTERVENTIONISM 1

Most studies of the neoliberal restructuring of the Turkish economy agree that the role of the state in this process was crucial. But few scholars have inquired into the transformation of the state itself. There were in fact fundamental changes in the functions and institutional structure of the state as it played a key role in the reorientation of the Turkish economy toward an export-led, open-market economy. Concerning the Turkish-dominant class, the state was to implement policies and to create institutions aimed at restructuring capital in favour of those fractions able to compete in the global market. With respect to the working class, in order to facilitate the international competitiveness of Turkish industry, the state was to discipline organized labour. In regard to the links between the Turkish social formation and the global economy, the state’s role would be transformed from that of protector of Turkish society and economy from global market forces to that of facilitator of their integration into the world economy. The Turkish state was very active in the economy and labour relations through the 1980s –90s. One aspect of this active role was to dismantle the mode of regulation associated with the previous period’s import substituting industrialization (ISI). The state carried out this “negative” intervention together with “positive” intervention. It was positive in the sense that the state created a new set of institutions, rules, and norms

24

THE ECONOMIC TRANSFORMATION OF TURKEY

that would constitute the regulative mode for the outward-oriented growth model. However, it is important to distinguish between the process and the means on the one hand and the goal on the other. The goal was a state that could secure the rights, above all the private property rights, of both transnational and domestic capital and guarantee an institutional and political framework within which market forces could successfully operate. But this form of state in the end would be largely devoid of those power bases and instruments necessary for intervening in the economy on the basis of principles other than that of market rationality. As the Turkish state acted as the main agent in the neoliberal restructuring of the Turkish economy, it simultaneously dismantled some of the bases of its own power that could enable it to intervene in the economy according to the principle of social justice. Its ability to control major economic policy instruments, such as interest rates and exchange rates, was also significantly constrained. The economic restructuring process was never a smooth one of course. It was characterized by forward and backward steps and by frequent crises.2 By the end of the 1980s, however, most of the state’s neoliberal policies had become structural aspects of the Turkish economy and could not be undone easily.

The Restructuring of the State and its Class Bias Centralization and Concentration of Policy Powers The transformations in the model of economic development and in the form of insertion of the Turkish economy into the world market were orchestrated and carried out mainly by the state. But it was a new form of the state characterized by a new configuration of social forces underpinning its power and by a new form of articulation among its apparatuses. First, the new form of the state, institutionalized by the military regime and sustained without major changes under the ensuing civilian regime in the 1980s, was based upon the dominance of big capital in society and the exclusion of the working class from the political process. Second, the internal articulation of the state apparatuses involved the centralization and concentration of policy powers. Third, the new structure of the state’s relations to society entailed the reinforcement and expansion of its coercive powers over society.

NEOLIBERAL RESTRUCTURING

AND STATE INTERVENTIONISM

25

The military regime, ruling from 12 September 1980 to 6 November 1983, tried to thoroughly restructure the state and its relation to society. In this effort, it enacted 535 laws and 91 decree-laws (O¨zbudun 1991, 41). These laws pertained to many fundamental aspects of the country’s political and judicial systems, economy, educational institutions, and civil society associations. They were very restrictive and imposed serious limitations on democratic rights and freedoms. The new constitution set the basic rules of the game and the main politicojuridical framework, which at once constituted the context for, and a product of, power struggles among social forces. Not only were the relations between the state and society restructured, with the citizen clearly subordinated to the state, but also the institutional configuration of the state apparatus was reorganized. Envisaged in the constitution was a “strong state” and a “depoliticized society”. The emphasis was on the limits of the rights and freedoms that it recognized. In this respect, it fundamentally diverged from the previous constitution. The 1982 Constitution also differed in major ways from the 1961 Constitution with respect to the form of articulation among the state institutions. While the latter adopted the principle of the separation of powers and of checks and balances among the executive, the legislature, and the judiciary, the former considerably increased the powers of the executive.3 By relegating the legislature to a secondary role, and by bolstering the powers of the executive, the framers of the constitution intended to turn public policy making and implementation into “an efficient and rapid process. Not only the time taken to enact new legislation was to be reduced but also any ‘unnecessary political conflicts’ which might arise in the process were to be prevented” (Ramazanoglu 1985b, 236). The Parliament retained its powers over the Council of Ministers that are typically associated with a parliament-cabinet system, such as vote of confidence and initiation of parliamentary investigation. The constitutional provision that the Parliament might delegate its law-making authority to the Council of Ministers, however, enhanced the executive vis-a`-vis the legislature.4 The post-military civilian government took the opportunity of this provision and extensively used the power to issue law-decrees even in critical policy areas and especially economic policy, thus largely bypassing the Parliament.5 Also significant was the considerable expansion of the president’s powers in the legislative, executive, and judicial areas compared with those of the 1961

26

THE ECONOMIC TRANSFORMATION OF TURKEY

Constitution.6 Despite the new wide-ranging powers, the president would continue to be elected by the Parliament, not by direct popular vote, and s/he did not have to be nominated from among members of the Parliament.7 This procedure made the representativeness and political accountability of the president highly questionable. The provisional article of the 1982 Constitution provided for the automatic election (upon approval of the constitution in a referendum) of the head of the military regime, General Kenan Evren, to a seven-year presidency. Thus, the former leader of the military regime was to preside over the country, until 1989, to ensure that the restructured order was maintained. All of these developments highlight the undemocratic and illiberal aspects of the new form of the state that was established under the military regime of 1980– 3 and survived long after the transition to the multiparty civilian regime. The constitution set the main institutional and authority structure of the state. In this new structure, the powers of the executive, particularly those of the politically non-accountable and non-representative branch of the executive, the presidency, were considerably bolstered vis-a`-vis the elected Parliament. Yet the actual content of this structure was to be shaped through political dynamics. The neoconservative Motherland ¨ zal won the guided elections of November Party founded by Turgut O 1983 and thus formed the first post-military civilian government. The same party also won the general elections of November 1987 and governed the country until October 1991. O¨zal was in charge of the neoliberal economic programme, which the Justice Party (JP) government had launched in January 1980 just prior to the military coup, in his position as undersecretary to the prime minister and later as the deputy prime minister in charge of economic affairs during the military regime until his resignation in July 1982. With the coming to ¨ zal became the prime power of his party following the elections, O minister and stayed in this post until 1989. He replaced Evren as the president of the country in 1989 and remained the president until his sudden death in 1993. We can thus see the continuity of the form of the state through the period of the 1980s and early 1990s despite the shift from a military to a civilian regime not only in the basic institutional and power structure of the state apparatus and the direction and nature of its functions but also in the personnel who filled the most influential state positions.

NEOLIBERAL RESTRUCTURING

AND STATE INTERVENTIONISM

27

New State Economic Organs and the Rise of Neoliberal Technocrats The period following the transition to civilian rule saw further centralization and concentration of public policy making in the executive, notably in the Office of the Prime Minister surrounded by several key agencies.8 A set of new institutions was created and attached to this office. These new institutions assumed most critical powers and responsibilities in directing the restructuring of the Turkish economy toward an export-led form of accumulation in an open-market economy. The organizational structures of the Ministries of Finance and Trade were broken down, and a new Undersecretariat of Treasury and Foreign Trade was created in the Prime Minister’s Office in December 1983. This led to a significant decline in the powers of the two traditional ministries. The new undersecretariat was bestowed with the authority of a ministry without actually becoming one. The head of the undersecretariat was an appointed technocrat directly responsible to the prime minister. The undersecretariat was later divided by the coalition government of the True Path Party and the Social Democratic Populist Party into the Undersecretariat of Foreign Trade and the Undersecretariat of Treasury in December 1994. Both were attached to the Prime Minister’s Office.9 The two organs continued to exert great influence in economic policy formation in subsequent years. The centralization and concentration of public policy making in the 1980s were also assisted by two major policy forums originally created either by the pre-military JP government following the launch of the economic programme of 24 January 1980 or by the military government. These were the High Economic Affairs Coordination Council and the Money and Credit Committee. These policy forums included only a small number of key ministries, technocrats, and top state officials. In the words of Yavuz Canevi, the former governor of the Central Bank (1983 – 6) and the former governor of the Undersecretariat of Treasury and Foreign Trade (1986 – 9), these institutions “were considered short-cuts to the long political decision-making process” (1994, 186). The High Economic Affairs Coordination Council had been established by the military government in 1981. Its purpose was to facilitate speedy decision making on domestic and international economic issues that exceeded the jurisdiction of one ministry and required the cooperation of more than one concerned ministry. In such

28

THE ECONOMIC TRANSFORMATION OF TURKEY

cases, instead of the entire Council of Ministers, the Coordination Council could convene to make decisions. The latter council was composed of the prime minister and those ministers whose portfolios were concerned with national and international economic affairs (Hu¨rriyet 1985 Yilligi 81). This composition was preserved during the MP government with the exception that some of the ministries were merged upon its coming to power. The Money and Credit Committee had been created by the JP government in 1980 to provide coordination in the area of money and credit policy (Baskaya 1986, 200). In June 1994, the Coordination Council and the Money and Credit Committee were merged to form the Money-Credit and Coordination Council. The State Planning Organization (SPO) was assigned the role of secretariat for the council.10 The creation of these new state institutions points to a complex pattern of transformation in the internal articulation of the state apparatuses. The most significant dimension of this transformation was not only the undermining of the Parliament’s legislative powers vis-a`-vis the executive but also the strengthening of the Prime Minister’s Office in relation to the cabinet as a whole. The prime minister, a small number of state ministers, who did not need to be from among members of the Parliament, and a close circle of politically non-accountable and non-representative top officials and technocrats, became the real centre of policy making and implementation during the critical period of neoliberal restructuring in the 1980s. The reorganization of the state apparatus was not only a matter of creating new institutions geared to the requirements of the new economic model. Some critical economic agencies also went through a major transformation. The most notable example was the Central Bank. Prior to 1983, it had no autonomy from the Ministry of Finance and ¨ nis and Webb 1994, 150). After the MP played a subordinated role (O government came to power in November 1983, the Central Bank was put on a course toward becoming more independent of the political executive. This was in line with the policy trend in Western developed countries at this time. “Economic or market rationality,” not politics, had to be the main principle guiding its functions. As it became more independent of the government, its policy influence increased. Another important dimension of this process was the decline of those state institutions embedded in the inward-looking import-substitution

NEOLIBERAL RESTRUCTURING

AND STATE INTERVENTIONISM

29

model of development of the 1960s and 1970s. The most dramatic case was the State Planning Organization (SPO). It was the principal agency for economic policy in the 1960s and 1970s. It was responsible for the five-year development plans and their annual programmes. The organization was increasingly relegated to a less important role during the 1980s. In 1991, it lost some of its most important functions and responsibilities to the Undersecretariat of Treasury and Foreign Trade. The Promotion and Investment, Foreign Capital, and Free Trade Zone Units were transferred from the SPO to the undersecretariat. Transformation of the state entailed major changes in the dominant policy outlook of the personnel who filled the main economic positions. When the neoliberal economic programme was implemented in the early 1980s, one of the government’s first measures was to transfer power from those parts of the bureaucracy that opposed the new programme to a new cadre of technocrats. Taking power away from the e´tatist bureaucrats was a principal motive behind the creation of the Undersecretariat of Treasury and Foreign Trade and the transfer of key powers that formerly belonged to the Ministries of Finance and Trade to this new agency by the MP government at the end of 1983. The Ministry of Finance and Customs, the Ministry of Trade, and the SPO were the main agencies for economic policy making and implementation prior to the 1980s. The staff and high-ranking officials of all three institutions were composed predominantly of persons who believed in state-led development (O¨nis and Webb 1994, 147 – 8). In the 1980s, the old e´tatist bureaucrats were effectively marginalized in the process of policy formation initially by relegating the previously principal economic departments to less important functions. A new team of technocrats were appointed to the new key economic posts. These technocrats shared important characteristics. They were not from the traditional career bureaucracy and came to public office directly from major private corporations. Most had degrees from American universities. Some had worked for the IMF or the World Bank (Kapital, December 1988, 28 – 31). Perhaps more important was their ideological outlook. They had a firm commitment to the idea of a market society and an open economy. These technocrats occupied centre stage during implementation of the structural adjustment programme during the second half of the 1980s.

30

THE ECONOMIC TRANSFORMATION OF TURKEY

In time, the staff of the old economic agencies also underwent transformation. The balance of power shifted significantly in favour of those who believed in economic liberalism. A significant case was the ¨ nis and Webb (1994, 150) note, from the midCentral Bank. As O 1980s, the Central Bank became “the principal point of entry into the government for economists favouring neoliberal policies and a base for disseminating their ideas”.

Class Bias of the Reorganization of State Institutions Several scholars of Turkish politics pointed out that the reorganization of the state that centralized and concentrated policy powers in the executive, notably in the Prime Minister’s Office, insulated public policy from political pressures and societal interests. They also argued that the insulation of policy was a crucial factor behind the successful implementation of policies designed to restructure the Turkish economy toward export-led development and an open-market economy (Heper ¨ ncu¨ and Go¨kce 1991; O ¨ nis 1991). However, they 1990a, 1990b; O overlooked the class bias of the restructuring of the state and the issue of “unequal access” by capital and labour to the new centres of public decision making. A key dimension of the reorganization was the marginalization of labour representation in the state. Organized labour was denied access to, and could not exert any influence over, the government at the same time that the executive’s powers were significantly expanded at the expense of the Parliament. The decline of those state institutions embedded in the ISI model of development, and the rise to prominence of new state agencies that were to act as links between the Turkish economy and the global economy, were partly responsible for labour’s exclusion from public policy formation. Organized labour had enjoyed institutionalized participation in the preparations of the five-year development plans through the SPO’s specialized committees in the 1960s and 1970s. The composition and number of specialized committees varied from one plan to another. They included experts, business representatives from different economic sectors, labour representatives, and state officials. The five-year development plans built on the specialized committees’ reports on their respective sectors. In this way, organized labour had a say in the process of making the plans. Tu¨rk-Is was not very influential in shaping the final contents of the plans. Yet, given that the dominant values and

NEOLIBERAL RESTRUCTURING

AND STATE INTERVENTIONISM

31

policies of the period were relatively favourable to labour, its demands found some expression in the development plans. With the transition to the new economic model, planning and development plans became virtually inconsequential though not officially abandoned.11 Parallel to this, the SPO and its specialized committees became less influential in the formation and implementation of economic policies. The SPO was eventually replaced by the new Ministry of Development in 2011. As the SPO lost much of its earlier influence from the early 1980s, labour was deprived of an important platform from which it could participate in economic policy making. At the same time, it could not gain access to those newly created or reorganized state apparatuses that became the main centre of public policy. In the 1960s and 1970s, there were summit meetings every three months between the prime minister and cabinet ministers and the largest labour union confederation (Tu¨rk-Is). If we leave aside the three years of military rule during which no autonomous space was left for the union movement, from November 1983 to October 1991 meetings between the MP government and Tu¨rk-Is were reduced to a minimum in spite of the latter’s constant search for dialogue. The first summit meeting between the government and the confederation was held in July 1984, about eight months after the formation of the government, though Tu¨rk-Is leaders constantly appealed to the government for a meeting. Two summit meetings took place in 1985. The government did not call any summit meetings in 1986 and 1987. The fourth meeting was held on 30 April 1988, three years after the previous one. It was not followed by a meeting in 1989. The fifth and sixth meetings were held in March 1990. There was no summit meeting between the government and the labour confederation in 1991. A meeting took place between the government and the Turkish Confederation of Employers’ Associations (TISK) whenever the government had a summit with the labour confederation during the same period. This was an established practice in the earlier decades. Other forms of contact between the government and organized labour included the tripartite Work Council, which advised the Ministry of Labour, which summoned the council and set its agenda. Although the Work Council did not convene regularly during the 1960s and 1970s, the average interval between meetings was slightly less than four years.12 Between 1980 and 1992, however, the council met only once, on 26 July

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THE ECONOMIC TRANSFORMATION OF TURKEY

1984. The Ministry of Labour set a single-issue agenda for the meeting: to discuss the ministry’s proposed changes in the severance payment scheme, an area highly guarded by unions and workers. The proposed legislative changes aimed to limit workers’ long-established right to severance compensation paid by employers in cases of dismissal. The Ministry of Labour called two other tripartite meetings with Tu¨rk-Is and TISK in March 1990 and May 1991. The meetings did not produce any positive results for labour. More importantly, the ministry preferred to hold these tripartite meetings outside the official structure of the Work Council. An important motive for doing so was to prevent institutionalization of the Work Council as a public policy forum for labour. Importantly, the Ministry of Labour called these two tripartite meetings at a time when working-class actions were on the rise. Nevertheless, the Work Council and the non-institutionalized tripartite meetings among the Ministry of Labour, unions, and employers’ associations did not provide labour with access to policy making. First, their agenda was narrowly defined to exclude broader economic and social policies directly affecting labour. Second, they were far removed from the real centre of public policy making. The Ministry of Labour itself did not have much influence in economic policy making. The ministry was more an instrument for implementing policies than an influential participant in making them. Business did not enjoy institutionalized participation in public policy making during the 1980s and early 1990s. However, big capital, which stood to benefit most from the neoliberal economic strategy and constituted the main support base of the neoliberal exclusionary state, enjoyed frequent direct access to the prime minister, the ministers of state responsible for the economy, and the small team of undersecretaries and top executives heading key state economic agencies. According to Gu¨lfidan (1993, 76– 82), interaction between high-level state officials and the Association of Turkish Industrialists and Businessmen ¨ SIAD), which represented the largest companies in the country, (TU increased significantly in the latter half of the 1980s. The MP government started the tradition of inviting business representatives to official visits abroad. This was part of the increased significance of economic considerations in Turkish diplomacy as the Turkish economy began to integrate into the world economy through trade, financial flows, and direct investment. The establishment of a close relationship

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between the MP government and big business does not mean, of course, that the relationship was entirely harmonious. Toward the end of the ¨ SIAD in fact became increasingly critical of the economic 1980s, TU performance of the government. The representatives or owners of big financial/industrial corporations, in fact, hardly needed the mediation of their associations to get access to the centres of public policy making. Especially in the 1980s, a close and visible relationship developed between the Motherland Party government and the favourite circle of businessmen.13 This presents a stark contrast to the situation of labour. Workers are almost totally dependent on their organizations for access to policy makers and for representation in the formation of public policies. Furthermore, business associations or big business could often intervene, at the level of top state officials, in the process of policy implementation as opposed to that of policy making to modify a particular unfavourable policy decision (Gu¨lfidan 1993, 81– 2). Organized labour did not have similar powers. Not only could big business apply extensive pressure on uncooperative administrative officials, but it could also offer important incentives.14 An incentive could well be a prestigious high-salary position in a big corporation. In fact, the movement of top officials and technocrats between private corporations and public positions appears to have become common during the 1980s. These advantages were not available to labour. Moreover, the new cadre of top civil servants spoke the language of business in a particularly fluent way, and their ideological dispositions were very favourable to capital. This greatly disadvantaged labour in terms of its representation within the state. It is important to point out that the reorganization of the state apparatus and changes in the civil bureaucracy that enhanced the representation of capital interests in public decision making at the expense of subordinate interests at the same time created ample opportunities for the formation of clientelistic ties between the political executive and high-ranking administrators and private businesses. The clientelistic type of relations between the state and business people existed during the ISI era as well since state support was crucial to private capital accumulation in the context of late capitalist industrialization. But, as Gu¨lalp (2001, 438) rightly points out, with the neoliberal shift in the 1980s, a qualitative change occurred in the relationship between the state and the capitalist class with respect to

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THE ECONOMIC TRANSFORMATION OF TURKEY

clientelistic relations. During the ISI period, the state provided support and distributed various benefits to private enterprises through the state economic agencies (such as the State Planning Organization) primarily according to consistent, formal procedures. In the post-1980s, in contrast, selective provision of various incentives and benefits to private companies on the basis of personal and political connections to governing political circles became common (ibid.). This situation was problematic from the perspective of the capitalist class as a whole. The clientelistic networks of ruling politicians, high-ranking officials and private companies led to various corruption scandals. Corruption scandals had the effect of undermining the popular standing of the major political parties of both left and right and fed the rise of political Islam from the mid-1990s. Thus, in the longer-term, the concentration of power in the political executive at the expense of the legislative together with the other changes in the civilian administration generated some counter-productive effects from the perspective of capital as a whole. Unequal access is only one aspect of the unequal representation of labour and capital interests in state policies. The issue of access to decision makers is concerned with the level of “relational power” rather than “structural power” (Gill and Law 1988, 73 –5). Structural power concerns the creation and reproduction of possibilities and constraints as well as the shaping of perceptions of what is possible and what is not. The patterns of possibilities and constraints condition the relationships among socio-political forces. In the context of these patterns, certain views and interests are represented in the state without any direct exertion of influence. At this structural level, the balance of power is markedly in favour of capital. That Turkish big business developed close relations with international capital and creditors in the process of neoliberal economic opening further enhanced its influence in national policy making. Its increased international links enabled business to exert great influence in Turkish foreign policy as well. Organizations such as the Foreign Economic Relations Organization (DEIK) and the Economic Development Foundation (IKV) came to acquire a quasi-governmental role in international economic relations. They brought together major Turkish business associations and several regional business councils, such as the Turkish-American Business Council (Bug˘ra 1994a, 250, 252). Business associations have extensive resources to create “information” and to shape knowledge production. They sponsor numerous

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publications and organize seminars and conferences. For example, ¨ SIAD’s publications have included regular reports on the Turkish TU economy, position papers on a variety of policy issues, and a periodical entitled Go¨ru¨s (View) in addition to numerous commissioned studies on a wide range of issues. The main targets of these publications and reports have been cabinet ministers, members of the Parliament, high-ranking civil servants, and journalists with the intention of influencing public policy and public opinion.15 There were also more frontal attacks on labour’s acquired right of representation within the state apparatus. The Law on State Economic Enterprises and Public Economic Institutions (No. 2929), enacted on 19 October 1983, repealed workers’ right of participation in the management of state corporations (Aker 1990, 211). Workers had obtained this right through a parliamentary act in 1964. Although the scope of their participation in the boards of directors of state enterprises and government corporations had remained limited in implementation, recognition of this right in a law had strengthened the legitimacy of such labour demands. The undoing of workers’ institutionalized right of participation in the management of state economic enterprises (SEEs) was in line with the policy of integrating these enterprises into the market and making them more “profitable”. This was to be followed by their privatization. Integrating state enterprises into the market economy and turning them into profitable organizations meant not merely removing subsidies on the commodities that they produced and rapidly increasing their prices, including those goods that constituted an important part of the consumption baskets of wage earners. It also meant cutting real wages as much as possible and reducing job security. In implementing this policy, no defence mechanisms were to be left to labour. Abolition of the co-determination system, despite its very limited nature, was also an aspect of the dominant ideology and policy of the period: managers of corporations should be able to act without any hindrance from labour unions or workers. The qualitative and quantitative transformation of the social security system against labour and other subordinate interests was associated with the reorganization of the administrative machinery and powers of the Social Insurance Institution (SII). The Executive Committee of the institution was reorganized by a piece of legislation enacted by the military government on 26 March 1982. The

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THE ECONOMIC TRANSFORMATION OF TURKEY

reorganization included reducing the number of labour members in the committee from four to one. Previously, the four labour members were representatives of different groups such as active workers, retired workers, and the SII’s own employees. The employers, on the other hand, had two representatives prior to the change. With the 1982 change, the number of employers’ representatives was reduced to one as well (Tuncomag 1982, 86 – 7). The overall results of the restructuring were that the weight of labour representation in the SII significantly diminished and that the administration of the organization came to be dominated by state officials. Another change concerning the SII’s administration was made by the MP government in 1986. The General Council of the institution was a tripartite organ and summoned every year. It was essentially an advisory body (Talas 1983, 389; Tuncomag 1982, 88). By a parliamentary act in 1986,16 the council’s power was further weakened. Its authority to approve the activity reports, supervision reports, and balance sheets of the institution was transformed into giving opinions on these matters. It was to convene every three years instead of every year. The General Council was an important institution for workers to participate in the formulation and administration of social security policies and legislation and to express their demands and grievances. Its reorganization in this manner meant the weakening of an important policy forum for labour. In short, simultaneous with the neoliberal restructuring of the economy was the marginalization of the working class’s representation in the determination and administration of state social security policy.

Neoliberal Reforms in the Economy Foreign Trade Liberalization International trade liberalization, financial and currency market deregulation, FDI encouragement, export promotion, and privatization defined the state economic agenda during the 1980s and 1990s. Turkish trade liberalization initially took place through unilateral measures in the 1980s. Import liberalization was achieved gradually by a shift from quantitative controls to tariffs and subsequent cuts in tariff rates. The gradual removal of import restrictions was planned to allow enough time for the manufacturing sector that had flourished behind protective walls to adjust to foreign competition (Kirkpatrick and O¨nis 1991, 27).

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Quotas were removed in 1981. This was followed by the abolition of other forms of quantitative controls and the removal of goods from the import restriction list in 1983– 4. Thereafter, import liberalization took the form of reducing tariff rates. Successive tariff reductions were carried out after 1984 and 1989. Following Turkey’s application for full membership in the European Union, or the European Community as it was known then, in April 1987 trade liberalization was increasingly directed toward this goal (Senses 1994, 57; 1995, 54). Together with the EU-oriented trade liberalization, Turkey carried out multilateral tariff cuts and removed non-tariff trade barriers following the conclusion of the GATT-Uruguay trade round and the creation of the WTO in 1994. Since the import-restricting measures were phased out gradually over more than a decade, trade liberalization did not cause a major upheaval in the industrial sector; however, the mood among Turkish manufacturers was one of pessimism until the end of the 1980s (Boratav, Tu¨rel, and Yeldan 1995, 30). Besides import liberalization, export promotion was a key dimension of Turkey’s further integration into the global economy.

Export Promotion The export orientation of the economy became the priority in resource allocation. The policy was to encourage specialization in those commodities that could compete in the global market. The competitiveness of Turkish exports in the 1980s was predicated on the suppression of wages, real exchange rate depreciation, and generous incentives (Barlow ¨ nis 1993; Senses 1990). and Senses 1995; Boratav et al. 1995, 27–9; O In the absence of technological improvements and new productivityenhancing production techniques in the Turkish manufacturing sector during the 1980s (Koray 1994, 227–8; Tu¨rel 1993a), internationally competitive prices for Turkish exports were achieved by, first, a substantial reduction of wages and, second, depreciation of the Turkish lira during the first decade of export-oriented growth.17 While the working class had to bear most of the burden of export promotion, export firms received a wide range of incentives from the state. These incentives included generous tax rebates, tax breaks, lowinterest credits, and priority in the procurement of imported inputs (Aktan 1996; Karluk 1994, 239– 49; Kepenek and Yentu¨rk 1994, 286). Although these subsidies and incentives played an important role in

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THE ECONOMIC TRANSFORMATION OF TURKEY

the impressive growth of Turkish exports during the 1980s, they also created distortions. As Senses (1994, 58) aptly put it, “the extent of state intervention through export schemes was so large that it probably led to much time and effort devoted to obtaining export incentives. Exporters responded to these incentives with such zeal that some resorted to illegal activities by overstating their export receipts to take advantage of the generous tax rebate scheme.” This situation was labelled “fictitious exports”.18 The government started to phase out the scheme of tax rebates after 1986 and abolished it by the end of 1988, mainly to prevent fictitious exports. Another important reason was pressure from OECD governments and the GATT, which made it clear that deviation from internationally dominant neoliberal norms would not be tolerated. The Turkish government tried to compensate for the gradually lower tax rebate rates and later their elimination by offering greater financial incentives and indirect subsidies, such as preferential credit rates and subsidies for key inputs such as energy (Boratav et al. 1995, 27– 9; Senses 1994, 58). The state played another important role in transforming the economy toward export-oriented growth. This role involved creating new institutions to serve the export sector. A significant example was conversion of the State Investment Bank into the Export-Credit Bank in 1987. The State Investment Bank stopped serving the state economic enterprises as a provider of subsidized credit by 1988 (SPO 1989, 87). The Export-Credit Bank was to provide exporters with preferential credit and insurance. The state also actively encouraged the establishment of big foreign trade companies through various material incentives and legal changes so that Turkish exporters could reap the economies of scale and penetrate international markets. The foreign trade companies were usually subsidiaries of Turkey’s large business conglomerates. These companies reaped most of the benefits of substantial export incentives (Ilkin 1991; O¨nis 1992). As an instance of state-supported capital concentration, this hardly fit the “competitive free-market model” advocated by the official discourse of the period. The effect of integration into the global economy, coupled with withdrawal of the state from manufacturing activities, was to encourage the industry to specialize in those very sectors in which low-wage unprotected workers and sweatshops were found. In the 1980s and 1990s, Turkish manufacturing exports tended to concentrate heavily in

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several low-technology, or natural resource-based, sectors such as textiles, apparel, iron, steel, and food processing. Textiles and apparel comprised the biggest sector of Turkey’s total exports in the 1990s. They accounted for nearly 38 per cent of Turkey’s total exports on average for the period 1995– 9.19 This composition of exports had major implications for the working class. The textile and apparel sector relied heavily on low-wage, nonunionized labour. As of the early 1990s, 80 per cent of clothing firms subcontracted some part of their production to small workshops and home-based producers (OECD 1993, 64 – 5). This meant mostly women workers who were paid very low wages and did not have any social security such as pension benefits and health insurance (C¸ınar 1994). Thus, the export-led accumulation strategy had the effect of fostering the informal economy in new forms and linking it to the global market.

Financial Market Deregulation The deregulation and liberalization of the foreign exchange market was another major dimension of neoliberal reform. The state-controlled, fixed exchange rate regime was gradually replaced by a marketdetermined exchange rate regime. The process was initiated by frequent mini devaluations and then continued by a system of daily adjustments by the Central Bank. It culminated in a system in which exchange rates were determined by market forces; the role of the Central Bank was to supervise the system and intervene only through open-market operations. Liberalization of international financial transactions was also achieved in the 1980s. As of 1984, Turkish citizens were allowed to open foreign exchange-denominated bank accounts and to transfer money from these accounts outside the country. Foreign investors were granted admission into the capital market in 1988. Turkey’s comprehensive participation in financial globalization came with the MP government’s decision to implement full capital account liberalization in 1989. This decision eliminated all restrictions on the country’s international financial transactions and established the convertibility of the Turkish lira (Ekinci 1997; Esen 2000). Complete liberalization of cross-border financial movements was the last major step in the sequence of neoliberal reforms in the Turkish economy. The removal of controls on cross-border financial flows was obviously a logical conclusion of the neoliberal

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THE ECONOMIC TRANSFORMATION OF TURKEY

restructuring of the national economy in the existing context of an increasingly liberalized and integrated international economy. Opening of the Turkish capital account followed competitive financial deregulation by the advanced capitalist states in the early 1980s. In the late 1980s and early 1990s, many major developing countries embarked on financial deregulation and started to remove many earlier restrictions on international financial flows. Although complete liberalization of the capital account was the ultimate goal of the Turkish government’s step-by-step financial liberalization, its timing was determined more by prevailing politicoeconomic conditions. The major pertinent conditions were slowing economic growth, rising domestic and foreign debt, labour unions’ increasing wage demands, and intensifying distributional conflicts. Tapping into rapidly growing international financial flows as a means of spurring economic growth was a major factor in determining the MP government’s decision on capital account liberalization in 1989. However, the government took this major step at this time despite concerns that the Central Bank and the State Planning Organization had expressed regarding possible adverse effects of large financial inflows. Industrialists also found the decision premature (Gemici 2012). The fact that the G-7 and international financial institutions (IFIs) had started championing the cause of financial liberalization in developing countries also influenced the Turkish government’s decision. According to Alper and O¨nis¸ (2002, 15), the IMF was not directly responsible for capital account liberalization in Turkey, though it did not object to it. The IMF’s role was in fact greater than Alper and O¨nis¸’s account recognizes. Even if there was no direct IMF pressure on the Turkish state at that moment, the fund had adopted capital account liberalization as a major goal and started campaigning in favour of it in the late 1980s. This policy move likely influenced the decisions of the MP government given its close relations with IMF officials. Turkey’s earlier highly restrictive foreign direct investment (FDI) regime was progressively replaced by a highly liberal one during the 1980s. This liberalization gained momentum in the mid-1980s under the neoconservative Motherland Party government. In 1985, a law enabling the establishment of free trade zones (FTZs) was enacted. The first two FTZs went into operation in 1987. The number of FTZs increased significantly in later years. The Turkish state made a major

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decision regarding FDI in 1986. It allowed 100 per cent foreign ownership for all foreign investors and in all sectors. By the same decision, all discriminatory provisions against FDI firms were repealed ¨ nis 1994). (Erdilek 1988; O The state also carried out a major transformation of the domestic financial sector. This transformation was not linear. It was often interrupted by financial/bank crises, leading to the re-establishment of direct state controls, only later to be removed. In 1980, interest rates were deregulated. Until this time, both deposit and credit rates had been set by the Central Bank or government. At that time, public banks as well as big private banks were not in favour of deregulation. Their stated rationale was that smaller banks would drive up interest rates for deposits to high levels to increase their shares of the market, causing a lack of control. When the government went ahead with the free interest rate decision, major banks reached a gentlemen’s agreement on a common interest policy. But this agreement was not successful as a result of increased competition from smaller banks and new brokerage firms (C¸o¨lasan 1983, 241– 2, 261; 1984, 106– 10, 126– 33). Without the prior creation of necessary institutions and prudential regulations to ensure an orderly functioning of liberalized financial markets, interest rate deregulation soon resulted in a financial crash triggered by the collapse of the largest brokerage firm (Kastelli) in June 1982 and a subsequent run on some of the smaller banks. This experience led the government to re-establish some controls on the money market and interest rates. At the same time, it set out to establish a juridico-institutional framework for the subsequently liberalized financial market (Inselbag and Gu¨ltekin 1988). In late 1988, commercial banks were again allowed to set interest rates themselves but subject to ceilings by the Central Bank. Ceilings were later abolished. By the late 1980s, a transition from a system in which interest rates were set by public authorities to a system in which they were determined by the financial market had been completed.

Supervisory and Prudential Regulations A crucial aspect of neoliberal reforms in the financial sector was the introduction of new institutions and financial instruments with the purpose of deepening and widening the financial system. The state acted as the main agency in transforming the structure and instruments of the

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THE ECONOMIC TRANSFORMATION OF TURKEY

capital market by legislating or creating new institutions such as the Istanbul Stock Exchange (1985) and the gold market (1989). These financial institutions aimed to facilitate the accumulation and circulation of capital and to allow it to move more easily into those activities that offered the highest returns and profits. The structural power of capital in society was certainly enhanced as a result. Equally important was the creation of a new set of institutions to supervise the financial sector. In 1981, the Capital Market Board was established. It was equipped with important supervisory powers over both primary and secondary capital markets. In 1985, a new banking law was enacted and constituted the central framework of the new regulatory system subsequent to liberalization of the banking sector. It introduced a minimum capital base and a capital adequacy ratio as well as other prudential regulations. The supervisory authority of the Central Bank over the financial/banking sector was buttressed at the same time as the sector was liberalized. A bank supervision unit was set up within the Central Bank to carry out off-site supervision. In 1986, the Turkish Lira Interbank Market was created under the bank’s auspices. This was followed by establishment of the Foreign Exchange Interbank Market under the Central Bank’s purview (Atiyas and Ersel 1994; Ekinci 1997). The Central Bank thus acquired the necessary mechanisms for intervention through open-market operations while the financial market was liberalized. A series of further regulatory reforms took place in some key areas in the 1990s. The Turkish Parliament enacted a law to protect market competition in 1994. The Act on the Protection of Competition (No. 4045) created an independent agency, the Competition Authority, to oversee its implementation. The main impetus for the competition policy reform was the Turkey –EU Customs Union, which came into effect in January 1996. An independent competition agency was part of EU conditionality for the Customs Union, and the Turkish competition law was modelled on the relevant EU legislation (Ozel and Atiyas 2011, 56, 58). Establishment of an autonomous regulatory and supervisory agency in the banking sector in June 1999 was possibly the most important regulatory reform in the 1990s.20 The supervisory function was thus transferred from the Central Bank. The Banking Regulation and Supervision Agency (BRSA) came in response to the Turkish financial crisis of 199421 and the Asian financial crisis of 1997, which shook the global economy. The 1994 Turkish crisis revealed the

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institutional and regulatory weaknesses of the Turkish banking sector. The 1997 Asian crisis turned the attention of the G-7 governments and IFIs to the importance of financial prudential regulations in the prevention of financial market crises. They soon started putting pressure on emerging-market countries to adopt newly created international financial standards and codes to ensure soundness of the ¨ nder 2005). International pressure from the global financial market (O G-7 and IFIs for financial regulatory reforms played an important role in the establishment of the BRSA. It and the new banking law that created the agency were in fact important components of an IMFsupported economic programme that the Turkish government started implementing in 1998.22 But the formation of a domestic pro-banking regulation coalition was also important in the creation of further prudential regulations for banking in addition to international ¨ nis¸ 2010). In short, both domestic and influences (Bakir and O international factors were at play in the pro-market financial regulatory reforms of the 1980s and 1990s.

Privatization Privatization was an integral part of restructuring the economy and the functions of the state from 1980 onward. To allow the economy to operate according to its “natural laws”, the state was to withdraw from production activities. Once it went ahead, privatization would make it difficult to pursue more interventionist economic strategies. Important measures to prepare the SEEs for privatization were carried out by the neoconservative MP government through the 1980s. These measures included deregulating the prices of products and services of the SEEs; removing the state monopoly on various goods and services, such as tobacco, tea processing, and electricity; and abolishing tax, tariff, and credit privileges or exemptions of the SEEs. Revenue-sharing certificates for some public infrastructural projects, such as power plants, dams, highways, and bridges, were issued to the public in the mid-1980s. The SEEs’ new investment in the manufacturing sector was greatly restricted. Subcontracting and outsourcing to the private sector of various public services and parts of production in the SEEs, a creeping form of privatization, became widely practised. Such proprivatization measures were accompanied by an ideological campaign to mobilize public support for the sale of public enterprises. In this

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campaign, the SEEs were heavily criticized for being inefficient and wasteful, and the growing fiscal deficit in the late 1980s was attributed to their operating losses. Privatization in the sense of selling public enterprises to the private sector was delayed, however, until the end of the 1980s, though the first privatization law was enacted in 1986. Political considerations were the main reason for this delay. As Senses (1995, 56) wrote, “Postponing more decisive steps towards privatization to a later stage reflected a tactical move on the part of policy-makers. This, in a country with a long tradition in public ownership, was correctly identified as an issue on which they would face the strongest opposition.” Strong opposition was likely to come from the administrators and employees of the SEEs, local communities whose economies relied significantly on one or more SEEs, large groups of the public concerned about the possible adverse economic and political consequences of foreign takeovers of public enterprises, as well as opposition political parties on the left.23 Moreover, public sector workers were highly organized, representing the most densely unionized section of the labour force. As a result, they could be expected to lead a resistance against privatization that would inevitably affect them negatively. Privatization posed a major threat to the working class and the union movement. For the working class, privatization meant the loss of a major source of secure employment; more particularly, for those employed in these enterprises, it meant layoffs and loss of income and social benefits.24 For the unions, it meant losing a significant base of membership. Furthermore, the government’s privatization plan did not give adequate attention to labour displacement. In fact, employment reduction25 and increased use of fixed contract or temporary employment instead of regular employment were among the measures adopted in preparing the public enterprises for privatization (Chapter 3).26 There was indeed significant opposition from all these different groups of people as soon as the MP government started implementing its privatization plan, and trade unions often took the lead in organizing campaigns against the privatization of particular public enterprises. Another political reason for slow privatization was the fact that stateowned enterprises were major sources of patronage for political parties and politicians in rewarding their members and supporters. In the 1980s and 1990s, privatization also ran into legal obstacles as many divesture

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transactions were cancelled by the Council of State or administrative courts because of legal and procedural reasons, inadequate conditions for investment (Atiyas 2009, 118), and insufficient protection of public interests in the case of natural monopolies. Privatization slowly got under way at the end of the 1980s and relatively accelerated in the early 1990s. From 1985 to 1997, a total of 159 companies were included in the privatization portfolio. Among them, 121 companies were privatized either via sale of shares or sale of assets. In 102 of them, no state shares were left as of 1997 (Undersecretariat of Treasury 1997). Privatization was possibly the main neoliberal policy that ran into the most political and legal obstacles, partly because of the major weight of the SEEs in the Turkish economy and the long tradition of e´tatisme. Whereas most other neoliberal economic reforms had been completed by the early 1990s, privatization continued into the 2000s. The first decade of the 2000s saw the divesture of a number of giant state-owned companies in the public services and infrastructure (Atiyas 2009). By 2012, the number of privatized enterprises reached 201, and the state no longer owned any shares in 191 of them.27 From 1985 to 2012, the total US dollar value of privatizations amounted to 43.6 billion. As of 2012, there were still 22 public enterprises waiting to be privatized.28 Contrary to the official discourse that privatization would broaden company ownership to a larger populace,29 block sales comprised the dominant method of privatization throughout the years. From 1985 to 2012, 47 per cent of the total privatization proceeds came from block sales and 32 per cent from asset sales (including premises and real estate). Only very large firms were usually able to participate in these two types of privatization. Privatization through public offerings accounted for a mere 16 per cent of total sale proceeds.30 In summary, the policies and institutions adopted or created by the state to promote and guide the structural transformation of the Turkish economy further strengthened the position of capital as a whole in society and institutionalized the dominance of big financial capital and corporations with an international orientation and/or links to transnational capital. These fractions of capital were the principal supporters of the neoliberal restructuring of the Turkish economy outward. The policy-led transformations and institutional changes also served to bring the Turkish political economy into conformity with

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restructuring of the global economy toward free capital mobility and easier flow of goods across borders. The state was the agency for carrying out and guiding the process of subjecting Turkish social formation to the dynamics of the world market.

Changes in Functions of the State The above analysis has established that the state played a crucial role in the neoliberal transformation of the Turkish economy. But this analysis remains insufficient without further investigation of the social class nature of the state’s new economic role. It is important to examine changes in the specific configuration of the accumulation and legitimation functions of the state.31 The accumulation function refers to the state’s role in facilitating and promoting capital accumulation. The legitimation function refers in this study to the state’s social welfare functions. Actual transformations in the social welfare functions of the state were reflected in the official discourse of the 1980s. This discourse aimed not only to disarticulate the dominant ideas of the 1960s and 1970s but also to reconstruct old, traditional elements. The themes of “voluntary social assistance”, “traditional solidarity among family members”, and “family is the first and foremost important social security system” became main elements in the official ideology (MP Government Programmes 1983, 1987; MP 1983b, 1986).32 This signified a notable change from the ideological discourse and political lexicon of the 1960s and 1970s. The idea of the “social state”, meaning that social security and education are main duties of the state, was a key element in the political discourse of this period. Almost every government programme of either the left or the right incorporated the principle of the social state and proposed to improve both the quality and the quantity of the social security system and public services. Although not all of these policy proposals were actually implemented, they served to strengthen the legitimacy of such demands from the working class and other subordinate classes. The discourse fundamentally changed in the 1980s and 1990s. One can empirically investigate the accumulation and legitimation functions of the state by analyzing the composition of state expenditures and revenues. The following analysis focuses on the 1980s and early 1990s because these decades were when most of the major neoliberal

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reforms in the economy were carried out. The subsequent years are the subject of Part 4, concerned with the failed project of a new social and political settlement.

Shifts in the Composition of Public Expenditures Actual trends in the level of public expenditures seem to have contradicted the dominant policy and ideology of the period. The dominant policy was to reduce the weight of the public sector in the economy. However, the share of total public expenditures in GNP actually tended to increase during the 1984 – 91 rule of the neoconservative Motherland Party, having somewhat declined under the military regime of 1980–3. As a percentage of GNP, total public expenditures declined from 33.1 per cent in 1980 to 29.0 per cent in 1984.33 They thereafter increased more or less steadily to reach 39.8 per cent in 1991 (Table 2.1). This situation is not as contradictory as it seems. The increase in public expenditures was mainly because of a rapid rise in transfers primarily to private capital in the form of export and investment incentives and because of surging interest payments (Celasun 1990, 46; SPO 1989, 77–8). As seen in Tables 2.1 and 2.1.1, total transfer payments increased significantly as a percentage of GNP. Interest payments, included in transfer payments, accounted for an increasing portion of public expenditures in relation to GNP. On the other hand, current expenditures, which included personnel payments and spending on goods and services, declined more or less continuously between 1980 and 1989 and tended to increase thereafter in proportion to GNP. Total public investment as a percentage of GNP did not decline during the period, but its composition changed. Public investment in manufacturing was substantially reduced. The annual share of manufacturing in public fixed investment was 23.2 per cent on average between 1975 and 1979. It consistently dropped to 19.4 per cent in 1980–4, 7.9 per cent in 1985 –9, and 4.2 per cent in 1990– 4 (SPO 1996a, Table 2.7). The decline was part of the privatization policy and the state’s withdrawal from manufacturing. Although it was sharply reduced in manufacturing, public investment was diverted markedly into infrastructure, energy, and communication (1995 Transition Programme, Tables 12 and 13; SPO 1996a, Table 2.7). In other words, as it moved away from direct involvement in production, the state directed its resources more toward the provision of infrastructure and

10.6 na 12.8 na na na 29.1

1981 9.0 na 9.5 na na na 24.4

1982 10.2 na 10.1 na na na 29.1

1983 9.0 9.7 9.7 0.0 7.3 3.0 29.0

1984 8.5 11.4 11.6 2 0.2 7.2 2.2 29.3

1985 8.9 13.4 13.3 0.1 10.6 1.4 34.3

1986 9.1 13.3 12.9 0.4 12.6 1.9 36.9

1987 8.7 10.9 11.5 2 0.6 11.8 2.9 34.3

1988

Sources: 1980– 3 from Orhan (1994, 86); 1984– 8 from SPO (1989, 78); 1989– 91 from 1992 Annual Programme.

12.3 na 11.1 na na na 33.1

1980

Economic Composition of Total Public Expenditures as % of GNP (Old Series) 1980– 91

Current Expenditures Investment Fixed Investment Change in Stock Transfers Stock Evaluation Fund Total

Table 2.1 11.4 10.0 10.2 2 0.2 11.6 2.6 35.6

1989

13.9 12.1 9.8 2.3 10.3 2.2 38.4

1990

16.2 10.2 10.3 2 0.1 10.4 2.9 39.8

1991

NEOLIBERAL RESTRUCTURING Table 2.1.1 1984 2.4

AND STATE INTERVENTIONISM

49

Total Interest Payments as % of GNP (Old Series)

1985

1986

1987

1988

1989

1990

1991

1992

2.4

3.4

3.9

5.0

4.3

4.9

5.3

6.0

Note: Interest payments are included in the category of transfers in Table 2.1. Source: Orhan (1994, 87).

public services that constitute a direct input into private sector production and trade. State investment in sectors such as infrastructure, communication, and energy does not exclusively benefit business. These public services are used by society as a whole. Therefore, they receive popular support and help to build winning electoral coalitions. Yet they particularly benefit business and increase the value of capital or property, unlike social welfare services. An analysis of the economic and functional distribution of the central government budget, the main source of state social expenditures, such as education, health, and social security, can provide important insight into the diachronic and synchronic configuration of state functions. What stands out about the economic distribution of the consolidated budget expenditures in the 1980s is the substantial increase in the share of transfer payments and a significant relative decline in personnel expenditures until 1989 and investment expenditures. In the government budgets of the period examined, transfer payments included interest payments on domestic and foreign debt, budgetary transfers to the SEEs, tax rebates to individuals and corporations, and social security and welfare payments. Total transfer payments rose from 36.9 per cent of the budget in 1980 to 49.6 per cent in 1988 and later declined to 40.5 per cent in 1991. The rise was not due to social security and welfare expenditures. The principal reason was the substantial increase in interest payments on government debt. Interest payments increased from 2.9 per cent of total expenditures in 1980 to 23.7 per cent in 1988. They remained in the range of 18.5–21.7 per cent in the subsequent three years, and they accounted for about half of total transfer expenditures during this period. Interest payments in relation to GNP also increased. They increased from 0.6 per cent of GNP in 1980 to 3.5– 3.9 per cent in 1988–91 (Table 2.2). During the 1980s and early 1990s, “the central government budget thus became a mechanism

Social Security

Tax Rebates

Transfers to SEEs

Foreign Borrowing

Domestic Borrowing

Interest Payments

Transfers

Investment

Other Current Expenditures4

Personnel

Current Expenditures

100 21.2 44.2 9.4 34.8 7.4 9.4 2.0 22.9 4.8 33.0 7.0 2.3 0.5 1.5 0.3 0.7 0.2 9.1 1.9 1.3 0.3 3.0 0.6

100 20.4 45.4 9.3 35.3 7.2 10.2 2.1 20.4 4.2 34.2 7.0 2.2 0.5 1.5 0.3 0.7 0.2 7.8 1.6 1.0 0.2 4.8 1.0

100 20.8 44.1 9.2 35.7 7.4 8.4 1.7 16.4 3.4 39.5 8.2 3.0 0.6 2.2 0.4 0.8 0.2 17.9 3.7 0.6 0.1 3.4 0.7

100 20.3 45.9 9.3 31.7 6.4 14.2 2.9 17.2 3.5 36.9 7.5 2.9 0.6 2.1 0.4 0.9 0.2 18.8 3.8 0.5 0.1 4.1 0.8

100 18.9 42.1 8.0 26.2 5.0 15.8 3.0 20.2 3.8 37.7 7.1 5.0 0.9 2.7 0.5 2.2 0.4 12.6 2.4 2.1 0.4 3.7 0.7

100 15.1 45.0 6.8 27.6 4.2 17.4 2.6 20.8 3.1 34.2 5.2 5.5 0.8 2.1 0.3 3.3 0.5 14.0 2.1 0.0 0.0 4.2 0.6

100 18.8 40.9 7.7 25.7 4.8 15.2 2.9 18.1 3.4 41.0 7.7 8.1 1.5 3.1 0.6 5.0 0.9 11.7 2.2 7.2 1.3 4.4 0.8

100 17.1 39.4 6.7 23.7 4.0 15.7 2.7 18.3 3.1 42.4 7.2 11.6 2.0 4.7 0.8 7.0 1.2 7.4 1.3 10.1 1.7 3.3 0.6

100 15.0 39.4 5.9 24.0 3.6 15.4 2.3 19.4 2.9 41.2 6.2 12.7 1.9 4.7 0.7 8.0 1.2 3.4 0.5 13.7 2.1 4.0 0.6

100 16.0 37.4 6.0 22.5 3.6 14.8 2.4 19.9 3.2 42.7 6.8 16.3 2.6 7.9 1.3 8.4 1.3 1.7 0.3 13.7 2.2 3.5 0.6

100 16.9 35.7 6.0 23.6 4.0 12.1 2.1 18.1 3.1 46.2 7.8 17.8 3.0 9.9 1.7 7.9 1.3 3.8 0.6 13.0 2.2 3.3 0.6

100 16.3 35.4 5.8 24.1 3.9 11.4 1.9 15.0 2.4 49.6 8.1 23.7 3.9 15.0 2.4 8.7 1.4 4.8 0.8 10.0 1.6 3.6 0.6

100 16.5 43.6 7.2 33.0 5.4 10.7 1.8 13.3 2.2 43.0 7.1 21.7 3.6 13.4 2.2 8.3 1.4 3.2 0.5 7.5 1.3 3.7 0.6

100 16.9 49.7 8.4 39.4 6.7 10.3 1.7 13.2 2.2 37.1 6.3 20.8 3.5 14.3 2.4 6.5 1.1 1.9 0.3 5.3 0.9 1.8 0.3

100 20.5 46.4 9.5 37.8 7.8 8.5 1.8 13.2 2.7 40.5 8.3 18.5 3.8 13.0 2.7 5.5 1.1 9.4 1.9 5.0 1.0 1.2 0.3

1977 1978 1979 1980 1981 19823 1983 1984 1985 1986 1987 1988 1989 1990 1991

Consolidated Budget Expenditures (Yearly Realizations), Economic Distribution (%)1 and as % of GNP2 1977– 91

Total Expenditures

Table 2.2

17.3 3.7

18.3 3.7

14.6 2.2

10.6 2.2

14.3 2.7

10.5 1.6

9.7 1.8

9.9 1.7

7.5 1.1

7.6 1.2

8.2 1.4

7.5 1.2

6.9 1.1

7.3 1.2

6.4 1.3

Note: SPO (1998) includes wages related to investment in personnel expenditures from 1987 onward. In this table, SPO (1996) is used for investment and personnel expenditures for the purpose of consistency in the series. It includes wages related to investment in investment expenditures, not in personnel expenditures. From 1986 onward, principal debt payments were not included in the budget. Otherwise, transfer payments would be higher. Source: SPO (1996, Tables 5.6 and 5.7; 1998, Tables 5.6 and 5.7). 1 Top entry in each row. 2 Bottom entry in each row. Based on the new national income series. 3 The 1982 budget covers ten months. 4 Other current expenditures include purchase of goods and services.

Other Transfers

52

THE ECONOMIC TRANSFORMATION OF TURKEY

of transferring resources to domestic and international finance and money capital” (Oyan 1991, 16). The government owed most of its domestic debt to banks, mainly national banks (Undersecretariat of Treasury and Foreign Trade 1994, 101, Table 54). There was also an important increase in transfer payments in the form of tax rebates during the 1980s. In the absence of data on the distribution of tax rebates among different income groups, one can only say that some portion went to wage/salary earners with introduction of the scheme of value-added tax rebates in 1984; a certain portion also went to exporters. The considerable decline in tax rebates as a percentage of budget expenditures after 1987 was due to the elimination of the tax rebate scheme for exporters. Both the share of investment expenditures in the budget and the ratio of national government investment expenditures to GNP declined significantly during the period 1980– 91 (Table 2.2). This was pursuant to the policy of rolling back the state sector. The effect was the deterioration of public services. To service the debt owed to both institutional and private lenders, the government targeted for reduction mainly public employee salaries and social spending. There were substantial cuts in the share of personnel payments in the budget between 1980 and 1988. The same trend existed in the ratio of personnel expenditures to GNP. Thereafter, there was a significant increase both in the share of personnel payments in the budget and in the ratio of personnel expenditures to GNP. The increase was partly due to real pay raises following the eruption of labour actions at the end of the 1980s and early 1990s. Other causes were expansions in the number of public staff and increases in the amount of compulsory payroll deductions (Karluk 1994, 49).

Spending on Education, Health, and Social Security Statistics concerning the functional distribution of central government spending reveal that, during the height of neoliberal restructuring, there were significant declines in the proportions of the consolidated budget allocated for education, social security, welfare, and health, collectively called the social wage, compared with the late 1970s. The relative drop in public spending on education as a percentage of the consolidated budget was particularly phenomenal (Table 2.3). There was also a substantial reduction in public expenditures on education as a

0.1

–

–

–

–

–

14.9 15.7 15.9 18.2 14.0

0.1 14.0 19.7

9.9 11.9 12.6 12.7 15.7 19.2 17.6 14.2 16.8 13.6 2.6 2.8 2.1 1.8 1.5 1.5 1.3 3.4 2.0 1.3

Note: Consolidated budget expenditures on economic services showed a significant decline. Note that these expenditures do not include expenditures in this area by the SEE and off-budget funds. Therefore, the figures do not reflect the total flow of public resources into economic services such as energy, communication, transportation, etcetera. On the other hand, the consolidated budget is the first and foremost source of state spending on education, health, and social security. Source: IMF (1986, 1995). 1 General public services also include public order. 2 Economic services include agriculture, manufacturing, mining, transportation, and energy.

2.5

31.8 22.9 19.6 24.3 23.6 22.1 19.8 17.8 25.9 34.0 18.5 13.3

47.5 43.0 34.0 25.7

2.2

12.5 10.7 1.1 2.9

20.3 18.6 14.2 16.8 2.2 4.3 3.4 8.4

9.5 6.9

13.2 11.6 10.9 13.5 11.4 10.4 11.6 11.7 10.4 15.2 2.7 2.5 2.9 3.2 3.8 3.6 4.5 5.7 5.0 6.3

12.0 11.9 15.2 15.2 4.0 7.6 6.3 2.6

8.9 7.1

38.6 49.3 54.0 44.2 31.6 33.5 30.9 25.2 25.8 26.6 31.9 35.4

11.4 12.1 26.6 31.2

1982 1978 1979 1980 1981 (na) 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994

Functional Distribution of Central Government Consolidated Budget Expenditures (%) 1978 –94

General Public Services1 Defence Social Security þWelfare þ Health Education Housing and Community Amenities Economic Services2 Other Expenditures

Table 2.3

54

THE ECONOMIC TRANSFORMATION OF TURKEY

percentage of GNP. They consistently fell below the 1978– 9 level during the 1980s. They did not catch up to that level until 1992 (Table 2.3.1). Not only did the share of education in government budgets and GNP decline, but there was also a significant decrease in the amount of public spending on education in real terms through the 1980s. Education spending in the consolidated central government budget amounted to 45.3bn TL in real terms in 1985 and 57.3bn TL in 1989, while it had totalled 66.7bn TL in 1978. Only in 1990 did it recover to the 1978 level and thereafter surpass it (Table 2.3.1). The country’s population grew at an annual rate of over 2 per cent during the 1980s and early 1990s. Even to maintain the quality and quantity of public education services at the same level, spending on education had to be increased. This demonstrates the extent to which the quality and availability of public education deteriorated over the 1980s. Accompanying reductions in public education spending was the policy of privatizing education. Private schools at every level, which only the well-off could afford, mushroomed in the country. Private universities were allowed for the first time in the early 1980s. Private schools and universities were encouraged by means of various incentives, such as tax exemptions and reductions. At the same time, tuition fees were introduced for public universities in the early 1980s. All of this represented a significant shift from the long-standing state policy that education at every level should be provided to all citizens free of charge. As this policy was abandoned, education became primarily a commodity. Budget spending in the area of social security, welfare, and health was already low before the 1980s. It accounted for 0.79 per cent and 1.57 per cent of GNP in 1978 and 1979 respectively (Table 2.3.1). The reason was that Turkey’s social safety net was composed predominantly of a premium-based insurance system. The state did not contribute to the insurance system by means of premiums except in its capacity as employer. Its financial contribution was principally in the form of tax exemptions. The state also subsidized public health services. Access to the public social security system depended on an attachment to the formal labour market. Dependants of active or retired employees and the self-employed were also eligible. The public social insurance system was divided along the lines of occupational and employment status. Separate public insurance institutions existed for workers, public servants, and the self-employed. Among the benefits that they provided

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994

66.7 64.8 47.7 57.3 na 47.8 45.4 45.3 51.1 59.8 63.1 57.3 122.7 143.1 165.9 195.4 131.6

4.05 3.94 2.99 3.19 na 2.50 2.18 1.94 1.92 2.14 2.11 2.65 3.30 3.67 4.09 4.28 3.15

% of GNP (Current Prices) 7.1 17.5 40.0 31.4 na 50.5 72.0 124.7 181.0 301.0 509.0 1,118.0 2,437.0 3,934.0 7,870.0 14,762.0 26,886.0

Nominal Terms Bn/TL 7.1 10.0 12.0 7.0 na 6.9 6.7 8.2 9.4 11.2 11.8 15.7 21.6 24.2 28.9 35.0 28.9

Real Terms Bn/TL

Health

0.43 0.61 0.08 0.39 na 0.36 0.32 0.35 0.35 0.40 0.39 0.49 0.61 0.62 0.71 0.77 0.69

% of GNP (Current Prices) 6.0 27.7 30.0 8.2 na 25.6 40.4 71.7 89.0 184.0 265.0 633.0 1,445.0 2,661.0 4,782.0 19,874.0 35,056.0

Nominal Terms Bn/TL 6.0 15.8 9.0 1.8 na 3.5 0.6 0.8 0.8 1.1 1.0 1.5 2.3 2.7 2.9 7.8 6.3

Real Terms Bn/TL 0.36 0.96 0.57 0.10 na 0.18 0.18 0.20 0.17 0.25 0.21 0.27 0.42 0.42 0.43 1.03 0.90

% of GNP (Current Prices)

Social Security and Welfare

Sources and Explanation of Data Used: Consolidated government budget expenditures are from IMF (1986, 1995). Note that the IMF does not give decimals after 1985. I used the SIS’s GNP series, as given in SPO (1996a), for calculating the ratios and the Istanbul Chamber of Commerce’s Wholesale Price Index for calculating real expenditures. The index is given in SPO (1996a, 89).

66.7 113.2 158.5 256.3 na 348.1 484.2 685.0 985.0 1,608.0 2,728.0 6,112.0 13,088.0 23,294.0 45,114.0 82,515.0 122,546.0

Year

Real Terms Bn/TL

Education

Consolidated Central Government Budget Expenditures on Education, Health, Social Security, and Welfare

Nominal Terms Bn/TL

Table 2.3.1

56

THE ECONOMIC TRANSFORMATION OF TURKEY

were pensions, health care, maternity, disability, occupational injury, and sickness insurance benefits. This social security system has been maintained without major changes with the exception that the separate insurance institutions were brought together as the Social Security Institution in 2006.34 Some non-work-related social benefits from the government budget have also been available. They include the old age and disability scheme. But the benefits from this scheme have thus far been negligible. Although state expenditures on health, social security, and welfare were already low prior to 1980, their share of the consolidated central government budget was further reduced in the 1980s (Table 2.3). Social security and welfare expenditures, as well as health spending in the consolidated budget, as a percentage of GNP all declined during the 1980s compared with the late 1970s. Government spending on health care in real terms also declined in the first half of the 1980s. But it recovered to the 1979 level in the mid-1980s and continuously surpassed it after 1986 in contrast to education spending, which did not recover to its late 1970s level until 1990 (Table 2.3.1). Total public spending on health in relation to GNP shows a similar trend. It declined in the 1980s and then showed an upward trend in the 1990s (Table 2.3.2).35 In the first half of the 1980s, cuts in (already low) budget expenditures on health care were responsible for substantial deterioration of public health services in qualitative and quantitative terms. This situation generated a backlash among the people. The press gave much coverage to the state of the health care system. Newspapers often included reports about real-life tragedies that occurred because of poor hospital conditions and stories involving people who had been denied emergency medical treatment because they did not have health insurance and enough money to pay for it. As a result of this backlash, the amount of government spending on health was increased after the mid-1980s. However, the fact that the share of health care in total government budget expenditures still remained low indicates that improving public health services was not a priority for the government during the period. As in the area of education, encouraging private capital to invest in the health care sector became a state policy. Private investors received various incentives, such as tax privileges and public land free of charge or at

NEOLIBERAL RESTRUCTURING

AND STATE INTERVENTIONISM

57

Table 2.3.2 Total Public Health Spending as a Percentage of GNP (Current Prices) Year

Public Health Spending % of GNP

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

1.8 1.4 1.4 1.5 1.4 1.3 1.3 1.5 1.6 2.0 2.2 2.3 2.6 2.9 2.7 2.5 2.4 2.2 2.8 3.3 3.5 4.3 4.8 4.8 5.3

Source: SPO (2004, Table 8.19).

subsidized prices, for building hospitals. Consequently, there was a substantial increase in the number of private hospitals, clinics, and the like. For example, the number of private hospitals was 74 in 1978; it continuously increased to 141 in 1995 and reached 234 by 2000 (1997 Annual Programme, Table 2.3; SPO 1989, 340; 2002 Annual Programme, Table 6.4, 156).36 Private hospitals enjoy various incentives provided by the state, such as tax privileges.

58

THE ECONOMIC TRANSFORMATION OF TURKEY

To sum up, during the 1980s and early 1990s, not only did the state prefer to neglect essential social welfare services, such as education and health, but it also promoted their privatization and commodification. Popular resistance limited, but could not reverse, the trend. In other words, transformations in the configuration of state legitimation and accumulation functions involved not merely quantitative changes but also major qualitative changes.

Social Assistance for “the Poor” A significant aspect of qualitative changes in the social welfare functions of the state was the creation of a social assistance scheme for the poor. For this purpose, the government established an off-budget fund called the Mutual Assistance and Support Fund (MASF) in 1986. The MASF was financed through earmarked revenues. Its purpose was to provide benefits in kind and lump sum payments on a discretionary basis as opposed to regular income support. The fund also had an important political purpose with respect to subordinate classes. While state budget expenditures on social welfare and education were cut, the MASF enabled political authorities to claim that these budget reductions were compensated for by expenditures from the fund. This social assistance scheme for the “needy” compensated neither quantitatively nor qualitatively for the declines in budget spending on social welfare and education. Discretionary social assistance programmes that target the poor fundamentally differ from general public welfare services. Public education, health care, and institutionalized social security services are enjoyed by the subordinate classes as social rights or entitlements. The role of the MASF, on the other hand, was to provide a discretionary amount of means-tested assistance to the “deserving poor”. As Therborn (1986, 158) notes, “[the poor] does not simply mean having a low income or being at subsistence level, it means to many a social relation. ‘The Poor’ connotes a marginalized population . . . Welfare states for the poor tend to have particular paternalist, repressive and occasionally populist features.” Despite its degrading aspects, the MASF became the main pillar of the state’s social welfare system in the late 1980s and 1990s. Not only has the MASF continued to operate despite the many changes of government since its creation, but its role was further enhanced in 2004 by reorganization of its administration in the form of a General Directorate.37

NEOLIBERAL RESTRUCTURING

AND STATE INTERVENTIONISM

59

Major Changes in the System of Public Revenue Generation The rearticulation of state functions in favour of private capital was assisted by changes in the system of public revenue generation. Throughout the 1980s, state revenue policy revolved around the principle of supporting private capital accumulation by reducing the direct tax burden on business. The statutory corporate tax rate was 46 per cent from 1986 to 1994, actually 3 percentage points higher than in the pre-1981 years. The corporate tax rate of 46 per cent was higher than in many other OECD countries (OECD 1992, 72, Table 23). However, the statutory rate was far from reflecting the real tax burden on corporations because of various exemptions, fiscal incentives, subsidies, and regular deductions allowed for taxable profits during the period (OECD 1992, 70 – 6). According to the SPO’s official estimates, the effective rate of corporate tax was about 26 per cent, and it was only 10 per cent in the case of banks as opposed to the legal rate of 46 per cent (SPO 1995, 114). Boratav et al. (1995, 20) put the effective corporate tax rate at about 10 –15 per cent during the same period. The system of tax exemptions was also used simultaneously to affect the allocation of resources in favour of export and other foreign currency-generating sectors (Oyan 1991, 12 –13). Substantial changes were effected in the system of personal income taxation as well in the 1980s. The system lost much of its progressiveness. Dividends, interest income, and capital gains on financial assets or real estate were exempted from personal income taxation. Unified declarations of income from different sources were no longer required. Interest receipts and rental income were subject to flat rates much lower than the lowest tax bracket applicable to wages (Boratav et al. 1995, 19 – 20; OECD 1992, 66, 74). Income tax brackets were not adequately adjusted by the government to keep them on par with the rate of inflation. In a situation of chronic double-digit inflation, personal income tax was thus allowed to lose further its progressive elements and actually become regressive as a result of bracket creep (Oyan 1991, 13, 15). To compensate for revenue losses because of increased exemptions for capital income, indirect tax revenue was expanded through the imposition of a regressive value-added tax on almost all goods and services in 1985. The value-added tax (VAT) is imposed on consumers in general, yet wage and salary earners and the self-employed or those who

60

THE ECONOMIC TRANSFORMATION OF TURKEY

operate small businesses of their own constitute the main base of consumer spending. An expenditure rebate system was introduced by the MP government in 1984 to compensate partially wage/salary earners for their increased tax burden and cost of living as a result of the VAT. The system aimed to reimburse a certain percentage of their expenditures on basic commodities.38 The scheme was later extended to other taxpayers. Another aim pursued by this scheme was to ensure compliance with the VAT by encouraging rebate-seeking individuals to collect invoices, thereby reinforcing the formal registration of economic transactions. This aspect of the expenditure rebate system was important given widespread tax evasion (especially among the self-employed) in the country (OECD 1992, 69). The rebate scheme was abolished in 1994 as part of deficit-reduction measures undertaken by the TPP– SDPP coalition government. In addition to the VAT, the government introduced a variety of levies to feed various off-budget funds (OECD 1992, 76 – 9). As a result, the share of indirect taxes in total tax revenue rose well over 50 per cent. Whereas the five-year average of the shares of indirect taxes was 45.7 per cent from 1975 to 1979 and 43.0 per cent from 1980 to 1984, it rose to 58.8 per cent from 1985 to 1989. It remained at this high level in the 1990s.39 Tax reforms in the 1980s in effect meant that the bulk of the tax burden was imposed on wage and salary earners. They paid an increasingly larger portion of total income tax (personal and corporate) revenues. Their effective tax burden40 was also the highest compared with profit, interest, rent, and agricultural income recipients. The argument that the configuration of the state’s accumulation and legitimation functions was transformed in favour of the former at the expense of the latter is also supported by changes in the legislation concerning social security and welfare. The 1982 Constitution, a product of the military regime, differed in fundamental ways from the 1961 Constitution that it replaced in its approach to the principle of a social state. Like the 1961 Constitution, the 1982 Constitution also incorporated the principle that “the Turkish State is a social state”, but it emptied the principle of most of its content. In spirit and letter, the 1982 Constitution abandoned the principle of balancing between the interests of different social classes and the different responsibilities of the state, which had inspired the previous constitution. It instead adopted the approach that the responsibility of the state is first and foremost to

NEOLIBERAL RESTRUCTURING

AND STATE INTERVENTIONISM

61

the well-being and stability of the economy and only after that to the social and economic welfare of labouring people and the needy. The spirit and ideology of the new constitution became concretized in the new legislation concerning social security. As part of the restructuring of the state and its functions, both the military government and the civilian government that followed made massive changes in the social welfare legislation and the Labour Code, which regulates labour –capital relations at the individual level and plays an important role in the social security and protection of workers. Most of these changes rolled back or restricted the gained rights of labour. Among them were restrictions on the scope and amount of severance payments, reductions in pensions as a share of basic wages, an increase in the number of days that wage earners must pay premiums to qualify for retirement benefits, increased contributions by wage earners to the social security scheme and health services, and an increase in the rate of premiums paid by civil servants to the Retirement Fund. Changes in the legislation were guided by state policy and the dominant ideology of the period that “the social security system should not discourage work” (MP Government Programmes 1983, 53; 1987, 95; SPO 1985, 154). One positive development during the period was the gradual inclusion of seasonal agricultural workers and farmers in the public social insurance system from 1983 (SPO 1989, 365). The state encouraged the development of private insurance schemes as existing social security rights were rolled back. From the late 1980s, private companies offering health insurance, pension schemes, and the like mushroomed. A two-tier system thus emerged: private health and other insurance services for those who could afford high premiums, and a low-quality public social insurance system for low-income groups. This system was complemented by a scheme of means-tested social assistance for the deserving poor, namely the Mutual Assistance and Support Fund. In conclusion, the state played a key role in restructuring the Turkish economy toward an export orientation and its further integration into the global economy along neoliberal principles. But in this process, the state itself was transformed. The internal articulation of its apparatuses and the configuration of its functions underwent fundamental changes. Changes in the articulation of state apparatuses entailed centralization and concentration of public policy making in the executive, creation of new institutions with responsibilities and functions geared to the

62

THE ECONOMIC TRANSFORMATION OF TURKEY

requirements of the new political economy, and decline of state institutions embedded in the import-substitution model of development of the 1960s and 1970s. An important result of this state transformation was marginalization of labour representation in policy making. The configuration of state functions also shifted in favour of accumulation at the expense of social welfare. This shift was realized through restructuring the systems of public revenue generation and government expenditure as well as through changes in social security and labour legislation.

CHAPTER 3 INTERVENTIONIST LABOUR RELATIONS POLICY

The marginalization of labour representation in the state and the policies responsible for a substantial reduction of the social wage detailed in the previous chapter were accompanied by the disciplining of labour in the economic sphere. The main mechanism for disciplining labour was not the market but the state. In its capacity as the maker and enforcer of laws and public policies, as well as in its role as the single biggest employer in the country, the state was at the centre of this process. The state used direct political interventions in labour –capital relations that aimed to shift power further in favour of capital and against labour. There was also extensive juridification and bureaucratization of the industrial relations system through new legislation and other measures. This points to the irony of the era during which the official discourse was that of liberalization, deregulation, and free-market economics. Increased state intervention combined with the principle of a free market was not entirely unique to Turkey. As Karl Polanyi (1957, 140) argued over half a century ago, “The road to the free market was opened and kept open by an enormous increase in continuous, centrally organized and controlled interventionism.” In the 1980s, Turkish state intervention in the economy did not actually decline; rather, its direction changed. The state was the agency for dismantling institutions and regulations associated with the ISI-led regime of accumulation. It was also the main agency for creating a new set of institutions that would constitute the regulative mode of export-led development in an open-market economy. In Turkey

64

THE ECONOMIC TRANSFORMATION OF TURKEY

of the 1980s, organized labour was the main subject of “centrally organized interventionism”. The purpose was to weaken, control, or dismantle institutions – above all labour unions, strike activity, and collective bargaining – that political authorities and employers claimed interfered with proper functioning of the market economy.

New Mechanisms for State Intervention A major restructuring of labour – capital relations took place under the military regime of 1980 – 3. The socialist DISK was closed down. It stayed closed until 1991 as a result of court trials.1 The military regime permitted the pragmatic Tu¨rk-Is but put it under state control. Collective bargaining was suspended, and all strikes (as well as lockouts) were banned. The new constitution that the military regime adopted in 1982 contained strict regulations for labour unions. In accordance with the constitution, a rather restrictive Trade Unions Law and a Collective Bargaining, Strike, and Lockout Law were enacted shortly before the restoration of civilian rule. The new labour legislation imposed extensive restrictions and administrative controls on unions and involved detailed juridification and bureaucratization of the collective bargaining process and strike activity. These laws remained in force without significant changes many years after the military regime. The new set of legislation allowed the state to establish control over the system of industrial relations. This was actually the other side of organized labour’s exclusion from the political process and its marginalization in the state. The state further expanded into the realm of labour relations to exclude organized labour from public policy formation and deprive it of the power resources needed to exercise political pressure. Two institutions played significant roles in implementing the interventionist labour policy in the 1980s while the state carried out structural adjustment of the economy. These institutions were the Supreme Board of Arbitration (SBA) and the Public Sector Collective Agreements Coordination Committee (PSCACC). During the military regime, a compulsory arbitration system replaced collective bargaining. The act creating the SBA equipped this organ with broad powers for reviewing expired collective agreements.2 The board had the authority to make changes in the non-remuneration provisions of collective

INTERVENTIONIST LABOUR RELATIONS POLICY

65

agreements as well as to determine wages and non-wage benefits in each expired collective agreement. The founding act allowed the SBA to repeal provisions of collective agreements that ran counter to “the integrity of the state with its territory and nation, national security, public order and general health” (Act No. 2364). This provision was valid for not only expired but also still effective collective agreement. During its tenure, the board extensively abused this wide and ambiguous authority (Aker 1990, 190; Ketenci 1990, 252). Since the labour movement was effectively suppressed by the military, workers could not immediately react to the compulsory arbitration system. There was no opposition by employers either. The majority of the SBA’s members were state officials. The board was composed of nine members: the head of the Department for Labour Disputes in the Court of Cassation; two members appointed by the Council of Ministers; one representative from the Ministry of Labour; the head of the Social Planning Department in the State Planning Organization; two labour representatives selected by the labour confederation with the highest membership; and two employers’ representatives (one on behalf of private sector employers from TISK as the biggest employers’ association, one on behalf of public sector employers to be selected by the Council of Ministers) (Ketenci 1985, 170; So¨nmez 1984, 74). Through the board, centralized state control was established over the system of industrial relations to carry out a major restructuring of labour –capital relations. Over the course of its existence (1981– 3), the SBA renewed 4,859 collective agreements covering 27,412 workplaces and 1,896,421 employees (Petrol-Is 1987, 126, Table 67). Some of these agreements, involving approximately 400,000 workers, were applied retroactively because the original agreements had expired in 1979 or 1980. Since the board renewed a large number of agreements in 1982 and 1983 for a three-year period, these agreements continued to be binding for one or two years after “free” collective bargaining officially resumed in January 1984 (Shabon and Zeytinoglu 1985, 227; So¨nmez 1984, 148, 150). Thus, though the SBA operated from 1981 to 1983, its influence reached far beyond this period, into the past as well as into the future. It accomplished a great deal in rolling back and even eliminating various benefits and rights that workers had won in collective agreements as a result of decades of struggle. It also consistently set wage increases below

66

THE ECONOMIC TRANSFORMATION OF TURKEY

the actual inflation rate, thus effectively lowering real wages (Shabon and Zeytinoglu 1985, 228, Table VI – 13). The Supreme Board of Arbitration was the foremost target of criticism for Tu¨rk-Is unionists and members during the period.3 Despite their constant criticism of the board, two labour representatives selected by the Tu¨rk-Is Executive Committee continued to sit on the board. It usually made its decisions by the majority of state and employer representatives despite labour opposition. The labour representatives noted their dissension in all of the collective agreements renewed by the SBA between 1981 and 1983 (Tu¨rk-Is 1983a, 90). Despite the criticisms and dissension, Tu¨rk-Is’s participation in the board actually helped its institutionalization. And the fact that Tu¨rk-Is representatives could not influence board decisions in favour of labour interests contributed to delegitimation of the confederation in the eyes of its rank and file. The SBA did not cease to exist with commencement of the collective bargaining system in 1984. It continued to serve as a main agency through which the government exercised control over organized labour in the post-military period. Unusual for a constitution, the 1982 Constitution included a provision concerning the SBA and its role (Article 54). Its transformed role was to arbitrate labour disputes in cases in which strikes were banned or postponed by the government or the labour union and employer could not reach an agreement within the time period set by the law. The SBA’s decision was final and binding. The significance of the SBA’s role can be better understood by the fact that the 1983 Collective Bargaining, Strike, and Lockout Act considerably extended the number of sectors and workplaces where strikes were prohibited compared with the previous law. Furthermore, the 1983 act allowed the government to postpone strikes for 60 days on the ground of “general health or national security” (Act No. 2821; Official Gazette No. 18040, 7 May 1983). Thus, if the government postponed a strike, the SBA had to settle the collective bargaining dispute if the parties failed to reach an agreement. The Motherland Party government further expanded the strike ban by enacting the Free Trade Zones (FTZ) Act in 1985. The act was in line with the government’s goal of attracting foreign capital. The FTZ Act prohibited strikes for a ten-year period from the day of the creation of a free-trade zone. As a result, in the FTZs as well, the SBA became responsible for resolving collective labour disputes (C¸elik 1988, 484, 486). While the MP government initiated FTZs, subsequent governments continued to create

INTERVENTIONIST LABOUR RELATIONS POLICY

67

new ones. By 2000, the number of FTZs had reached 17. There were 446 foreign companies and 2,238 local companies employing 19,000 employees in these FTZs (2001 Annual Programme, 47). The wide-ranging prohibitions on strikes made the Supreme Board of Arbitration a powerful state agency in the area of industrial relations. This power enabled the government to exercise close supervision over organized labour and to intervene in the collective bargaining process. The figures for unionized workers denied the right to strike and hence potentially under the SBA’s authority indicate the powers of the board over organized labour. According to the Ministry of Labour’s Industrial Branch statistics, the number of unionized workers in industrial branches in which there was a ban on strikes was 609,000 in 1985 and 758,000 in 1992. They constituted 38 per cent of total union members and 34 per cent of all wage earners registered to the Social Insurance Institution in 1985. The corresponding figures for 1992 were respectively 34 per cent and 32 per cent.4 The SBA played an influential role in labour –employer relations in the 1980s and 1990s. The number of collective agreements finalized by the board showed a rising trend in both the public and the private sectors in the late 1980s and early 1990s.5 The underlying reason for the rise was the (re)mobilization of organized labour to compensate for its large losses and hence the failure of collective negotiations to lead to agreements. Since many workplaces in the public sector were forbidden to strike, collective labour disputes in such cases had to be referred to the SBA according to the labour legislation. From the end of 1984 to the end of 1995, it finalized 1,146 collective agreements for 218,602 workers at 5,225 workplaces. A large majority of the workers were in the public sector in branches in which strike activity was prohibited. The single most important reason for the referral of collective disputes to the SBA during the period was the prohibition of strikes in particular industries or workplaces (predominantly in the public sector) as stipulated in the Collective Bargaining, Strike, and Lockout Act (Article 32) (Ministry of Labour and Social Security 1996, 69).

The State as “Arch-Employer” A significant aspect of the restructuring of state –working-class relations in the 1980s was emergence of the state “as the arch-employer to the

1970 1975 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

Year

na na 15,702 15,839 16,006 16,169 16,419 16,699 17,010 17,402 17,755 18,221 18,538 19,287 19,459 18,499 20,006 20,586

4,173 5,387 6,162 na na na na 6,398 na na 7,170 7,013 7,361 7,322 7,345 7,805 8,190 8,551

362 544 541 530 529 580 641 653 666 661 655 638 643 631 612 599 555 496

na 749 1,134 1,137 1,175 1,187 1,206 1,240 1,268 1,301 1,325 1,328 1,380 1,401 1,464 1,517 1,508 1,554

na na 3.4 3.3 3.3 3.6 3.9 3.9 3.9 3.8 3.7 3.5 3.5 3.3 3.2 3.2 2.8 2.5

8.7 10.1 8.8 na na na na 9.9 na na 9.1 9.1 8.7 8.6 8.3 7.7 6.8 5.8

na na 7.2 7.2 7.3 7.3 7.3 7.4 7.5 7.5 7.5 7.3 7.4 7.4 7.7 7.9 7.7 7.6

na 13.9 18.4 na na na na 19.4 na na 17.9 18.4 18.6 19.1 18.7 19.2 18.7 18.8

Wage/ Salary Total Total Personnel Cadres Civilian Earners (2) (Regular Personnel in General Budget Employment (1) and Casual) in SEEs (3) Institutions (4) 3/1 % 3/2 % 4/1 % 4/2 %

Table 3.1 Employment in SEEs and General Budget Institutions in Relation to Total Civilian Employment and Entire Wage/ Salary Earners (in Thousands)

21,194 21,204 21,778 22,048 21,581 21,524 21,354 20,067 22,594

9,075 9,466 9,712 9,925 10,488 10,155 10,625 11,435 13,762

487 467 457 449 435 421 384 247 186

– – – – – 2,201 * 2,179 2,099 2,277

2.3 2.2 2.1 2.0 2.0 1.9 1.8 1.2 0.8

5.4 4.9 4.7 4.5 4.1 4.1 3.6 2.2 1.4

– – – – – 10.2 10.2 10.5 10.0

– – – – – 21.7 20.5 18.4 16.5

Notes: 1. Civilian employment includes persons at least 15 years old. Sources: Turkish Statistical Institute (TSI, formerly State Institute of Statistics), Household Labour Force Surveys, www.turkstat.gov.tr; SPO, Main Economic Indicators (various issues), and SPO, Economic and Social Indicators 1950– 98. 2. The years 1970–80 are based on population censuses, 12 years and older. Source: SIS (1995, 307). Other years are from SIS (1987, 1998b) and TSI, Household Labour Force Surveys, www.turkstat.gov.tr. 3. 1970 –83 from the SPO’s Annual Programmes and the Fifth Five-Year Development Programme as provided in Waterbury (1992, 58); 1984 from 1997 Annual Programme (Table III.36); 1985– 2002 from Undersecretariat of Treasury (2013). 4. From SIS (1998a, Table 1). The figures are based on Ministry of Finance, General Directorate of Budget and Finance Control, records. Since data concerning the size of personnel cadres in general budget institutions as of 1975 were not available, relevant data for the nearest year (1976) were used in the table. Note that staff cadres in general budget institutions include public servants, workers, and contract employees. The principal form of employment is that of public servant. The figures include not only those cadres actually filled at the time but also vacant ones. The ratios of filled to total cadres are 84 percent for 1976– 87, 82 per cent for 1988, 85 per cent for 1989, 87 per cent for 1990, 87 per cent for 1991, and 88 per cent for 1991– 5. * 2001– 10 figures refer to filled cadres and vacant positions. Since these figures are not from the same series as those for earlier years for the general budget institutions, caution is required when comparing them. Source: State Personnel Directorate (Devlet Personel Bas¸kanlıg˘ı), www.euygulama.dpb.gov.tr/Dpb.../Dpb_Istatistik.aspx. - means unavailable.

1996 1997 1998 1999 2000 2001 2002 2005 2010

70

THE ECONOMIC TRANSFORMATION OF TURKEY

extent of overshadowing the role of the main representative bodies for employers – TISK and TU¨SIAD” (Sakallioglu 1991, 58). The state has been the largest single employer in Turkey. The central government and the SEEs together employed over a quarter of wage/salary earners and were responsible for 10 – 11 per cent of total civilian employment in the country during the 1980s and 1990s (Table 3.1). If local administrations and other public institutions were included, then the figure would be much higher. In the 1960s and 1970s, the state followed a policy conducive to the unionization of wage earners in the public sector though not to the unionization of civil servants. Partly because of this permissive state policy and partly because of domination of the public sector by large enterprises, hence a high concentration of labour, unionization was higher in the public sector than in the private sector. The number of workers covered by collective agreements was higher in the public sector than in the private sector.6 Consequently, wage settlements in the former sector were usually pace setters for collective negotiations in the latter sector. Real wage increases in the public sector exerted upward pressure on private sector wages in the 1960s and 1970s. The state qua employer thus played a major role in enlarging the domestic market for importsubstitution industries during the period. This was “a clear instance of the [employer] state implementing a policy that benefited ‘the collectivity of the capitalist class’ to the detriment of the logic of profit maximization from the perspective of each individual capitalist” (Keyder 1987b, 300). But the state was also responding to demands of the increasingly organized working class. Simultaneous with neoliberal restructuring of the Turkish political economy in the 1980s was transformation of the state into an arch-employer. Wage settlements in the public sector continued to act as pace setters but this time for lowering real wages. Reducing wages in the public sector would accomplish a double goal. It would mean less state expenditure on payroll. Hence, there would be more public resources available for other uses, including investment incentives, export subsidies, and tax breaks for private firms as well as more funds for public debt servicing. The Public Sector Collective Agreements Coordination Committee and the public employers’ associations epitomized the state’s new role as arch-employer. As soon as collective bargaining started after transition from the military regime, the MP government created the PSCACC

INTERVENTIONIST LABOUR RELATIONS POLICY

71

in June 1984 (Prime Minister’s Circular No. 84/12, in TU¨BA, IIC¸B, 25 June 1984). The PSCACC was attached to the Prime Minister’s Office and composed of eight state officials. Its role was to supervise collective agreement negotiations in the public sector from a single centre and to make sure that collective agreements were in line with the government’s neoliberal economic agenda. Although its role was limited to the public sector, its influence reached far beyond it. The PSCACC determined a set of principles that state enterprises and institutions were mandated to observe in their collective negotiations with labour unions. These principles all sought to restrict employees’ wage and non-wage benefits as much as possible. They instructed public sector employers not to concede more rights and benefits above the legally required minimum concerning work hours, overtime payments, vacation times, and other similar benefits. This actually meant denying workers their right to collective bargaining. Even according to the new restrictive labour legislation, laws set the minimum protective measures that could be increased by collective agreements. One of the PSCACC’s principles was against union demands for participation in enterprises’ decision mechanisms; the PSCACC instructed public sector employers not only not to agree to such union demands but also to remove any such provisions from collective agreements (text of the principles in Cumhuriyet, 12 and 13 September 1984, 6 January 1985; also in Karahasanoglu 1986, 187–8). The PSCACC not only determined general principles but also set a ceiling for wage increases in the public sector. In a number of cases, collective agreements that did not comply with the PSCACC principles were not implemented by the concerned public enterprise’s management as a result of pressure from the government or PSCACC (Karahasanoglu 1986, 190). The PSCACC and its principles were strikingly similar to the Collective Agreements Coordination Committee established by the Justice Party government several months prior to the military takeover on 12 September 1980. It had taken a repressive military regime to effectively carry out such anti-labour policies and to institutionalize them in a new constitution and labour legislation. The Supreme Board of Arbitration of both the military and the post-military periods acted according to a set of principles very similar to the ones embraced by the PSCACC. A remarkable degree of consensus formed between the state ruling elite and the capitalist class with respect to labour. The policies

72

THE ECONOMIC TRANSFORMATION OF TURKEY

that TISK adopted for post-military collective bargaining closely resembled those of the SBA and the PSCACC (Cumhuriyet, 13 September 1984; So¨nmez 1984, 154– 5). Labour unions, considerably weakened by the military regime, and significantly restricted by the new labour legislation, failed to develop a viable strategy to defend workers’ interests against the state as archemployer. They largely acquiesced to the principles and wage ceilings set by the PSCACC on behalf of the employer state. The PSCACC was too visible a political control mechanism over organized labour. Labour unions not only constantly criticized the situation at home but also carried the issue to several international labour platforms, such as the ILO and the International Confederation of Free Trade Unions (ICFTU), of which Tu¨rk-Is was a member. Consequently, in 1986 the government reorganized public sector employers’ associations, then numbering about 12, into three major ones (Kamu-Sen, Kamu-Is, and Tu¨his). It also instructed all of the public enterprises and institutions to promptly join one of these associations. The PSCACC was abolished in April 1987. But its functions were transferred to public employers’ associations (PEAs). Labour unions were to negotiate with these associations rather than individual public enterprises. According to Dereli and Zeytinoglu (1993, 695– 6), PEAs’ goal was to prepare public enterprises for privatization by making them profitable; they thus pursued hard bargaining policies. PEAs were not independent of the government. Although labour unions sat at the bargaining table with PEAs, they actually negotiated with the government. When there was a deadlock in collective negotiations, a minister of state or the prime minister often stepped in, and negotiations were often continued with either of them. In parallel with the concentration and centralization of public policy making in the Prime Minister’s Office assisted by a small circle of ministers of state and key state officials, decision making concerning labour relations in the public sector was virtually monopolized by the prime minister and ministers in charge of economic affairs. PEAs joined TISK, the confederation of private employers’ associations, in 1986. Consensus between the ruling elite and private capital concerning labour relations thus turned into institutionalized cooperation in determining and enforcing common policies. TISK expressed its delight with the fact that “close coordination of the policy principles to be followed by the public and private sector employers in

INTERVENTIONIST LABOUR RELATIONS POLICY

73

collective bargaining would prevent the emergence of different provisions in collective agreements that labour could use as a staircase to climb up” (1986, 24 – 5). Public enterprises joining TISK eventually created a counter-productive effect. Workers came to see the state as identified with big capital (Boratav and Yalman 1989, 61). Confronted with a unified bloc of private and public employers, the labour union movement was unable to overcome its impasse until the end of the 1980s. It was only through rank-and-file mobilization at the turn of the decade that labour unions started pushing back. To sum up, centralized political control over the trade union movement and the collective bargaining process, and a highly interventionist labour relations policy, constituted an integral part of neoliberal restructuring of the Turkish economy.

Distribution from Labour to Capital in the 1980s The state’s interventionist labour policy and suppression of the labour movement accomplished the transfer of income from labour to capital. The working class’s real wage gains in the 1960s and 1970s were reversed in the 1980s. The absence of a reliable series of wage statistics for the period covered creates problems for analysts.7 The calculation of wages has been a matter of dispute between labour unions and employers’ associations. For employers, wages include not only basic wages but also non-wage payments such as social benefits, premiums, and bonuses. Because of the poor quality of data, and disagreements over the definition of wages, this study provides the wage series of the State Planning Organization, TISK, and the Petrol-Is Union (Tables 3.2, 3.2.1, 3.2.2). All three sources point to a substantial decline in real wages in the 1980s, though they differ over how great the decline was. Real wages decreased in both the private and the public sectors. According to the Petrol-Is Union’s wage series, the index of real wages dropped from 100.0 in 1979 to 55.6 in the private sector and 49.7 in the public sector in 1988. According to the SPO’s series, the index of real wages declined from 100.0 in 1981 to 81.0 in the private sector and 46.0 in the public sector in 1988. The SPO’s wage index was based on TISK’s wage series. Average private sector wages were overestimated in TISK’s statistics, and hence in the SPO’s index, because TISK’s survey covered predominantly medium and

74

THE ECONOMIC TRANSFORMATION OF TURKEY

Table 3.2 Wages (TL/Day) (Basic Wage þ Social Payments) According to Official and Employer Sources Public1

Private2

Year

Nominal Wages

Real Change (%) over the Previous Year

Nominal Wages

Real Change (%) over the Previous Year

1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993

1,902.4 2,410.4 3,092.9 3,757.0 4,383.0 6,175.0 9,226.0 21,698.0 45,200.0 109,200.0 202,900.0 378,500.0

2 11.2 2 3.6 2 13.5 2 16.2 2 13.3 1.5 2 14.8 38.1 29.8 45.7 9.2 12.3

2,098.2 2,529.4 3,535.3 4,772.9 6,299.9 9,847.4 16,423.3 36,577,5 68,237,0 169,300.0 280,800.0 472,800.0

2 3.6 2 8.3 2 5.8 2 6.9 2 1.9 12.6 2 4.9 31.3 16.4 49.6 2 2.5 1.4

Source: 1982– 9 from 1992 Annual Programme (1992, 342, Table 284); 1990– 3 from SPO (1994, 231, Table 207). 1 Basic wage plus social benefits, excluding employers’ social security premiums. 2 Basic wage plus social payments, excluding bonuses, premiums, and the like.

large firms. Furthermore, all kinds of social payments in kind or cash were included in TISK’s calculation of wages. As a result, the actual decline in private sector wages is highly likely to have been underestimated in the SPO’s series. A decade of wage repression eventually provoked labour mobilization. There was an eruption of labour actions at the end of the 1980s. These actions included various passive and active forms, such as lawful and unlawful strikes, demonstrations, rallies, slow-downs, and refusals of overtime (see Chapter 10). The rise of labour militancy led to relatively better wage deals for workers in 1989. Real wages continued to improve in the early years of the following decade. Differences in the actual amounts notwithstanding, all sources point to a significant increase in real wages in both private and public sectors during the period 1989 – 93.

INTERVENTIONIST LABOUR RELATIONS POLICY Table 3.2.1

75

Official Real Wage Index (1981 ¼ 100)

Year

Private

Public

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993

100 96 88 83 78 76 86 81 107 124 186 181 194

100 89 86 74 62 54 55 46 64 84 122 133 150

Source: 1995 Transition Programme (1994, 204). Notes: 1. The figures for private sector wages are based on TISK’s annual survey of labour statistics and labour costs. TISK’s survey covers a sample of establishments that are members of TISK-affiliated employers’ associations. Since TISK’s members are predominantly medium and large firms, the figures for private sector wages based on its surveys do not include wages in small firms. Social payments in TISK’s wage data include social benefits in kind or cash, such as fuel and transportation pay; birth, death, and marriage allowances; family, children, and education allowances; meals; and the like. Some of these social benefits, such as birth, death, and marriage allowances, are not regularly enjoyed by workers (see TISK 1995b). 2. According to OECD (1990, 29), the increase in private and public sector wages in 1987 was due mainly to public sector price restraint.

Wage statistics alone do not reveal enough about the distribution of income between labour and capital. A principal indicator of the economic position of labour in relation to capital is the share of wages in total value added. The available data show a substantial redistribution of income from labour to capital during the 1980s. The share of wages in total value added in both private and public manufacturing sectors fell dramatically (Table 3.3). Bigger enterprises compared with smaller ones were even more effective in reducing the share of wages in value added (Table 3.3.1). Whereas real wages declined sharply, labour productivity steadily increased during the same period (OECD 1993, 49, Table 16). This meant that workers produced more but received continuously

462.1 805.6 1,169.5 1,461.8 1,904.2 2,446.9 3,058.6 3,629.0 5,362.0 8,011.3 18,746.0 39,600.0 97,300.0 181,000.0 262,450.0

1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993

462.1 383.3 407.3 388.9 385.6 333.9 287.8 253.7 269.9 229.9 317.2 409.5 606.2 662.9 578.7

Real 345.7 563.3 936.1 1,151.3 1,455.8 1,920.6 2,277.6 2,714.6 4,032.4 6,703.9 14,247.0 25,442.6 40,588.4 66,722.3 169,007.8

Nominal 345.7 268.0 326.0 306.3 294.8 262.1 214.3 189.8 203.0 192.4 241.0 263.1 252.9 244.4 372.7

Real

Private Sector

389.9 654.8 1,014.4 1,252.8 1,599.0 2,090.5 2,511.1 2,983.0 4,209.2 7,041.9 15,634.2 28,619.4 46,923.0 79,526.0 190,538.7

Nominal

Total

389.9 311.5 353.3 333.3 323.8 285.2 236.3 208.5 211.9 202.1 264.5 296.0 292.3 291.3 420.1

Real 100 82.9 88.1 84.2 83.4 72.2 62.3 54.9 58.4 49.7 68.6 88.6 131.2 143.5 125.2

Public 100 77.5 94.3 88.6 85.3 75.8 62.0 54.9 58.7 55.6 69.7 77.2 106.2 122.1 107.8

Private

Real Wage Index

100 79.9 90.6 85.5 83.0 73.2 60.6 53.5 54.3 51.8 67.8 77.0 108.8 129.2 107.8

Total

Source: Petrol-Is (1995, 245). This wage series is based on data of the SPO, Prime Ministry, High Board of Auditors, and SII and pay raises agreed in collective labour contracts during the period. It uses the SIS consumer price index in calculating real wages. 1 Wages refer to basic wages excluding bonuses, premiums, and social benefits in kind or cash.

Nominal

Public Sector

Wages TL/Day1 Petrol-Is Union Yearbook

Year

Table 3.2.2

INTERVENTIONIST LABOUR RELATIONS POLICY Table 3.3

77

Share of Wages in Total Value Added in the Manufacturing Sector

Year

Public

Index

Private

Index

Total

Index

1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

51.8 35.3 26.3 23.4 23.3 22.9 18.6 12.9 17.2 13.0 17.6 21.7

100.0 68.1 50.8 45.2 45.0 44.2 35.9 24.9 33.2 25.1 34.0 42.0

32.2 27.6 27.7 26.3 26.0 23.8 22.8 18.2 17.4 16.7 19.7 21.8

100.0 85.7 86.0 81.7 80.7 73.9 70.8 56.5 54.0 52.0 61.2 67.7

38.7 30.7 27.1 25.1 24.8 23.5 21.2 16.1 17.3 15.4 19.0 21.7

100.0 79.1 70.0 64.9 64.1 60.7 54.8 41.6 44.7 39.8 49.1 56.1

Sources: 1979 from SIS (1991), as provided in Tu¨rk-Is (1992a, 20); the rest are from the SIS’s Statistic Indicators 1923– 91, as provided in Koray (1994, 152).

Table 3.3.1

Share of Wages in Value Added (%) Establishments with 25 or More Employees

Year

Establishments with 10 – 24 Employees

Total

Public

Private

1985 1986 1987 1988 1989 1990 1991

23.4 22.7 21.0 20.0 19.8 21.6 22.3

21.1 15.9 17.2 15.3 18.9 21.8 25.0

18.6 12.9 17.0 13.0 17.6 21.9 27.9

22.8 18.0 17.3 16.6 19.7 21.8 23.7

Source: SIS (1995, Tables 2.18 and 2.19).

declining shares in what they produced. In other words, the exploitation of labour was dramatically intensified during the period. Public servants also suffered substantial absolute and relative deterioration in socio-economic position throughout the 1980s. Unlike workers, public servants did not have unions until the mid-1990s. Since

78

THE ECONOMIC TRANSFORMATION OF TURKEY

Table 3.4

Civil Servants’ Salaries (TL/Month) (Weighted Averages)

Year

Nominal Salaries

Real Salaries

Nominal Change % over the Previous Year

1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993

9,465 12,107 17,289 23,836 30,144 40,090 57,754 78,986 113,984 182,307 378,090 697,227 1,239,749 2,400,300 4,072,100

9,465 5,769 6,035 6,344 6,093 5,475 5,431 5,527 5,735 5,231 5,340 7,210 7,723 8,791 8,979

27.9 42.8 37.9 26.5 33.0 44.1 36.8 44.3 59.9 107.4 84.4 77.8 93.5 69.6

Real Change % over the Previous Year

Real Salary Index

2 39.0 4.6 5.1 2 4.0 2 10.1 2 0.8 1.8 3.8 2 8.8 2.1 35.0 7.1 13.2 2.1

100 61 64 67 64 58 57 58 61 55 56 76 82 93 95

Note: Real salaries and index are my calculation based on the SIS’s consumer price index as given in Petrol-Is (1995, 245). Sources: 1978– 9 from Dereli and Zeytinoglu (1993, 697); 1980 –91 from 1992 Annual Programme (1992, 343); 1990– 4 from SPO (1994, 232).

they did not have the right to collective bargaining, their salaries were unilaterally determined by the government.8 The index of real salaries dropped from 100.0 in 1979 to 55.0 in 1988. In the following years, real salaries tended to recover but not enough to compensate for substantial erosion in the previous ten years (Table 3.4). This was not, however, only a quantitative deterioration. Income loss also meant a loss in social status, which came to be measured largely in terms of access to the newest consumption goods and services as the dominant neoliberal ideology recast the individual as first and foremost a consumer and market participant. Public employees also experienced important transformations concerning their career patterns and expectations. State employment largely ceased to be a channel of upward social mobility and

INTERVENTIONIST LABOUR RELATIONS POLICY

79

a source of prestige and social status. In this sense, middle- and low-level civil servants experienced a process of proletarianization. Although this process started before the 1980s, restructuring of the state and reformulation of its role in the 1980s definitely accelerated it. The initial reaction of civil servants to their worsening conditions took mainly individualistic forms, such as working more slowly and less efficiently. Moonlighting was another widespread recourse. Accepting bribes also became common. Individualistic forms of resistance impaired the state’s capacity to carry out policies at the lower echelons of the bureaucracy. This situation also negatively affected the delivery of public services to citizens and created public animosity toward “bribe-seeking and lazy” bureaucrats. Citizens’ experiences with the state sector and public servants thus enforced in their minds the dominant policy discourse that the public sector was wasteful and less efficient than the private sector, and hence its frontiers had to be rolled back. In the early 1990s, public employees increasingly joined collective struggles against their economic and social marginalization. Class struggles were thus increasingly reproduced within the state apparatus itself. Public employees’ demands were not merely of an economiccorporate nature. They also involved expansion of democratic public space, such as recognition of the right and freedom to organize.

Impact of the Changing Role of the State on Working-Class Structure The transformation that Turkish public employees experienced is a good example of how the formation and structure of social classes are directly affected by state policies. Significant changes in the structure of the working class occurred via reformulation of the politico-economic functions of the state in the 1980s and 1990s. Redefinition of the state’s role as a major economic agent included conscious policies, such as withdrawal of the state from direct production activities as well as scaling back of the public sector. This also meant that the size of state employment was reduced. General budget institutions and SEEs have been responsible for most state employment.9 General budget institutions are central state institutions that do not generate their own revenues and rely solely on payments from the central government budget. Principal general budget

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institutions include ministries and various departments attached to ministries. It is logical to expect that government policies concerned with restructuring, or reducing the size, of the public sector would first affect general budget institutions and SEEs.

Employees in Central Government Institutions In contrast to the dominant official discourse of scaling back the public sector, there was no decline in the total size of staff in general budget institutions (GBIs). The total number of state personnel continuously increased in the 1980s and 1990s.10 The rate of growth was much slower, however, compared with that of the late 1970s (Table 3.1). It is necessary to evaluate the increase in state personnel in relation to the growth of Turkey’s general population. There was a significant increase in the size of GBI staff as a percentage of the general population in the late 1970s. It rose from 1.83 per cent in 1976 to 2.55 per cent in 1980. It remained in the range of 2.42– 2.53 per cent during the period 1981–95.11 This means that, though the number of government employees continuously increased in the 1980s and 1990s, there was not a significant change in the number of state personnel relative to the general population. In that sense, the policy of limiting the state sector was effective. The proportion of public employees in the GBIs to total civilian employment and total wage/salary earners did not significantly change between 1980 and 1995. But there seems to have been significant increases in the late 1990s and early 2000s (Table 3.1). Most employees in GBIs have the status of public servants as opposed to non-salaried workers and contract personnel. The number of public servant cadres in GBIs continuously rose in the 1980s and 1990s (Table 3.1). In contrast to consistent growth in the number of public servants, state policy of the 1980s was to restrict the employment of workers. There was an overall decline in the number of regular workers in GBIs.12 Important in this regard are the different legal rights and privileges associated with the special legal status of public employees. Whereas workers had the right to unionize and bargain collectively, employees with the legal status of public servant did not have these collective labour rights.13 But one important advantage that public servants enjoyed was job security. Although their right to unionize was recognized by a constitutional amendment in 1995, they continued to be deprived of the right to collective bargaining. In the Turkish system, the

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status of public servant tended to be defined too broadly to include staff who had nothing to do with tasks normally associated with administration of the state. Apart from restricting the recruitment of employees with the legal status of workers, there was no major transformation in the form or legal status of employment in central government institutions during the period. Public servants remained the predominant type of employees in general budget institutions. However, the data available pertain only to the cadres of state institutions. They do not reveal anything about outsourcing or contracting out certain services by state institutions to the private sector. Such practices tended to increase in the public sector. It is highly possible that ministries tended to contract out certain auxiliary services, such as janitorial services, instead of recruiting employees to do these tasks.

Transformation of Employment in SEEs In a situation of high unemployment, including high levels of underemployment, sharp cuts in state sector employment could create a socially and politically explosive situation. Partly because of political considerations, and partly because privatization of public enterprises did not take off until the early 1990s, there were no cuts in the labour force in SEEs in the 1980s. But from the early 1990s on, the acceleration of privatization meant that the number of employees in SEEs began to decline. As many large public enterprises were privatized from the late 1990s on, SEE employment dropped sharply (Table 3.5). Although until the mid-1990s there was no significant decline in the size of the labour force in the state economic sector, there were major changes in the composition of employment. The most controversial development in this regard was the creation of a new category of employees, called contract personnel, in addition to the existing categories of public servants and workers.14 The category of contract personnel was first created by the military government through a decreelaw (No. 60) dated 11 April 1983. The MP government continued this policy with some revisions through more decree-laws enacted in 1984, 1988, and 1990. Creation of the category of contract personnel was clearly connected to the privatization agenda. The first piece of legislation concerning the privatization of SEEs referred to the

187,276 173,590 123,537 78,652 39,106 27,074 16,251 14,212 16,428 15,067 13,085 12,955

Year

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

4,159 21,087 80,384 132,421 173,833 185,083 192,965 188,858 188,880 178,730 165,074 162,484

Contract Personnel 385,547 383,781 350,789 331,877 337,960 349,053 332,970 324,104 307,599 276,661 231,812 223,131

Employees with Collective Bargaining Rights1 0 0 29,237 38,493 19,820 8,810 17,760 7,377 7,362 7,392 6,782 6,778

Out-of-Scope Employees2

Employees in SEEs According to the Status of Employment

Civil Servants

Table 3.5

76,084 87,393 76,884 73,131 67,679 73,038 70,667 77,657 78,975 77,261 79,599 81,321

Temporary Employees

653,066 665,851 660,831 654,574 638,398 643,058 630,613 612,208 599,244 555,111 496,352 486,669

Total

48 49 53 51 47 49 49 49 49 51 50 58

Number of Enterprises

12,041 11,667 11,169 10,329 7,012 6,307 6,041

163,650 164,537 162,806 141,801 86,870 78,813 75,901

204,165 195,206 182,147 182,793 119,900 90,241 77,104

6,758 6,979 8,718 16,891 4,033 2,950 3,276

80,151 78,705 84,316 82,841 29,447 7,826 5,777

1

Source: Undersecretariat of Treasury (2013). Employees covered by Labour Law No. 4857 and subject to the collective bargaining process. 2 Employees covered by Labour Law No. 4857 and excluded from the right to collective bargaining.

1997 1998 1999 2000 2005 2010 2012

466,765 457,094 449,156 434,655 247,262 186,137 168,098

47 48 46 41 32 28 27

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employment of contract personnel in SEEs (Decree-Law No. 233, 1984). The stated official reason for the creation of contract personnel was to attract highly qualified experts to the management of SEEs by offering higher salaries than those attainable under either the collective agreement system or the civil service system. But actual implementation of the policy was to convert civil servants to contract personnel through “both compulsion and pay incentives” (Serim 1995, 423– 4). This de facto situation became de jure by another decree-law in 1988 (No. 308), which allowed for only two types of employment, contract personnel and workers, in SEEs. Contract personnel were subject to special regulations and denied a number of legal protections or rights available to non-salaried workers or civil servants. They were excluded from the union and collective bargaining rights of workers and the job security right of public servants (Decree-Law No. 308, 1988). The contract personnel system conformed well with the privatization policy. Such employees, who did not enjoy any collective rights or individual protections against dismissal, would not have any power to resist the privatization of their workplaces. Furthermore, SEEs would be more attractive to private capital. Contract personnel posed a clear threat to organized labour. Labour unions soon started challenging the contract personnel legislation before the courts, leading to a number of court rulings in their favour (Petrol-Is 1988, 295– 6; Tu¨rk-Is 1989a, 243). In February 1988, the Social Democratic Populist Party (SDPP), the main opposition party at the time, also filed a case with the Constitutional Court against Decree-Law No. 308 of 1988 concerning SEEs. The court repealed many important provisions of the decree-law on the ground of unconstitutionality in December 1988.15 It based its ruling primarily on the principles of a “social state” based on the rule of law and equality before the law. Among the annulled provisions were the elimination of the position of public servants in SEEs16 and the exclusion of contract employees from the collective bargaining system. The Constitutional Court stated that it was unconstitutional to deprive contract employees of protections and guarantees enjoyed either by public servants or by workers and to leave them at the mercy of the political executive and managers. In explaining its ruling, the court wrote that “It is not possible to reconcile the absence of protections for [contract] employees in the concerned provision of the

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decree with the nature of the social state that ensures real equality by protecting the weak against the powerful, as expressed in Article 2 of the constitution . . .” (Constitutional Court Decision No. 1988/55, Official Gazette No. 20232, 25 July 1989, 50). Despite weakening of the principles of checks and balances and separation of powers in the restructured state, there was still scope for conflicts and disagreements among different apparatuses of the state. The task of the Constitutional Court is to rule on the constitutionality of parliamentary acts and governmental decrees – in other words, to uphold the constitution. But the constitution does not speak for itself; it needs to be interpreted. When deciding on the (un)constitutionality of the decree-law on SEEs, the court adopted a progressive interpretation, emphasizing the principle of a “social state”. The executive apparatus of the state continued to implement the policy of contract personnel despite the decision of the Constitutional Court. The Council of Ministers enacted a new decree-law (No. 399), in January 1990, authorizing the use of contract personnel. In accordance with the Constitutional Court’s ruling, the new decree-law (re)included the employment status of public servants in SEEs who would fill administrative posts. It also allowed the use of contract personnel as a main form of employment.17 The decree-law took into account the court’s ruling to some extent and introduced specific regulations concerning employment and pay conditions of contract employees, thus limiting to some extent the discretionary powers of the political executive and SEE management. However, it continued to deny them the rights to unionize and bargain collectively. The labour union movement continued its fight against the policy of contract employees deprived of collective labour rights. In February 1990, Tu¨rk-Is filed a complaint with the ILO against the government, arguing that the decree-law on contract employees violated the ILO Convention Right to Organize and Collective Bargaining (No. 98), ratified by Turkey in 1952. The Tu¨rk-Is-affiliated Demiryol-Is (railway workers) Union brought a similar complaint to the ILO (ILO Committee on Freedom of Association, 273rd Report, 1990, paragraphs 19– 24).18 After investigating the case, the ILO Committee on Freedom of Association requested that the government amend provisions of the legislation to bring it into conformity with the ILO’s principle of freedom of association for all workers (paragraph 33).

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The SDPP once more challenged the decree-law in the Constitutional Court. In April 1991, the court again repealed a number of its restrictive provisions on grounds similar to its previous ruling (Petrol-Is 1992a, 276– 8). Nevertheless, the use of contract personnel continued. Soon after the coalition government of the conservative True Path Party and the Social Democratic Populist Party came to office in November 1991, it passed a new piece of legislation (No. 3771) on 5 February 1992. The act essentially legislated the MP government’s decree-law (No. 399, 1990) after some revisions to comply with the Constitutional Court’s annulment decision as well as in response to mounting criticism from the trade union movement (Dereli and Zeytinoglu 1993, 693). It provided legal protections against arbitrary treatment. However, it also ratified the ban on contract personnel’s membership in unions and collective bargaining.19 Public servants were subject to similar restrictions under the constitution and Public Servants Act No. 657. There was no piece of legislation prohibiting them from setting up trade unions. As a result, they had started organizing in unions when Act No. 3771 explicitly banned contract personnel from joining unions. Furthermore, unlike public servants, contract personnel did not enjoy job security. The renewal of their employment contract (normally one year) was conditional on their performance.20 The act prohibited the conversion of workers in SEEs to contract personnel, thereby protecting them against deprival of trade union and collective bargaining rights in this way. But the Council of Ministers could create new contract personnel cadres to fill the positions vacated by workers upon retirement, dismissal, leave, and so on, subject to court appeal. The result of the contract employee policy was a drastic decline in the number of public servants and a concomitant increase in the number of contract employees in SEEs in the late 1980s and early 1990s (Table 3.5). Some reductions in worker positions were also effected during the same period through attrition. After composition of the labour force was transformed, privatization sped up in the mid1990s. Consequently, both total employment and the number of workers in SEEs started to decline significantly in the mid-1990s. The proportion of employees in SEEs to total civilian employment as well as to total wage/salary earners also dropped (Table 3.1). SEEs thus ceased to be a major source of secure employment for the Turkish working class.

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Increased Subcontracting and Outsourcing in the Public Sector Another significant change concerning employment in the public sector was increased resort to a type of subcontracting known as tas¸eron in Turkish. In the tas¸eron system, employees are typically denied minimum legal protections in the labour code and social security law, such as severance compensation, health insurance, retirement benefits, paid annual leave, and the like. They are usually paid minimum wage and even below the legal minimum wage. The use of subcontract labour increased significantly in almost all public sector industries and services from the late 1980s on. The proportion of employees hired through the tas¸eron system rose from 5 per cent to 14 per cent in the public sector between 1986 and 1997 (Boratav, Tu¨rel, and Yeldan 1995, cited in Cam 1999, 698). Various state institutions and enterprises, which previously carried out their production or service functions themselves and through their own employees, increasingly transferred their work to private subcontractors. Not only state institutions and enterprises within the jurisdiction of the central government but also local administrations increasingly subcontracted their service or production activities to private capital. The use of subcontract labour became particularly common at the level of local-municipal administrations. Municipal governments privatized or subcontracted an increasing number of public services, such as garbage collection, public bus transit, water and electricity provision, and gas meter readings. In situations of subcontracting, municipal government employees were forced to make a “choice” between either being unemployed or being hired by the subcontractor for the same job.21 The practice of subcontracting or contracting out in the state sector constituted a creeping form of privatization. It was part of the wider process of scaling back the public sector and abandoning the provision of even essential public services to the private sector. The subcontracting system clearly posed a real threat to the labour union movement since it contributed to the expansion of a low-wage and non-unionized labour force.

PART 2 THE MILITARY REGIME AND ORGANIZED LABOUR 1980—3

The previous part studied state– working-class relations primarily at the level of “state form”. A new form of state called neoliberal-exclusionary in this study had started to take shape in Turkey just prior to the military coup of 1980, became institutionalized under the repressive military regime of 1980– 3, and then survived after the military relinquished power. The different political regimes – that is, the military regime and the ensuing parliamentary civilian regime – were situated within the same state form, the outside-oriented growth and labour exclusion strategies to which this state form corresponded. But the type of political regime had, as we shall now see, an independent impact on the development of social forces in struggle and their particular interactions with public authority. This part and the one that follows introduce the variable of political regime and study the nature of relations between organized labour and the state first under the three years of military rule and then under the following multiparty civilian regime. Despite the basic continuity in state form in the 1980s, the changes in political regime had important implications for Turkish organized labour. The military regime lacked an organizational base in civil society, and it did not seek mass mobilization. It was based primarily on the use of repression to silence any opposition. The transition to parliamentary civilian rule did not mean real democratization since the restrictive juridico-political institutions established by the military regime defined the nature of

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post-military rule. However, unlike the military regime, the civilian regime was characterized by the existence of political parties and periodic competitive elections, which also meant relative political liberalization. The post-military administration was grounded on a political party that had considerable organizational and mobilizational presence in civil society, the neoconservative Motherland Party, which ruled Turkey from 1983 to 1991. This party undertook a hegemonic project that tried to articulate the interests of subordinate classes to the interests of dominant fractions of capital; it was in fact able to mobilize significant support among the popular sections of society, including the working class, for a period. Yet change at the political strategic level was change within the overall continuity of the state form and the economic growth model. This was essentially a continuation of exclusion of the working class from the policy formation process and marginalization of its socioeconomic interests.

CHAPTER 4 THE MILITARY COUP AND SUPPRESSION OF THE LABOUR MOVEMENT

The Armed Forces as a “Caesarist” Force A military coup had long been expected. There were constant rumours that the military would intervene on this or that day, though what direction and nature it would take were not known for sure.1 On the eve of the military takeover, subordinate classes and labour lacked a widely based political movement capable of leading the country out of its political and economic crises and securely establishing the foundations of a democratic parliamentary regime. The dominant social classes also proved incapable of leading society out of the catastrophic situation without sacrificing the parliamentary regime and without relying on a Caesarist force such as the military. Gramsci’s analysis of Caesarism can apply to the Turkish case. The country’s situation prior to the coup approached his conception of a Caesarist situation “in which the forces in conflict balance each other in a catastrophic manner”. The forces in struggle “bleed each other mutually and then a third force intervenes from outside” (1971, 219). Gramsci proposes to study the specificity of social forces that produces a Caesarist solution: It would be an error of method . . . to believe that in Caesarism – whether progressive, reactionary, or of an intermediate and

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episodic character – the entire new historical phenomenon is due to the equilibrium of the “fundamental” forces. It is also necessary to see the interplay of relations between the principal groups . . . of the fundamental classes and the auxiliary forces directed by . . . or subjected to their hegemonic influence. (222) In Turkey in 1980, this Caesarist third force was the military, then the most unified and strongest apparatus of the state. The balance of power between Turkish capital and labour was far from an “equilibrium of forces”, but the Turkish working class, though lacking an effective, unified political movement, was strong enough to resist employers’ demands, and it was sufficiently mobilized to provoke a counter-offensive from capital. Furthermore, political polarization between the left and the right was such that neither side could effectively lead, and society was in a catastrophic conflict. In this conjuncture, the public was ready to acquiesce to a military takeover. Most of the people had lost faith in the Parliament, politicians, and political parties. The armed forces had always carried great political weight and been an important political force in the country. But they had managed to remain above daily politics, whereas constant parliamentary squabbling and petty rivalries among politicians toward the end of the 1970s caused repulsion among the public. The military was the only state apparatus that maintained internal discipline and cohesiveness as well as a clear sense of mission, whereas other organs of the state were factionalized and paralyzed. In such a situation, the armed forces could rise above society and present themselves as the real guardians of the general interest of the nation and the real defenders of the unity of the country on the verge of a civil war. Furthermore, the Turkish armed forces had long enjoyed high esteem in the eyes of the public because of their particular role in the history of Turkish society.

Depoliticization of Civil Society and Ideological Cleansing of the Civil Bureaucracy The military’s first step in restructuring the state and society was the provision of immediate law and order. This involved abundant use of outright repression and bare force. The second step was the creation of new institutions and mechanisms to guarantee continuity of the new politico-economic order. These steps were not simply stages exclusive of

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each other. They coexisted, but the emphasis shifted to institutionalization of the new order with the creation of immediate “social peace”. The political parties, professional associations, and trade unions received the coup with resignation. The takeover was completed in a very short time and without bloodshed. The military encountered no mass resistance either from the left or from the right. The military junta immediately moved to suppress radical politics and any dissension with a heavy hand. The whole country was brought under martial law. Martial law authorities rounded up thousands of people claimed to be extremists of the left or the right, separatist terrorists, or political offenders.2 Among those arrested and tried were former parliamentarians, political party leaders, lawyers, journalists, as well as many members of legal associations, including the Confederation of Revolutionary Workers’ Unions (DISK) ¨ B-DER). The arrests of and the leftist Teachers’ Association of Turkey (TO right-wing extremists and the trials of leaders and members of the neofascist Nationalist Action Party (NAP) and the Islamist National Salvation Party (NSP) created the impression that the military was impartial. In fact, the crackdown on the left was particularly harsh, as the official data for arrests and court sentences show.3 On the eve of the coup, military officers were convinced that “at the foundation of terrorism lay the left. They received orders from Moscow in order to divide the country. The right was not that important. Some of them [the rightist extremists] acted out of their true nationalist sentiments. The head of the left had to be crushed” (Birand 1984, 170). The military government suspended political activity. At the inauguration in October 1981 of the Consultative Assembly, given the task of drafting a new constitution, military rulers passed a law formally abolishing all of the existing political parties. The military put a major part of the blame for the pre-coup crisis on the political parties. In both deeds and words, military leaders expressed the view that the political parties “had weakened the state . . . divided the citizenry, and promoted nothing but enmity among themselves” (Heper 1985, 133). Associational life in the country was also brought to a halt. The activities of all associations were initially suspended, and later thousands of them were banned. Thus, the military regime effectively disorganized and depoliticized civil society in a fairly short time. The military junta quickly set out to remould the state administration at the same time that it established its domination

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over the entire state apparatus. The military considered the ideological position of civil bureaucrats critical for the new order that it wanted to create. Therefore, the first priority was to address perceived polarization of the bureaucracy along extreme leftist and rightist ideologies (Heper 1987, 141– 2). This meant in practice cleansing the civil bureaucracy of “extreme” leftists and rightists and Islamists for the declared purpose of restoring “impartiality”. Most personnel in the higher administrative echelons were replaced by those expected to serve the new regime loyally. Martial law commanders were authorized to dismiss public employees without any justification or right of appeal. This extra-judicial power was exercised over not only public servants but also workers in SEEs. Military authorities carried out massive purges in the civil bureaucracy and local administrations during their rule (Dodd 1983, 44; Pevsner 1984, 92– 3). The main motives were, first, to suppress any possible resistance to military rule from within the state and, second, to mould the civil bureaucracy into a loyal servant of the new politico-economic order. The military regime created a set of supervisory institutions such as the State Supervision Board to ensure in the longer term that the civil bureaucracy remained free of unacceptable elements. The civilian cabinet of the military regime tried to streamline the civil bureaucracy for economic development purposes while the military carried out ideological cleansing. The cabinet was composed mostly of civilians under the premiership of retired admiral Bu¨lend Ulusu. The government programme, announced on 21 September 1980, mentioned “bureaucratic red tape, unnecessary formalities, and overstaffing” as obstacles to the country’s economic development. It promised a major overhaul of the civil service so that it could better serve the policy of economic development (Ulusu Government Programme 1980, 4 –6).4 Accordingly, during the period, the government took some measures to slim down the bureaucracy.

The Military Regime and the Trade Union Movement Suspension of Collective Labour Rights and Suppression of Trade Unions In his first radio –television speech following the military takeover, General Kenan Evren, chief of the general staff and leader of the coup, announced that

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All rights of the industrious and patriotic Turkish worker will be safeguarded within the framework of current economic conditions. However, the activities of certain labour bosses who exploit the innocent Turkish worker and resort to all kinds of pressures and tricks to use them in the direction of their own ideological views and personal interests instead of trying to protect workers’ rights will never be permitted. All sorts of measures will be taken for all employers to help improve labour peace without deviating from legal rules. (12 September in Turkey, Before and After 1982, 231– 2) On the day of the coup, the National Security Council ordered the suspension of DISK, the Confederation of Nationalist Trade Unions (MISK, an extreme right-wing organization associated with the NAP), and the labour unions affiliated with these confederations. Two days later the Istanbul Martial Law Authority ordered all executive cadres and workplace representatives belonging to these unions to surrender within 48 hours. The Islamist-oriented Confederation of Pro-Justice Trade Unions (Hak-Is), which initially had probably eluded the attention of military authorities, was also soon closed down. Two days after the coup, strikes and lockouts were banned, and all striking workers, numbering 51,000, were ordered back to work; 114 strikes involving 122,000 workers had already been postponed by the civilian government on the grounds of national health and security just prior to the coup (Cumhuriyet, 16 September 1980). Employers greeted with relief the NSC’s back-to-work decision. TISK president Halit Narin claimed that “the end of strikes will be an important step in the development of Turkey’s economy . . . It will encourage export industries, and thus foreign exchange in millions will flow into the country” (Cumhuriyet, 16 September 1980). In the aftermath of the coup, the military administration implemented two measures to avert mass discontent among workers. The first one was a 70 per cent wage increase for workers whose collective agreements had expired (NSC Circular No. 15, Decision No. 3, Official Gazette No. 17105, 14 September 1980). The wage increase would solve to some extent the problem of a huge wage gap bound to occur between workers who had signed new collective agreements with high wage settlements just prior to the coup and workers who were either on strike or in the process of negotiating when the military stepped in. This

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situation would create unfair competition among employers. The 70 per cent wage increase was actually below the inflation rate, which had risen over 90 per cent at that time (OECD 1992, 144, Table E). The second measure was a ban on employers’ dismissal of workers. The intention was to prevent large-scale layoffs by employers taking advantage of the suspension of trade union rights. Employers were required, in most cases, to prove their cases before martial law authorities and regional offices of the Ministry of Labour before they could terminate the employment of their workers. Furthermore, collective layoffs were allowed only in situations of economic necessity, and prior permission was required from the competent authorities (Ekonomi 1986, 102– 6). Restrictions on layoffs remained in force until late 1984. Although they were not firmly observed (Binatli 1986, 129; Sen 1993, 103), the military regime’s measures against layoffs somewhat ameliorated workers’ social and economic hardships resulting from the suppression of labour unions.

Business Associations after the Coup The military regime allowed the organizations of capital (TISK, ¨ SIAD, and the Union of Chambers) to continue their activities as TU before, while several labour confederations were closed down. The only exception was the suspension of TU¨SIAD for nine days following the coup. This was in accordance with the NSC’s circular suspending activities of all associations (dernekler), with the exception of three charity organizations (Circular No. 7, Official Gazette No. 17103, 12 September 1980).5 With permission of the martial law authorities, ¨ SIAD, and some other voluntary associations, resumed their TU activities shortly after the NSC’s suspension order. As Boratav (1991, 75) notes, “at the time when most of the associations in the country were suspended or banned by the military rulers, TU¨SIAD, the most political of all, established very close relations with the military administration, and was almost officially given the role of representing the Turkish state abroad”. These capitalist organizations openly supported and defended the military regime.6 The Military’s Ban on “Unacceptable” Labour Unions The military regime’s treatment of labour unions showed a stark contrast to its treatment of business associations. As noted earlier, several labour

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confederations were closed down following the coup. By suspending both left and right radical and Islamist trade unions, the military created the impression that it was impartial regarding different political orientations. Although different sources and the unions themselves suggested widely varying figures concerning union membership, there is no doubt that DISK was the second largest union. Its membership was estimated at between 400,000 and 600,000 at the time of military intervention.7 Tu¨rk-Is, the largest union, represented between 800,000 and 1 million workers. MISK had only between 15,000 and 20,000 members. Hak-Is, founded in October 1976, had no more than several thousand workers at the time of the coup (Isikli 1981, 360; Koc 1981, 294–5; 1989b, 9).8 There were three other much smaller labour union confederations. They were the Confederation of Turkish Nationalist Pro¨ lke-Is), the Confederation of Social Justice Workers’ Trade Unions (Tu¨rk-U Democrat Workers’ Unions (Sosyal Demokrat-Is), and the Confederation of Turkish Communitarian Workers’ Unions (Toplumcu-Is). All three were founded in the late 1970s and very small in membership (Shabon and Zeytinoglu 1985, 189–90).9 The military’s initial “formal” impartiality soon disappeared. The National Security Council lifted the ban on Hak-Is and its member unions five months later, in February 1981, even though the confederation was known to have been sponsored by the Islamist NSP, closed down following the coup and later tried on charges of violation of the constitutional principle of secularism. At its first general convention held in December 1981 after the coup, Hak-Is reciprocated by declaring its support for the military regime (Mahirog˘ulları 2005, 338). Officials of MISK were released several months after their arrest. But the confederation and its member unions were not allowed to open until after transition to the civilian regime. MISK was closely linked to the neofascist NAP as well as the party’s youth branch, called the Idealist Hearts, involved in terrorism before the military coup. No legal charges were filed against the confederation or any of its 19 affiliates during the military regime (Koc 1992a, 322), while the officials of NAP were tried on charges of crimes against the state and later found guilty. In relation to the court case against NAP, which continued after the military regime, in 1985 the prosecutor of the Military Court at Ankara Martial Law Command asked for the closure of MISK on the ground of having provided funds to NAP and the Idealist Hearts in the years

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leading up to the military regime. But the court later decided that the case did not fall within its area of competence and transferred it to a civilian court. In the end, the court case against MISK was dropped because of the statute of limitations (Mahirog˘ulları 2005, 349). In contrast to the military regime’s relatively lenient treatment of Hak-Is and MISK, DISK and its member unions were brought before the military courts on serious charges under various sections of the Turkish Penal Code that concerned security of the state. Hundreds of DISK unionists and militants were arrested. The military prosecutor called for the death penalty for 52 members or former members of the executive bodies of the confederation and its member unions as well as the dissolution of these unions. While the largest labour organization, Tu¨rk-Is, and its affiliates were allowed to operate, they were put under close state control. The threat of being closed down continued to exist. For example, martial law authorities suspended several unions affiliated with Tu¨rk-Is, such as Petrol-Is and several regional unions of Yol-Is, for various reasons at different times. These unions belonged to the social democratic movement within the Tu¨rk-Is organization. This movement had been pressing the confederation to abandon its above-party politics and follow a more activist stance in the pre-coup period. The military regime’s permission of the Islamist Hak-Is despite its close links with the outlawed NSP seems paradoxical because the military was deeply committed to secularism and opposed Islamist movements. There are two plausible explanations. First, military officials did not see Hak-Is as a significant organization because it had been created only four years earlier and was very small. Second, whereas the military government was pro-secularism and cracked down on Islamist organizations, it viewed the faith of Islam as an antidote to radical leftist ideologies and recognized its role in providing social order. It applied this view by adopting a number of measures aimed at increasing individuals’ religiosity, such as a compulsory course on religious education in schools (S. Ayata 1993, 63 –4). These considerations about the social role of religion probably played a role in the military’s decision to allow Hak-Is under close state supervision over the entire labour union movement. The military administration did not establish any special relationship with Hak-Is, unlike Tu¨rk-Is. During the military regime, Hak-Is focused on its organizational activities.

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The military regime was particularly harsh on DISK. First, while preparing for the coup, military commanders factored into their plans that DISK had about 15,000 militants who could organize mass resistance (Birand 1984, 201). Second, the commanders were also convinced that there was an underground communist organization behind the legal facade of DISK. Unionists of different shades of the left and supporters of various small socialist parties, the biggest centre-left Republican People’s Party, and the old outlawed Communist Party of Turkey (CPT) were all present within the DISK organization in the late 1970s. Thus, no one political party or external organization (whether legal or illegal) was in fact in control of DISK. Its 1975 General Convention had brought a number of pro-CPT unionists to administrative posts of the confederation. Subsequently, the CPT’s influence increased within DISK. This soon led to a major internal struggle between those who sought to bring the organization closer to the CPT’s line and those who wanted to guard independence of the confederation (Alkan 1977). At the General Convention of December 1977, Kemal Tu¨rkler, who had moved toward the line of the CPT in the mid-1970s, was voted out of office, and most of the pro-CPT cadres were purged by socialist or social-democratic factions (Samim 1987, 166 – 7).10 The military’s calculation of mass resistance by DISK activists did not come true. When the coup was announced in the early morning of 12 September 1980, there was general compliance with orders of the junta. In a public announcement (No. 49) on 14 September, the First Army and Istanbul Martial Law Command ordered the surrender of all DISK and MISK officials by 16 September. Hundreds of DISK officials complied and surrendered to the martial law authority.11 Some unionists fled abroad. In an interview in late 1983, while still in exile in Brussels, a DISK staff member who had fled Turkey after the coup responded to the question of which preparations had been taken by the DISK leadership in response to an expected military coup as follows: There were not any. About 50,000 workers were on strike. The unions had to feed them, to pay them; the unions were exhausted. The workers were not too concerned about the possibility of a military takeover. Their living conditions were so bad that it was almost impossible for them to imagine worse. There were no means to organize against a coup. A trade union, at its best, can

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only be a support for a political movement but cannot organize resistance to a political attack on this scale. (Merip Reports, February 1984, 25) In the interviews that I conducted, a number of trade union leaders in high positions in DISK at the time of the coup expressed similar views. They also confirmed that DISK had not made any decision concerning what to do in the event of a military coup. They stated that organizing a mass resistance movement was far beyond the capacity of DISK and the trade union movement alone.12 Workers did not engage in any significant acts of resistance when the military junta disbanded DISK, arrested its officials, and prohibited strikes and collective bargaining. The 51,000 striking workers, most of whom belonged to DISK, went back to work upon order from the military administration. No doubt the ultimate fear of imprisonment and physical punishment implanted deep fear among potential dissident labour leaders. There were some sporadic acts of resistance, such as slow-downs and organizing fundraising campaigns for jailed unionists and their families. But the military had no tolerance for even such isolated acts of resistance. Workers involved, or suspected of having been involved, in such actions were immediately arrested and/ or dismissed from their jobs by martial law authorities (Ketenci 1990, 243; Koc 1989a, 28; 1991a, 146).13 Although the military regime used repressive measures on a massive scale, they alone cannot account for the absence of any important resistance among workers to suppression of their unions and union rights. To better understand why there was no mass resistance by workers, it is thus necessary to take several other factors into account besides the extensive use of state repression. These include (1) the particular history of the labour movement, (2) the conjuncture at which the military intervened, and (3) the particular nature of the labour organization and the relationship of rank-and-file members to their organizations. Many years after the military regime, DISK unionists sometimes complained that “neither during the court trial nor afterwards did the membership make the necessary contributions to the Confederation’s struggle”. They added that “It would be a quieting, but not an adequate, approach to explain this phenomenon only in terms of . . . suppression and terror.” They identified their past form of organization as a main

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factor responsible for this result: “that the form of our past organization embraced workers only at the workplace, and did not establish links with other spheres of life, is one of the main factors behind this outcome” (quoted in DISK Dergisi, December 1992, 7).14 This post facto diagnosis by DISK unionists offers some insight into the absence of workers’ resistance to the suppression of their unions and gained rights. Limitation of labour unions’ presence in general to workers’ industrial life and unions’ lack of organic presence in workers’ multiple spheres of life can provide some explanation of how easily the military regime crushed DISK and subjugated the entire union movement. Several DISK unionists also offered other explanations (besides state repression) post facto for the absence of significant resistance by their rank and file. One DISK unionist emphasized “the Turkish working class’s lack of experience of struggle against the state and a relatively short history of the Turkish trade union movement compared to the Western countries”.15 Another DISK unionist claimed that, prior to the military intervention of 12 September, The rank and file left most of the work to the union leaders and militant cadres. When we [the union leaders] called them for an action, for example a strike, they always came because they believed in us and that we would do the right thing. But they themselves did not participate much in making the decisions and administering the union affairs. When the union leadership and militant cadres were deposed, the entire union organization became paralyzed. The same unionist stated as a self-critique that the union leadership contributed to this situation by creating “a union bureaucracy on the left”. He added that “this was not because of our personal self-interests but our conviction that our ideas were in the best interest of the working class”.16

Leftist Political Unionism on Trial The trial of the DISK confederation and its officials began on 24 December 1981, a year after their arrest. The prosecutor charged the confederation and its 52 officials with infringements of sections 141, 142, and 146 of the Penal Code and called for the death sentence under section 146 as well as dissolution of the union. Section 141 provided for

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penalties of from eight to ten years of heavy imprisonment for those “who created or attempted to create associations aimed at establishing the domination of one social class over other social classes or eliminating a particular social class, or overthrowing the fundamental social and economic order of the country, or the state’s political and legal order”. It also stipulated capital punishment for those “who led several such associations”. Furthermore, “the sentence of imprisonment would be increased by one-third for those who committed such crimes in trade unions and workers’ associations”. Section 142 forbade propagation in any form of the actions listed in section 141. Section 146 was concerned directly with protection of the constitutional order of the state. It provided for death sentences for those who overthrew or attempted to overthrow the constitutional order by force and violence or attempted a coup d’e´tat against the Turkish Grand National Assembly set up under the constitution. In the period following adoption of the relatively liberal 1961 Constitution, sections 141 and 142 of the Penal Code were in principle interpreted to prohibit not socialism but communism.17 The Penal Code nevertheless hung over the heads of Turkish socialists like Damocles’ sword even during the relatively liberal political regime of the pre-coup period. Political and judicial interpretation of these articles became strict or flexible depending on the political climate in the country. The DISK indictment dated 25 June 1981 was voluminous, over 800 pages long. Throughout the indictment, DISK and its officials were accused of having established an illegal Marxist-Leninist organization aimed at creating a proletarian dictatorship. The military prosecutor’s evidence included DISK’s foundational declaration of 1967; its statutes, conventions, and executive committee decisions; activity reports (which had all been public); various publications and declarations; May Day rallies; some demonstrations; and several one-day general strikes during the period of DISK’s existence. The DISK indictment stands out as a document demonstrating how the judicial system was subordinated to strictly political decisions under the military regime. Most of the activities, if not all of them, presented by the military prosecutor as evidence were considered legal in the pre-coup period. As the ILO Committee on Freedom of Association put it, “the specific acts in respect of which charges have been laid are mostly connected with the exercise of trade union type activities such as, for example, the organization of

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demonstrations on 1 May or protest strikes against dismissals” (211th Report, November 1981, 124–5). Furthermore, some of the rallies and demonstrations cited as evidence against DISK had been organized with the permission of state authorities or had not been subject to any legal proceedings prior to the military takeover. In a number of cases involving some of the above activities, legal charges had been brought against DISK officials prior to the coup. But most of these charges had been laid under the Trade Unions Act or the Collective Bargaining, Strike, and Lockout Act, not under sections of the Penal Code that DISK and its officials were now charged with violation of, thus facing the death penalty.18 Abdullah Bastu¨rk, the president of DISK, and Fehmi Isiklar, the secretary general, responded to the accusations in detail in their separate defences amounting to hundreds of pages, both published in book form in 1986. They stated that the trial was not a legal trial but a political one. On trial was not merely DISK but also all Turkish workers and democratic rights and freedoms. They denied the charges that DISK was an illegal Marxist-Leninist organization that conspired to overthrow the constitutional order to establish a proletarian dictatorship. They maintained that DISK was an independent trade union organization that sought to protect and improve economic, social, and cultural interests of workers in accordance with democratic rights and freedoms recognized in the 1961 Constitution. The DISK leaders also reaffirmed that DISK was based on the principle of class-conscious mass unionism and in favour of socialism. The trial of political unionism was not limited only to the confederation and its top leadership. Military prosecutors also brought DISK-affiliated unions and their officials before 30 separate trials. The charges in these cases were the same as in the DISK trial. The prosecutor requested the dissolution of each union. These trials were later merged with the original trial of the DISK leaders. The total number of defendants was 1,473;19 78 of them, including all members or former members of the executive bodies of the DISK confederation, faced the death sentence. The DISK trial attracted a great deal of attention abroad and was condemned by international trade union organizations, such as the ICFTU, ETUC, WCL, and WFTU, and a number of international trade secretariats. The ILO also followed the trials. The ILO Freedom of

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Association Committee constantly entreated Turkish authorities to release the detained unionists and withdraw their request for the death penalty. It also urged the Turkish government to ensure that the DISK officials were given fair trials. Pressure from the ILO as well as international trade union organizations played an important role in the release of imprisoned DISK unionists. The release of DISK members on bail first started in January 1983 and continued at varying intervals. The DISK president, general secretary, and Executive Committee members were the last to be released, on 24 August 1984 (i.e., after the transition to a civilian regime), having spent about four years in detention.20 All accused persons in the trial of DISK and its affiliated unions had been released on bail by late August 1984 and remained free thereafter. The DISK trial was concluded with various prison sentences for a number of DISK officials and dissolution of the DISK confederation in December 1986. The defendants appealed the verdict; it took another five years for the Appeal Court to issue its decision, in 1991. The verdict was in favour of the defendants. To sum up, under the military regime of 1980– 3, the DISK movement was effectively suppressed. In the years following transition from the military regime, the judicial system served as the main vehicle to exclude DISK from the political and industrial relations systems. The trial was not about the DISK organization or its unionists per se. It was really about “political, class unionism” and its principles and strategies. The aim was not merely to close down DISK but also to prevent the rise of a radical left-wing trade union movement in the future.

CHAPTER 5 AUTHORITARIAN CORPORATISM

The relationship between the largest trade union confederation and the military rulers can best be described in terms of authoritarian corporatism. After its main rival, DISK, was disbanded, Tu¨rk-Is was officially sanctioned as the sole representative of Turkish workers. The privilege of representation was reserved for top officials of the confederation. All other legitimate channels of access to the state that had been available to workers under the parliamentary democracy of the pre-coup period were suppressed. The representative status accorded to Tu¨rk-Is did not carry the same meaning as it did in a democratic setting. The main sources of power available to a trade union in a democratic system, such as the right to strike, were either eliminated or tightly controlled by the military-dominated state. Tu¨rk-Is was now deprived of any autonomous bases of power to define goals and articulate demands on behalf of its members. But it was to take responsibility for the implementation vis-a`-vis its members of decisions and measures determined by the state without its participation. With the parliamentary representative institutions dissolved and political and trade union rights and freedoms suspended, corporatist arrangements monopolized channels for the mediation of labour interests not only in relation to the state but also vis-a`-vis employers. The corporatization of Tu¨rk-Is aimed to control the working class (which could not be contained by brute force alone) through its own class organizations.

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What differentiated the corporatist arrangements under the military regime of 12 September from the tripartite corporatist experiences of many advanced capitalist democratic societies of Europe after World War II was not only the context and how they came into existence. Clearly, in the Turkish case, corporatist arrangements were imposed from above by the state predominantly through coercive means, and they were accompanied by the suppression of collective labour rights and freedoms. In postwar Europe, tripartite corporatism developed in a democratic context, especially where more or less unified and strong trade union organizations and a strong social democratic party existed. It was tripartite in the sense that there was institutionalized class cooperation and reconciliation between the peak organizations of labour and employers and between these organizations and the government in the formation and implementation of certain public policies, especially income policies. In the Turkish case (as in other cases of authoritarian corporatism such as Latin America during the authoritarian regimes), since trade unions were brought under direct state supervision and deprived of any meaningful power, there was no genuine cooperation or concertation between employers’ associations and trade unions but mainly stateimposed subordination of the latter. The relations between organized labour and capital became more directly mediated by the state itself. The main reason was the inability of Turkish industrial capital to establish social hegemony in a Gramscian sense. It was thus ready to rely on a Caesarist regime to use coercion, through authoritarian corporatism, to discipline organized labour. In contrast to authoritarian corporatism, which typically developed in political situations in which the capitalist class was not able to establish its hegemony or its hegemony broke down, tripartite corporatism presupposed the existence of capitalist hegemony. In the latter case, organized labour consented to continued organization of the economy on the basis of capitalist principles, and capital tried to acquire this consent through some concessions to labour (Cox 1987, 78 – 9). The main aims of corporatism imposed by the military regime were to control the trade union movement and to suppress the economic demands of labour. But it had another important role to play for the military government. Unlike fascism, the military regime lacked organizations of mass mobilization, particularly a political party of mass mobilization, that would serve to root it in the popular classes. Corporatist arrangements

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thus acted as links between a section of society, namely the working class, and the governing elite. The dual task of corporatism points to a paradox. As Baretta and Douglas (1977, 520) put it, When associated with authoritarian regimes corporatist features operate not only as a means of control, but also as a channel (perhaps the only one) of communication between state organs and social groups. When associated with open, competitive regimes, however, corporatist arrangements become an effective tool, to limit the autonomous expression of social forces. In addition to its role as a linkage mechanism, corporatism had a legitimizing role. Formal participation of the country’s largest labour organization, Tu¨rk-Is, in the newly fashioned institutions of industrial relations, such as the Supreme Board of Arbitration, and meetings held between the government and Tu¨rk-Is leaders from time to time gave the military regime, to some extent, the appearance of impartiality toward labour and capital. Furthermore, rank-and-file workers could put the blame for anti-labour decisions and policies implemented through these corporatist arrangements not only on the military government but also on the ineffectiveness of their own organizations in representing their interests. An important aspect of these corporatist arrangements was their class specificity. They encompassed only trade unions. No other social interest was subjected to a similar process of corporatization. While a monopoly of intermediation was imposed on labour, and the officially sanctioned union organization was subordinated to the state, business continued to have several organizations to represent its interests ¨ SIAD, TISK, and the Chambers of Commerce and Industry). These (TU chambers were semi-public bodies with compulsory memberships; having the legal status of public body, they were not entirely independent of the ¨ ncu¨ 1979, 1980; and Saybasili 1976). They state (see Bianchi 1984; O were allowed by the military regime to continue to function as before. ¨ SIAD was permitted to carry out its activities as the voluntary TU association of big business. TISK, the central association of employers in the sphere of industrial relations, welcomed the suspension of collective bargaining and the establishment of the tripartite Supreme Board of Arbitration (SBA), authorized to determine wages and non-wage benefits.

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The tripartite structure of the board was more procedural than substantive. Employers’ representatives and state officials combined significantly outnumbered labour representatives on the board, and they acted in concert to make decisions against workers’ interests. Formal similarity between the interpenetration of the state and the employers’ association in the corporatist structure of the SBA, and the direct connection of the officially recognized trade union organization to the state apparatus through the same board, should not lead one to overlook important substantive differences between the two cases. In the existing political context, the SBA represented a further opening of the state apparatus to the representatives of employers. As for labour, it meant subordination of the trade unions to the state and capital. In his study of authoritarian corporatism in Latin America, O’Donnell (1977, 74) refers to this as the “bifrontal” character of corporatism: “[Corporatism] implies a movement from the state toward the society, through which the former conquers or subordinates institutions of the latter. However, corporatism is also an advance of ‘private’ sectors toward the state, through which some areas of the state are opened to ‘the representation of interests’ from civil society.” He explains that the first situation applies to popular classes and that the second case is valid for dominant social classes. When their organizations are suppressed or subordinated to the state, workers cannot effectively defend or promote their interests either in relation to the state or vis-a`-vis employers. As Offe (1981, 146–50) explains, the power of labour rests ultimately on the effectiveness of its organizations since organization is the only means for uniting labour. Contrary to this, the power of capital derives primarily not from its organization but from the ownership or control of the means of production. Yet the means of production cannot be transferred from members of the capitalist class to their organizations; business associations themselves do not generate power and define the interests of their members. They merely state already existing power positions and already determined definitions of interests.

The Tu¨rk-Is Reaction to the Military Coup The Tu¨rk-Is Executive Board issued a circular letter to its affiliated unions when the coup occurred. In this circular, signed by its president

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and secretary general, the confederation asked member unions to suspend temporarily their activities, including organizational and educational activities, conventions, and shop steward elections. The circular urged the confederation’s affiliates to comply with the military junta’s decisions if they were to remain open (Tu¨rk-Is Dergisi, September 1980, 37). Tu¨rk-Is leaders also verbally communicated to affiliated unions that they had written the circular according to definite directives from the generals and that it should be strictly obeyed (Ketenci 1990, 238). The military government gradually allowed the unions to resume some of their activities, such as convening board meetings and later general conventions and educational or training seminars for union officials or members. Even such limited union activities required prior permission from the martial law commanders, and they were carried out under close state surveillance. The scope and degree of restrictions concerning trade union activities were not uniform across the country. The implementation of restrictions was much stricter in regions with greater concentrations of industrial and organized labour, such as Istanbul. It was not until February 1982 that the martial law command granted permission for a general union convention in the Istanbul region (Tu¨rk-Is 1982a). One of the most controversial actions of Tu¨rk-Is was its approval of the appointment of its secretary general, Sadik S¸ide, as minister of social security in the cabinet of the military regime. The confederation’s own documents reveal that, before agreeing to take this post, S¸ide had approval of the confederation’s Executive Board (Tu¨rk-Is 1982a, 333–34). After the transition from the military regime, S¸ide maintained that accepting the ministerial post in the military regime had not been his individual decision but that of the confederation. His claim was not disproved by other Tu¨rk-Is officials.1 The Tu¨rk-Is leadership’s justification for allowing the secretary general to serve in the military regime cabinet was to ensure that Tu¨rk-Is remained open to serve workers’ interests (interview with Health Service Workers’ Union president Mustafa Basoglu, 18 July 1996).2 According to a unionist who was the president of a Turk-Is affiliate during the military regime, “S¸ide’s presence in the military government did not have any positive effect with respect to workers’ rights.” He noted that “No legislation was acted in favour of labour. Everything went against labour” (Yildirim Koc’s interview with Kenan Durukan, former president of Harb-Is, 26 January 1989).3

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That the Tu¨rk-Is secretary general was a minister in the military government caused a lot of criticism from international trade union organizations. The ICFTU suspended the Tu¨rk-Is membership on 15 August 1981. The ICFTU-associated ITS followed suit and froze the membership of the Tu¨rk-Is unions. S¸ide retained his dual posts until November 1982. In his role as a cabinet minister, he signed all antilabour decrees of the government. To overcome its isolation by the international trade union movement, and because of increased pressures from within its organization, the Tu¨rk-Is Executive Board decided to allow S¸ide a leave of absence from his post in Tu¨rk-Is in November 1982,4 while some members of the Tu¨rk-Is Administration Board had earlier called for his resignation from his ministerial post (Cumhuriyet, 8 September 1982). S¸ide remained the minister of social security until the end of the military regime. His leave of absence from Tu¨rk-Is proved important for the normalization of its relations with international labour organizations. In its meeting on 24 –26 November 1982, the ICFTU’s Executive Board welcomed the decision of Tu¨rk-Is to excuse its secretary general from his office and decided to normalize relations with Tu¨rk-Is (Resolution on Turkey in ICFTU Economic and Social Bulletin 30, 5 –6 [1982], 31– 2). The ICFTU lifted the suspension of the Tu¨rk-Is membership in May 1983. The Council of Ministers, which included the Tu¨rk-Is secretary general, was the executive arm of the military regime responsible for the day-to-day administration of the affairs of state. The cabinet ministers were mostly technocrats, bureaucrats, university professors, and retired military officers.5 In the cabinet was a prominent businessman and influential member of TU¨SIAD, Sahap Kocatopcu, minister of industry and technology. After his resignation in December 1981 following ¨ SIAD corruption allegations, another big businessman and TU member, Fahir Ilkel, was appointed as minister of energy and natural ¨ zal (introduced earlier in this study) was deputy resources. Turgut O prime minister in charge of economic affairs. He stayed in this post until his resignation in August 1982 following a financial market crash ¨ zal had worked for big private corporations for the month before. O years; he had also served for the Metal Goods Industrialists’ Association in the late 1970s. Recruitment of prominent businessmen or business representatives to the cabinet constituted some of the organic links established between the military government and the business

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community. The presence of business representatives in the military government represented, to use O’Donnell’s (1977) terminology, a “complex interpenetration” of the state and the dominant social class, which involved “mutual control”. Within the existing politicoeconomic context, the links established with the moderate section of organized labour, on the other hand, represented more a situation of “penetration” of the state into trade unions. Tu¨rk-Is continued to participate in a number of tripartite bodies created in earlier decades, such as the Social Insurance Institution (SII), the National Productivity Centre (merely an advisory board), the Minimum Wage Commission, and the newly fashioned Supreme Board of Arbitration. The continuing participation of Tu¨rk-Is in such public bodies during the military regime meant that the confederation took responsibility for the government’s labour policies in the making of which it could exert no influence. Furthermore, the number of labour representatives in some of these tripartite organizations was reduced. For example, in the pre-coup period, labour had four representatives on the SII Administrative Board. The number was reduced to one under the military regime. The military government also abolished the legally recognized right of workers to co-determination in public enterprises. An important form of contact between Tu¨rk-Is leaders and the military government was top-level meetings. These meetings were similar to summit meetings between union leaders and the government of the 1960s and 1970s in form but not in substance. In contrast to the labour – government summit meetings of earlier years, meetings between the military government and Tu¨rk-Is took place in a context defined by the suppression of democratic institutions and collective labour rights. Meetings of the military regime era formed an important element of authoritarian corporatism. Authoritarian corporatist arrangements acted primarily as a means of control over the working class, yet they simultaneously served as a link between military rulers and organized labour. However, in this system, the role of representing labour was reserved for the top leadership of the officially recognized Tu¨rk-Is confederation. All other channels for the representation of labour interests in the state were severely restrained. There were nine summits between the government and Tu¨rk-Is leaders from November 1981 to the end of 1982. Talks and decisions at these meetings were not made public; they remained largely

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confidential. According to the agendas of meetings released to the public, the items for discussion were strictly “labour issues”. Among the main issues were the Supreme Board of Arbitration, renewal of expired collective agreements, the minimum wage, severance compensation, and problems resulting from the legal distinction between the employment status of workers and that of civil servants. The “labour issues” constituted the domain in which Tu¨rk-Is was officially recognized as competent to express opinions and put forward proposals. An exception was the formal invitation by the Consultative Assembly6 to the confederation to present its views on the draft constitution. Other institutions asked to provide opinions on the draft included provincial governors, universities, supreme courts, and business associations. The summit meetings between Tu¨rk-Is and the government did not produce any gains for labour. The president of the confederation at the time explained this situation to union members: “The public asks, ‘You visited the prime minister; what did you talk about?’ We discuss the level of minimum wage, and the response we get [is] ‘The employers cannot afford it’” (Ibrahim Denizcier’s speech at the Ninth General Convention of the Textile Workers’ Union, in Tu¨rk-Is Dergisi, June 1982).The Tu¨rk-Is leadership’s views of the military regime can help to understand its persistent cooperation. These views can be summarized as follows.7 Military intervention was inevitable as a result of paralysis of the country’s political institutions and widespread terrorism. Restoration of democracy was necessary for an independent trade union movement and labour rights. Therefore, it was important for the Tu¨rk-Is organization to assist the military administration in its efforts to restore democracy as quickly as possible. Tu¨rk-Is officials were also of the opinion that they had no plausible alternative to dialogue with the military government to ensure trade unions’ survival and protect workers’ rights as much as possible.8 Tu¨rk-Is officials did not, however, simply acquiesce to the military regime. They supported it, though they also called for a rapid transition to democracy. In urging support for the military regime, Tu¨rk-Is officials frequently used the theme “first the nation and the state”. This was indeed in conformity with the traditional discourse of the confederation. Cooperation with the government, whether it was a centre-left or centreright party, was the traditional policy of Tu¨rk-Is. In the 1960s and 1970s, this policy had indeed provided economic and social benefits for

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the rank-and-file membership of the confederation, concentrated in the public sector. However, the same strategy could not achieve the same results under the military regime. The 12 September coup not only brought about a governmental change or political regime change but also marked a fundamental restructuring of the state form and economic growth model.

Dialectics of Cooperation and Opposition The corporatist arrangements that structured cooperation of the Tu¨rk-Is leadership with the military government served two roles: 1) as a mechanism of controlling and disciplining organized labour, and 2) as an institutional link between the state and the working class in a situation in which other institutions of mediation, particularly political parties and parliamentary institutions, were dissolved. For effectiveness of the second role, it was important that the corporatized unions maintained some legitimacy vis-a`-vis their memberships. Within the limits set by its overall corporatist cooperation, Tu¨rk-Is showed its disapproval of some anti-labour decisions and actions of the military government. This opposition did not touch the fundamentals of the regime’s programme. Unionists from Tu¨rk-Is were often heard complaining about the SBA, low wages, severance compensation, unemployment, and dismissals. The targets of their criticisms were first employers and second “some high-level bureaucrats” responsible for economic affairs but never the military regime directly.9 The initial acts of opposition included withdrawal from the Minimum Wage Commission in March 1981 and Tu¨rk-Is representatives’ votes against the SBA’s decisions regarding the renewal of expired collective agreements. In both cases, however, the opposition of Tu¨rk-Is was very limited. After talks with the minister of labour, Tu¨rk-Is representatives returned to the Minimum Wage Commission shortly after their withdrawal (Tu¨rk-Is 1982a, 209– 10; Tu¨rk-Is Dergisi, April 1981). In the second case, Tu¨rk-Is representatives continued to sit on the SBA, though they lacked power to influence its decisions in favour of labour.10 Disquiet grew among workers as they felt the effects of structural adjustment policies more deeply. There were sporadic labour actions in 1982, such as slow-downs and lunch boycotts (Margulies and Yildizoglu 1984, 20). By early 1982, Tu¨rk-Is unionists expanded their criticisms

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and demands. They started to attack the neoliberal economic model and emphasized the principles of social justice and the welfare state (see, e.g., Pronouncement of Tu¨rk-Is Executive Committee, 12 January 1982, in Tu¨rk-Is Dergisi, February 1982).

Change in Leadership The General Convention of the Tu¨rk-Is confederation in May 1982 resulted in a change in leadership. Ibrahim Denizcier, who had the misfortune of being the leader of the country’s largest labour organization at the time of the military takeover, decided not to run for office. Advice and pressure from member unions’ leaders played a role in his decision.11 Sevket Yilmaz, the vice-president, got elected president. Unionists expected that the leadership change would help to improve the tarnished image of the confederation in the eyes of its members and international trade union organizations without upsetting the military rulers. Yilmaz was from the conservative wing of the organization, someone whom the military administration was not likely to reject. But the re-election of Sadik S¸ide as secretary general caused the most controversy and speculation. S¸ide was serving as the minister of social security in the military government at the time of his re-election. According to a Turkish journalist who was a keen observer of labour affairs, “there were rumours that if S¸ide were not re-elected the military rulers might punish the confederation” (Ketenci 1990, 262). A Tu¨rk-Is union president also confirmed this explanation and reported that the former Tu¨rk-Is president, Ibrahim Denizcier, had told him in response to his query regarding S¸ide’s re-election that, “if S¸ide were not re-elected, Tu¨rk-Is might have been closed down [by the military administration]”.12 But several months after his re-election as secretary general, S¸ide was compelled to take a leave of absence from Tu¨rk-Is for the duration of his stay in the military cabinet, as explained earlier. The 1982 Tu¨rk-Is convention did not usher in a major transformation in its corporatist subordination to the state. Yet some changes followed. If the confederation were to avoid an organic crisis of representation, and regain its credibility as a labour organization before the international trade union movement, it had to distance itself to some extent from the military administration. Following the leave of S¸ide from his union post, Tu¨rk-Is initiated efforts to normalize its relations with international trade union organizations and to get readmitted into the ICFTU. These

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efforts included providing technical assistance to missions from the ILO and various international trade unions whose aim was to investigate the situation of labour rights in Turkey (Ketenci 1990, 263–4).13 But more important was the Tu¨rk-Is campaign against the draft constitution.

Organized Labour and the Making of New Juridico-Political Institutions The first and only major act of opposition by Tu¨rk-Is under the military regime was its campaign against the draft constitution in the summer of 1982. However, even this serious opposition was followed by cooperation with the military rulers. To understand better the position of the military regime toward different social forces, it is important to look at not only the end products but also the processes and procedures involved in making the political– legal institutions of the new order. These institutions were to constitute the terrain where political struggles would take place and affect the development of social forces beyond the military regime. The National Security Council (NSC) created a Consultative Assembly to draft a new constitution.14 The assembly convened on 23 October 1981. Its mandate included preparing the laws on political parties and an election system after the constitution was approved in a referendum. The final decision rested with the NSC. The assembly was an appointed body of 160 members, of whom 120 were selected by the NSC from lists of candidates prepared by the provincial governors, and the remaining 40 members were appointed by the NSC directly. Fortyseven per cent of Consultative Assembly members came from within the state apparatus; they were retired or active judges, prosecutors, military officers, high-ranking civil servants, and administrators/managers in public sector enterprises. There were only two trade unionists and two workers (one former union official).15 The three unionists, former and current, were from Tu¨rk-Is. They were among the 40 members selected by the NSC.16 The military rulers thus granted the corporatized Tu¨rk-Is three seats in the Consultative Assembly. None of the three unionists was selected, however, for the Constitutional Committee of the assembly, entrusted with the main task of drafting the constitutional text, while the general secretary of the Confederation of the Turkish Employers’ Association (TISK), Rafet Ibrahimoglu, became a member of the committee.17 In the committee were nine university professors, two

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former judges, two former generals, one agricultural engineer, and TISK’s secretary general. Tu¨rk-Is welcomed the Consultative Assembly as an important step toward the restoration of democracy (Pronouncement of Tu¨rk-Is Executive Committee, 28 October 1981, in Tu¨rk-Is 1982a, 450). Looking back at the situation about seven years later, a Tu¨rk-Is union president reflected on Tu¨rk-Is unionists’ mistaken hopes: When it was announced that a Consultative Assembly would be created, we entered upon great efforts. We sincerely hoped that an assembly similar to the one that had prepared the 1961 Constitution would be set up. If a constitution similar to the 1961 Constitution is prepared, we too can express our ideas through these people [the trade unionists in the Consultative Assembly], we hoped . . . But the Consultative Assembly did not become another Constituent Assembly. It did not have any role other than to show to the outside that there was an assembly. It was a camouflage [used by the NSC] to meet the demands of capital. In other words, the existence of the assembly created the impression that it was the assembly rather than the NSC that carried out the wishes of capital.18 Tu¨rk-Is organized a serious campaign against the constitutional draft when the NSC allowed public discussion of the draft from mid-July 1982. Public debate went on until the final text was approved by the NSC on 19 October. Many intellectuals, journalists, academics, and professional associations heavily criticized the restrictive nature of the draft constitution and its authoritarian clauses. The Tu¨rk-Is campaign included issuing public statements and detailed reports highly critical of the draft constitution. The criticisms were from the standpoints of fundamental human rights and freedoms, political rights, collective labour rights, economic and social rights, as well as the institutional and power structures of state organs. Tu¨rk-Is emphasized that, if the draft constitution were adopted as it was, fundamental civil and political rights and freedoms would be severely restricted. Democracy would exist in name only. In this pseudodemocracy, workers would be deprived of any meaningful rights to collective bargaining, strike, and unionization. An important theme in

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the Tu¨rk-Is campaign was its claim that the draft constitution, particularly its sections dealing with social and economic rights, was modelled after business associations’ views and demands.19 Tu¨rk-Is widely publicized its criticisms and demands through frequent public declarations and press conferences. It organized seminars and conferences to disseminate its views. In an effort to obtain international support, Tu¨rk-Is translated a number of its campaign documents into English and sent them to the ICFTU.20 In addition to the public campaign, Tu¨rk-Is worked closely with the three unionists in the Consultative Assembly.21 In the debate sessions of the assembly, the unionist members submitted a series of motions to amend the draft constitution in a democratic direction. They had prepared the motions in cooperation with Tu¨rk-Is officials. The assembly rejected all these motions.22 It approved the draft constitution without major changes. In the final round of voting, the three unionists were among the seven assembly members who voted against the constitution (Danisma Meclisi Tutanak Dergisi, B: 156, 23 September 1982, O: 2). The next step for Tu¨rk-Is was to appeal to the head of state and the NSC for changes to the draft constitution. The NSC would give the constitution its final shape and then submit it to a referendum. But at this stage, Tu¨rk-Is significantly narrowed its demands. They were limited to the major restrictions on collective bargaining, strike activity, and unions (Tu¨rk-Is 1983b, 159–85). Tu¨rk-Is did not continue to press for its broader pro-democracy demands because it was convinced that it could not succeed under prevailing political conditions. Perception of the limits of the possible was the explanation given by ¨ zdemir, educational secretary of the confederation at the time Kaya O of the constitutional campaign, in an interview a number of years later. When asked whether Tu¨rk-Is leaders had discussed with the head of state and chair of the NSC, Kenan Evren, and the prime minister, Bu¨lend Ulusu, the removal of restrictions in the constitutional draft concerning fundamental democratic rights and freedoms beyond the ¨ zdemir said that, “Yes they did. But under the labour provisions, O existing conditions, it would be too optimistic to expect further amendments beyond the nine articles. Further amendments would mean changing the existing balance of social forces” (interview by Yildirim Koc, 26 January 1989). While the military government undoubtedly exercised “active power” over union leaders to shape their behaviour, the

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actions of union leaders also showed another aspect of “behavioural power”: that is, “covert power” (Gill and Law 1988, 77). The prevailing power relations shaped union leaders’ perceptions of what was possible. The failure of their earlier campaign to influence the Consultative Assembly in a desired direction was important in this regard. Tu¨rk-Is leaders internalized the existing constraints and the balance of power that had greatly shifted against organized labour, with the result that they themselves constrained their behaviours and demands. In their appeal to the NSC, they made it clear that they were willing to settle for realistic concessions. In the final constitutional document, the NSC made a few changes in the provisions concerned with trade unions in the direction of the Tu¨rkIs proposals. The military rulers offered some concessions to Tu¨rk-Is that amounted to no more than face-saving for its leaders. Extensive restrictions on collective bargaining, strike activity and trade unions remained in the final text. But once the constitution was approved by the NSC, Tu¨rk-Is abandoned its oppositional stance. Before the popular vote on the constitution on 7 November 1982, the Tu¨rk-Is Executive Committee issued a communique´ emphasizing that “the most important feature of the new constitution is to open the way to a normal democratic parliamentary order” (Cemal 1986b, 135; Tu¨rk-Is 1983a, 28 –9). On 5 November, Tu¨rk-Is president Sevket Yilmaz appeared on public TV and urged people to “go to the polling stations and cast their votes for the transition to democracy as soon as possible” (Teksif 1986, 7). The president’s speech was phrased in such a way that it could be easily interpreted as a call for a yes vote for the constitution.23 That the Tu¨rk-Is president was allowed to address the public via state TV just two days before the constitutional referendum shows that the military government sought the support of the largest labour organization in mobilizing working-class votes for the constitution. The Tu¨rk-Is U-turn also requires an explanation. Tu¨rk-Is officials’ response to the question of why they threw their weight in favour of the constitution in the referendum was that the objective was to make a transition from the military regime as quickly as possible. The dialectics of opposition and cooperation clearly manifested itself in the Tu¨rk-Is constitutional campaign. The campaign against the constitution showed its membership and the public that it was still a labour organization representing workers’ interests. However, its

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opposition campaign ended in cooperation with the military rulers. The U-turn demonstrated the limits of its representativeness, as set by the state.

Approval of the New Constitution The Turkish electorate approved the authoritarian constitution by an astonishing 91.4 per cent of the valid votes in the referendum; 91.3 per cent of the registered electorate cast their votes. Even the generals did not expect such a high approval rate. Before the referendum, they said that they expected about an 80 per cent yes vote but would be satisfied with even 60 per cent (Ahmad 1993, 187). One reason for the very high approval was the lopsided campaign. While the military leaders conducted an effective yes campaign, any opposition campaign was prohibited after the NSC approved the final text to be submitted to popular vote. Another reason was the fact that the electorate came to view a vote for the constitution as a vote for the restoration of civilian rule. The military leaders often played on the public’s fears by repeatedly emphasizing that, if the constitution were rejected, the military would prolong its stay in power (Ahmad 1993, 187; Cemal 1986b, 101). This was also the apologetic explanation of Tu¨rk-Is leaders for why they threw their weight behind the constitution on the eve of the referendum. Business leaders were very pleased with the referendum result. They interpreted it as the Turkish people’s rejection of the difficult political situation that preceded the military intervention (Ahmad 1984, 4). The approval rate for the constitution was lower among the working class compared with the entire electorate. In some predominantly working-class districts, the yes vote was about 85 percent compared with the national average of 91.3 percent (Boratav and Yalman 1989, 51). Nevertheless, the overwhelming majority of the working class voted in favour of the constitution despite its very restrictive provisions concerning collective labour rights and freedoms. Perhaps the Tu¨rk-Is position during the referendum had some influence among working-class voters. But the high support cannot be explained by the implicit call for a yes vote, as Koc (1989a, 29) points out, because the confederation did not have an established tradition of urging workers to vote one way or the other. But certainly the public had not been adequately informed about the content of the constitution.

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The Codification of State-Controlled Trade Unionism The 1982 Constitution envisaged a weak labour union movement whose activities would be restricted to a narrowly defined domain of industrial relations. It contained for a basic law unusually detailed provisions regulating trade unions and their activities. The various prohibitive clauses of the constitution aimed to prevent the development of political ¨ zbudun 1991, 49 – 50), such as the type of labour union unionism (O movement represented by DISK. One of the most undemocratic articles of the constitution concerning collective labour rights and freedoms was a comprehensive ban on trade unions’ engagement in any kind of political activity (Article 52). The ban provided state authorities with a strong weapon to keep unions under close control.24 The constitution imposed substantial restrictions on the right to strike. It limited the right to strike to interest disputes and thus abolished right strikes (i.e., those strikes resulting from the violation by the employer of a previously concluded collective agreement). It also included a ban on “politically motivated strikes, solidarity strikes, general strikes, workplace occupation, work slow-downs, decreasing production, and other forms of resistance actions” (Article 54). Furthermore, it declared that “the right to strike and lockout shall not be exercised in a manner contrary to the principles of good faith, prejudicial to the community, and in a manner detrimental to national wealth” (Article 54). The phrases “good faith”, “prejudicial to the community”, and “detrimental to national wealth” were too vague. They could easily lend themselves to abuse by state authorities against trade unions. The constitution institutionalized an important mechanism of state control over trade unions in the form of the Supreme Board of Arbitration. The SBA had final and binding authority for settling collective bargaining disputes in cases in which strikes were legally banned, or postponed by the Council of Ministers, as explained earlier. Compared with the previous constitution and trade union legislation, the 1982 Constitution significantly rolled back collective labour rights and imposed close state tutelage over trade unions. Employers supported the state’s further expansion into industrial relations to restrain trade unions and labour struggles at the same time that they argued for less state intervention in the economy. The Confederation of Employers’ Associations (TISK) expressed its satisfaction with the 1982 Constitution, particularly its provisions dealing with labour –capital relations. It emphasized that the labour

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provisions of the new constitution could provide long-term industrial peace and hence assist economic development of the country (TISK 1983, 8– 11). The military regime enacted two pieces of labour legislation in May 1983 – the Trade Unions Act (No. 2821) and the Collective Bargaining, Strike, and Lockout Act (No. 2822) – in accordance with the restrictive labour provisions of the new constitution.25 The two trade union laws were enacted by the National Security Council without a debate at the Consultative Assembly. The labour legislation set up the main “extraeconomic” framework of industrial relations that constituted an integral element of the regulation mode of the outward-oriented growth model. The most striking feature of the new labour legislation was extensive direct involvement of the state in every stage and aspect of labour – capital relations in the economic sphere.26 It introduced cumbersome legal and bureaucratic procedures regulating the processes of collective bargaining and strike activity. Its elaborate regulation of every stage and aspect of collective bargaining and strike activity considerably increased the possibility of occasions when the state could invoke its coercive powers against organized labour. “Formal procedures . . . are never mere procedural formalisms but they predetermine as such the possible content and possible outcome of the process. They do so . . . by providing certain interests with a head start, and by granting them chronological priority . . . or the opportunity to employ specific power resources” (Offe 1974, 40). The neoliberal economic project was associated with statization of the industrial relations system. The statization and juridification of industrial relations aimed to ensure the political and economic marginalization of the working class beyond the military regime. The lawmaker’s justification for the Trade Unions Act (No. 2821) stressed that the law’s aim was a centralized and strong trade unionism instead of the fragmented and weak trade unionism of earlier decades. It claimed that, under the previous system, the number of unions had proliferated to such an extent that it was incompatible with the socioeconomic conditions of the country.27 This view was similar to TISK’s criticism of “union inflation” and “union competition” for damaging industrial peace and driving up labour costs above employers’ capacities in the pre-1980 period (TISK 1983, 11, 12, 15). Consequently, the new legislation permitted only industrial branch unions operating at the

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national level and confederations. It recognized the freedom to organize more than one union in a particular industry. Nevertheless, the legal prohibition of other forms of labour organization impinged on the freedom of workers to form and join organizations of their own choosing.28 The law’s permission of only industrial branch unions organized on a national scale should be evaluated in the context of the entire labour legislation. When it is taken into account, it appears that the real purpose was to promote a centralized and concentrated trade union organization capable of controlling the membership but greatly restricted in power and resources vis-a`-vis the state and employers. Labour unions were to negotiate with employers in an orderly fashion and under state supervision to ensure labour peace and mitigate class conflict. The Collective Bargaining, Strike, and Lockout Act introduced a very restrictive condition for labour unions to qualify for certification. To be authorized to conclude a collective agreement, a union had to represent at least 10 per cent of all workers in the particular branch of activity and more than half of the workers (50 per cent plus one) in the establishment (Article 12).29 This double requirement in effect privileged existing large unions, specifically the affiliates of Tu¨rk-Is. It made it very difficult, if not impossible, to form new unions. Although this provision, as Turkish state authorities often claimed in justifying it, could prevent extensive fragmentation of the Turkish labour union movement by hindering the emergence of many small unions, it encroached on the freedom of unionization.30 The 2822 act prescribed a complex series of formalities for trade unions to observe in the process of negotiating and concluding collective agreements. If a trade union did not comply with any of the detailed regulations, it would risk decertification and thus would have to restart the process from the beginning. The highly detailed procedures for calling and conducting strikes were aimed at discouraging organized labour from using the strike weapon and rendering it ineffective. For example, a labour union had to notify the employer or the employer’s association of its strike decision through the public notary within six days (Article 28). The strike had to start within at most 60 days after notification of the decision and not before the employer was notified of implementation of the strike at least six days in advance (Article 37). If the union failed to strike within the specified time period, and if there was no lockout decision by the employer, then

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its certificate of competence to conclude collective agreements would automatically terminate. Such regulations were not simply bureaucratic formalities. They provided employers with significant advantages over labour unions. For example, the requirement that the labour union had to inform the employer of the start date of the strike at least six days in advance allowed the employer a significant amount of time to take necessary measures to minimize costs likely to result from the strike action. Act No. 2822 expanded the number of industrial branches and workplaces where strikes were forbidden and partially instituted a compulsory arbitration system (the SBA) in these industries compared with the previous system. Employers received the new labour legislation with satisfaction. As was the case with the constitution, the industrial relations laws incorporated most of the employers’ demands. Many provisions of the acts almost copied TISK’s proposals (Aker 1990, 211–20; TISK 1982, 27– 31).31 TISK described many articles of the labour acts as right and capable of overcoming the deficiencies and mistakes of the previous system (Isveren, February 1984, 3 – 7; TISK 1983, 12 – 16). To conclude, the 1982 Constitution and the new labour legislation enacted by the military regime entailed extensive restrictions for labour unions. They defined the boundaries of union activities strictly as the area of industrial relations and prohibited unions from political activities of any form. Strike action was substantially constrained. These restrictions on labour unions met many of the employers’ demands. The trade union legislation introduced cumbersome legal and bureaucratic procedures for every stage of the collective bargaining process and strike activity. Many of these procedures not only advantaged employers but also ensured more direct involvement of the state in industrial relations. The main objective behind expansion of the state’s role in industrial relations was to control organized labour. The trade union legislation of the military regime remained in force without significant change until June 1997.32

CHAPTER 6 THE MILITARY REGIME AND TURKISH LABOUR IN THE INTERNATIONAL CONTEXT

The form of state develops principally in relation to two configurations of forces: the configuration of domestic social forces and the constraints or permissiveness of world order pressures (Cox 1987, 107, 147–8). World order is defined by the coexistence of the interstate system and the world economy. The forms and actions of states are thus conditioned by the pressures emanating both from other states and from global economic forces. Transnational civil society, comprised of the networks of social and political relations that cut across national state borders, can also be a source of such pressure. This chapter investigates the nature and effects of the pressures on the Turkish military regime that emanated from major Western governments and international organizations. The investigation includes relevant international labour organizations. Although there is a fair amount of literature on official European and American relations with the Turkish military government as well as on the role of the IMF and World Bank in the economic restructuring during and after the military regime, this literature hardly pays attention to international labour organizations. From the mid-1990s on, International Relations (IR) scholars started to pay closer attention to transnational social movements and internationally active non-governmental organizations, and they posited the emergence of a transnational or global civil society that arguably transformed the nature of international politics. When IR scholars talk

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about transnational or international non-state “actors” or “agencies”, they hardly take notice of labour organizations operating at that level, even though international labour organizations have existed since the late nineteenth century.1 When IR studies include these organizations or movements, they are usually concerned with their reactions to the policies of the IMF, World Bank, and WTO. Studies that investigate those international institutions in which or areas where labour organizations, international or national, seek to exert influence are scarce.2 One obvious reason for this neglect is that, compared with multinational corporations and intergovernmental institutions, international labour organizations lack direct influence in the sphere of international politics and economy. However, at a particular conjuncture and in a particular place, their actions and policies can have certain consequences for other international institutions or particular states. At the international level, labour unions are at a great disadvantage relative to capital as well as to states in regard to both “overt or covert power over” and “structural power”. “Overt power” is when an actor (A) makes another actor (B) modify his/her behaviour in ways desired by A. This involves the use of positive or negative sanctions, the extreme case being the use of force. “Covert power” is when an actor (A) alters his/ her behaviour in anticipation of what actor (B) might do but without B exerting active power over A (Gill and Law 1988, 73). The international trade union movement thus far has had few resources at its disposal to exert overt power or have covert power over a particular state. At the international level, the labour movement is even more disadvantaged relative to big states and big businesses with respect to structural power. Structural power involves creating patterns of incentives and constraints and shaping preferences and perceptions of what is possible or impossible (Gill and Law 1988, 73 – 5). The role of global capital and its agencies in shaping the politics and form of a particular state is not merely one of “external pressure”. Global capital is reproduced within a particular social formation itself, especially in the current accelerated process of economic globalization. It can be present within the very state apparatus as a result of its internalization and representation by a section of the ruling elite and of the “domestic” bourgeoisie (Poulantzas 1978, 70– 83). Although labour is currently interconnected across national borders more than ever before because of the emergence of production relations on a world scale, the international labour

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movement is still characterized by historical divisions along national lines. Whereas capital, especially finance capital, has become highly mobile and increasingly organized in globally active corporations, there are major restrictions, both state imposed and practical, on the international movement of labour. Thus, the international trade union movement is not strong enough in terms of either relational or structural power to bring effective, direct influence to bear on a particular state, in this case Turkey. In seeking to force the military regime in Turkey to respect collective labour rights, international trade union organizations focused a significant part of their efforts on influencing the actions toward the Turkish military government of intergovernmental organizations and other governments to which they had relatively better access. In other words, the role of the international trade union movement vis-a`-vis the Turkish state at this time was confined to “external” pressures or influences. But this role was still significant, as discussed in detail in this chapter.

Major Western Governments’ Reactions to the Military Coup Turkey has been linked to the West through a myriad of political, military, and economic institutions. Especially at the time of the military intervention, the Turkish state was also financially dependent on major Western states and IFIs controlled by major Western governments. The policies and actions of major Western states and of the international institutions that they control exert great influence on the Turkish state and political economy by opening up opportunities or imposing constraints. Anticipated or actual reactions of major Western states to the overthrow of parliamentary democracy by a military coup in Turkey would bear great significance for the success or failure of the military regime as well as for its nature and course. The military coup in Turkey by no means took American and Western European governments by surprise. They had been closely following political developments in the country. US Embassy staff and military personnel in Turkey seem to have been expecting a coup during the summer of 1980.3 NATO and American military officers often raised with their Turkish colleagues “encouraging” questions such as “what are the Turkish Armed Forces planning to do in the face of the chaotic situation in the country?” (Birand 1984, 184–97; Hale 1994, 239).

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This does not show, of course, that the US government or its agencies had any direct role in the military coup of 12 September (Hale 1994, 239). However, anticipated reactions from Turkey’s Western allies, especially the United States, to a military intervention promising to bring “order and stability” in the country were heartening for the Turkish generals planning a coup d’e´tat at that time. The international conjuncture was propitious for such an intervention by the Turkish armed forces in the country’s political system. The Soviet invasion of Afghanistan in December 1979, and the toppling of the Western-friendly Shah regime by the revolution in Iran the same year, had significantly increased the political and military importance of Turkey for the West. However, the serious political and economic crises engulfing the country did not make the Turkish state a strong partner that could be relied on to defend the strategic and political interests of the West in the murky waters of the region. At this international conjuncture, initial official reactions to the coup in the United States and Western Europe were hardly unfavourable. In an interview in 1985, Jimmy Carter, American president at the time of the Turkish military takeover, would say that “the situation in Turkey before the coup posed a danger. We were relieved as a result of the stability brought about by the military regime in Turkey in the wake of the Soviet invasion of Afghanistan and the overthrow of the Shah’s regime in Iran” (quoted in Cemal 1986a, 43). Both the American and the West German governments immediately stated that this political development would not hold up their economic aid to Turkey. Four days after the coup, on 16 September, the foreign ministers of the nine states in the European Community (EC) issued a statement in which they expressed concern over the recent developments in Turkey but added that the EC’s economic and political relations with Turkey would not be affected, provided that there was a rapid restoration of democratic institutions and respect for human rights by the military (Keesing’s Archives, 31 October 1980, 30545; EC ministers’ declaration in Official Journal of the European Communities, Debates of the European Parliament, No. 1-263: 116 – 17).

Washington Welcomes the Military Regime in Turkey During the military regime, American– Turkish relations became more harmonious. Relations had been tense during the latter half of the

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1970s. The tensions had been due to the embargo imposed, in October 1974, by the American Congress on US arms supplies and bilateral military aid to Turkey in the wake of the Turkish military intervention in Cyprus. The Turkish government’s response was to close down a number of US military facilities on Turkish soil. Turkey at the same time was expanding its relations outside the Western alliance, including the Soviet Union. With the lifting of the arms embargo in December 1978, Turkish – American relations had started to improve just prior to the military takeover in Turkey. In the period following the coup, further improvement occurred. The American administration maintained cordial relations with the Turkish military regime from beginning to end. Turkey was strategically and politically too important for the American administration to alienate the friendly military rulers of the country. The military regime brought about political stability in this NATO country, albeit at the expense of democratic rights and freedoms. Moreover, the military government implemented an economic policy in conformity with the interests of the United States and international capitalism. The neoliberal economic policy that Turkey adopted was enthusiastically promoted by the Reagan administration as well as by international financial institutions at this time. Financial aid and political support from the American government in turn bolstered the confidence and resolve of the military rulers in carrying out restructuring of the Turkish political system and economy. When the armed forces overthrew parliamentary democracy in Turkey, the Carter administration was in power in the United States. American strategic interests prevailed despite this administration’s loud promotion of human rights policy elsewhere. Immediately following the coup, the State Department announced continuation of US aid to Turkey. The US government declared its trust in the Turkish military leaders and their pledge to restore democracy (Dagi 1996, 127). The neoconservative Reagan administration, which formally took power in January 1981, was particularly understanding of and sympathetic toward the military regime. And the Turkish military government in turn proved to be the closest ally of American interests in the region. Several concessions by the military government to NATO and/or the United States helped to establish good relations with the US government. First, there was the lifting of the Turkish veto against

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the return of Greece to the military wing of NATO in October 1980. The Turkish government agreed to do so without a quid pro quo from Greece (Ahmad 1993, 184). Second, the NSC ratified the Defence and Economic Cooperation Agreement (DECA) with the American administration in February 1981.4 This agreement permitted American military installations to continue to operate on Turkish soil. They included a number of air bases and intelligence-gathering operations.5 DECA had finally been signed by the Justice Party government in March 1980, but at the time of the military intervention the agreement had not yet been ratified by the deadlocked Turkish Parliament. Another military agreement with the United States soon followed. The Modernization and Improvement of the Airfields Agreement, dated November 1982, granted the United States permission for military storage on a number of air bases in Turkey and provided for the improvement of existing airfields and the building of new ones within the framework of NATO (Cemal 1986b, 162–3).6 With no organized opposition in the country, the military government could easily take and implement such foreign policy measures as it saw fit. In return for its close cooperation, the Turkish military administration received a substantial amount of military and economic aid from the United States. The aid totalled $453 million in 1981, $704 million in 1982, and $688 million in 1983 (Dagi 1996, 127). These figures represented a significant increase compared with the precoup period. The level of grants in the aid package increased as well (ibid.). The close relations between the American government and the military regime did not remain within the bounds of bilateral relations between the two countries. The American government offered diplomatic support to the Turkish state in international relations. It lobbied European governments, the EC, and the Council of Europe to show understanding toward the Turkish military regime and not to isolate it (Dodd 1983, 59; Keesing’s Archives, 27 August 1982, 31675).

Western Europe and the Military Regime: From Understanding to Strong Criticism The general atmosphere of “understanding” on the European front soon gave way to a highly critical attitude when the repressive measures of the military regime became widely known to the European public and when pro-democracy and human rights organizations began to exert pressure

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on governments and regional institutions of Europe concerning the situation in Turkey. Many Turkish leftist political activists who had fled to Europe following the coup also mounted a campaign to pressure European states and institutions to take action against the military regime to restore democracy. The Council of Europe was a major player in European–Turkish relations during the military regime. Turkey joined the Council of Europe soon after it was founded by Western European democracies in 1949. Membership in the council has had great symbolic value for Turks. It signified the “Europeanness” of Turkey. The symbolic importance that Turkey attached to the Council of Europe was a source of influence for the council over the Turkish state (Dagi 1996, 131). The council’s initially mild reaction7 to the military coup soon became extremely critical. Some parliamentarians in the council’s Parliamentary Assembly, particularly socialists and communists, pressed for the expulsion of Turkey until a democratic civilian regime was reestablished. Despite numerous moves in the Parliamentary Assembly for its suspension, Turkey continued to be a member. Although Turkey formally remained a member of the council, the Parliamentary Assembly voted on 14 May 1981 not to renew the Turkish delegation’s mandate as long as democracy was not restored (Keesing’s Archives, 27 August 1982, 31674–75). The Turkish delegation was not readmitted to the assembly until May 1984, more than five months after the transition to an elected civilian government. The Council of Europe also passed a number of resolutions condemning the curtailment of democratic rights and freedoms in Turkey and made urgent appeals to the military rulers to reestablish democracy in a short time.8 Official fact-finding missions that the council sent to Turkey also put pressure on the military regime to respect human rights.

The European Economic Community Turkey had a long-standing relationship with the European Union (EU), originally the European Economic Community (EEC) and later the European Community. Soon after the EEC was launched in 1958, Turkey signed an association agreement with it in 1963; its final objective was full membership. The prerequisites for membership in the EEC were clearly not only economic but also political, above all a liberal democratic regime. Political developments, especially a radical turn of

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events such as dissolution of parliamentary institutions and establishment of an authoritarian military regime in a country bordering on Europe, having centuries of political and economic relations with European countries, and linked to the EEC by a special association agreement, directly impinged on the community. And the EEC’s policies and actions toward Turkey carried paramount importance for the country’s politics and economy. The initial reaction of the EEC to the military takeover was hardly unfavourable. Both the European Commission and the Council of Ministers noted with concern this turn of events in Turkey and urged military authorities to keep assurances that they had given in their public statements regarding respect for human rights and a speedy return to democracy. They added their decision to continue cooperation with Turkey as envisaged in the association agreement. They emphasized, however, that this decision was based on the rapid reestablishment of democratic institutions and respect for human rights as promised by the coup leaders. According to official statements of the council and commission, suspension of Turkey’s association with the community, and curtailment of economic aid, would accentuate the political and economic crisis that had led the military to intervene in the first place and hence make it more difficult to restore a democratic civilian regime in the country. The initially dominant view in the European Parliament was not different from the position of the council and commission. The only strong reaction came from the communist group, pressing for the immediate suspension of relations between the community and Turkey in so far as the military regime was in power. The communists were to maintain this position throughout the period. Greek parliamentarians, who took their place in the European Parliament when Greece became a member of the community on 1 January 1981, took a similar position but for reasons different from those of the communist group. Greek parliamentarians looked at the Turkish situation primarily through their Greek nationalist lenses regardless of their party affiliations. The initial mostly understanding position of the European Parliament (with the exception of the communist group) soon gave way to a more critical stance given the prolonged suspension of democracy and serious human rights violations in Turkey. The Parliament adopted a resolution on 10 April 1981 that urged the

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other organs of the European Community and member states to inform Turkish officials that the Turkish – EEC association would be suspended if they did not restore democratic institutions within two months.9 By putting the future of the Turkish – EEC association agreement in question, the resolution sent a serious warning to the military administration. Turkish – EEC relations at the executive level seemed to be following a track different from that of the European Parliament. Only a month after the Parliament’s harsh resolution, the Turkish– EEC Association Council continued negotiations on the fourth financial protocol in the framework of the 1963 association agreement. The negotiations reached an agreement in June 1981. The signed financial protocol provided for financial aid of 600 million ECU. The agreed amount was about 94 per cent higher than the amount in the previous financial protocol. However, release of the aid was conditional on political developments in Turkey. Thus, the EEC sought to use the financial aid package to exert pressure on the military regime for a rapid restoration of democracy (Dagi 1996, 129– 30). Turkish – EEC relations took a turn for the worse toward the end of 1981. There was growing pressure on European institutions and governments from human rights organizations, political parties, trade unions, and public opinion concerning the situation in Turkey. From the perspective of the EEC, the military administration was not doing enough to reinstitute democracy as it had promised. The formal dissolution of all political parties by a decree-law of the NSC on 16 October 1981 triggered a crisis in Turkey – EEC relations. In November 1981, the European Parliament proposed a temporary freeze on the Fourth EEC– Turkey Financial Protocol. It also agreed to suspend the Joint Parliamentary Committee of the EEC –Turkey association on the ground that there was no longer an elected Parliament in Turkey. In December, the commission, under pressure from the Parliament, recommended to the Council of Ministers of the EC that implementation of the Financial Protocol and the package of financial aid provided in the protocol be delayed until the Turkish authorities clarified their political course. Following the Parliament’s proposal and the commission’s recommendation, the Council of Ministers of the EC decided to suspend the Financial Protocol and thus freeze the agreed package of financial aid.

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As it became clear that the military rulers were not going to relinquish power immediately to a democratically elected government, and in light of widespread violations of human rights, the European Community hardened its stance toward the military regime and applied some important sanctions against it. Major provisions of Turkey’s association agreement with the community were frozen; its main committees were suspended. The EC refused to normalize its relations with Turkey until after the mid-1980s, several years after the transition from the military regime. It refused to summon any highlevel meetings with the Turkish government or a ministerial-level meeting of the EEC – Turkey Association Council until September 1986 on the ground that democratic rights and freedoms in the country were not satisfactory enough to reactivate association between the community and Turkey.10 Neither the Council of Ministers nor the commission was in favour of halting all cooperation with Turkey. The Turkey– EEC Association Council was in practice suspended; financial aid was frozen. But the association agreement formally remained in effect, and the commission continued to implement some of the decisions that had been made by the Turkey – EEC Association Council just before the military intervention. These decisions were concerned with custom duties and financing of some individual projects in Turkey.11 Turkey continued to receive loans from Western European governments, albeit not without difficulty, within the framework of the OECD, while the EEC blocked its financial aid. The loans were for the stabilization and liberal restructuring of the economy. When the military government sought credits from the OECD, some delegates to the OECD, mainly from Western European states, reportedly brought up the issue of the political regime in Turkey (C¸o¨lasan 1984, 103–4). The government of Denmark refused to release the loan that it had pledged earlier within the context of the OECD; it urged other member states to do the same (Cemal 1986a, 439). The West German government declined, in January 1981, a Turkish request to coordinate an OECD loan package as it had willingly done in late 1979 (C¸o¨lasan 1984, 87 –8, 170– 4). Although it faced such difficulties from some Western European states within the OECD, the military government continued to receive substantial aid from the organization. Between 1979 and 1983, the OECD had pledged a total of $4.42 billion in

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credits; of this total, $1.13 billion were not released, but Turkey was able to use the rest (Kazgan 1988, 339).12 Unlike the governmental delegates to the OECD, IMF and World Bank officials did not express any interest in the situation of democratic rights in Turkey in their communications with Turkish authorities. They were concerned primarily with implementation of the stabilization and structural adjustment programs that the overthrown civilian government had adopted (C¸o¨lasan 1984, 86–7, 103, 196–8, 227–43). As it became clear that the military government was committed to implementing the required policies, IFIs released the agreed loans. To sum up, in the wake of the Iranian Revolution, the Soviet invasion of Afghanistan, and the continuing Iran –Iraq War, Turkey had become strategically too important for the United States and Western Europe to part with. Moreover, the Turkish military regime proved to be a loyal ally of the foreign policies and military interests of Western states in the region. It also remained loyal to, and effectively implemented, a neoliberal economic strategy urged by IFIs and major Western governments. The European institutions applied some economic and political sanctions and frequently urged the country’s military rulers to restore democracy. But at the same time, governments of the major European countries were careful not to alienate them. The Reagan administration, on the other hand, adopted a very understanding attitude toward the Turkish military regime. The military government also continued to receive substantial amounts of financial assistance from the IMF, World Bank, and OECD.

International Labour Organizations and the Turkish Military Regime The international trade union movement played an active role in putting pressure on the Turkish military regime to respect internationally recognized labour rights and freedoms. But not all international trade union organizations had an equal influence or role. To explicate their role and influence, it is necessary to examine their policies and actions in this instance. The International Labour Organization (ILO) was also a significant source of international pressure on the Turkish state with respect to labour rights.

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The ILO is unique among intergovernmental world organizations in that its system of representation is based on the principle of tripartism. Voting delegates to the organization include representatives of national labour and employers’ associations alongside government officials. The ILO sets up international labour standards “in a semi-parliamentary way” (Murphy 1994, 44), and it supervises the compliance of member states with these standards. The ILO thus not only constitutes a part of the regulatory mechanism of world order but also makes specific decisions and takes specific actions with regard to its member states.13 ILO conventions can become an important resource or a restrictive condition in the power struggles between labour and capital, and with respect to the policies and actions of the state, in a particular society at a particular time. Turkey joined the ILO in 1932. By the end of 1983, it had ratified a total of 28 international labour conventions, including the Right to Organize and Collective Bargaining Convention, 1949 (No. 98), but excluding the Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87) (ILO 1985).14 Given Turkey’s long-standing membership in the organization and its ratification of a significant number of ILO conventions, the ILO and its standards have been important elements in the relationship between the Turkish state and workers and employers. The ILO as an international organization became a strategic ally of Turkish labour in defending its rights against frontal attacks by the state during the military regime and beyond. The ILO was also one of the main international institutions whose support international trade union organizations sought to mobilize in trying to put pressure on the Turkish state to respect labour rights. It is thus important to investigate which policies and actions the ILO adopted toward the military regime, which clearly violated trade union rights, and how the Turkish state responded to the ILO. There have been two major forms of international trade union organization in recent history: the international confederation of trade unions and the international trade secretariats (ITSs). The former brings together national associations of trade unions. The latter are international bodies of trade unions in related industries, crafts, or occupations in different countries. The ITSs antedate the formation of international trade union confederations. In the postwar period,

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however, they played a less prominent role than the highly politicized international confederations during the political and ideological struggles of the Cold War (Cox 1971, 563). There were three major international labour confederations in the postwar decades, and they were still active in the early 1980s: the World Confederation of Labour (WCL), World Federation of Trade Unions (WFTU), and International Confederation of Free Trade Unions (ICFTU).15 The WCL (the oldest of the three) was originally founded in 1920 by Christian, mostly Catholic, unions in Europe. After it abandoned its earlier emphasis on its Christian roots in the late 1960s, it continued to blend socialist ideas with Christian social and humanitarian principles. It followed a strongly anti-Soviet and anticommunist policy during the Cold War decades (Sims 1992, 65). The WCL had no affiliates in Turkey. The WFTU was founded in 1945. At the time of its formation, it brought together labour unions from both the capitalist West and the communist East. When the Cold War divisions were drawn, most Western European unions and North American unions left the WFTU to form the anti-communist International Confederation of Free Trade Unions in 1949. As a result of the departure of North American and Western European unions, the WFTU came to be controlled by labour unions from the Soviet Bloc. The ICFTU, on the other hand, was dominated by the social democratic unions of Western Europe.16 Among regional international trade union organizations, the European Trade Union Confederation (ETUC) was particularly important in the Turkish case. ETUC was founded in 1973 by ICFTU-affiliated national trade unions in Western Europe to protect the rights and interests of labour at the European level and strengthen European democracy. It has been dominated by social democratic or socialist trade unions. The Turkish trade unions had developed close relations with various international trade union organizations in the decades prior to the 1980 military coup. Relations between Tu¨rk-Is and the ICFTU go back to the time of its birth (Su¨lker 1955, 1976). It formally joined the international confederation in 1961 and has remained a member since then. Most of the member unions of Tu¨rk-Is were also affiliated with the ITSs of the ICFTU in their respective industries. DISK did not join any of the international trade union confederations between the date of its foundation in 1967 and the date of its suspension by the military regime

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in September 1980. But it left its member unions at liberty to affiliate with industry-based international associations of trade unions of their own choosing. In 1975, 11 of DISK’s 22 member unions belonged to one of the ITSs of the ICFTU (Firuz 1987, 215). In the latter half of the 1970s, an increasing number of DISK unions joined Trade Unions International (TUI) linked to the WFTU. As of 1980, 12 of DISK’s 30 unions were affiliated with the TUI of the WFTU, and five belonged to one of the ITSs of the ICFTU (DISK 1980, 417). In the latter half of the 1970s, given the increasing internationalization of capital, DISK made special efforts to develop multidirectional relations with a number of international trade union organizations and national unions in other countries.17 Although it still did not apply for membership in any of the major international trade union confederations (WCL, WFTU, ICFTU), it established close relations with the WFTU and labour organizations in socialist countries as well as with the French Confe´de´ration ge´ne´rale du travail (CGT) and a number of trade union organizations in Third World countries. Toward the end of the decade, DISK began to establish relations with the WCL as well. Although a number of DISK unions were affiliated with the ICFTU-associated ITSs, and though among them was also Genel-Is (municipal services workers’ union), whose president became the president of DISK in 1977,18 DISK was generally critical of the ICFTU’s ideological position (for DISK’s international relations in the late 1970s, see DISK 1980, 414–46). The only international trade union organization that DISK applied to join was ETUC. It applied in 1974.19 ETUC, however, refused DISK’s application on the ground that Turkey geographically did not belong to Europe. Upon DISK’s objection, the ETUC Executive Committee agreed to reconsider its decision (DISK 1980, 425–7). Following DISK’s application, Tu¨rk-Is also filed a membership application with the European Confederation. ETUC took its time to decide on the Turkish unions’ applications.20 Just a few days after ETUC invited DISK to a meeting to discuss its membership application, the military takeover occurred in Turkey. As a result, at the time of the coup, there was still no ETUC decision on the membership of either DISK or Tu¨rk-Is (Shabon and Zeytinoglu 1985, 205). The much smaller Islamist Hak-Is confederation and its affiliates did not seek membership in the international trade union organizations during the late 1970s and early 1980s. The reason was primarily

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ideological. Hak-Is viewed the ICFTU and ETUC as representatives of Western imperialist interests. It was anti-communist and thereby also opposed to the WFTU and its affiliated organizations. The Turkish political processes and economy have been subject to major influences from the advanced capitalist societies and states, particularly Europe and the United States, and the international institutions dominated by them. As a result, one can expect that international and national trade unions in Western Europe and the United States would bring more influence on the Turkish state by mobilizing public opinion and influencing the governments and international organizations of these countries compared with labour organizations in other countries. The most important example of the latter that is particularly relevant to the Turkish case is the World Federation of Trade Unions and Trade Unions International associated with it. As explained earlier, the WFTU and TUI were dominated by labour unions from the socialist bloc, whereas Turkey, as a member of NATO, was in the opposite camp. In this case, these international labour organizations could not be expected to play an equal role vis-a`-vis the Turkish state at this time.21

International Trade Union Movements’ Protest All three international trade union confederations and ETUC took a strong stance against the suppression of labour and human rights in Turkey in the aftermath of the military takeover. The international labour organizations sent a number of investigative missions to Turkey to review the situation. The missions contacted Turkish trade union leaders and state officials and attended the DISK trial to the extent permitted by the military government. The ICFTU sent an on-the-spot mission to Turkey from 6 to 10 April 1981. Subsequently, it decided to lodge a formal complaint with the ILO as well as to urge its affiliates to pressure their governments to intervene with Turkish state authorities to save DISK union leaders who faced the death sentence. The ICFTU also decided to initiate legal and financial aid for the arrested unionists and their families in cooperation with likeminded trade union organizations.22 ETUC, most of the national affiliates of which were at the same time ICFTU members, joined the aid campaign. The WCL also set up a similar fund. Because the military regime prevented Turkish workers’ fundraising campaigns for arrested

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unionists on the ground that such campaigns meant support for illegal organizations, solidarity aid from international trade union organizations was the only financial aid that imprisoned DISK unionists received.23 Besides, international labour solidarity had important political and symbolic value. The ICFTU continued to watch the situation in Turkey closely. Its Executive Committee and World Congress of June 1983 passed a number of resolutions that strongly criticized the military regime’s repressive measures toward labour unions and demanded the restoration of free trade unionism and democracy. It pledged cooperation with truly democratic forces in Turkey.24 The ICFTU sent two more missions to Turkey in December 1982 and October 1983. The 1982 mission included representatives from ETUC and some ITSs. The missions contacted government authorities and Turkish labour unionists and attended a trial session of DISK. Upon completion of the missions, the ICFTU issued resolutions condemning trade unionists’ imprisonment and called upon Turkish authorities to restore trade union freedoms immediately (Shabon and Zeytinoglu 1985, 214, 219). The other two international trade union confederations, the WFTU and WCL, also closely followed the labour situation in Turkey under the military regime. They sent a number of missions to investigate the abuse of trade union rights and the trials of DISK unionists.25 The international trade union organizations also tried to bring the labour situation in Turkey to the attention of other governments and intergovernmental organizations. The ICFTU and ETUC in particular sought to press their concerns regarding the situation in Turkey before the European governments and the major European regional organizations with which Turkey had close relations. In its first statement on Turkey following the coup, the ICFTU specifically urged its national affiliates to exert pressure on their respective governments concerning violation of human rights and suppression of the trade union movement by the military regime in Turkey.26 The confederation officially supported its European affiliates’ move to have Turkey brought before the European Commission of Human Rights.27 It also called upon democratic governments and the EEC to make economic aid to Turkey conditional on the restoration of democracy and trade union rights.28 ETUC was particularly active at the level of European regional institutions. It urged the Council of Europe and the EEC either to expel

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Turkey from membership or to suspend all trade and financial agreements in protest of the suspension of democratic and trade union rights by the military regime (Keesing’s Archives, 22 January 1982, 31287; Shabon and Zeytinoglu 1985, 213– 14). Pressure from the European labour movement played an important role in pushing the European institutions to take a more decisive position against the Turkish military regime. The international trade union organizations also used other international platforms, such as the UN Commission on Human Rights, to press their concerns regarding violation of democratic and trade union rights in Turkey as well as other countries. From these platforms, they criticized the situation in Turkey with the intention of bringing international pressure on the military administration to stop human rights violations, to release jailed unionists, and to restore democracy and free trade unionism.29 The ILO was the main international organization in which all three international trade union confederations (ICFTU, WCL, and WFTU) were active concerning the Turkish case. The ILO is the only world organization that allows international and national labour organizations to lodge complaints regarding infringements of labour rights and freedoms against a state. The international trade union confederations and a number of international trade secretariats and trade unions international played important roles in keeping the Turkish case on the ILO’s agenda. The three confederations, several ITSs, and several TUI registered separate complaints of violations of trade union rights and freedoms with the ILO Freedom of Association Committee against the Turkish government following the military coup.30 From September 1980 to the 234th meeting of the ILO Governing Board in November 1986, the WCL made 18 applications to the ILO regarding the Turkish case, the WFTU (including the TUI) made 33, and the ICFTU (including the ITSs) made ten (Firuz 1987, 213 – 14). Besides registering complaints with the ILO, the international trade union organizations regularly provided the organization with information on developments concerning labour rights and freedoms in the country. There was a two-way relationship between the ILO and the international trade union organizations. On the one hand, the ILO and its conventions constituted a power resource for the international trade union movement vis-a`-vis a

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particular state. On the other hand, the international trade unions assisted functioning of the supervisory machinery of the ILO. Thus, the international labour organizations, despite their long ideological and policy differences, acted in concert in protesting against the suppression of collective labour rights in Turkey. Building an alliance between the international trade union movement and the Turkish labour organizations that survived the coup in defence of democratic and labour rights failed to materialize, however. The Tu¨rk-Is leadership initially received actions of the international trade unions against the Turkish military regime with hostility (see, e.g., Tu¨rk-Is 1982a, 478 – 83, 489 – 94). Cooperation of Tu¨rk-Is with the military regime soon resulted in its isolation in the international arena. As explained earlier, the ICFTU suspended the membership of Tu¨rk-Is on 15 August 1981. Following this decision, the ITSs also put on hold membership of Tu¨rk-Is-affiliated unions. The Trade Unions Advisory Committee of the OECD froze its relations with Tu¨rk-Is. In April 1982, ETUC rejected the membership application of Tu¨rk-Is because of its cooperation with the military government as well as the imprisonment of DISK unionists (Shabon and Zeytinoglu 1985, 205).31 Discord between the largest Turkish labour organization and the international trade union movement in the aftermath of the military intervention reduced the effectiveness of the latter vis-a`-vis the Turkish state. Yet the isolation of Tu¨rk-Is in the international labour organizations was a major factor in the Tu¨rk-Is leadership’s later adoption of a more critical stance toward the anti-labour policies of the military administration. For example, it led a campaign against the undemocratic constitution drafted by the Consultative Assembly in the summer of 1982, as explained earlier.

An International Labour Organization’s Cooperation with the Military Regime The Asian-American Free Labour Institute (AAFLI) diverged from the highly critical position of the international trade union movement toward the Turkish military regime. The institute had been set up by the AFL-CIO in 1968 to serve as its regional arm in Asia. The AFL-CIO had created similar regional organizations in Latin America and Africa in the early 1960s. These regional organizations were a product of the

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American union leadership’s alliance with the US government and American corporate capital in the international system of the Cold War period (Radosh 1969; Sims 1992). The AAFLI became the main channel through which the American union leadership actively participated in promoting American foreign policy in Asia-Pacific and the Middle East. It tried to help create a type of docile labour organization that would not challenge American hegemony and capital interests in the region. In line with this aim, the institute extended selective support to “friendly” labour leaders while weakening radical leftist labour movements. Its activities were financed mostly by contributions from the US government’s Agency for International Development (Coldrick and Jones 1979, 436–7; Sims 1992, 59 – 61, 101). Tu¨rk-Is had developed close relations with the AFL-CIO through the years of its existence. It established formal relations with the AFL-CIO’s Asian-American Free Labour Institute with the signing of a technical aid project agreement in June 1971 (Tu¨rk-Is 1973, 764–5). This project continued into the 1980s. During the military regime, there was a striking increase in the activities of the AAFLI in Turkey. These activities included seminars, conferences, and training courses for union officials and workers as well as social projects such as consumers’ cooperatives. The institute received a warm welcome and material support from the military rulers when trade union activities were prohibited or restricted in the country (Isikli 1987a, 31). The military authorities permitted all the seminars sponsored by the AAFLI, yet they limited, or refused to permit in some cases, even administrative board meetings of Tu¨rk-Is affiliates (Shabon and Zeytinoglu 1985, 197). Whereas the ICFTU and ITS suspended the Tu¨rk-Is membership because of its collaboration with the military regime, the AAFLI signed with Tu¨rk-Is another technical aid agreement and decided to continue their joint education and training programmes under a long-term plan in the immediate aftermath of the coup (Tu¨rk-Is 1982a, 282–3). In accordance with this agreement, there were significant increases in the number of AAFLI-sponsored seminars during the military regime (Koc
1986c, 256). These seminars were concerned with various topics, including women’s issues, workplace health and safety, and training of union officials. The AAFLI’s increased role in Turkey following the military intervention was not about the protection of labour rights. Its main purpose was to influence, at this critical moment, the future course of the

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Turkish labour movement in a way that would work against the rise of a radical trade union movement. The remarks of the institute’s director general at a press conference on 28 October 1982 are illuminating in this regard. He commented that “Turkey is not the only country that imposes restrictions on trade union activities. Such restrictions exist in some other countries in Asia as well. It is necessary to tolerate them” (quoted in Isikli 1986, 51). The military government’s welcoming of the AAFLI’s activities is not difficult to understand either once we take into account that the international policies of the AFL-CIO and its regional organizations had often served to promote state-controlled unionism in “peripheral” regions. The close relations between Washington and Ankara at this time also helped the AAFLI to operate in Turkey with great ease.

Turkey on the ILO Agenda The labour situation in Turkey became a permanent item on the ILO’s agenda in the years following the military coup. This was mainly because of a number of complaints that the international trade union confederations filed with the ILO Freedom of Association Committee (FAC) against the Turkish state on the grounds of violations of trade union rights and freedoms. Subsequent to the complaints, the committee frequently reviewed the Turkish case and urged the Turkish state to bring its actions into conformity with ILO conventions and standards. The ILO FAC is a tripartite committee, composed of three members each from the government group, the employers’ group, and the workers’ group. Its conclusions are not legally binding; they are recommendations. The ILO FAC communicates its recommendations to the government concerned and asks that government to take necessary actions toward resolution of the problem. Complaints can be lodged by another state, an employers’ association, or a trade union, which can be a national trade union, an international trade secretariat (if the issue affects one of its affiliates), or an international trade union confederation with consultative status at the ILO. Neither other governments nor employers’ associations lodged a complaint with the ILO against the Turkish state during the military regime or the subsequent period despite the heavy violation of trade union rights and freedoms. Labour union organizations were the only complainants during this period.

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Several complaints had been filed with the ILO FAC against the Turkish government just prior to the military coup of September 1980. The WCL, the WFTU, and several TUI were the complainants. The complaints were concerned with violations of trade union rights, specifically with the increasing subjection of DISK to state pressure following the declaration of martial law in some regions of the country at the end of the 1970s (ILO Freedom of Association Committee, 197th Report, 1979; 199th, 202nd, 204th Reports, 1980). Subsequent to the military coup, the international trade union organizations lodged new complaints. As a result, between 1981 and 1983, the Turkish case was reviewed by the ILO FAC eight times with respect to three separate cases. It remained on the committee’s agenda even after the transition to civilian government, not least because the authoritarian trade union legislation enacted by the military regime remained in effect. In contrast, in the 1970s, Turkey had become a subject for review by the ILO FAC only three times, as a result of complaints filed against the Turkish government by DISK in 197032 and by the WCL in 1977 and 1979. Before the military coup, the ILO committee had examined the state of trade union rights in Turkey another three times in 1980 as a result of several complaints by the international trade union organizations.33 The post-coup complaints against the Turkish state at the ILO were for serious infringements of democratic and trade union rights. They were concerned specifically with the banning of DISK, arrests of trade union officials, and suspension of collective bargaining and strikes. Given the gravity of the situation, the Freedom of Association Committee suggested, in May 1981, that the Turkish government should agree to an ILO direct contact mission. The mission’s purpose would be to carry out on-the-spot investigations. Although the military government emphasized that it wished to cooperate with the ILO through normal channels, it objected to a special ILO mission (ILO Freedom of Association Committee, 211th Report, 1981, paragraphs 465 and 466).34 The ILO’s persistence paid off in the end. The Turkish government agreed to allow an on-the-spot mission for 12 –22 July 1982. By this time, the military administration had taken steps toward relative liberalization of the political environment and announced a timetable for the return to democracy. The ILO investigative mission took place as planned. It was led by two high-level ILO officials. They

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had talks with various state authorities, leaders of Tu¨rk-Is, and ¨ SIAD and TISK). They also attended a employers’ associations (TU session of the DISK trial. But the Turkish state authorities rejected the ILO mission’s request for access to imprisoned DISK leaders (Report of the ILO Mission, Annex to the Freedom of Association Committee, 220th Report, November 1982). The military government kept the channels of dialogue open to the ILO. It regularly sent the requested documents and replied to the questions put forward by the ILO FAC. Of course, an important aspect of the Turkish government’s communication was to defend its policies and actions. Its replies formulated a defence principally with reference to the gravity of the political and economic situation preceding the coup. The government tried to justify the suspension of free trade unionism on the ground that the period of transition required exceptional temporary measures. With regard to the allegations submitted to the ILO by international trade union organizations, the government maintained that, “while international trade union organizations might legitimately adopt a political attitude towards a government and act accordingly, each sovereign government, on the other hand, was free to decide what attention it should pay to attitudes of that kind” (quoted in ILO Freedom of Association Committee, 220th Report, November 1982, paragraph 38). But at the same time it emphasized its resolve to work toward the establishment of a democratic regime.35 An important development in the military government’s relations with the ILO took place during preparation of the country’s new trade unions legislation in early 1983. The military administration responded positively to the ILO FAC’s request to send the two draft bills on trade unions for review. Furthermore, the minister of labour informed the ILO on 28 April 1983 that he wanted an ILO advisory mission to visit the country to discuss the draft bills. Subsequently, an ILO advisory mission visited Ankara in May 1983 to advise the government on conformity of the draft labour bills with ILO conventions regarding freedom of association and collective bargaining (ILO Freedom of Association Committee, 228th Report, 1983). The government also agreed to another direct contact mission as requested by the ILO FAC. The mission’s mandate was to examine matters still pending and gather more information on the cases, especially by visiting detained trade union leaders (ILO Freedom of Association Committee, 232nd Report, 1983,

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paragraph 10). ILO officials’ visit took place from 5 to 15 September 1983, shortly before the first parliamentary elections after the coup. The ILO was the first organization to which the Turkish authorities granted permission to visit detained DISK unionists in prison (besides the detainees’ lawyers and next of kin). That the military government maintained dialogue with the ILO and agreed to its requests for on-the-spot missions showed that it tried not to be isolated in the international arena because of issues regarding democracy. The ILO was not effective, however, as far as the protection of labour rights was concerned during the military-administered transformation of Turkey’s politico-economic order. It was not very influential in shaping the new labour legislation. The National Security Council, which had the final say on any legislation, made a number of amendments to the draft trade unions legislation following the ILO advisory mission. These amendments were positive overall and in line with the ILO’s recommendations. But the amendments somewhat moderated excessive restrictions on trade unions in the draft bills; they did not include any substantial changes, as recommended by the ILO.36 In other words, its recommendations were only paid lip-service by the Turkish state. This was also the case with the labour provisions of the 1982 Constitution.37 Both the labour laws and the constitution were in contravention of ILO principles and standards. The ILO did not have influential power resources to ensure that a member state complied with its conventions. For the rest of the 1980s, the organization continued to urge – without great success – the Turkish state to bring its constitution and labour legislation into conformity with the major international labour conventions that it had ratified. The ILO and the international trade union movement had some impact, however. The complaints and fact-finding missions by these international organizations forced the Turkish authorities to improve prison conditions of detained unionists and investigate allegations of torture and ill treatment of detained DISK leaders. Their influence also helped the gradual release of detained trade unionists.

The Military Regime’s Reaction to International Pressure International pressures on the military regime were not uniform, as we have seen. It is therefore not easy to judge their net effects on specific

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actions and decisions of the military rulers. The military regime remained committed to the neoliberal economic programme that IFIs and major Western governments had impressed upon the Turkish state. In the economic arena, as a result, the military regime received considerable material and ideological support from IFIs, the American government, and to a lesser extent major Western European governments. Thanks to international economic support, the military regime was able to continue not only the short-term economic stabilization programme but also the longer-term transformation of the economy toward an outside-oriented growth model. The availability of external credits ended severe shortages of basic consumption goods and essential production inputs such as oil. The end of severe economic shortages helped to ensure that the Turkish popular classes did not immediately become disenchanted with the military regime and that private business continued its support of the regime. As a result, the military rulers could proceed with restructuring of the political system. In the political arena, the military regime enjoyed the continued support of the super-power United States. The Reagan administration not only refrained from publicly criticizing the military regime on issues of democracy and human rights. It also repeatedly assured Turkish generals of American government support. European institutions and governments followed a different course. They sought to exert pressure on the military rulers to hand over power to a democratically elected government quickly, while they, too, were pleased with the military government’s economic programme. The Turkish state elite historically attached great significance to Turkey’s relations with Europe. Westernization, particularly Europeanization, was a long-standing orientation of the modernizing Turkish elite, going back to before the foundation of the Republic of Turkey in the early 1920s. Furthermore, the Turkish economy was closely linked to the European economy. Prolongation of political conflicts with European institutions, especially the EC, or deterioration of relations with major European states could have serious repercussions for the Turkish economy. With restructuring of the Turkish economy toward an outward-oriented growth model, Turkey’s relationship with the EC became even more important for the Turkish state and capital. Thus, one can hypothesize that European pressure for democratization carried weight with the military regime. It appeared to be highly sensitive to

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adverse international, mostly European, criticism at a time when domestic critics were largely silenced. That was partly because the military regime lacked durable and secure bases of public legitimacy. Its legitimacy was based primarily on the difficult political and economic conditions in the country that had preceded and led to the coup and the public’s perception that a military intervention had been inevitable. That the military rulers often declared their belief in parliamentary democracy, and claimed that the objective of the intervention was to establish a durable foundation for democracy, attests to their awareness of the shaky basis of legitimacy for a military regime in Turkey.38 The military rulers often replied to European critics by accusing them of interfering in Turkey’s domestic affairs and infringing on its sovereign rights. They also maintained that they were not going to be rushed by foreign critics into a premature move to restore democracy and that external pressures would be countered accordingly.39 Such responses to foreign critics were usually followed by mitigating statements. The generals stressed that Turkey was European and wanted to remain European. They recognized the fact that institutional integration into Europe was conditional on the consolidation of a fully democratic regime. The military government reaffirmed Turkey’s intention to apply for full membership in the EC as soon as circumstances permitted.40 Thus, the military leaders wanted to maintain good relations with the European institutions. They also cared about Turkey’s international image.41 Given the importance that the military rulers gave to Turkey’s relations with Europe, one can conclude that European pressure played a role in speeding up the process of returning to a multiparty parliamentary regime. Although the military leaders claimed that external pressures for the restoration of democracy had not played any part in determining their policies (Hale 1994, 251), it was not a mere coincidence that the head of state, Kenan Evren, announced the timetable for democratization just days before a prescheduled mission from the Council of Europe visited Ankara in December 1981. This was followed by the military government’s assurances to a high-ranking EC representative on an official visit in March 1982 that Turkey would return to democracy within two years (Keesing’s Archives, 13 August 1982, 31644). Of course, the two events do not prove that the military government initiated the transition to a civilian regime mainly because

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of external pressures. But they do show that pressure from Europe led the military government to set up a clear timetable for the restoration of civilian rule and commit itself to that timetable. To sum up, Turkey’s close relations with Europe and direct pressure exerted by European institutions had significant influence on the reestablishment of a multiparty civilian regime in Turkey as soon as possible. Yet European influence was not substantial in terms of the particular content of the new political system fashioned by the military rulers and supported by the dominant social forces. The new political system was based on the basic institutions of representative democracy. But it was far from liberal democracy. It contained numerous authoritarian features, especially with respect to freedom of association and expression and trade union rights.

PART 3 HEGEMONY AND THE DYNAMICS OF STATE—LABOUR RELATIONS 1984—91

Part 3 investigates changes in the dynamics of relations between the state and organized labour after the military regime. It applies and develops the Gramscian notion of hegemony to explain the nature of state– labour relations after the restoration of a multiparty parliamentary regime. It argues that the initially successful hegemonic project of the neoconservative Motherland Party mobilized sufficient support among subordinate classes, including the working class, to continue neoliberal restructuring of the economy in the post-military years. But the antilabour effects of this hegemonic project and the highly inegalitarian consequences of neoliberal economic policies provoked a counter-labour movement from below at the end of the 1980s. Counter-labour mobilization played a major role in weakening the hegemonic project and fighting the inegalitarian results of neoliberalism.

CHAPTER 7 FROM MILITARY AUTHORITARIANISM TO HEGEMONY

Transition from the Military Regime Transition from the military regime to the civilian parliamentary regime was effected without a break in the form of state that the military regime had been instrumental in creating. The military rulers managed the transition in a closely controlled way. Pacified and deprived of independent organizations, the popular classes lacked the strength to intervene decisively in the process. The relatively short period of military rule did not permit the rise of conflicts within the military regime or the power bloc to reach a level that could create an opportunity for the subordinate classes to participate in shaping the process of transition.1 The absence of any decisive intervention by the subordinate classes in the transition largely accounts for why there was no democratic break with the neoliberal authoritarian state. It is necessary to explain why the military gave up administration of the state to a civilian government in a relatively short time, though it did not entirely cede its influence in Turkish politics. There were several important reasons for the relatively quick transition. First, in modern Turkish history, rule by the military had also been brief. There were two earlier cases: the direct military rule of 1960– 1 and the indirect military rule of 1971– 3. Resumption of the parliamentary civilian regime after the 1980 –3 period was thus in conformity with the

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historical experience. One common reason for the rapid transition in each case was the character of the Turkish military itself: it is a modern, professional institution. For the military officers, institutional hierarchy and internal discipline are two crucial values (Birand 1991). The longer the generals stayed in power, the greater the risk that the institutional hierarchy and discipline might be damaged. The top generals often warned officers not to get involved in politics since it was the biggest danger to institutional unity of the military.2 The junta was successful in maintaining institutional hierarchy of the military as well as unity within the NSC until the end of its rule (Hale 1994, 248–9; Karpat 1988, 149, 241– 2). Nevertheless, if the military were to maintain internal discipline and unity, the officers had to retreat to their barracks as soon as possible, as the generals often emphasized. The retreat would not mean, of course, the end of the military’s political influence, for the military continued to see its ultimate mission as protecting the state against both external and internal enemies. Second, tensions within the power bloc and the military regime help to account for the rapid transition from the military regime. The implementation of austerity policies and the launching of an export-led growth strategy resulted in increasing conflicts among different sections of capital. Particularly hard hit were the small to medium industrialists oriented to the domestic market because of the contraction of domestic demand, a credit squeeze because of skyrocketing interest rates, and the removal of some extensive trade protections. Domestically oriented large industrial firms also suffered setbacks. On the other hand, large conglomerates with their diversified activities and exporters were able to take advantage of new opportunities (Kemal 1984, 21 – 2). With adoption of the neoliberal economic project in 1980, the government started to deregulate the financial market quickly. The deregulation reforms soon resulted in a major financial crisis in 1982 (Atiyas 1990). The crisis caused great political discomfort for the military rulers. The increased conflicts of interest among the different fractions of capital were reflected at the heart of the military ¨ zal and Minister administration because of the financial crisis. Turgut O ¨ of Finance Kaya Erdem (Ozal’s right-hand man) were forced to resign amid public outcry in the wake of the financial crash. Adnan Baser Kafaoglu was appointed minister of finance and replaced O¨zal as the

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main cabinet member in charge of economic policies. Kafaoglu was an ¨ zal’s experienced techno-bureaucrat and known to be critical of O economic policies based on “simplistic free-market principles” (Ulagay 1983, 64 – 99). Under Kafaoglu, there was some moderation in the stabilization policies to help ailing firms; a set of new regulations was also created for the financial market, and some of the earlier restrictions were reintroduced. But the government had to walk a fine line to remain compliant with the IMF agreement. This first crisis in the power bloc did not undermine, however, the state’s commitment to the neoliberal economic project. The crisis might have made the military rulers better aware of the kinds of difficulties that they would have to deal with if they continued to stay in power. Yet one should not put too much emphasis on such tensions in the ruling alliance. The tensions were not of such a nature, at least in the short run, that might lead to the breakdown of the military regime. Although some sections of capital, particularly small and medium industrialists, suffered hardships as a result of the IMF-guided stabilization policies and the abandonment of ISI in favour of export promotion, they simultaneously obtained significant benefits from the suppression of organized labour and hence sharply falling wages. Their discontent with the results of the stabilization policies never led them to withdraw their political support for the military regime. As Keyder (1987a, 225) put it, “the bourgeoisie as a whole seemed to weigh political gains against economic losses . . .” Directly related to the question of internal conflicts is the overall position of the bourgeoisie. Although the entire business community backed the military regime politically, they would rather have seen this “unpredictable” force hand over administration of the state to a civilian government as soon as it put things in order.3 A political regime based on the electoral competition of political parties would allow the regulation of conflicts among class fractions of the power bloc through their own organic representatives. The particular form of the military regime was not suitable for the organic settlement of internal contradictions of the power bloc.4 After organized labour was considerably weakened, and the leftist movement was crushed, capital or fractions of it could organize themselves vis-a`-vis the subordinate classes in the political field through their own organic representatives rather than rely on a Bonapartist force, the army.

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The subordinate classes were not able to intervene decisively in the transition from the military regime. But they still had some influence. A large section of society had greeted the military intervention with relief. Yet the military regime was not firmly grounded organizationally and ideologically in the popular sections of society. There was no mass mobilization by subordinate social groups against the military regime. Although there was no immediate popular resistance, growing discontent among subordinate classes, particularly the working class, which suffered the greatest economic and social hardships under military rule, was real enough. The Tu¨rk-Is campaign against the draft constitution in the summer of 1982 was a sign of increasing labour discontent. Increased international pressure was also important for the rapid transfer of power to a civilian government. The international political conjuncture was propitious for a conservative military takeover in Turkey. But when widespread human rights abuses became public, European institutions and governments started exerting pressure on the military government to restore democracy quickly. Long military rule was certain to seriously damage Turkey’s relations with European governments and lead to its expulsion from European organizations.

A Painful Road to Electoral Politics The general elections of 6 November 1983 marked the beginning of the formal transition to a parliamentary civilian regime. The elections were contested under strict conditions set by the military rulers. The military expressed its preference for a two-party system composed of one centreright and one centre-left political party. The former would be the dominant one; the latter would act as the loyal opposition.5 The military rulers expected this system to ensure continuity of the order that they had set up. They envisioned the two-party system as a solution to the problem of weak coalition governments and a fragmented political party system that had characterized the 1970s (Turan 1988, 68 –73; 1991, 47– 9). The 1982 Constitution also banned former political party leaders and members of the pre-coup Parliament from politics for five to ten years.6 In addition to creating a new legal framework for political parties and elections, the military junta played an active role in the process leading up to the elections. According to a provisional article of the new Political Parties Law, the NSC had the authority, until the first

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elections, to review and veto any founding members of political parties. This provision enabled the NSC to determine not only who would be allowed to found a political party but also which political parties would compete in the transitional elections. The NSC also gave itself the power to reject any candidates on the political parties’ election lists or independent candidates wanting to compete for a parliamentary seat. The NSC permitted only three political parties to participate in the parliamentary elections of November 1983, though 15 parties had been created (Yesilada 1988, 360– 1).7 The three parties were the Nationalist Democracy Party (NDP), the Populist Party (PP), and the Motherland Party (MP). All three parties were formed by individuals from within the framework of the military administration. The NDP, led by retired general Turgut Sunalp, was the true representative of the military regime. Despite its officially neutral position, the military junta made its preference for the NDP known to the public. The Populist Party was led by Necdet Calp, a seasoned bureaucrat and the undersecretary to the prime minister, Bu¨lend Ulusu, of the military regime. It was an artificial creation encouraged by the military rulers. The NSC expected that the PP would serve as the loyal opposition to the dominant NDP in the post-military political system. The founder and leader of the Motherland Party was Turgut O¨zal. The MP’s founding members primarily came from the private sector (Ergu¨der 1991, 155). The MP did not fit the military’s plan of a two-party system. But the veto power used unhesitatingly against many other parties was not ¨ zal invoked against the MP. There were several reasons for this. First, O had a strong support base in the Turkish business community. Second, he was well known and held in high esteem by Western governments and IFIs because of his role as the architect of Turkey’s new economic strategy as well as his personal connections with IFIs (C¸o¨lasan 1983, 1984). Boratav (1991, 83 –4) cites some evidence of international pressure on the military junta to allow O¨zal’s party to participate in the elections.8 Third, the military junta saw no real danger in the MP to the ¨ zal politico-economic order that it had been instrumental in creating. O himself was the deputy prime minister and a minister of state in the cabinet of the military regime until his resignation in July 1982. Fourth, ¨ zal’s MP survived the vetoes because the military rulers did not expect O it to be a serious challenge to the NDP (Ahmad 1984, 8; Hale 1994, 265). Years after the transition from the military regime, Evren (as the

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former head of the military regime) explained why the NSC had permitted the MP to run in the elections in terms of its desire to prevent domination of the political system by a single party and dangers that such a situation could pose to the constitutional order that the NSC had created (Milliyet, 3 June 1998). One cannot be sure whether Evren’s statement was essentially a post facto rationalization of the NSC’s action rather than an explanation of the real reasons. The other factors, too, must have played a role in the NSC’s decision. An exclusive focus on the “positive decisions” (i.e., active attempts to form a political party and the NSC’s actual use of its veto) does not present the whole picture. It overlooks “non-decisions” and “negative decisions”. The existing balance of political power and the structural setting were such that those groups strongly opposed to the existing politico-economic order might decide not even to attempt to initiate a political party (negative decision). Thus, the NSC would not need to use openly its veto power (non-decision). This was particularly the case with the radical left. The military regime had struck its most severe blow to the leftist movement. Among the 15 parties formed following removal of the ban on political activity, only one was a centre-left party (Yesilada 1988, 360). This party, the Social Democracy Party (SDP), was prevented from competing in the transitional elections. No socialist or radical leftist party was formed at this time. Several trade union leaders affiliated with Tu¨rk-Is played active roles in formation of the SDP. Speaking in 1995, Petrol-Is president Cevdet Selvi, one of these trade unionists, explained that “the Petrol-Is Union always believed that labour’s economic struggle cannot be separated from its political struggle. Despite all the repression by the military regime, Petrol-Is officials decided to take a role in political party organization” (Petrol-Is Dergisi, May 1995, 16). The military rulers vetoed the SDP’s founding members of trade union origin together with its other founding members. The Turkish business community offered political and financial support to both the NDP and the MP. In other words, neither party emerged as the clear preference of the capitalist class before the transitional elections. It is possible to identify a divide in the business community between the two parties before the elections. According to Ahmad (1984, 10), whereas “the new breed of businessmen and industrialist-contractors who had made their fortunes in exports”

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seemed to favour the MP, the established big corporations leaned more toward the NDP but also made campaign contributions to the MP. But this divide was not strong and clear-cut. Many prominent businessmen and corporations gave substantial sums of money to both parties (Turgut 1986); they obviously did not want to throw their lot exclusively with one or the other. Furthermore, a significant section of the business community preferred unity on the right and hence wanted a merger between the MP and the NDP so that one strong rightist party would establish unchallenged dominance in Turkish politics (Boratav 1991, 76). Before the elections, business circles as well as the military rulers ¨ zal to merge his party with the NDP (Cemal 1986b, tried to convince O 367– 8, 374–5). But his adamant refusal frustrated this scheme.

The Neoconservative Motherland Party’s Victory The NDP ran its election campaign primarily on the themes of law and order, a strong state, and anti-communism (Ahmad 1984, 8; McFadden 1985, 77). While prescribing a mixed economy in which priority would be given to the private sector, the NDP stressed its preference for ¨ zbudun 1987, 357). Its free-market principles (McFadden 1985, 77; O economic programme did not propose moving away from the neoliberal restructuring that had started four years earlier. The NDP’s electoral platform sought to reassure the capitalist class that it was also their party. The Populist Party projected a faint social democratic image. Its election campaign emphasized the themes of social security and social justice. It promised more equitable income distribution and social protections for the economically underprivileged. Its economic programme differed from both the NDP and the MP in advocating a mixed economy with a greater weight given to e´tatisme. The PP proposed better management of SEEs as an alternative to privatization. It was not against foreign capital but supported some controls (McFadden 1985, 78 – 9; O¨zbudun 1987, 359). The Motherland Party’s campaign focused on economic issues. To distance itself from the military regime, it avoided law-andorder issues at that time while stating its agreement with the general policies of the military regime in political matters. Its economic programme was based on a strong commitment to free-market principles. It advocated limiting the state’s economic role to the area of regulation, encouraging private initiative, liberalizing foreign trade, and promoting the export sector (MP 1983b).

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The transitional elections were won not by the military rulers’ favoured party but by the MP. Voter participation was 92.3 per cent. The MP won 45.2 per cent of total valid votes.9 The generals were shocked that the NDP came in a humiliating third place with only 23.3 per cent. To the surprise of many, the PP finished second and scored 30.5 per cent of total valid votes (SIS 1991, 188, Table 127). The military junta respected the election results, and President Evren promptly invited the victorious MP’s leader to form the new government. The National Security Council was officially dissolved on 6 December, and the civilian government formally assumed power on 13 December. Before the regime transition, the military rulers wanted to set themselves up as the ultimate guardian of the new political– legal order. Upon popular approval of the 1982 Constitution, General Evren had automatically become the president of the republic for the following seven years. Under Provisional Article 2 of the constitution, the five members of the NSC resigned their military posts and became members of the new Presidential Council for a six-year term, until November 1989. The role of the council was to examine laws passed by the assembly and to advise the president. The council was essentially an advisory organ. It did not play a significant political role during its existence (Hale 1994, 290). In his capacity as president, Evren held important powers under the 1982 Constitution. Although the Motherland Party was not the first choice of the military rulers, no serious friction occurred between the MP government and the Office of President.10 First, there was no conflict between the two as far as economic strategy was concerned. The MP government continued the neoliberal restructuring of the economy. Second, it readily accepted the political system created by the military rulers and focused its attention on the economy instead of pursuing further democratization. Furthermore, President Evren’s avoidance of active intervention in the day-to-day administration of the state facilitated relations between the two organs of the state (Hale 1994, Chapter 11).

Post-Transitional Changes in Party Politics The local elections of 25 March 1984 confirmed the electoral success of the MP once more. The elections were free and competitive. Some potentially major parties that had been excluded from the 1983 national election participated in the local elections. The outcome of the local

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elections proved that votes for the MP in the earlier parliamentary election were not simply reactionary votes against the military rule but also expressed genuine support for the party. The MP received 41.5 per cent of total valid votes. This was only slightly lower than its 45.2 per cent in the guided national elections. Given that the True Path Party (TPP), the successor of the main centre-right party in the pre-1980 period, participated in the local elections, the result was a significant success for the MP.11 The two other parties that had the blessing of the military regime were flatly rejected by the electorate. The NDP won only 7.1 per cent, while the PP received 8.8 per cent. The SDP replaced the artificial PP as the main centre-left party with 23.4 per cent of the vote. The traditional rightist TPP came third with 13.2 per cent. The voter turnout of 91.1 per cent was very high for local elections (SIS 1991, 190, Table 129). Important developments took place in the party system following the local elections. Because of its continuing loss of popular support, the NDP decided to dissolve itself in an extraordinary convention in May 1986. Another development occurred on the left. The Populist Party merged with the Social Democracy Party in November 1985. The new party was named the Social Democrat Populist Party (SDPP). Just when this merger would provide unity on the left, another centreleft party, called the Democratic Left Party (DLP), was formed in November 1985. All of these factors significantly affected the distribution of seats in the National Assembly and hence the nature of opposition to the MP government. The formerly excluded SDP and the TPP gained representatives in the assembly and became the main opposition parties. Nevertheless, the ruling MP not only retained its seats in the assembly but also gained seats as a result of a number of former NDP deputies joining it. The two-party system that the military regime sought to establish was soon frustrated. Nor did the constitutional ban on former politicians’ active engagement in politics prove to be effective. Former political party leaders were actively involved in party politics behind the scenes. Their ban was eventually lifted by a referendum in September 1987. Truly competitive multiparty politics was thus fully restored in the mid-1980s. Even after the restoration of free elections and the competitive party system, the MP won more votes than any other party. In the 1987 parliamentary elections, its share of valid votes fell to

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36.3 per cent from 45.2 per cent in the 1983 elections. Since its formidable rival on the right, the TPP, competed in the 1987 elections, the result was still a victory for the MP. The SDPP finished second with 24.7 per cent and became the main opposition party. Together with the 8.5 per cent vote for the smaller DLP, total electoral support for the moderate left reached 33.2 per cent. The TPP scored 19.1 per cent and placed third. The MP was a newcomer in terms of its organization as well as its discourse in contrast to the TPP and SDPP. The TPP and SDPP were descendants of the Justice Party and Republican People’s Party respectively, each of which had a long history. As Ergu¨der (1991, 154) rightly pointed out, in Turkish politics, new political parties had often come and gone without much electoral success. It is important to study how the MP was able to mobilize enough popular support to become the unquestionable government party and thus continue neoliberal restructuring of the Turkish political economy, which marginalized the subordinate classes. It is also necessary to investigate the significance of the MP for the political organization of the power bloc in its relations with popular classes and more particularly of capital vis-a`-vis the working class.

Toward Capitalist Hegemony The military regime had ensured the political organization of capital at the same time as it had achieved the political disorganization of labour. With transition to the parliamentary regime, the Motherland Party emerged as the main organization of the capitalist class on the political scene. The business community had briefly divided between the NDP and MP during the transitional elections. But with the overwhelming victory of the MP and the humiliation of the NDP in the elections, the capitalist class came to unify around the former. Almost all of the business groups were convinced that the neoconservative MP was an indisputable representative of capital interests and that there was no alternative to it (Boratav 1991, 77). The MP articulated a successful hegemonic discourse that appealed to the subordinate classes. Through the political organization of the MP, the capitalist class, led by its dominant fraction of big industrial/ financial capital, was successful in acquiring the subordinate classes’

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consent for continuing neoliberal transformation of the economy. It attempted to attain a position of moral and political leadership, or hegemony, over the popular classes rather than rely only on the coercive apparatus of the state for its domination in society. Hegemony [e]ntails the critical passage of a system of domination into the authority of a leading bloc, which is capable not only of organizing its own base through the construction of alliances between different sectors and social forces, but which has as a central feature of that process the construction and winning of popular consent to that authority among key sectors of the dominated classes themselves. (Hall 1988a, 53) To adequately understand Turkish capital achieving hegemony in the post-military era, it is important not to treat “consent” and “coercion” dichotomously. The political leadership of capital was in fact heavily armoured in state coercion. Political forces that could pose a credible challenge to bourgeois hegemony based on the “popularization” of neoliberal economics had already been substantially weakened under the military regime. The leftist movement and organized labour had been subjected to open state repression. At the same time, the state, the dominant classes, and their organic intellectuals launched an ideological offensive against them. The increased power of the repressive state apparatus to protect the existing order was a main aspect of the form of the state institutionalized in the early 1980s. The restrictive trade union legislation enacted by the military regime remained in force and imposed narrow boundaries on the struggles of organized labour. The rearticulation of state institutions was such that business interests acquired further structural privileges in terms of access to, and representation in, the state. While its political domination ultimately rested on the state, the capitalist class sought to bolster its power position by shaping a new collective will in civil society. The MP became the main political agency for capital’s attempt at hegemony in civil society in the post-military era. The party was able to mobilize considerable support across classes and social groups. “No single occupational, educational or income group appeared to have decisively refrained from voting for the MP” (A. Ayata 1993, 37).12 According to an opinion poll about different occupational

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groups’ party choices just prior to the 1987 parliamentary election, the MP was the party of choice among all the occupational groups, ranging from blue-collar workers, to public servants, to shopkeepers, to farmers, and to business. Among private sector workers surveyed, 51.7 per cent identified the MP as their party. This percentage was the second highest among all of the occupational groups included in the poll after agricultural workers. Support for the MP was comparatively lower among public sector workers; nevertheless, 33.2 per cent said that the MP was their party, whereas 22.3 per cent identified the SDPP as their party (Milliyet, 15 November 1987, reported in A. Ayata 1993, 36). Another survey of the actual voting behaviour of the working class in the 1987 election showed that the MP obtained substantial support from the working class.13 Among wage earners surveyed, 45.5 per cent said that they had voted for the MP, whereas 35.5 per cent had voted for the social democratic parties (Boratav and Yalman 1989, 56, Table 15). In contrast to the working class’s overwhelming support for the neoconservative MP in the 1980s, the centre-left RPP was the predominant party among the working class in the 1970s. According to a survey of party identification in 1977, 67.1 per cent of workers and 71.8 per cent of civil servants identified themselves as RPP supporters (Ergu¨der 1986, 349, Table V). All of this shows that the MP was successful in mobilizing political support among social democratic strongholds of the 1970s. To sum up, the neoconservative Motherland Party emerged as the predominant political party in Turkish politics following the military regime. Electoral support for the party in the transitional elections proved to be much more than a reactionary vote against the military regime. The MP was able to appeal to the subordinate classes at the same time as it became the principal representative of capital interests on the political platform. This ensured that, in the post-military era, capital’s political domination rested not only on state coercion but also on the construction of consent in civil society.

The Neoconservative Hegemonic Project The neoconservative Motherland Party’s ability to mobilize broad support across social classes and groups can be explicated in terms of ¨ zalism”. O ¨ zalism was founded on two main pillars: the influence of “O (1) a neoliberal economic programme and an export-driven regime of accumulation integrated into this programme, and (2) a “hegemonic

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project” centred on the discourse of popular capitalism that sought to appeal to “common sense” and become “common sense” by grounding itself in popular experiences. A hegemonic project is a nationwide project that articulates the particular interests of subordinate classes to the long-term interests of the dominant class (fraction) that are asserted as the general interest. A hegemonic project is normally elaborated by organic intellectuals of the dominant class (fraction). The development of a hegemonic project enables the dominant class (fraction) to exercise moral, intellectual, and political leadership over the popular classes (Jessop 1990, 207– 11). The neoliberal economic strategy had become a state policy just before the military coup. Yet it had lacked the political fortification of a hegemonic project that could mobilize support from the subordinate classes. It took an authoritarian military regime to effectively implement the neoliberal policy. This involved open state repression of organized labour and the leftist movement. The initial use of state repression opened the way for the later development of the dominant class’s hegemonic project. The hegemonic project represented by the MP successfully linked the realization of certain interests perceived by the subordinate sections of society to realization of the neoliberal economic ¨ zalist discourse was very effective in “translating programme. The O economic doctrine into the language of experience and . . . common sense” and “a theoretical ideology into a populist idiom”.14 One of the central concepts that the MP coined was ortadirek, which can be translated as “the central pillar of society”. In this parlance, workers, civil servants, small shopkeepers and artisans, small farmers, and pensioners constituted ortadirek (MP 1983b, 86; 1987, 8; MP Government Programmes 1983, 31; 1987, 84). An important role of this concept was “to dissolve any mode of thinking based on class analysis” (Tu¨nay 1993, 22). The theme of ortadirek was combined with the discourse of competitive individualism. Individual economic success or “making it” became elevated to a social dictum. “Diverse social classes and strata, sometimes with conflicting interests, were thus grouped together into the shapeless category of ortadirek at the same time that they were atomized as rational economic individuals” (Parla 1993, 152). The discourse of ortadirek was utilized to incorporate the interests of the major subordinate social classes and groups into the neoliberal economic project. The Motherland Party emphasized that strengthening

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ortadirek was its central goal. To achieve this goal, it argued, the economy must be allowed to operate according to its own laws. This abstract argument was related to the life experiences and particular economic interests of the subordinate classes. For example, the MP identified highlevel inflation as an enemy of low-income groups. It promised to control inflation to improve the economic position of ortadirek. To reduce inflation, the money supply had to be held in check, and the budget deficit had to be kept down. Besides such monetarist policies, principles of the free market had to be observed to ensure the best allocation of resources in the fight against inflation. The MP incorporated a number of populist themes into its economic ideology. One such theme was the claim that the costs of state intervention in the market, such as rescue operations for distressed companies, were ultimately borne by lowincome groups (MP 1983b, 86 –7; 1987, 23; MP Government Programmes 1983, 41; 1987, 79– 81). Especially after the launch of the privatization programme in the mid-1980s, privatization was also promoted as a solution to inflation. Since “inefficient and wasteful” state enterprises were a major cause of budget deficits, hence inflation, the MP claimed, their privatization would help to control the high inflation that impoverished the masses (MP 1991, 30– 3). The MP government failed badly to relieve ortadirek of inflation. The rate of inflation continued to rise to high levels during its rule (SPO 1996a, Table 6.4). Its failure to lower inflation cost it significant popular support in later years. The hegemonic discourse effectively linked neoliberal reforms, such as foreign trade and financial market liberalization, to the welfare of the subordinate classes and of the people as a whole. It claimed that foreign trade liberalization would serve the interests of ortadirek as consumers by protecting them from high prices and low-quality products as a result of international competition. Deregulation of the financial sector would also benefit ortadirek through higher returns on their savings and greater investment options (MP 1983b, 1987; MP Government Programmes 1983, 1987). One important instance of the MP government’s attempt to create popular capitalism by extending asset holding to middle- and lower-income groups was the issuance of revenue-sharing certificates, in small denominations, in bridges, power plants, and dams during 1984–6 (Waterbury 1992, 68n4). Anti-statist and anti-bureaucratic themes formed an integral part of the hegemonic project. Like the Thatcherite project in Britain, the

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discourse of anti-statism was articulated to create a national popular consensus (Tu¨nay 1993, 22). The MP’s anti-statist discourse empowered the individual vis-a`-vis the state (MP 1983b, 95; 1987, 15). This discourse resonated with the average citizen. As a legacy of the particular historical development of the Turkish social formation, the state occupied a central place in many areas of Turkish society. The repressive hand of the state under the military rule of 1980–3 was also fresh in memory. Moreover, arduous bureaucratic red tape and formalities were real enough for anyone who stepped into a public office. The new right’s politics connected with such popular experiences that cut across socio-economic divisions in society. The MP harnessed this popular discontent to its project by promising “efficient delivery of services” and “getting things done”. For higher public offices, a picture of an efficient, knowledgeable technocrat was drawn in contrast to the negative image of the traditional bureaucrat lost amid bureaucratic procedures (Parla 1993, 153). The hegemonic project was supported by a conservative ideology that unified elements of Turkish right-wing nationalism and Islamism. The MP originally defined itself as inclusive of four different political orientations: “nationalist, conservative, an advocate of social justice and of free-market economy” (MP 1983a, 5). These four orientations were represented by different factions in the party. A faction known as the Holy Alliance represented the conservative and nationalist orientations. This was an uneasy alliance of ultra-nationalists and Islamists. Islamic religious and ultra-nationalist groups within the party were clearly antiliberal, anti-individualist, and in many ways anti-Western (Yes¸ilada 1988, 364– 5). Market liberalism and competitive individualism constituted the core of MP ideology, however. Toward the end of the 1980s, the Holy Alliance made significant gains in the upper echelons of the party and consequently in the government. This was accompanied by a bitter intra-party rivalry between the Holy Alliance and the dominant liberal wing for control of the party. At the 1991 convention of the MP, the liberals eventually emerged victorious. The ideology of conservative nationalism offered symbolic rewards to diverse social groups interpellated simultaneously as “nation-people” and “religious community.” Since this ideology was primarily concerned with the national-popular, not with particular social classes, it could weld together the interests of different classes into an organic whole

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(Tu¨nay 1993, 21 – 2). Conservative nationalism served to absorb within the existing order the dissatisfaction of those disadvantaged or threatened by neoliberalism. In other words, its role was to channel the discontent of those likely to suffer from neoliberal economic reforms into an area not directly impinging on capital accumulation. In practice, the MP government made some concessions to conservative and religious groups, such as permitting the traditional Islamic headscarf in universities and increasing religious programmes on public television and radio. New public religious schools were rapidly added to existing ones (Okcabol and Go¨k 1995, 760), while total government spending on education was cut. The MP government also displayed significant ¨ zal tolerance toward Islamist organizations in the country. Turgut O himself, the party’s founder and chairman (until he became president in October 1989), epitomized the contradictory unity of market liberalism and competitive individualism on the one hand and conservative nationalism based on a synthesis of nationalism and ¨ zal was the most ardent protagonist of a Islamism on the other. O free-market economy, individualism, and opening Turkish society to the outside, including joining the European Community, in Turkey of the 1980s. He was also a devout Muslim and a great sympathizer of the Turkish-Islamic synthesis. Hegemonic projects are not identical with accumulation strategies, or economic growth models, even though they might overlap partially and/or mutually condition each other. They are not necessarily concerned mainly with economic objectives. They might be centred on “military success, social reform, political stability or moral regeneration”, each of which might resolve conflicts between particular interests and the general interest and thus mobilize the support of popular classes around a definite goal (Jessop 1990, 208 – 9). The hegemonic project articulated by the Motherland Party as the organic political representative of Turkish capital was centred, however, on economic objectives. There was a close convergence between the neoliberal economic model and the hegemonic project. Neoliberal economic objectives were articulated in such a way that they represented a new vision. Although the hegemonic project included political, cultural, and moral themes based on the amalgamation of nationalism and Islamism, these themes were mostly secondary to the economic agenda.

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Disintegration of the Neoconservative Hegemonic Project Counter-Movements from Below Integral hegemony in the Gramscian sense is not merely a political, ideological phenomenon; it is grounded in economic class relations. As Gramsci (1971, 161) emphasizes, hegemony is impossible to achieve without “the decisive nucleus of economic activity”. If a hegemonic project is to succeed in the long term, it is important that the dominant class make some material concessions to those subordinate interests whose consent and support the hegemonic project seeks. This might involve the dominant class (fraction) sacrificing some of its short-term interests but not such as to endanger its long-term interests. In Gramsci’s words (1971, 161), Undoubtedly the fact of hegemony presupposes that account be taken of the interests and the tendencies of the groups over which hegemony is to be exercised, and that a certain compromise equilibrium should be formed – in other words, that the leading group should make sacrifices of an economic –corporate kind. But there is also no doubt that such sacrifices and such a compromise cannot touch the essential; for though hegemony is ethical – political, it must also be economic, must necessarily be based on the decisive function exercised by the leading group in the decisive nucleus of economic activity. Thus, the long-term success of a hegemonic project is conditioned by the economic growth model. The hegemonic project of Turkish big capital was initially successful in mobilizing political support from the subordinate classes. Its discourse effectively articulated some of their particular interests to a “general interest” favourable to capital. This hegemonic project began to weaken toward the end of the 1980s. By this time, the wide discrepancy between what the dominant discourse professed and the actual experiences of the subordinate classes was too visible not to notice. The neoliberal policies that the MP government claimed would bring significant economic benefits to ortadirek resulted in their impoverishment. Workers, public servants, and pensioners experienced dramatic deterioration of income and living conditions (Chapter 3). The

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neoliberal transformation of the economy and the export-led growth strategy did not leave much room for material concessions to the subordinate interests, above all labour, without undermining the new regime of capital accumulation. The anti-statist discourse that had struck a chord with ordinary people led, in practice, to the reduction of state welfare functions. But state intervention in the economy and industrial relations in favour of capital continued. The undemocratic constitution and other major laws of the military regime, which considerably expanded coercive powers of the state over civil society, remained in force without significant changes. Anti-bureaucratism became a means to justify the concentration and centralization of public policy making in the Prime Minister’s Office and a small number of high-ranking technocrats. This centralization was presented as “a way of getting things done” and “speeding up the process of decision making”. Tight state control over organized labour and direct state interventions in labour–employer relations in favour of the latter were main features of the MP’s rule. This situation inevitably provoked a counter-reaction from the labour movement toward the end of the 1980s. The counter-reaction took the form of mass rallies and various industrial actions, including lawful and unlawful strikes. Whereas O¨zalism had received significant support among the working class, anti-O¨zalism later became a unifying force for the labour movement. Besides the working class, peasants/farmers were the principal losers from neoliberal restructuring of the economy (Kepenek and Yentu¨rk, 1994, 296–300).15 Three types of farming have coexisted in Turkey: subsistence, diversified, and specialized production. The first is much less widespread than production for the market, either specialized or diversified, and is mostly concentrated in the eastern region (OECD 1993, 47). There was a significant transfer of resources from the agriculture sector to urban capital. This transfer occurred as a result of reductions in agricultural support prices pursuant to the policy of subjecting the agriculture sector to market forces and the considerable decline of agricultural terms of trade during the 1980s (Boratav 1991, 44– 51; Yeldan 1994). The World Bank was an influential actor in the structural adjustment of Turkish agriculture. The bank’s involvement was not direct but mediated by the Turkish state, thus making it less visible to the public (Aydin 1993). At the end of the 1980s, farmers began to resist structural adjustment measures. Their resistance included

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protest demonstrations (Aydin 1993, 118; Petrol-Is 1990, 272). When its popular support started to wane, the MP government became more generous with agricultural subsidies. Thus, the hegemonic project articulated by the MP on behalf of big capital was self-defying in the medium term because of growing contradictions between what its neoliberal economic policy promised to the subordinate classes and what these classes actually experienced in their everyday lives. As Gramsci (1971, 210) wrote, “The crisis of the ruling class’s hegemony . . . occurs either because the ruling class has failed in some major political undertaking for which it has requested, or forcibly extracted, the consent of the broad masses . . . or because huge masses . . . have passed suddenly from a state of political passivity to a certain activity. . .” The conditions to which Gramsci alluded were present to a significant extent in the Turkish case. Not only did the governing MP fail to improve the living conditions of large sections of society, but also its policies were responsible for increasing income inequality and declining socio-economic conditions for the subordinate classes. All of this inevitably provoked countermovements from below.

Conflicts within the Power Bloc Other major factors responsible for the crisis of the hegemonic project were the intensification of conflicts within the capitalist class and the growing discontent of some sections of business with the MP government. To be successful in the long run, a particular model of economic growth must integrate the circuit of capital and ensure its effective operation. In other words, it must unify the particular interests of different fractions of capital under the leadership of the dominant fraction. This does not mean, of course, the elimination of all conflicts and competition among the fractions of capital (Jessop 1990, 198–9). The main beneficiaries of neoliberal reforms of the 1980s turned out to be money and finance capital. Banks and financial investors gained the most from state-supported redistribution in favour of the capitalist class and improved their position vis-a`-vis other fractions in the process of neoliberal structural adjustment (Boratav 1991, 51 –9; Yeldan 1994, 77). Among the important reasons were deregulation of financial markets, removal of restrictions on cross-border capital mobility, and creation of many new financial instruments. The position of industrial

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capital relative to other fractions worsened considerably. It fared worst in the redistribution of profits among the different fractions of capital. Industrial capital enjoyed rising profits during the structural adjustment decade of the 1980s (Yeldan 1994, 77). But banks and financial investors increased their profits many times more. Although they reaped considerable benefits from wage repression over the 1980s, industrialists could not retain a significant portion of these benefits because of transfers to banks in the form of high interest payments on credits (Boratav, Tu¨rel, and Yeldan 1995, 22– 3). According to annual surveys of the largest 500 industrial firms conducted by the Istanbul Chamber of Industry since 1982, the share of interest payments in the net value added of private and public industrial corporations reached high levels in the 1980s and early 1990s. The annual average was 32 per cent for private firms and 48 per cent for public enterprises for the period 1987– 91 (Istanbul Sanayi Odasi Dergisi, September 1989, 47; September 1993, 58). Besides the functional differentiation of capital, two other divisions within the capitalist class and their importance for the hegemonic project need to be explained. First is the division between big capital and smaller firms, and second is the division between holding companies with diversified activities and big specialized firms.16 The former combine activities in different sectors, such as industry, banking, and foreign trade, in a vertical manner. The functional differentiation of capital is not very meaningful in the case of such conglomerates. However, there is also a large group of specialized industrial and commercial capital (Boratav 1990, 219). Therefore, the functional divisions of capital are not entirely superfluous. Holding conglomerates emerged as clear winners from the neoliberal reforms and exportpromotion strategy because they had their own banks and exporting subsidiaries that received numerous incentives from the state. In the second group of big but specialized businesses, there were also clear winners: construction companies, which also benefited from large incentives provided by the MP government, and exporters. On the other hand, industrialists that were not able to set up their own banks or exporting firms in the manner of holding companies were the most disadvantaged section of Turkish capital during the period (Boratav 1991,79). This was especially the case with small and medium industrialists. State incentives such as tax rebates and cheap credits were

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given primarily to exporters rather than producers. Furthermore, industrialists had to pay high interest rates for bank credits. The business community had united around the MP’s hegemonic project following restoration of the parliamentary system. But the neoliberal economic strategy soon generated differential effects for different sections of capital. As long as the economy grew, conflicts of interest stayed in the background. There was a sudden downturn, however, in the economy in 1988– 9. Growth rates became rather erratic. The sharp fluctuations demonstrated the underlying instability of the economic strategy. In addition, after years of wage repression, organized labour launched effective struggles that won significant wage gains. This signalled that the decade of repressed wages and “labour peace” was coming to an end, putting further pressure on industrialists. In this conjuncture, relations between the business community and its principal political representative, the governing MP, started to deteriorate. Prominent businesspeople began to criticize publicly the MP government’s economic performance. Toward the end of the 1980s, the Chambers of Industry and Commerce became increasingly vocal in complaining about the MP government’s economic policies (Heper 1991, 168). Industrialists especially complained that the government did not give enough importance to the industrial sector (Istanbul Sanayi Odasi Dergisi, 15 December 1988, 39 – 41; Kapital, July 1988; Cumhuriyet, 18 April 1989, 11). Even more important was the deterioration of relations between TU¨SIAD and the MP government. ¨ SIAD was the main organization of the country’s largest TU ¨ SIAD corporations, including industrial, commercial, and financial (TU 1991).17 In other words, it represented the dominant class fraction of the power bloc. In the 1980s, TU¨SIAD fully backed the MP government. But, at the turn of the 1990s, TU¨SIAD’s harsh criticisms of the government began to appear in the press. They were mainly concerned with the poor economic performance of the government in areas such as price stability, external debt, foreign trade deficit, and budget deficit. ¨ SIAD also criticized the government for less than satisfactory TU implementation of its programme of economic liberalization and privatization (Gu¨lfidan 1993, 98 –101). In brief, though TU¨SIAD continued to support the neoliberal economic policy, it was increasingly unhappy with the MP government’s actual performance in implementing it.18 The government’s frequent changes in specific policy measures

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and the resulting uncertainty in the business environment comprised an important source of the business community’s discontent (Bug˘ra 1994b, 145– 51). Another significant reason was the state’s loss, under the MP administration, of its neutrality vis-a`-vis individual corporations. Those corporations and businesspeople able to establish close relations with the government were often rewarded. Rewards included privileged access to public credits and contracts for large public projects. Such practices of nepotism had reached high levels in the late 1980s.19 This situation was problematic from the perspective of the capitalist class as a whole because the distribution of special privileges was based not on objective economic criteria but on the degree of closeness to governing political circles. The changes that the civil bureaucracy underwent in the 1980s contributed to the emergence of favouritism toward particular firms. The most important aspects of these changes were marginalization of career bureaucrats in the top state administration, recruitment of a new cadre of technocrats from the private sector into the key state economic agencies, and transfer of powers that traditionally belonged to civil bureaucrats to the political executive. This restructuring of the state administration enhanced the representation of capital’s interests in the state and provided big business with privileged access to key policy centres. It also served to insulate public policy formation from subordinate interests; it especially marginalized the representation of labour interests in the state. But this administrative reorganization that helped the representation of capital interests in public decision making at the expense of subordinate interests opened the way for clientelistic ties between individual companies and the political executive and highranking administrators. The increase in personnel transfers between private corporations and top echelons of the state administration, and the resultant development of close personal connections, also contributed to loss of the state’s neutrality toward individual business firms. This situation caused conflicts within the business community because not all firms could gain equal access to decision makers and hence to the distribution of public benefits. Increased conflicts of interest among the particular fractions of capital as well as the business community’s discontent with the performance of the MP government resulted in the deepening crisis of the hegemonic project at the end of the 1980s. However, big business never turned its

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back on the MP. The MP continued to enjoy the support of business conglomerates and a new group of internationally oriented companies. Despite its public criticisms, TU¨SIAD also continued to back the MP government so that it could carry on with neoliberal reforms. Decline of the MP’s support among the popular classes was another significant reason for disintegration of the hegemonic project. In the 1989 local elections, the MP was badly defeated. Its electoral support declined to 22 per cent from 45 per cent in the 1983 national election. It came third and lost control of all the big municipalities.

The Political Opposition’s Challenge In the late 1980s, two major political parties emerged as credible alternatives to the ruling MP. They were the Social Democratic Populist Party (SDPP) on the centre-left and the True Path Party (TPP) on the centre-right. Both sought to mobilize particularly groups that had incurred economic losses under, or had become disenchanted with, the MP government. The two opposition parties played important roles in challenging the neoconservative hegemonic project. Nevertheless, they were not able to formulate a new vision that could mobilize broad support. In contrast to the MP’s presentation of itself as a new party inclusive of several older political orientations, the TPP openly claimed the inheritance of the Justice Party (JP) of the 1960s and 1970s. The JP was the main representative of the capitalist class on the political stage in the years before the 1980 military coup. Toward the end of the 1980s, the TPP emerged as an alternative on the right to the MP, which became increasingly identified with big corporations. The TPP disclaimed identification with any particular social class. Its platform, however, sought to appeal especially to groups that were either marginalized or felt threatened by the MP’s neoliberal economic policies. According to the TPP, peasants/farmers, workers, civil servants, artisans and small shopkeepers, and pensioners were the main losers under the MP’s rule. These were the same social groups that the MP had described as ortadirek and claimed would be the main beneficiaries of its policies in the medium to long term. The TPP called on these groups to vote the MP out of office, emphasizing that the MP’s policies had impoverished them. Social justice and egalitarianism, and the state’s responsibility for the welfare of its citizens in general and its underprivileged in particular,

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were major themes in the TPP’s discourse. The TPP often criticized the MP government’s economic policies for their inegalitarian consequences and destruction of the welfare state (TPP Election Manifestos 1987, 1991). These recurrent themes were in the populist tradition of its predecessors, the JP and Democratic Party of the 1950s. Both parties had provided various material benefits to subordinate classes when in office (Keyder 1987a). Two major notions on the Turkish traditional right were “economic justice and political egalitarianism”. These notions conveyed “both a sense of social justice and a contractual understanding of the state as having an obligation to preserve the general well-being of its citizens” (A. Ayata 1993, 41). While the TPP denounced the MP government’s neoliberal policy for widening inequality, it did not have any clear alternative economic policy. Its economic programme was rather ambiguous at first (TPP 1988). In the 1980s, the TPP was mostly quiet on the issue of Turkey’s further integration into the global economy, whereas it was a major theme in the MP’s platform. But, by the early 1990s, it came openly to accept the neoliberal reforms thus far implemented and stressed the necessity of continuing them. The TPP’s 1991 election manifesto described “Turkey’s integration with the world” as a major goal. Its economic programme emphasized that, in today’s world, globalization, the free market, and a smaller public sector had become universally accepted principles (87– 127). However, the TPP also emphasized the state’s welfare role to protect the underprivileged and society against the ills of the free market. Removing undemocratic restrictions on trade unions was also an important part of the TPP’s 1991 election campaign. The party’s proposed political economy was thus “compensatory” neoliberalism. However, there was no serious discussion about how the two sides of the party’s proposed political economy would be made compatible. With its move toward neoliberalism, the TPP’s economic programme indeed became an ensemble of discordant elements. Its conflicting elements targeted respectively the subordinate classes, Turkish capital, and global financial markets. With this platform, the TPP sought to win the support of Turkish capital that it had lost to the MP, especially that of big business, whose economic power had considerably increased. It also wanted to assure international financial institutions of its commitment to neoliberal reforms. But at the same time, it appealed to those sections of society whose socio-economic positions had greatly deteriorated over the past decade by offering

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material benefits. As the MP government lost a great deal of its support among the subordinate classes, and as various fractions of capital became increasingly discontented with its economic performance toward the end of the 1980s, big business began to look to the TPP as a credible alternative but without totally withdrawing its support from the MP. The Union of Chambers of Commerce, Industry, and Commodity Exchanges of Turkey (TOBB), dominated by small and medium business, significantly distanced itself from the MP and moved closer to the TPP at the turn of the 1990s. Throughout the 1980s, the TPP challenged the MP with respect to the political regime as well. As opposed to the MP, whose approach was “first economy then democracy”, the TPP called for a “free democratic Turkey”. But its understanding of democracy was more populist majoritarian than liberal pluralist, and it was restrictive (Acar 1991). As a result of growing pressure from civil society for further democratization in Turkey and the rise of democracy on the international political agenda of the post-Cold War years, a more liberal pluralist conception of democracy started to emerge in the party in the early 1990s (Sakallioglu 1996).20 The hegemonic project of Turkish big capital was challenged by the social democratic left as well. The SDPP was the biggest leftist party in Turkish politics in the 1980s and early 1990s. The party did not want to be identified with any particular social class exclusively (SDPP 1986, 47). To win national elections, it had to obtain support among the self-employed and peasants/farmers, who continued to occupy a significant place in the Turkish social structure, as well as workers and public employees. According to the SDPP, the main conflict of interest was between all these subordinate groups, on the one hand, and private monopoly capital, on the other. The economic and political power of all these subordinate groups had to be strengthened to achieve social democracy (SDPP 1986, 37). To achieve its avowed goal of improving the power position of the working class, the SDPP campaigned for replacing the highly restrictive trade union legislation inherited from the military regime with a more democratic one. It adopted the theme of economic democracy and proposed co-determination mechanisms whereby workers and their organizations could participate in workplace management (SDPP 1987, 14, 41). Although the SDPP envisaged a strong labour union movement, and emphasized the role of

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labour unions in counteracting the inegalitarian nature of capitalism, its links with labour unions remained weak. A main reason was the strict legal restrictions on relations between political parties and trade unions. “It was also partly due to the failure of party leadership to develop links with unionized wage-earners,” though there was a group of former union leaders in the party echelons, and “[t]hey took for ¨ nis and Webb granted the votes of industrial union membership” (O 1994, 141). Unlike social democratic parties of Europe, Turkish social democrats faced simultaneously three major issues: 1) development of a dependent capitalist economy within increasingly globalized world capitalism, 2) democratization, and 3) redistribution in favour of labour. The party’s economic programme emphasized several major objectives: rapid development through industrialization, social justice through redistribution, participation of “working people” in management of the economy, and an independent international economic policy (SDPP 1986, 49). A major dilemma was how rapid industrialization and redistribution in favour of labour could be achieved simultaneously. The SDPP’s solution was state economic planning. Until the early 1990s, the SDPP indeed continued to champion its e´tatist heritage from the old Republican People’s Party (RPP). Planning would not replace private ownership and the market mechanism, but it would be the main vehicle for correcting ills of the market and private ownership such as income inequality and uneven regional development. The SDPP advocated state planning as the most effective mechanism for rapid development of the country as well. Planning would be accompanied by selective trade protections for Turkish industry (SDPP 1986, 49). The SDPP’s talk of redistribution in favour of labour, state planning, a mixed economy, and opposition to privatization disturbed the business community (Kapital, July 1989, 22). The SDPP’s economic programme was not very different from the Turkish economic model of the 1960s and 1970s. It was essentially a defensive programme. It failed to offer a new alternative to dominant neoliberal economics. Democratization constituted the focus of the SDPP’s platform in the 1980s and early 1990s. The party consistently called for amendment of the military-made constitution and other major laws to establish a liberal pluralist democracy. At the same time, its economic and social programme envisaged a strong role for the state in the economy. The

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SDPP could achieve its stated goals of social justice and greater economic equality through effective state intervention in the market. But the dilemma was how to prevent the big and strong state from becoming the authoritarian state that did not leave enough free public space. This dilemma was expressed well in the two coexisting notions of the state in Turkish popular culture: the paternal state (devlet baba), which looks after the well-being of its people, and the tyrannical state (ceberrut devlet) (Mango 1991, 174, 184). To resolve this quandary, the social democrats proposed participatory democracy (SDPP 1986, 40; 1987, 6, 7). The idea of participatory democracy was neither first developed by the Turkish social democrats nor exclusive to the SDPP in Turkish politics. The vision of participatory democracy was even more strongly emphasized by the smaller Democratic Left Party. Starting in the 1960s, the New Left in the West had developed a powerful critique of bureaucratic and oppressive aspects of the welfare state. The Turkish social democrats partly owed their concept of participatory democracy to this earlier critique. The SDPP and DLP shared the goal of establishing a pluralist and participatory democracy. The DLP tried to distinguish its economic programme, however, by emphasizing that it did not favour traditional e´tatisme, unlike the SDPP. It proposed instead a “people’s sector” in addition to the private and public sectors. To develop a people’s sector, special investment funds would be created for farmers and workers. The DLP’s economic programme proposed to finance workers’ funds through shares from profitable private and public economic enterprises of a certain size (Alpay and Gu¨rsel 1986, 36 –41). This scheme was very similar to Swedish wage earners’ funds of the 1970s and 1980s. The DLP’s people’s sector took the principle of economic democracy further than what the SDPP proposed at the time. But there were not major ideological differences between the two leftist parties. Nevertheless, unity on the left failed to materialize mainly because of the DLP’s determination to maintain its separate existence. Thus, by the early 1990s, just as the centre-right was divided between the TPP and MP, the centre-left was split as well.

The End of the Neoconservative Hegemonic Project The MP’s rule was based on the construction of a collective will in civil society that was at the same time the hegemonic moment of

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Turkish big capital. The initially successful hegemonic project began to unravel under the weight of its own contradictions, intensified conflicts of interest within the power bloc underpinning the hegemonic project, as well as the rise of counter-movements from below and increased challenges from the political opposition. This exceptional hegemonic rule ended as growing mass discontent turned into a vote of no confidence for the MP government in the early 1990s. The electorate voted the MP out of office in the 1991 election but did not give a clear mandate to any other party. The TPP came first with 27.1 per cent of the vote. The MP won 24.1 per cent and placed second. The SDPP came in third with 20.8 per cent. No political party had enough parliamentary seats to form a majority government. The political party system became fragmented. The MP’s hegemonic project had disintegrated, but none of the opposition parties could formulate a new hegemonic project that could mobilize broad popular support. The election result was a great disappointment for the social democrats. The DLP increased its vote from 8.5 per cent in the 1987 general election to 10.8 per cent, but it barely cleared the 10 per cent hurdle to win parliamentary seats. The SDPP obviously lost some of its supporters to the DLP. Total centre-left votes amounted to 31.6 per cent. This meant a decrease from 33.3 per cent in the 1987 general election. Some of the SDPP votes, especially in the Kurdishconcentrated provinces in the southeast, actually belonged to the proKurdish People’s Labour Party (PLP), with which the SDPP had entered an electoral alliance. According to a survey, the biggest shift in voting behaviour between 1989 and 1991 was between the centre-right bloc (MP and TPP) and the centre-left bloc (SDPP and DLP). The number of votes that the centre-left bloc lost to the centre-right bloc was higher than the number of votes that it captured from the two centre-right ¨ SES 1995). Given that the DLP’s vote actually increased parties (TU between 1989 and 1991 while the SDPP’s vote declined, loss to the centre-right parties was primarily because of the SDPP losing support among the electorate. Paradoxically, the SDPP lost electoral support at the very time when organized labour mobilized against the MP government and employers and against the neoliberal policies that had marginalized its interests. Civil servants, who had incurred great socio-economic losses over the earlier decade, also began to engage in collective struggles and establish

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unions in the early 1990s. The social democratic parties failed to harness this development to their politics and to cultivate organic links with the recently (re)activated labour movement. The SDPP’s loss of support and the MP’s partial recovery in the 1991 elections were largely due to factors independent of the neoliberal restructuring of the Turkish ¨ nis and Webb 1994, 142). First, between the 1989 political economy (O local elections and the 1991 national election, the SDPP was torn by bitter power struggles between its more radical leftist faction and its more pragmatist and centrist faction. Struggle for control of the party later resulted in the expulsion of some radical members and the subsequent marginalization of the radical leftist faction (Ko¨mu¨rcu¨ 2009). The intra-party rivalry greatly demoralized its supporters and resulted in the party’s failure to present a clear alternative to the government in the 1991 election. Second, the fratricidal rivalry between the SDPP and DLP also accentuated their weaknesses. Furthermore, the results of the 1989 local elections had created a significant opportunity for the SDPP to develop a social democratic alternative at the level of municipal government. But the SDPP-controlled municipal governments performed poorly and failed to deliver their campaign promises during the 1989– 91 period. This situation disappointed the party’s actual and potential supporters. The MP’s second place in the 1991 election came as a surprise. The party had fallen behind the TPP and SDPP in the 1989 local elections. It was able to increase its share of the vote by just over 2 percentage points compared with its 1989 share. Part of this increase was due to the party’s leadership change. A new young leader, Mesut Yilmaz, took over the party shortly before the election. Yilmaz had emerged as the leader of the liberal wing of the party in the intra-party struggles with the nationalist and Islamist factions.21 This leadership change possibly had an impact on voters. But the MP’s performance in the 1991 election was still far short of its performance in the 1987 election. To summarize, the MP’s hegemonic project began to fall apart toward the end of the 1980s. The main reasons were the rise of countermovements from below and the intensification of conflicts within the power bloc. The highly inegalitarian consequences of the MP government’s economic policies and its anti-labour policies in particular soon generated active resistance from the working class and peasants/ farmers. Increasing conflicts of interest among the different fractions of

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capital also contributed to the crisis of the hegemonic project. Neoliberal reforms in the economy entailed unequal benefits and costs for different sections of capital and impacted their relative positions. The political opposition launched a powerful challenge to the governing party’s policies, but both the left and the right opposition parties were unable to produce an alternative viable project that could mobilize broad support.

CHAPTER 8 NEOLIBERAL EXCLUSION AND IMMOBILIZATION OF THE LABOUR MOVEMENT

Transition to a civilian regime did not bring an end to the exclusion of organized labour from the political process and the marginalization of working-class interests. Yet it ushered in some significant changes in the relations between organized labour and the state. In contrast to the military regime period, the nature of trade union– state relations under the ensuing civilian regime cannot be described as authoritarian corporatism when the interactive dimension as well as the organizational structural dimension of corporatism are taken into account. The neoconservative Motherland Party government that took over power from the military administration at the end of 1983 and ruled Turkey until the end of 1991 sought to keep the trade union movement under close control and prevent it from gaining any strength. To that end, it made extensive use of juridical and political structures that the military regime had established, above all the restrictive Trade Unions and Collective Bargaining, Strike, and Lockout Acts. As discussed in Chapter 3, direct state intervention in industrial relations in favour of capital and against labour was a pivotal aspect of the Turkish political economy during both the military regime and the ensuing civilian government. An interventionist industrial relations policy constituted an integral element of the neoliberal restructuring of the Turkish economy through the 1980s. However, an exclusive focus on these continuities between the military regime and the civilian government

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leads one to overlook important differences in the interactive dimension of trade union– government relations. Transition to the civilian regime restored the all-encompassing institutions that intermediate between the state and society: political parties and elections. Grounded in a political party and thus having a mass base in society, the civilian government could implement a policy of controlling and disciplining labour without relying on trade unions as a mechanism of linkage or communication with the working class. Instead, the MP government sought to appeal, on the politico-ideological plane, directly to workers as voters or individual economic agents. Political party organization and elections were the crucial institutions for mobilizing support among the working class. This chapter first investigates the effects of the 1983 labour legislation on the organizational structure of the trade union movement. It shows that the labour legislation resulted in centralization and concentration of the trade union movement. The rest of the chapter discusses relations between organized labour and the state in the years following transition to the parliamentary civilian regime. The focus is on Tu¨rk-Is because it was the largest labour organization. The other labour confederation, Hak-Is, remained small and not very active until the late 1980s.

Centralization and Concentration The three-year military regime clearly had a negative effect on the size of union membership. It is not possible, however, to determine the precise amount of deunionization by comparing pre-coup and post-military regime figures for union membership. The reported figures for the 1970s (Table 1.1) were grossly exaggerated because of possible membership in more than one union at a time and deliberate overreporting by labour unions themselves because of inter-union rivalry. The estimates of actual union membership at the end of the 1970s range between 1.5 and 2 million (Koc 1981, 291). The Ministry of Labour’s statistics for the postmilitary period are much more reliable. The 1983 legislation prohibited dual membership and required that joining and leaving trade unions had to be recorded by a notary public. These legal provisions solved, to a great extent, problems responsible for the gross exaggeration of trade union membership in the 1970s. According to the ministry’s statistics,

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185

the number of unionized workers was 1.25 million as of January 1984 when trade unions were allowed to resume their regular activities. Union membership statistics suggest that there was a decline in membership during the military regime. This was not unexpected given that the second largest labour confederation was banned and that the formally open unions were not allowed to carry out basic union activities. The decline was not dramatic, however. A significant number of former DISK members joined other existing unions upon its closure. Union membership had grown to 1.60 million by January 1985 after the free collective bargaining system started in practice. This number constituted 61 per cent of all workers registered by the Social Insurance Institution, 25 per cent of all wage and salary earners, and 10 per cent of the employed civilian labour force (Table 8.1). Labour legislation is a significant constitutive element of the structure of a country’s trade union movement. The organizational structure of the Turkish trade union movement was reshaped by the 1983 labour union laws imposed from above. The new legislation was a reaction to the rising militancy of organized labour in the years before the military coup. It was designed to prevent the re-emergence of the pre-1980 situation. The main effect of the 1983 labour legislation on the structure of the trade union movement was its concentration and centralization. As previously explained, the Trade Unions Act allowed the formation of unions only on the basis of industrial branches and at the national level. The Collective Bargaining, Strike, and Lockout Act required that a trade union must represent at least 10 per cent of workers in the concerned branch of industry and a minimum of 50 per cent plus one of all workers in the establishment to qualify for concluding collective agreements. The Trade Unions Act reduced the number of industrial branches from 34 to 28.1 The given justification for these legislative provisions was to encourage stronger unions by preventing the creation of many small unions at the workplace or occupational level. There was a substantial decline in the number of trade unions as a result of the new labour laws (Table 8.2). There were 733 labour unions in 1980 and 676 in 1983.2 The number decreased to 138 in 1984 after the new labour laws became effective and continued to decline in following years. The increase after 1991 was mainly due to the reopening of 28 DISK affiliates. Some of the 733 registered unions that appeared in

Civilian Employment (1)

16,419 16,699

17,010 17,402 17,755 18,221

18,538 19,287 19,459 18,499 20,006 20,586 21,194 21,204 21,778 22,048

1984 1985

1986 1987 1988 1989

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

7,361 7,322 7,345 7,805 8,190 8,551 9,075 9,466 9,712 9,925

na na 7,170 7,013

na 6,398

Wage/Salary Earners (2)

3,521 3,692 3,912 4,153 4,416 4,664 4,869 5,109 5,552 5,225

2,845 2,915 3,181 3,345

2,456 2,626

Workers Covered by the SII (3)

Trade Union Membership 1984 – 2009 (in Thousands)

Year

Table 8.1

1,338 1,595 (as of Jan.) 1,828 (as of July) 1,946 2,011 2,174 2,278 (as of Jan.) 1,835 (as of July) 1,960 2,104 2,224 2,414 2,627 2,664 2,702 2,744 2,890 3,013

Unionized Workers (4) 8.2 9.6 10.9 11.4 11.6 12.2 12.5 10.1 10.6 10.9 11.4 13.0 13.1 12.9 12.7 12.9 13.3 13.7

4/1 % na 24.9 28.6 na na 30.3 32.5 26.2 26.6 28.7 30.2 30.9 32.1 31.2 29.8 29.0 29.8 30.4

4/2 %

54.5 60.7 69.6 68.4 69.0 68.3 68.1 54.9 55.7 57.0 56.9 58.1 59.5 57.1 55.5 53.7 52.1 57.7

4/3 %

21,581 20,006 21,277

10,488 11,435 12,770

5,468 7,144 9,249

2,777 2,924 3,219

12.9 14.6 15.1

26.5 25.6 25.2

50.8 40.9 34.8

Notes: 1. Civilian employment refers to total civilian labour force minus the unemployed. It comprises all persons at least 15 years old who were economically active during the reference period as an employee, employer, self-employed worker, or unpaid family worker or who had a job attachment but temporarily were not working for various reasons during the reference period. The figures are based on the Household Labour Force Surveys. Sources: SPO, Main Economic Indicators (various issues), and SPO (1998, Table 8.7); TSI, Household Labour Force Surveys, www.turkstat.gov.tr. 2. Wage/salary earners include both regular and casual employees. The numbers are based on the Household Labour Force Surveys. Note that the SIS started to conduct biannual Household Labour Force Surveys comprising both urban and rural settlements on a regular basis in 1988. The surveys in the new series are designed in such a way as to allow historical and international comparison. There are some differences between the new series and the prior surveys. Some caution is thus required when comparing the 1984– 7 figures and the post-1987 figures for civilian employment and wage/salary earners. Sources: SIS (1987, 1998b); TSI, Household Labour Force Surveys, www.turkstat.gov.tr. 3. Employees registered by the SII, including active-insured agricultural employees but excluding voluntary-insured employees (SPO 1998, Table 8.4). 4. The membership figures do not include public servants, who began to unionize in the early 1990s. The figures refer to the averages of the January and July Labour Statistics regularly published by the Ministry of Labour since 1984 (except for 2010– 12 because of transition to a new system of collecting union membership data), unless otherwise specified. I have given the January– July 1985 statistics separately, since the July 1985 figure is inflated. This is because, relying on a provisional article of the Trade Unions Law, MISK-affiliated unions prepared their membership lists on the basis of their pre-1980 membership records after they were reopened in late 1984 (Koc 1989b, 8; Pekin 1987, 132), and these lists were included in the July 1985– January 1989 statistics of the Ministry of Labour. The reason for giving both January 1989 and July 1989 statistics is that all trade unions were required to renew their membership records through a notary public for the July 1989 labour statistics. Thanks to this implementation, the figures for July 1989 and for the years that immediately follow are reliable.

2000 2005 2009

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Table 8.2

Number of Workers’ Unions and Employers’ Associations Confederations

Year

Workers’ Unions1

Employers’ Associations

Workers

Employers

1965 1970 1975 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 2000 2005 2009

668 737 781 733 721 676 676 138 99 97 91 80 82 81 98 106 116 118 109 106 96 100

95 120 107 106 104 102 102 60 48 46 48 49 49 49 52 51 54 54 54 52 51 48

2 6 4 7 7 2 2 3 3 3 3 3 3 3 4 3 3 4 4 4 3 3

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Source: Ministry of Labour and Social Security, C¸alisma Hayati Istatistikleri (1996, 83, 86; 2009, 113). 1 Unions in the process of liquidation were not included in the figures from 1992 onward.

the 1980 statistics were actually dormant or did not have real memberships (Koc 1982, 239).3 It is highly likely that these unions officially dissolved themselves instead of reorganizing according to the new legislation. However, most of the decline was a consequence of amalgamation and reorganization on an industrial basis to comply with the new legislation. The trade unions law of 1983 also required employers’ associations to organize according to the industrial branches

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189

and on a national scale. As a result, there was a considerable decline in the number of employers’ associations as well (Table 8.2). There was already a trend toward a more homogeneous and centralized trade union structure in the pre-1980 period. In the early 1960s, Tu¨rk-Is had adopted the principle of national-level, industrybased unions, modelled on the German DGB. The goal was a single national union in each industry. Propagating the slogans of “unity in mind, unity in cash” and “fewer unions, more members” (Dereli 1968, 158), Tu¨rk-Is gradually reorganized its structure toward that of industrial unions operating at the national level (Dereli 1977; Kutal 1977; Tu¨nay 1978). By the end of the 1970s, most of its 32 affiliates were national-type industrial unions. However, six of them continued to have a decentralized, federated structure, albeit organized on an industrial basis.4 DISK had also adopted the policy of national-type, industry-wide unions. All of its affiliates were organized according to this principle in the 1970s. However, both DISK and Tu¨rk-Is had more than one affiliate in some branches of industry. Despite the move toward a more centralized structure, the trade union movement as a whole was still characterized by a variety of union organizations (including industrial unions, federations, and regional, local, and workplace unions) and a high number of unions (Table 8.3). Existing unions that did not fit the definition of industrial branch and national unions had either to reorganize or to dissolve themselves. The 1983 labour legislation had the effect of protecting the domination of Tu¨rk-Is because it was very difficult for new unions to organize, mainly because of the 10 per cent requirement for certification Table 8.3 1970s

Organizational Structure of the Trade Union Movement in the

Industrial Unions Federations Regional Unions Local Unions Workplace Unions Total Source: SIS (1983, 207).

1973

1975

1977

1980

262 18 116 275 75 746

313 16 189 175 104 797

419 16 176 180 88 879

366 10 147 155 65 743

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THE ECONOMIC TRANSFORMATION OF TURKEY

to enter collective negotiations. According to Ministry of Labour statistics, as of January 1985, in nine of the 28 industrial branches, Tu¨rk-Is affiliates were the only unions.5 In 23 of 27 industrial branches,6 Tu¨rk-Is affiliates were the only unions that met the 10 per cent condition and thus qualified for collective bargaining.7 As of January 1991, before DISK was allowed to operate again, the number of industrial branches in which Tu¨rk-Is enjoyed a monopoly of representation was 13. The number of industrial branches in which Tu¨rk-Is unions were the only unions to meet the 10 per cent requirement was 19. The other labour confederation, Hak-Is, was able to increase its membership from the early 1980s on partly because some of DISK’s former members joined Hak-Is-affiliated unions following the banning of DISK. Hak-Is, however, remained limited to six or seven industrial branches and therefore did not pose a significant challenge to the domination of Tu¨rk-Is in many industrial sectors. It was also very difficult for non-affiliated unions to organize and recruit enough members. Although there was a significant number of non-affiliated unions, most were very small and failed to meet the 10 per cent condition.8 As a result, many disappeared soon after their creation. The number of non-affiliated unions tended to decline over the period. Several large non-affiliated unions, such as Laspetkim-Is and Otomobil-Is, later joined DISK after it was allowed to resume its activities in late 1991. Independent C¸elik-Is, with over 40,000 ¨ z Demir-Is in 1991. The mergers members, merged with the Hak-Is O substantially reduced the number of workers organized in non-affiliated unions in the mid-1990s (Table 8.4). The reopening of DISK and its member unions in 1992 ended the monopoly of representation of Tu¨rk-Is in a number of industrial branches. However, Tu¨rk-Is-affiliated unions continued to dominate many industrial branches in the 1990s because many DISK and Hak-Is unions as well as independent unions failed to meet the 10 per cent requirement. Not only did that condition impinge on freedom of association, but it also deprived a large number of unionized workers of the right to collective bargaining. In some cases, not all unions whose memberships fell short of 10 per cent were small; some indeed had thousands of members. Depending on the size of employment in a given industrial branch, 10 per cent could amount to thousands of workers.

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

34 32 32 32 32 32 32 32 32 32 33 33 33 33 33 33

996,355 1,355,528 1,438,475 1,513,317 1,670,897 1,421,257 1,567,501 1,675,301 1,766,535 1,815,271 1,967,260 1,978,035 2,014,452 2,047,708 2,134,593 2,178,886

7 6 6 6 6 7 7 8 7 7 7 7 7 7 7 7

104,504 129,206 149,158 162,313 180,557 166,597 189,090 249,637 268,035 272,338 283,292 295,729 317,265 335,577 356,642 361,415

– – – – – – – – 2 28 26 26 25 26 26 25

– – – – – – – – 19,378 208,266 334,765 329,337 313,046 325,404 358,328 368,743

DISK – – – – – – – – – – 2 2 2 2 2 2

– – – – – – – – – – 5,959 4,209 3,923 1,805 2,864 3,351

MISK

Tu¨rk-Is

Year

Hak-Is

Labour Confederations, Their Affiliates, and Membership

Table 8.4

48 37 36 33 28 32 33 30 32 33 29 27 25 27 29 29

143,723 204,064 223,519 228,997 259,841 245,088 240,253 205,873 200,323 189,806 53,141 59,704 60,098 64,128 71,119 75,580

NonAffiliated 4 10 10 9 6 4 4 – – – – – – – – –

3,142 139,673 142,740 140,170 115,734 2,027 720 – – – – – – – – –

Others1 93 85 84 80 72 75 76 69 73 99 97 95 92 95 97 97

1,247,744 1,828,471 1,953,892 2,044,797 2,227,029 1,834,969 1,997,564 2,130,811 2,254,271 2,485,6812 2,644,417 2,667,014 2,708,784 2,774,622 2,923,546 2,987,975

Total

33 33 33

1,789,873 2,067,884 2,239,341

Tu¨rk-Is

7 7 7

283,908 369,136 431,550

Hak-Is 22 19 17

314,321 399,676 426,232

DISK 2 – –

3,534 – –

MISK 30 37 37

76,955 109,233 135,556

NonAffiliated – – –

– – –

Others1 94 96 94

2,468,591 2,945,929 3,232,679

Total

Source: Ministry of Labour and Social Security, C¸alisma Hayati Istatistikleri (1993, 1996, 1999, 2007, 2009, 2011). The table uses the July statistics. Notes: 1. The table does not include public employees’ unions, which started to organize in the early 1990s. 2. The number of unions given above refers to those that filed their membership cards with the ministry for the purpose of certification. It does not include all the unions that formally existed. Except for MISK, which formally appeared to have six affiliates, while only two of them had actual membership, almost all unions that affiliated with one of the confederations regularly notified the ministry of their membership numbers. The total number of non-affiliated unions was generally higher than the number of non-affiliated unions that notified the ministry of their membership numbers. Those that often failed to notify the ministry did not have adequate active membership numbers. 3. The 1985– 9 figures for “the other” or MISK/Yurt-Is in the table were greatly inflated. According to the July 1989 statistics based on the renewed union cards, the membership of MISK/Yurt-Is was only 2,027, while it was 51,804 according to the January 1989 statistics. 1 Others include the MISK/Yurt-Is confederation, formally dissolved later, because the number of its affiliates declined below five, the number legally required for the formation of a union confederation. It was refounded in 1994, but it lost its legal existence in 2000 again. 2 The total in the source is given as 1,485,681, a mistake in calculation. 3 The drop in membership was due to the Ministry of Labour’s updating of union membership records.

20003 2005 2009

Year

Table 8.4 continued

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193

The Tu¨rk-Is Search for Dialogue Tu¨rk-Is officials believed that, once democracy was restored, they would recover the losses that they suffered under military rule. Partly because of this dominant belief among unionists, the first post-military general convention of the confederation did not usher in a new strategy. Nor did it bring about a change in the confederation’s leadership. The first post-military Tu¨rk-Is general convention took place in December 1983 immediately after the transfer of power to the elected Motherland Party ¨ zal, most cabinet government. The new prime minister, Turgut O ministers, a large number of deputies from the ruling party, and leaders of opposition parties all attended the inauguration of the convention. This might have been interpreted at the time as a sign that the new civilian government would follow a policy of cooperation with unions, as Tu¨rk-Is officials expected. The convention became the occasion for heated debates over the earlier cooperation of Tu¨rk-Is with the military regime. Two union leaders put forth their names for the position of secretary general to compete against Sadik S¸ide and in protest of his having served as the minister of social security in the cabinet of the military regime (Mahirog˘ulları 2005, 326). The incumbent Tu¨rk-Is president and the only candidate for the post, Sevket Yilmaz, had said prior to the general convention that he would not serve in an Executive Committee that included S¸ide (Yildiz 1984, 33). But despite significant opposition, S¸ide was elected secretary general once more. Yet the election result was not a clear victory for him. He received only 171 of 345 votes (Info-Turk 1986, 298; Tu¨rk-Is Dergisi, January 1984). Yilmaz was also re-elected as president. Although he was the sole candidate, he received only 192 of 349 votes (Info-Turk 1986, 298). A large number of delegates refused to support him, casting blank ballots. After the election results were announced, Yilmaz decided not to go ahead with his earlier threat concerning S¸ide; instead of resigning from his post, he chose to work with S¸ide as secretary general. At the end of the convention, there was only one new member in the confederation’s five-member Executive Committee.9 Tu¨rk-Is thus started the new period with old officials. The convention decided that Tu¨rk-Is should focus its energy on changing the military regime’s labour legislation and other laws impinging on labour rights.

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THE ECONOMIC TRANSFORMATION OF TURKEY

It soon became apparent that Tu¨rk-Is unionists’ expectation of recovering workers’ losses after the military regime was based on false assumptions. Shortly after its general convention in December 1983, Tu¨rk-Is encountered strong opposition from the MP government to the issue of wage increases. Despite the official resumption of collective bargaining under the new legislation in January 1984, the Supreme Board of Arbitration would determine the wage increases for 1984 for about 700,000 workers. This was because the SBA of the military regime period had renewed the collective agreements expiring in 1982 for a new three-year period. The SBA’s wage increase was crucial for unions and workers because of its impact on forthcoming collective negotiations. As under the military regime, the board based its wage offer on the annual projected inflation rate announced by the government, which usually fell far below the actual inflation rate by year-end. There was a huge gap between the SBA offer and the Tu¨rk-Is demand. Consequently, Tu¨rk-Is officials tried to negotiate directly with the government. A meeting took ¨ zal on place between the Tu¨rk-Is president and Prime Minister O 20 February 1984. But the government supported the SBA’s wage decision (Cumhuriyet, 16 and 21 February 1984). Tu¨rk-Is officials summoned an extraordinary meeting of the Executive Committee and Presidents’ Council on 25 February 1984 to discuss the situation.10 They agreed to organize mass meetings with their members to explain and protest the situation. Despite their talk of withdrawing the two labour representatives from the SBA, Tu¨rk-Is unionists did not take that step (Tu¨rk-Is Dergisi, February 1984, 6 – 7). That kind of action could damage their efforts to build cooperative relations with the new civilian government. The prime minister and Tu¨rk-Is president met a second time, on 1 March. Like the first meeting, the second meeting did not bring any government concessions to the Tu¨rk-Is demand for a higher wage increase. The SBA’s original wage offer was implemented. Since it was a framework decision, in individual cases, the board could implement wage increases about 10 per cent lower than the framework decision (Cumhuriyet, 16 May, 8 June, and 23 June 1984). This was an important signal to labour unions that transition to the civilian regime did not mean re-establishment of the status quo ante and that their hopes of regaining lost labour rights would not easily materialize. As the Tu¨rk-Is leadership slowly came to realize this

IMMOBILIZATION OF THE LABOUR MOVEMENT

195

situation, they started organizing mass meetings in different cities with large working-class populations, including Istanbul and Izmir. The meetings took place with thousands of workers in the spring and summer of 1984. The objective was to strengthen the organization’s relationship with the rank and file and influence public opinion. Links between the union leadership and the membership had substantially weakened under the military regime as a result of the prohibition of collective bargaining and strikes. In the mass meetings, which adopted the theme of democracy and labour rights, Tu¨rk-Is leaders criticized the MP government for neglecting the economic needs of workers and maintaining the legal restrictions on trade unions (Tu¨rk-Is Dergisi, March 1984, 9– 16; June 1984. 2 – 10). Tu¨rk-Is members used the meetings to send a warning to the union leadership by chanting slogans such as “don’t sleep, Tu¨rk-Is” and “no to a silent [Tu¨rk-Is] administration” (Cumhuriyet, 4 June 1984). Tu¨rk-Is continued to seek dialogue with the government while organizing mass meetings. It continuously requested a summit meeting with the government. Periodic summit meetings between cabinet ministers and Tu¨rk-Is leaders were an established convention before 1980. But persistent calls by Tu¨rk-Is for a similar meeting went unanswered by the MP government, or the prime minister responded that “he was too busy to meet with Tu¨rk-Is” (Cumhuriyet, 22 June 1984). Meanwhile, as soon as the collective bargaining system resumed in practice, the government founded the Public Sector Collective Agreements Coordination Committee (PSCACC) in June 1984. According to the prime ministerial circular creating the committee, its function was to determine general principles for public sector collective agreements and assist public enterprises in the process of ¨ BA, collective bargaining (Prime Minister’s Circular No. 83/12, in TU IIC¸B, 25 June 1984, 16; also in Cumhuriyet, 25 June 1984, 7). Its principal role was, in fact, to control collective negotiations in the public sector from the centre and to ensure that collective agreements signed by public employers with labour unions were in conformity with the government’s neoliberal policies (Chapter 3). The circular also provided for the organization of public employers’ associations to counter labour unions. There were a number of public employers’ associations whose origins dated back to before the 1970s. Subsequent to the circular, the government started organizing all public institutions and enterprises in

196

THE ECONOMIC TRANSFORMATION OF TURKEY

employers’ associations and restructured existing ones to consolidate them. Thus, as soon as the collective bargaining system resumed, trade unions faced the powerful PSCACC and later the public employers’ associations, which took over the task of the Coordination Committee. The PSCACC and its anti-labour principles constituted one of the most contentious issues in Tu¨rk-Is’s relations with the MP government in the early years. Participation of the Ministry of Labour and Social Security in the PSCACC had important consequences for labour unions. The ministry’s undersecretary, the highest official after the minister, was a member of the committee. The undersecretary had access to extensive insider information about labour unions (as well as employers’ associations), including their revenues and strike funds. He/she became at the same time a participant in the determination of public employers’ collective bargaining principles against labour unions. The Ministry of Labour and Social Security also became responsible for coordinating and overseeing the organization of public employers’ associations. As a result, it lost even formal neutrality vis-a`-vis employers and labour interests. In understanding the MP government’s position toward organized labour, in addition to its neoliberal ideology and policy, its composition should be taken into account. As Ahmad (1985, 217) aptly put it, “There was no representative of the unions in the cabinet – as there had been in the Ulusu government [of the military regime] – or anyone concerned with the problems of workers or their needs.” Sixteen of the 20 ministers in the cabinet had worked as advisors, general managers, administrative board members, and the like in private sector corporations. A few trade union representatives in the cabinet would not, of course, guarantee real influence in favour of labour interests. But composition of the cabinet provides insights regarding government policies toward labour. Besides its efforts to dialogue with the government, Tu¨rk-Is appealed to the Parliament directly to amend the labour legislation. In early 1984, it submitted a list of proposed amendments through individual deputies with trade union backgrounds. Tu¨rk-Is initially limited its proposed amendments to several provisions of the trade union acts that caused the most difficulties for unions. The amendments were concerned, for example, with clauses regulating union certification, procedures for the collection of membership dues, and financial and

IMMOBILIZATION OF THE LABOUR MOVEMENT

197

administrative inspection of trade unions by state authorities (Tu¨rk-Is 1986a, 3– 11; Tu¨rk-Is Dergisi, May 1984, 11 – 12; July–August 1984, 11).11 The strategy of lobbying the Parliament was not effective. First, the Parliament was dominated by the neoconservative Motherland Party. Second, unless a bill was supported or sponsored by the government, it did not have much chance of passing. The number of (former) trade unionists or workers elected to the National Assembly in the November 1983 elections was also very small. There were seven former trade unionists elected on the main opposition Populist Party’s ticket, one trade unionist and one worker on the ruling MP’s ticket, and none on the Nationalist Democracy Party’s list. The total number of deputies who were trade unionists or workers was thus only nine in the National Assembly of 1983–7. In the 1987 general election, eight current or former trade unionists were elected. Seven were elected on the SDPP ticket and one on the MP ticket.12 There was not a big difference, however, from the national assemblies of the 1970s in regard to the number of deputies with working-class backgrounds,13 even though the leftist Republican People’s Party had the most votes and parliamentary seats in the 1970s, albeit short of a majority. To sum up, in the immediate post-military period, the Tu¨rk-Is strategy was to seek gradual and piecemeal improvements in collective labour rights and freedoms through negotiations and compromises with the political authority. Organized labour’s demands directed at the state were shaped and restricted by power resources at its disposal, which in turn were greatly limited by existing juridico-political structures, besides trade unions’ previous experiences and strategies.

Lobbying the President A novelty in organized labour– state relations in the post-military years was the Tu¨rk-Is leadership’s efforts to lobby the president of the republic. This tactic took the form of paying visits and submitting reports regarding trade union demands and problems.14 One important reason for this lobbying effort was the recent transformation in the articulation of state apparatuses and the distribution of power among them. The 1982 Constitution conferred much more power on the president compared with the 1961 Constitution. Another reason was conjunctural. The presidency was occupied by the head of the former

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THE ECONOMIC TRANSFORMATION OF TURKEY

military regime, Kenan Evren, from November 1982 to November 1989. President Evren carried great political weight that went beyond his formal powers because he had been the head of the former military regime. He was rather careful to abide by the constitution. He mostly refrained from intervening in the day-to-day administration of state affairs and transgressing the boundaries of the domain reserved for the Council of Ministers or the Parliament (Dodd 1994, 179– 86; Hale 1994, 296– 300). Furthermore, the president came to office through a process and from a background independent of the ruling party. These ¨ zal conjunctural conditions disappeared with the succession of Turgut O to the presidency in November 1989. Between November 1989 and ¨ zal was president and the party that he had October 1991, when O created was in power, the constitutional separation of powers between the two branches of the executive became largely meaningless in practice (Heper 1994). Since the MP government did not reciprocate the Tu¨rk-Is policy of dialogue, or refused to make any concessions to labour demands, the Tu¨rk-Is leadership lobbied President Evren. This lobbying effort did not, however, produce the desired outcomes. For example, Tu¨rk-Is spent a great deal of effort to convince the president to veto the parliamentary act of December 1985 that introduced a minimum pensioned retirement age. The president approved the act in spite of strong opposition from trade unions and workers. The Tu¨rk-Is tactic of lobbying the president was mostly futile since Evren in his former role as head of the military regime had been responsible for enactment of the anti-labour legislation that Tu¨rk-Is wanted changed. He had also adopted the role of defender of the new constitutional order and opposed amendment of the constitution.15

Summit Meetings Three summit meetings took place between the prime minister and cabinet ministers on the one hand and leaders of the Tu¨rk-Is confederation and affiliated unions on the other in the first two years of the MP government. The first summit was on 17 July 1984. Its agenda included a range of specific issues concerning the labour legislation, collective bargaining, and social security as well as broader topics relating to economic strategy and the fifth five-year development plan (Cumhuriyet, 16 and 18 July 1984; Tu¨rk-Is 1986a, 11 –12; Tu¨rk-Is

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Dergisi, July– August 1984). The summit did not achieve any concrete results as far as labour unions’ demands and interests were concerned. The prime minister and ministers made it clear to the unionists that they would not make any concessions on government and party programmes. The government responded negatively to unions’ demand for wage improvements on the ground that it did not want to fuel inflation. It agreed to refer a number of other issues, including changes to the labour legislation proposed by Tu¨rk-Is, to the relevant ministries for further review (Cumhuriyet, 18 and 19 July 1984). Just the day before the summit, the Ministry of Labour summoned the tripartite Work Council, which had not met for a long time. The council had first been created by the Act on the Foundation and Functions of the Ministry of Labour dated 1946 (Ministry of Labour 1947, 15 –20). The MP government passed a decree-law on the creation and functions of the Ministry of Labour and Social Security soon after it came to power in December 1983. According to this decree-law as revised in June 1984, the Work Council was presided over by the minister of labour and social security, or the undersecretary to the minister, and composed of the general director of labour, the head of the Department of Labour Health, one representative each from the ministries and State Planning Organization, five academics from universities, and workers’ and employers’ representatives from each branch of industry, who were selected by the largest labour and employers’ confederations respectively. Its role was to investigate, discuss, and give its views on the issues on the agenda. The council was summoned by the Ministry of Labour and Social Security at its initiative. The agenda was also determined by the ministry itself (C¸elik 1988, 32). In these respects, there were not significant differences between the previous legislation and the new legislation. The ministry set the Work Council’s agenda to discuss the draft bill on the establishment of a severance (or seniority) compensation fund,16 thus rejecting the Tu¨rk-Is request that the agenda should focus on unions’ and workers’ urgent problems, especially those resulting from the trade unions law. The proposed fund was primarily a response to employers’ vocal complaints since the mid-1970s that severance compensation was an excessive financial burden.17 Since there was no legal protection of workers against wrongful dismissals at the time, and the existing labour code enabled employers to lay off workers with great ease, a fundamental role of

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severance compensation in Turkish practice was to provide a disincentive against labour dismissals.18 Severance compensation would cease to have this aspect if dismissed workers received severance compensation from a common fund. The draft bill also restricted the conditions of workers’ entitlement. The right to seniority/severance compensation had long been jealously guarded by trade unions and workers. By convening the Work Council, the Ministry of Labour sought to get the bill approved by unions. But unions had strong objections. Subsequently, the ministry made some small changes to the bill but did not alter its fundamentals. It continued to work on the bill, but unions were excluded from this process. Although the government kept bringing up the issue in subsequent years, it did not push it further in the face of opposition from trade unions and workers. This was the only time that the MP government retreated because of anticipated unified labour opposition during the period. There was rising opposition within the Tu¨rk-Is organization to the policy of dialogue, which seemed to bring no positive outcome. At a meeting of the member unions’ presidents on 27 December 1984, several union leaders urged a re-evaluation of the Tu¨rk-Is policy and proposed to organize mass meetings or marches (Cumhuriyet, 28 December 1984, 8). However, the majority of union leaders, including the president of Tu¨rk-Is, still favoured the policy of dialogue and put their trust in the next government – labour summit. The result of the meeting was a “wait and see” policy (Tu¨rk-Is Presidents’ Council’s Decisions, 27 – 28 December 1984, in Tu¨rk-Is Dergisi, December 1984, 6 – 7). The second Tu¨rk-Is-government summit was held on 11 February 1985.19 Many of the issues on the first summit agenda were discussed again (Cumhuriyet, 8 and 11 February 1985; TU¨BA, IIC¸B, 18 February 1985, 4 –5; Tu¨rk-Is Dergisi, January– February 1985, 1 –7). According to the Tu¨rk-Is Report of Activities (1986a, 16), in response to unionists’ criticism of the government’s economic policies as anti-labour, the prime minister defended the overall economic strategy initiated in 1979– 80 as “necessary and the right choice” and said that “any deviation from this strategy could result in an economic deadlock or even a crisis as serious as the one at the end of the 1970s.” He also emphasized that the government was determined to continue to implement a strategy that it believed to be right, even though different sections of society and

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interest groups might have criticized it. The government thus made it clear to union leaders that they should not expect any economic policy changes. Regarding the more specific items on the summit agenda, the government clearly rejected many of the Tu¨rk-Is demands and made no concrete promises concerning its other demands or complaints (Cumhuriyet, 12 February 1985; TU¨BA, IIC¸B, 18 February 1985, 3– 5; Tu¨rk-Is, 1986a, 16 –17).

Employers–Government Summit The government held a separate meeting with the employers’ confederation on the same day as the labour summit. In this meeting, TISK officials conveyed to the government their opposition to many of the trade unions’ demands, including amending the trade unions and collective bargaining laws. TISK extended support to the government’s plans to introduce a minimum retirement age and a severance compensation fund despite strong labour opposition. It also put forward a number of financial demands, such as cuts in employers’ rate of social security premiums and a tax deduction for employers’ association dues. The government soon responded to the latter demand with an amendment to the income tax law in 1986. In the meeting, employers’ representatives reaffirmed their support for the outward-oriented and free-market economic strategy. But they also complained that industry was relegated to a secondary position while export activities received the most attention from the state. They asked for more incentives for the industrial sector (Cumhuriyet, 12 February 1985; Isveren, February 1985, ¨ BA, IIC¸B, 18 February 1985). 25– 31; TU A New Collective Bargaining Strategy and Protest Actions One of the major complaints that Tu¨rk-Is brought to the summit meetings with the government was the PSCACC and its direct interventions in the collective bargaining process. Labour unions often complained that there was no free collective bargaining because of the PSCACC’s direct interventions (Tu¨rk-Is Dergisi, September 1984, 3 –5). When it soon became clear that the committee and its interventionist policy were there to stay, Tu¨rk-Is affiliates agreed to create a counterpart committee within the confederation in September 1984. The role of this committee was to coordinate unions’ collective bargaining strategies and activities in the public sector and thus strengthen their bargaining

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position. The Tu¨rk-Is coordination committee’s principles emphasized protecting real wages and defending workers’ existing benefits in collective agreements concerning holidays, overtime compensations, work hours, labour – management joint committees at workplaces, and shop stewards (Cumhuriyet, 11 October 1984, 22 March 1985; TU¨BA, IIC¸B, 1 April 1985, 3 – 4). Tu¨rk-Is’s collective bargaining principles showed that unions could not even contemplate demanding further rights and benefits in collective agreements at that time. Their principal concern was rather to protect existing ones. Yet they were not able to achieve even this goal in the collective agreements signed in the mid-1980s. Tu¨rk-Is’s counter-strategy of coordinated bargaining meant increased power and control for the confederation over member unions. In the pre1980 period, though Tu¨rk-Is had exercised considerable control over its affiliates’ activities, its role in the area of collective bargaining had been limited. In the 1980s, the establishment of centralized political control over the collective bargaining system thus led to the centralization and coordination of collective bargaining by labour unions as a counterstrategy. The Tu¨rk-Is collective agreements coordination committee would play a pivotal role in coordinating unions’ collective bargaining activities in the latter half of the 1980s and the early 1990s. As the government continued to exercise political control through the PSCACC over the collective bargaining process in the public sector, Tu¨rk-Is and its public sector affiliates decided to boycott ongoing collective negotiations in public sector workplaces for about two weeks. They decided on the boycott to protest the PSCACC’s announcement of maximum rates of wage increase that public employers were to observe in collective agreements for 1985 and 1986. The rates were far below the prevailing and projected inflation rates. While boycotting collective negotiations, the Tu¨rk-Is leadership invited the prime minister and cabinet ministers to a meeting to discuss once again labour problems and ¨ BA, IIC¸B, 1 April 1985, 4– 5). Not a possible solutions to them (TU single minister attended the meeting that took place on 11 April 1985. In response, the confederation and member unions decided to withdraw indefinitely the two labour representatives from the Supreme Board of Arbitration. The labour representatives did not return to the board until April 1988. Despite their absence during these three years, the SBA continued to make decisions concerning collective labour disputes.

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Tu¨rk-Is and member union leaders agreed to organize outdoor and indoor protest meetings in different regions of the country. But the Tu¨rk-Is leadership was very concerned that mass actions might get out of hand. To prevent such a situation, it sought to keep the planned actions under tight control. Tu¨rk-Is instructed its member unions not to organize any mass actions or meetings on their own. All of the planned actions were to be organized by the confederation. This was a blatant example of limited mobilization led and controlled from the top. At the same time, the unions decided to end their boycott of public sector collective negotiations and go back to the bargaining table on the ground that a longer boycott would harm workers whose collective agreements had either expired or were about to expire (Tu¨rk-Is 1986a, 24– 7; Tu¨rk-Is Dergisi, April 1985, 7– 10). However, even the two-week boycott was not effectively implemented because of poor organization and lack of will (Cumhuriyet, 2 April 1985). The third summit between Tu¨rk-Is and the government was held on 29 April 1985. The summit took place upon the government’s invitation shortly after Tu¨rk-Is started to implement a number of actions to protest government labour policies. The issues on the agenda of the previous two summits were discussed again; unionists reiterated the same complaints and demands. The meeting did not produce any satisfactory results for them. Rather, the government brought up the issue of introducing a minimum age for retirement and tried to obtain the agreement of union leaders. Despite labour opposition, the Parliament passed the bill on retirement age several months later. With respect to the PSCACC, a major source of concern for unions, the prime minister’s response was that “the Committee is not such an important matter. We can abolish it tomorrow; instead, I can directly instruct public sector employers; . . . the same thing happens. Or, alternatively, we can establish public employers’ associations. They can perform the ¨ BA, IIC¸B, 6 May 1985). The same function [as the PSCACC]” (TU prime minister was indeed foretelling what would come in the near future. The newly organized public employers’ associations would take over the role of the PSCACC after it was abolished in 1987. In response to the frequent Tu¨rk-Is criticism (especially with regard to the government’s direct interventions in collective bargaining in the public sector) that “the state lost its impartiality by siding with employers”, the prime minister said that “You [Tu¨rk-Is] say the state is taking sides.

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Of course it will take sides; public employers are not on their own. Workers’ wages in the public sector are paid by the state. I am in an ¨ BA, employer’s position in the state. Of course I become a party” (TU IIC¸B, 6 May 1985). These words reveal that in the eyes of Prime ¨ zal there was no distinction between the state as the Minister Turgut O source of public authority and the state qua employer. Throughout this period, the employer state was equipped with all the powers available to the state as the source of public authority. Union leaders gradually realized that they would either start mobilizing their memberships rather than rely primarily on the policy of dialogue or completely surrender to the government’s anti-labour policies. Tu¨rk-Is organized two large meetings in May and June 1985, as was decided prior to the third government summit. Tu¨rk-Is officials and member union leaders made trips in October to the country’s central and eastern provinces, where they held meetings with local unionists and workers. These meetings had three objectives: 1) to develop closer contacts with lower levels of the organizational hierarchy and membership base; 2) to exert pressure on the government and create favourable public opinion; and 3) to lobby the local administrations and state officials such as provincial governors and mayors.20 Simultaneously, along with the protest actions, Tu¨rk-Is decided to seek dialogue with the government for some further time “for the sake of national interests” (Tu¨rk-Is Dergisi, July 1985, 16 – 17). Its actions were often incoherent and contradictory during this period and undermined its credibility. This situation was largely due to intra-union struggles between those who pressed for a strategy of mobilizing the rank and file and those who favoured finding compromises and agreements with the government. The division within the Tu¨rk-Is confederation was not entirely along the politico-ideological lines of left and right as in the 1970s (Koc 1991a, 66–7). But it was not bereft or exclusive of political ideology either. Internal opposition to the confederation’s continued reliance on the ineffective policy of dialogue was led mainly by the social democraticoriented unions and union leaders. The social democratic opposition movement in Turkey was born in the early 1970s.21 During the 1970s, the movement campaigned against the above party politics of Tu¨rk-Is and in favour of cooperation with a social democratic party. Its two principal objectives were to create a social democratic system as an alternative to both capitalism and communism and to increase the political power of the

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labour movement (Mumcuoglu 1980, 391 – 3). The Petroleum, Chemicals, and Rubber Workers’ Union (Petrol-Is), one of the oldest unions in the country, assumed the de facto leadership of the social democratic wing in the post-military years. In the mid-1980s, Petrol-Is voiced increasingly harsh criticisms of the Tu¨rk-Is leadership for “begging for dialogue with the government that turned a deaf ear” (Petrol-Is Dergisi, July–August 1985, 3, 16–17; January–February 1986, 2–4). At the December 1986 convention, the social democratic unions tried to capture the leadership of the confederation en bloc but failed. To a significant degree, the content of future Tu¨rk-Is policies and actions was shaped by intra-organizational struggles. The balance of power between the two opposing strategies was in turn predicated upon developments at the rank-and-file level as well as state policies toward organized labour.

Immobilism at the Rank-and-File Level In the years following transition from the military regime, “immobilism” best describes the state of the labour movement at the grassroots level. In spite of substantial losses in workers’ wages, social benefits, and legal rights, the incidence of strikes and other forms of labour action was low during the period. A look at the (non-)use of strikes and other actions reveals how effectively the working class had been demobilized primarily by non-economic means. The existence of martial law in most of the country’s provinces until late 1985 discouraged organized labour from using the right to strike since martial law authorities enjoyed extensive powers to suspend or restrict trade union activities as well as civil rights. There were only four strikes, involving a total of 561 workers, in 1984. The number of strikes and workers on strike were 21 and 2,410 in 1985 and 21 and 7,926 in 1986. They were all in the private sector (Tables 8.5.1 and 8.5.2). The low incidence of strikes in the private sector and their absence in the public sector do not indicate that trade unions reached agreements with employers at the bargaining table. A total of 284 collective negotiations involving 427,619 workers ended in dispute and were referred to mandatory mediation in the public sector in 1984– 6. The number of collective negotiations ending in dispute and thus referred to official mediation in the private sector during the same period was 1,793; they involved a total of 216,855 workers (Ministry of Labour, Labour Statistics, various issues).22

Table 8.5.1

Lawful Strikes in the Public Sector 1984– 2011

Year

Number of Strikes

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

3 – – 3 9 7 20 22 48 9 12 70 7 3 7 2 19 4 8 2 1 1 4 2 1 0 1 0

Number of Work-places on Strike – –

3

4 111 115 229 220 1,338 122 129 3,266 26 16 40 3 187 14 37 3 3 12 15 2 8 0 10 0

Number of Workers on Strike

Workdays Lost

526 – – 6,507 12,850 30,153 58,616 62,528 57,464 2,189 2,718 178,539 3,434 3,362 4,111 67 11,879 737 2,735 8 283 437 948 268 610 0 406 0

2,252 – – 325,707 1,054,089 2,258,633 1,363,850 1,189,428 761,629 75,468 30,553 4,249,920 79,251 60,061 60,035 1,917 132,990 18,617 15,450 184 1,981 874 2,394 4,246 610 0 2,030 0

Source: Ministry of Labour and Social Security, “Strikes and Lockouts” (Grev ve Lokavt Uygulamalari), http://www.csgb.gov.tr/csgbPortal/csgb.portal?page¼grevlokavt.

Table 8.5.2

Year 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007* 2008 2009 2010 2011

Lawful Strikes in the Private Sector 1984 – 2011

Number of Strikes

Number of Work-places on Strike

Number of Workers on Strike

Workdays Lost

1 21 21 304 147 164 438 376 50 40 24 50 31 34 37 32 33 31 19 21 29 33 22 13 14 13 10 9

1 21 28 342 155 210 632 466 70 56 37 103 32 41 78 53 46 52 25 27 44 45 29 791 30 34 27 26

35 2,410 7,926 23,227 17,207 9,282 107,690 102,440 4,725 4,719 2,064 21,328 2,027 3,683 7,371 3,196 6,826 9,174 1,883 1,527 3,274 3,092 1,113 25,652 4,430 3,101 402 557

2,695 194,296 234,940 1,636,233 838,566 652,774 2,102,700 2,619,926 391,949 499,273 212,036 588,321 195,071 121,852 222,603 227,908 235,485 267,398 28,435 144,588 91,180 175,950 163,272 1,349,312 145,115 209,913 35,732 13,273

Source: Ministry of Labour and Social Security, “Strikes and Lockouts” (Grev ve Lokavt Uygulamalari), http://www.csgb.gov.tr/csgbPortal/csgb.portal?page¼grevlokavt. * A strike took place in the 768 workplaces of the Turkish Telecommunication Company (Tu¨rk Telekominikasyon) in 2007, and a total of 1,152,000 workdays were lost. The company was previously state owned.

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The experience of the first post-military strikes was not encouraging. They demonstrated that the effectiveness of strike action diminished greatly because of extensive legal restrictions on strikes in the implementation stage and the absence of effective legal mechanisms to prevent employers from hiring new employees to replace striking workers.23 The prevailing view among workers as well as union leaders at that time was that strikes were not likely to succeed and thus were not worth the trouble. Trade union leaders often publicly expressed this view, especially after the outcomes of the first strikes (Cumhuriyet, 22 and 23 March 1985). For example, Tu¨rk-Is president Sevket Yilmaz said that, “given the existing conditions the trade unions were in, going on strike would bring no benefits; strikes were turned into a mechanism for employers to reduce inventories” (Cumhuriyet, 20 April 1985). In 1984– 5, strike votes failed to obtain the required majority in many workplaces (Koc 1987, 7).24 Another reason for the loss of strike votes was the ease with which employers could fire unionized workers during collective negotiations. However, in some cases, union officials themselves advised workers to vote against their strike decisions, claiming that a strike action was not likely to be effective in achieving their collective bargaining demands. Legal strikes alone can be misleading as an indicator of labour (de)mobilization, especially in situations in which the right to strike is considerably restricted. Therefore, both unlawful strikes and other forms of labour action must be taken into account. The period immediately following the transition to civilian government is also conspicuous for the virtual lack of such labour actions. In 1984, there were only two reported unlawful short work stoppages involving a very small number of workers. In 1985, there were two labour demonstrations in protest of particular employers. The reasons for these labour actions were unpaid wages and layoffs (Sen 1993, 160–2). These are reported actions, and it is possible that some labour actions went unreported. In addition to these rank-and-file actions, the two Tu¨rk-Is labour assemblies in 1984, two-week boycott of public sector collective negotiations, and withdrawal from the SBA in 1985 should be noted. In conclusion, the very low incidence of labour actions suggests that, in the immediate post-military period, immobilism at the union leadership level was accompanied by demobilization at the grassroots level. This despite the fact that the working class suffered falling real wages and that

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the state continued its anti-labour policies, implementing further measures against labour interests. One reason for immobilism of the labour movement at the grassroots level was the enduring effects of the large-scale demobilization and depoliticization campaign of the military regime. A second reason was the restrictive legal framework for collective labour rights and freedoms along with the heavy hand of the state in labour affairs. Another factor was the fact that the ruling MP’s neoconservative hegemonic project made important advances among the working class. The hegemonic discourse, systematically disseminated by the official media, constantly claimed that the government’s neoliberal economic policy was the only feasible option under the circumstances and that, though that policy might cause some negative effects for some groups in the short run, it would benefit them, as well as the entire nation, in the medium term (Boratav and Yalman 1989, 58). If lower- and middle-income groups would only be patient for a short while, it was claimed, they would reap large benefits later.

CHAPTER 9 THE LABOUR POLITICS OF CONFRONTING NEOLIBERALISM

A gradual move away from a policy of cooperation and toward a strategy of confrontation defined the labour union movement in the latter half of the 1980s. The state’s exclusion of the working class from the political process and its disciplining of labour in the economic sphere by predominantly extra-economic means led to the politicization of labour struggles. At the same time that it weakened and disciplined organized labour, the state became the nationwide locus for labour struggles. In trying to defend their members’ interests, trade unions were compelled to lead a struggle not merely against individual employers or corporations but also against the state. The state thus provided workers with “a sense of totality” of power relations beyond the workplace, individual enterprise, or industry as it systematically repressed their demands and marginalized their interests.1 Mobilization of the trade union movement and politicization of its struggles were neither automatic nor inevitable. This chapter examines the decisions, strategies, and actions of important actors involved in this process at various levels, from the top union leadership to the rank-and-file membership.

The Tu¨rk-Is Strategic Re-Evaluation Failure of the Tu¨rk-Is policy of cooperation and growing pressure from within eventually compelled the union leadership to re-evaluate its

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policy. In its meeting in November 1985, the Presidents’ Council of the confederation acknowledged that “continuation of the well-intentioned dialogue policy created a lot of new problems, contrary to what was expected” (Tu¨rk-Is 1986a, 51– 2). Union leaders unanimously agreed on a series of new actions. These actions included bringing Turkish labour’s complaints to the ICFTU and organizing open-air assemblies and demonstrations as part of the struggle against dominant socio-economic policies (Tu¨rk-Is 1986a, 51 – 3; Tu¨rk-Is Dergisi, November 1985, 6 –10). The agreed actions represented a significant change in the long-standing Tu¨rk-Is position. The confederation had long opposed “taking to the streets” in favour of making deals with the government. The decision to bring Turkish labour’s grievances against the Turkish state to international forums was also an important departure for Tu¨rk-Is. Brewing disquiet in the lower ranks of the confederation was influential in pushing the union leadership to adopt a programme of action. For instance, just ten days before the Presidents’ Council’s November meeting, the provincial and regional representatives of Tu¨rk-Is and the secretaries of affiliated unions urged the Tu¨rk-Is leadership to end its policy of dialogue since the government ignored labour demands and to adopt a nationwide programme of action to protect labour interests (Tu¨rk-Is Dergisi, November 1985, 11 –14). The first step for Tu¨rk-Is in implementing the new programme of action was to bring its complaints against the government and its labour legislation to the ICFTU. The Tu¨rk-Is president heavily criticized the MP government for its anti-labour policies as well as the undemocratic Turkish Trade Unions Law at the ICFTU meeting in Brussels from 17 to 19 December 1985 (Tu¨rk-Is Dergisi, December 1985). This action was symbolically important. At the same time, Tu¨rk-Is abandoned its earlier strategy of trying to soften the existing labour legislation in a piecemeal fashion. This strategy had failed and even appeared to be counterproductive because it allowed the government to choose the least significant proposed amendments for consideration from the Tu¨rk-Is list and then present them as meeting unions’ demands (Cumhuriyet, 12 March 1985). Accordingly, an act amending eight articles of the Collective Bargaining, Strike, and Lockout Act was later passed in the Parliament in June 1986.2 Because the political authority (ab)used some illiberal clauses of the legislation as a stick against trade unions, Tu¨rk-Is withdrew its earlier amendment proposals and announced a new package

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in January 1986 (Tu¨rk-Is 1986a, 121–34; for a review of the package from a legal perspective, see Kutal 1986a, 1986b). The new package demanded fundamental changes in the labour legislation to democratize it in accordance with ILO norms and conventions. More importantly, this time Tu¨rk-Is raised the issue of changing the constitution to remove its restrictions on collective labour rights. Among the constitutional amendments that Tu¨rk-Is wanted was also the recognition of civil servants’ right to unionize. However, its demands for legislative changes did not yet extend to other undemocratic sections of the constitution concerned with civil and political rights and freedoms. In pressing for major changes in the trade unions legislation, Tu¨rk-Is emphasized the discourse that its proposals were along the lines of ILO norms and aimed to bring Turkish legislation into conformity with international labour treaties. By referring to ILO norms, Tu¨rk-Is sought to strengthen its position in relation to the state and employers as well as to obtain support from the ILO. The call for constitutional amendments came in the wake of intense public debates on constitutional reform between the opposition parties on the one hand and the ruling party and president on the other after the spring of 1985. By late 1985, the TPP, SDPP, and DLP seemed to have reached a concordat on the need for constitutional reform. The concordat was concerned primarily with basic civil and political rights and liberties. The policy priorities adopted by the SDPP’s miniconvention of 14 April 1985 centred on democratic reform of the country’s laws (SDPP 1986, 16 – 20). The TPP and DLP also signed a preliminary agreement on 10 January 1986. In it, they pledged to strive for a democratic new constitution (Cumhuriyet, 11 January 1986; Parla 1993, 17 – 18; Turgut 1986, 388 – 90). Increasingly loud calls from the opposition parties for constitutional reform evoked harsh criticisms from the president in defence of the existing constitutional ¨ zal, the 1982 Constitution structure.3 According to Prime Minister O needed to be implemented for at least ten years before anyone should consider changing it (Cumhuriyet, 12 September 1984). As the political opposition started to campaign for pro-democracy legislative reforms, Tu¨rk-Is joined in by demanding abolition of the constitution’s restrictive labour provisions. However, no close cooperation developed between the political opposition and the trade union movement in this respect.

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Protest Rallies Tu¨rk-Is started 1986 with open-air assemblies and marches, first in Balikesir on 8 February. The second and much bigger assembly was in Izmir on 22 February. All 32 affiliates of Tu¨rk-Is and four independent unions took part in the event. Between 30,000 and 100,000 workers from all over the country were reported to have participated in the action. This was the first open-air assembly for Tu¨rk-Is in the past 16 years and only the sixth in its 34 years of existence (Sakallioglu 1991, 64; Teksif 1986, 22). The confederation’s leadership exercised strict supervision over who could participate and which slogans could be chanted lest the action get out of control (Petrol-Is 1987, 217). At the assemblies, the government’s economic policy and anti-labour practices as well as the legal restrictions on unions and democratic rights were protested. Prime Minister O¨zal’s reaction was to hold “union bosses” ¨ zal and anti-government slogans chanted at the responsible for anti-O labour demonstrations. Although the primary target of the protests was the government, the Izmir assembly became an occasion for union members to express their dissatisfaction with the confederation leadership. There were protests from the crowd against both President Sevket Yilmaz and Secretary General Sadik S¸ide (Turkish dailies dated 23 and 24 February 1986). After two months of silence following the Izmir assembly, under increasing pressure from below, Tu¨rk-Is decided to organize further mass actions. More striking was the decision in principle to use the strike action and spread strikes in a coordinated manner. This decision primarily targeted the public sector (Tu¨rk-Is Presidents’ Council’s decisions dated 30 April 1986, in Tu¨rk-Is 1986a, 76 – 8). The widespread feeling among trade unionists that, under the restrictive labour laws, striking was not possible or worth the trouble gradually gave way to the idea that the right to strike must be exercised despite all legal restrictions. This change came about because of great losses in collective agreements in the past couple of years with the attendant disquiet among workers (Ketenci 1990, 276). In accordance with its decision to organize further mass actions, Tu¨rk-Is planned rallies in five cities across the country in the summer of 1986. Four of the rallies were to be held in the cities where there would be by-elections in September. Nevertheless, the provincial governors concerned rejected the Tu¨rk-Is request for permission to hold assemblies under the Assemblies,

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Demonstrations, and Marches Act. Tu¨rk-Is officials instead held press conferences or meetings restricted to union halls in which they discreetly urged workers not to vote for the ruling MP. In other words, Tu¨rk-Is carried out a small-scale campaign against the government party during the by-election period. This represented a significant departure from the confederation’s long policy of non-partisan politics. Tu¨rk-Is, for the first time, thus took a stance against the ruling party during an election. Tu¨rk-Is failed to implement its decision to call strikes in a coordinated manner. Yet there was an important development regarding strike action toward the end of 1986. The strikes up till then had been very small. Two larger strikes started in Istanbul at the end of the year. They were called by two independent unions, the Otomobil-Is at the Netas electronics company, and the Laspetkim-Is at the Derby tire company. These factories that witnessed the first big strikes of the postmilitary years had a history of labour militancy and were organized by non-affiliated unions heir to the more militant unions of the pre-coup years (Dogan 2010, 7).4 The strikes ended several months later after the workers had won most of their demands. Although the economic and political significance of these initial strikes was limited, they played an important role in showing workers and labour unions that, despite the highly restrictive laws, strikes were possible (Koc 1987, 7). Yet a couple of months after the strike at Netas ended, the company laid off over 150 employees. The reason given was the introduction of new technology (Cumhuriyet, 16 May 1987). As unions began to overcome their fears of industrial action, the government also resorted to various tactics of intimidation to undermine the effectiveness of strikes or force striking workers in the public sector to agree to its conditions. Among these scare tactics were threats to close down public enterprises and lock out workers. The most “creative” tactic employed by the government was to reduce or abolish custom duties or lift the import ban on goods produced by private or public enterprises where union members either went on strike or decided to do so (for particular cases, see Dogan 2010; and Koc 1991b, 70 –89).

Same Union Leadership but Changing Policies? The division within Tu¨rk-Is had become even deeper by its December 1986 convention. The convention witnessed fierce competition among

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different groups.5 The social democratic group, which renamed itself “democratic opposition”, bid for the confederation leadership. The centre-right wing in control of the current administration was also challenged by the faction further to the right. That the dominant right wing of the confederation was divided seemed to have increased the chances of the social democrats. They competed on a platform emphasizing the need for an alternative conception of labour unionism. Their programme promised union democracy, stressed the importance of labour struggles for the country’s democratization, urged an effective use of strikes, including general strikes, and opposed neoliberal economic policy. It rejected the above-party politics policy while wanting to protect unions’ independence from political parties (PetrolIs 1987, 248 – 53; Petrol-Is Dergisi, December 1986). The incumbent president and all four candidates on his list for the Executive Committee won the elections by a small margin over the social democratic group’s list. The group challenging the incumbent administration from the right also received significant votes from delegates (Cumhuriyet, 29 December 1986; Petrol-Is 1987, 240). The confederation’s 14th General Convention did not result in a substantial change in the leadership. Nor were there important changes in the top cadres of affiliated unions whose congresses had taken place in the months leading up to the Tu¨rk-Is congress. Sevket Yilmaz maintained his position as Tu¨rk-Is president. Three members of the five-member Executive Committee were replaced, however, by candidates from Yilmaz’s list, including the controversial secretary general, Sadik S¸ide. Thirty-eight of the 49 Presidents’ Council members of the 1983–6 period were also in the new Presidents’ Council for a three-year term.6 In other words, turnover in the affiliates’ leaderships was also minimal. The convention brought Tu¨rk-Is further toward an active stance and away from its traditional collaborationism even though the same unionists continued to occupy the leadership posts. It declared 1987 the year of action. The convention’s adjourning resolution was far-reaching in its demands for reform of the legal and political order to further democratize the political system and remove the restrictions on collective labour rights. Tu¨rk-Is also formally stated for the first time its opposition to the ban and trial of DISK, albeit without mentioning DISK directly in the resolution.7 Announcement of the court verdict

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dissolving DISK and sentencing its officials to varying years of imprisonment coincided with the Tu¨rk-Is convention. This coincidence prompted Tu¨rk-Is unionists to condemn the persecution of DISK in the convention resolution (Petrol-Is 1987, 253– 6; 14th General Convention Resolution, Tu¨rk-Is 1989b, 3– 5). Another important resolution was concerned with the American–Asian Free Labour Institute (AAFLI), whose influence had considerably increased in the Turkish labour movement during the military regime (Chapter 6). From 1985 on, there was increased internal opposition to close relations between Tu¨rk-Is and the AAFLI (Koc 2009, 24). The resolution called for ensuring the independence of Tu¨rk-Is educational programmes from the institute (Cumhuriyet, 27 December 1986; Isikli 1987b, 5). Soon after the convention, the new Tu¨rk-Is administration decided to submit to the government once more a package containing labour demands before adopting a new programme of action. But the government did not show any inclination to respond to the demands (Ketenci 1990, 279; Petrol-Is 1988, 231). The confederation leadership was thus left no choice but to implement the convention resolution declaring 1987 the year of action. The programme of action as approved by the Presidents’ Council on 16 March 1987 included walking to the National Assembly building to present a petition, a series of assemblies and rallies in various provinces, and a nationwide campaign to inform the public of the anti-labour position of the government. An interesting part of the programme read as “to start to execute the principle of ‘productivity according to wages paid’”. Its actual meaning was a work slow-down (C¸avdar 1989, 8). Since slowing down work was legally banned, it was reasonable that union leaders used a coded phrase for this form of action. At the same time, the leaders of Tu¨rk-Is member unions often began to speak of a general strike and threaten to call one. Some of them were no doubt insincere, hence undermining their credibility. The Tu¨rk-Is action plan of 16 March, for the first time, mentioned the possibility of a general strike. But it was not among actions included in the programme (Tu¨rk-Is 1989a, 59 –60; 1989b, 193– 5). According to Tu¨rk-Is president Sevket Yilmaz, “the last thing to do is not to be done at the start” (Milliyet, 17 March 1987, 14). It is important to note that, in response to Tu¨rk-Is union leaders’ talk of a general action or strike, the Hak-Is confederation’s Presidents’ Council issued a public statement criticizing such talk. It claimed that a

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general strike or a similar labour action was “premature and unnecessary” at that time, especially since Tu¨rk-Is unions had not yet adequately used the legal strike action to get better collective agreements (Milliyet, 16 March 1987, 9). Thus, the labour union movement was divided on the question of which kinds of action should be carried out and specifically whether unionists should defy the law by calling a general strike. Those opposed to more militant actions and a general strike carried the day. As part of the programme of action, about 700 Tu¨rk-Is unionists wanted to march from the confederation’s headquarters in downtown Ankara to the Parliament on 24 March. The purpose was to submit a petition in which labour problems and demands were explained (the full text is in Tu¨rk-Is 1989b, 15 – 19). The unionists found themselves barricaded by the police. After an hour-plus scuffle and argument with the police, the Tu¨rk-Is president called it quits, while some unionists insisted on completing the march despite police barricades.8 The government’s response was to defend the police action and call the march unlawful, whereas the major opposition parties condemned the incident and criticized the government for not tolerating even the smallest expression of workers’ problems (Cumhuriyet, Milliyet, and other dailies, 25 March 1987). In the wake of the failed march, Tu¨rk-Is continued to implement its programme of action by organizing several assemblies in different cities. At the demonstrations, both unionists’ speeches and workers’ slogans identified the MP government with its anti-liberal politics and anti-labour, pro-capital policies as the main obstacle to the realization of labour demands (Cumhuriyet and Milliyet, 27 April 1987, 11 May 1987; Petrol-Is 1988, 232– 6). Tu¨rk-Is thus couched the struggle for labour interests primarily in terms of a struggle against the MP government and its policies. An important factor behind the Tu¨rk-Is move toward a more active strategy was the emergence of major initiatives at the lower ranks of unions. Most important in this regard was the creation of horizontally organized “platforms of union branches” starting in 1987. The “branch platforms” were independent of central union administrations, and they were able to act outside the formal union hierarchy. They brought pressure on the Tu¨rk-Is Executive Committee as well as union leaders for a more active strategy of membership mobilization (Mahirog˘ullari 2005, 328). The branch platforms later played a major role in the grassroots activism of spring 1989.

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Tu¨rk-Is Political Campaigns One of the most important developments in the trade union movement in the 1980s occurred when Tu¨rk-Is abandoned its traditional policy of non-partisan politics. It led a nation-wide political campaign against the ruling party for the first time in its history, aside from a small-scale campaign during the by-elections of September 1986. There were actually two separate but related political campaigns by Tu¨rk-Is during the period. The first was a “yes vote” campaign during the referendum of 6 September 1987 on a proposal to repeal provisional Article 4 of the constitution, which barred 242 pre-1980 politicians from active political life for a ten-year term. The second was a “no vote” campaign against the ruling MP in the early general elections of 29 November 1987. In the confederation’s entire history since its foundation in 1952, there had been only one attempt to organize a political campaign in the sense of taking an active political stance during elections. This campaign had taken the form of blacklisting anti-labour deputies in the National Assembly during the 1965 general elections. The campaign had not been against or in favour of a particular political party (Agrali 1967, 188– 90; Isikli 1972, 311; Mumcuoglu 1979, 197– 8; Tu¨rk-Is 1966, 120– 32). The 1965 campaign had not violated the above-party politics policy that Tu¨rk-Is had adopted in its 1964 General Convention. The political context was important for the Tu¨rk-Is decision of a political campaign against the ruling Motherland Party. The MP government came under great public pressure, after the mid-1980s, to lift the constitutional ban on ex-politicians. The government tabled a package of constitutional amendments in May 1987 that included lifting of the ban. Its objectives were first to respond to mounting public pressure and disarm critics, who claimed that the ruling party was sheltering behind undemocratic restrictions, and second to improve Turkey’s chance of admission into the EEC (Finkel and Hale 1990, 108). The government had applied for full membership in April 1987. The opposition parties were in favour of the restitution of political rights of former politicians. The government decided to submit the constitutional amendment for abolition of the political ban to a referendum. The date for the referendum was 6 September 1987. In the pre-referendum campaign, the official position of the government was neutrality. Nevertheless, the government and MP officials made it

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starkly clear that they favoured keeping the ban. Against the ruling MP’s reticent “no” campaign, all of the opposition parties organized a “yes” campaign. As a result, the referendum became at the same time a vote of confidence for the ruling MP. The Tu¨rk-Is campaign was called “yes for a democracy without any bans”. As part of its campaign, Tu¨rk-Is organized conferences, distributed thousands of leaflets and buttons, and issued press releases from July to September. In the campaign, Tu¨rk-Is and its affiliated unions urged workers and the general electorate to vote yes in the referendum. The campaign framed the yes vote not only as a vote for abolition of the undemocratic ban, hence for democracy and human rights, but also as a vote of no confidence against the ruling party.9 Unionists were worried that, if the referendum rejected the constitutional amendment, the governing party’s position would be strengthened. Hak-Is and several non-affiliated unions also urged a yes vote. Hak-Is had stood close to the MP partly because the latter’s amalgamation of an ideology of marketbased entrepreneurialism with socially conservative values and its emphasis on the freedom of religion appealed to the Islamist tendencies among Hak-Is unionists (Mahirog˘ullari 2005, 411). Hak-Is support for the yes vote in the referendum was a departure from its earlier position.10 Organized labour started weakening the restrictive legal structure. The Tu¨rk-Is referendum campaign defied, if not violated, the legal prohibition of trade unions from political activities. Relations between Tu¨rk-Is and the government became further strained. The ministers of labour and internal affairs threatened Tu¨rk-Is with legal action for engaging in political activities (Petrol-Is 1988, 238; Sakallioglu 1991, 67). The republic prosecutor of Ankara pressed charges against the Tu¨rkIs Executive Committee for violating the ban on trade unions’ political activities because of its referendum campaign. The trial of Tu¨rk-Is leaders concluded with acquittal. The court ruled that the Tu¨rk-Is action was an instance of freedom of expression and not a political action (Tu¨rkIs 1989a, 357–69). In this case, the court defined “political” in narrow terms. Nevertheless, prosecution under this restrictive provision of the Trade Unions Law remained an imminent threat. There was not a clear definition of “political” in either the legislation or the jurisprudence (C¸elik 1988, 352). Thereby, the legal provision was wide open to subjective interpretations by the courts. In the mid-1980s, this provision was invoked by prosecutors, on a number of occasions, even

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regarding events such as visits by trade union leaders to opposition party leaders or visits by political party officials to striking unions to show their solidarity.

From the Referendum to the National Election The referendum on the constitutional amendment to repeal the ban on pre-1980 politicians resulted in a narrow victory for the yes vote. The proposal was approved by less than a percentage point: 50.16 per cent yes versus 49.84 per cent no. The ruling MP cleverly turned defeat into victory by interpreting the strength of the no vote as a vote of confidence (Abadan-Unat 1989, 27). Calculating that most of the no voters in the referendum would vote for the MP, as well as to allow as short a time as possible for former politicians’ return to active political life, the government called an early general election. It was scheduled for 29 November 1987, over a year ahead of schedule. Tu¨rk-Is took an active stance in the elections. During the days leading to the elections, its leadership and its affiliated unions led a major campaign against the MP.11 Even unionists at the right-wing end of the labour movement and relatively closer to the MP could not oppose the anti-MP election campaign (Ketenci 1990, 280). The Tu¨rk-Is campaign was clearly against the governing party but not in support of any other party. The Tu¨rk-Is leadership simply stated that they found the platforms of the centre-right TPP, the centre-left SDPP, and the DLP relatively favourable to labour interests. Avoidance of even a discreet call for support of one particular political party was due not only to the prohibition of trade unions’ political activities but also to the lack of ideological unity and the presence of sympathizers of different political parties (mostly centre-left and centre-right) in the ranks of the confederation. Pro-MP unionists had become a rarity, however.12 Hak-Is did not take an active position in the elections, unlike in the referendum. Officials of the two confederations for the first time held a formal meeting several weeks before the elections, on 9 November, upon the initiative of Hak-Is. The purpose of the meeting was to examine possibilities for cooperation. Following the meeting, the two organizations announced their agreement to seek a common strategy for removing the legal restrictions on labour rights after a new government and a new Parliament were formed (Joint Statement dated 10 November 1987, Hak-Is 1989, 71). The agreement involved not

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cooperation in the election but a plan to present a unified front vis-a`-vis the new government to emerge from the election. This cooperation did not materialize. One reason was that Tu¨rk-Is continued to see itself as the only legitimate representative of workers because it was the biggest labour organization and that, from its point of view, labour solidarity meant, above all, organizing within one confederation (which of course meant Tu¨rk-Is).13 Another reason was ideological difference between the two confederations. The dominant orientation in Hak-Is was Islamist, though it gradually moved away from its earlier predominantly Islamist discourse. Tu¨rk-Is, on the other hand, was a strong supporter of the official traditions of secularism.14 This ideological divide hardly defined the membership of Hak-Is and Tu¨rk-Is, however, as attested by the fact that many former DISK members joined either Tu¨rk-Is or Hak-Is following the military regime’s banning of DISK. The MP came first in the 1987 election. But its vote fell from 45.2 per cent in 1983 to 36.3 per cent in 1987. The labour unions had invested great hopes in the election and were bitterly disappointed in the outcome. Since the MP suffered a drop in its vote, Tu¨rk-Is was still able to claim a victory before the public (Sakallioglu 1991, 67). Yet the ruling neoconservative party still received considerable support among the working class despite the worsening of its living standards as a result of the government’s neoliberal economic policies. After the election ¨ zal went results were announced, Prime Minister and Chair of the MP O on the offensive against the trade unions and claimed that “the election results have proved that the trade unions do not represent workers” (Ayin Tarihi, November 1987). The election outcome was an indication of the extent to which the hegemonic project of Turkish big capital, as articulated by the MP, had accomplished its political objective. This situation did not necessarily translate into “labour peace” in the workplace. Industrial disputes and wage grievances were growing. There was a sharp increase in the number of strikes in the private sector in 1987. The total number of strikes rose from 21 in 1986 to 307 in 1987, and the total number of workers on strike increased from 7,926 to 29,734. And 304 of the strikes and 23,227 of the striking workers were in the private sector (Tables 8.5.1 and 8.5.2). But increasing working-class unrest in the sphere of industrial relations did not immediately get channelled into politics. Nevertheless, industrial blue-collar workers, the most likely to unionize,

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were the least supportive of the MP compared with other sections of the working class in the November 1987 election (Boratav and Yalman 1989, 56).

The New MP Government and the Threat of a General Strike Tu¨rk-Is faced a dilemma after the election. The party that it had campaigned against was to govern the country for another five-year term. The election trauma once more immobilized the confederation. The Tu¨rk-Is officials adopted a “wait and see” policy and sought to establish relations with the new government. This policy soon came under attack from a number of Tu¨rk-Is affiliates, such as Petrol-Is, Deri-Is, Agac-Is, Tu¨mtis, and Tes-Is. Independent unions such as Otomobil-Is also criticized the passive position of Tu¨rk-Is (Cumhuriyet, 9 January 1988). What sparked such criticisms was the government’s announcement of steep price increases on various goods and services of public enterprises, including basic consumption goods. The effect was a reduction of the purchasing power of wages. But despite pressure from both within and without, the meeting of the Tu¨rk-Is Presidents’ Council in January 1988 resulted in a de facto approval of the wait and see policy. No new programme of action was decided on, reflecting the stalemate of the country’s largest labour organization. It was, ironically, a joint state – employer action that helped Tu¨rk-Is to overcome its stalemate. In the face of growing labour unrest, the employers’ confederation, TISK, and the public employers’ associations announced in early February a one-off lump sum pay increase to provide some compensation for the decline in real wages.15 The labour unions were also pressing for an additional pay raise because of the higher than expected inflation rate. However, they were left out of the process of determining the additional increase. TISK and the government made the decision outside the framework of any collective agreement. Hence, the government and employers could present the pay raise as a unilateral concession on their part. This tactic was in line with the governing party’s strategy of undermining labour organizations and obtaining the political support of individual workers as voters. The joint act of the government and TISK that bypassed labour unions in an area considered a principal domain of labour unions was the main factor that impelled Tu¨rk-Is to adopt more militant actions. In an extraordinary meeting on 10 February, the Tu¨rk-Is Presidents’ Council

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agreed for the first time to include a general strike in its plan of labour actions. Tu¨rk-Is had no real experience of a general strike. Over the course of its existence, it had made only two real attempts: a two-hour work stoppage on 31 December 1970 (Koc 1991a, 43 – 6) and a partial attempt at a province-wide work stoppage in Izmir on 16 June 1975 (Bianchi 1984, 223; see also Tu¨rk-Is 1976, 295– 300). In addition to the threat of a general strike, the Tu¨rk-Is programme of action included a nationwide lunch boycott (i.e., refusing meals served at the workplace) sometime in March and a two-hour sit-in in May. These three actions were not among the recommendations of the Executive Committee. They were included because of the insistence of a growing number of member union officials for more effective action. Not all Tu¨rk-Is officials were in favour of such militant action. The then secretary general of the confederation, Emin Kul, refused to sign the programme of action, thus causing a crisis. The confederation almost went to an extraordinary general convention as a result (Koc 1989a, 42). Although more and more union leaders agreed that the traditional Tu¨rk-Is policy was bankrupt, the intra-union struggle between those who supported the strategy of mobilizing the rank and file and those who were opposed to burning all bridges to the government was not entirely over. The more the government rejected or ignored labour demands and tried to weaken labour unions, the further the intra-union power balance shifted in favour of the more militant group. The union movement continued to face prosecution on the grounds of violations of the trade unions and collective bargaining acts. Inclusion of a general strike in the Tu¨rk-Is programme of action led the republic prosecutor of Ankara to instigate penal proceedings against the Presidents’ Council. The prosecutor charged members of the council for having incited workers to go on a general strike in violation of the Collective Bargaining, Strike, and Lockout Act. The trial concluded with acquittals in December 1988. Despite the threat of prosecution, Tu¨rk-Is unionists continued to speak of a general strike but instead opted for safer actions. These actions included a general lunch boycott on 11 March 1988 and two assemblies in March and April. A number of independent unions and civil servants in many public offices also supported the lunch boycott. Participation among workers was very high despite TISK’s threat that employers would give the names of participating workers to public prosecutors (Cumhuriyet, 11 and 12

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March 1988). This showed that workers were gradually overcoming their fears of labour actions in spite of extensive legal restrictions and state repression. Lunch boycotts as a form of labour action were not new to the Turkish working class. Heavy restrictions on the political and industrial actions of trade unions in the 1983 labour legislation gradually led to the rediscovery, or innovation, by workers and unions of such forms of action not anticipated in the law. This type of action either defied the restrictive legal framework without technically violating it or fell into the grey area between legality and illegality. Such actions included medical visits en masse during work hours, refusing to work overtime, refusing to get on service buses and instead collectively walking to work barefoot, and the like. These labour actions attracted a great deal of media attention and won public sympathy. The “non-codified” forms of labour action gained momentum from 1987 on and reached a new level in the spring of 1989, only to be surpassed in the early 1990s. Such labour actions developed parallel to an increase in strikes and not only as an alternative to strikes (Tables 8.5.1 and 8.5.2). While workers denied the right to strike got around the legal ban through non-traditional forms of labour action, workers on the verge of or already on strike resorted to various actions not defined in the law to back the weakened strike action. Declining real wages and social benefits, worsening work conditions, employers’ use of various tactics to intimidate union members and weaken labour unions, and the MP government’s turning a deaf ear to workers’ concerns were the major complaints and issues in the strikes and labour actions of these years. Collective agreement negotiations also often failed (more so in the private sector than the public sector) because of disagreements over administrative and managerial issues such as out-of-scope employees, workplace disciplinary committees, and overtime work. The labour unions of different political leanings and workers gradually overcame their earlier sense of hopelessness and started using both strikes and other forms of labour action to defend their interests. The MP government continued its various tactics of intimidation, ¨ zal especially in the public sector. For example, Prime Minister O threatened to shut down the Seydis¸ehir Aluminum Facilities when workers went on strike there. But these workers received significant support from the local community (Milliyet, 30 July 1987, 12). The strike continued for two months and ended with a collective agreement.

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Private sector employers also resorted to various measures to weaken strikes and force workers to return to work. Such measures included lockouts, lockout threats, opening new facilities, outsourcing,16 and illegally hiring new employees to do the work of striking workers. The MP government’s concerted efforts to turn trade unions into inept organizations and discredit them in the eyes of workers had the counter-productive effects of pushing the union leadership toward a more militant position and of politicizing industrial relations. The transformation of the state into an arch-employer and the institution of centralized political control over the collective bargaining system resulted in a situation in which trade unions were not able to obtain satisfactory collective agreements for their members. Unions came under increasing pressure from their members, whose discontent was rapidly growing. The government systematically tried to turn workers’ growing dissatisfaction with the performance of trade unions into a mass movement of deunionization. This tactic was not effective; no mass resignations from trade unions occurred. Workers continued to believe in the importance of organizing to defend their interests. They did not, however, establish new unions or different organizations as alternatives to the trade unions with which they were disillusioned (Koc 1989a, 48– 9; 1991a, 52). According to official statistics, the size of unionized labour continued to expand in the post-military period. Both the number of unionized workers and the proportion of unionized labour to all wage and salary earners increased (Table 8.1). Official union membership figures were somewhat exaggerated because not all of those who ceased to be duepaying members for various reasons (e.g., layoff, retirement, or change in branch of work) were immediately dropped from the statistics. But official figures for July 1989 and immediately following years were very close to actual union membership. That was because an amendment in the Trade Unions Law in May 1988 required that trade unions had to renew, within a year, their membership records. The result was a visible fall in the number of unionized workers in the Ministry of Labour’s July 1989 statistics (Table 8.1). Some of the decline was actually due to the failure of some unions to comply with the requirement on time (Koc 1991a, 106). So, though the actual number of union members was lower than the official number, it still tended to increase in the latter half of the 1980s. Workers remained in or joined trade unions despite the

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government’s anti-union campaign. They also provided significant support for various protest actions organized by unions. Besides, they started engaging in numerous collective actions in a spontaneous manner, beyond the control of union leaders.

The Government’s Attempts at Reconciliation The spread of labour actions and the increased militancy of the trade union movement forced the government to re-evaluate its exclusionary policy. The prime minister invited Tu¨rk-Is to a summit meeting on 30 April 1988. The last such meeting had been three years earlier. The government scheduled separate summit meetings with the major ¨ SIAD), the Union of the business associations (TISK, TOBB, TU Chambers of Agriculture, and the Confederation of Artisans and Shopkeepers to discuss their complaints and demands. Whereas the government’s meeting with Tu¨rk-Is occurred after three years of minimum contact with representatives of organized labour, there had been frequent contact between the prime minister, cabinet ministers, and high-ranking bureaucrats on the one hand and business associations and big business on the other during the same period (Chapter 2). Two major issues dominated the meeting between the government and Tu¨rk-Is: wages and amendment of the labour legislation. Unlike in the previous summit meetings several years earlier, the government was rather conciliatory this time. It agreed to set up a commission to investigate the erosion of real wages by inflation in response to the Tu¨rk-Is wage demand. The government’s response regarding the Tu¨rk-Is demand for amendment of the labour legislation was also encouraging. A bill to amend some provisions of the Trade Unions Act was under preparation by the Ministry of Labour and Social ¨ zal proposed that the minister of labour meet Security. Prime Minister O a second time with Tu¨rk-Is to discuss the draft bill, and in the case of disagreement he agreed to meet with Tu¨rk-Is again. Union leaders welcomed the suggestion (Cumhuriyet, 1 and 3 May 1988; TU¨BA, IIC¸B No. 653, 9 May 1988, 5). The government’s move to placate organized labour was matched by a change of heart among employers about how to deal with “the labour question”. In the government– business summit, TISK president Halit Narin warned of the possibility of social explosion and stressed that wage increases should not fall below the inflation rate. However, he also asked

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the government to take necessary measures to reduce interest charges on credits as well as taxes and social premiums for employers so that they could afford higher wages. The other two business associations also complained of high interest rates on industrial credits, rising inflation, and high taxes on business (Baydur 2008, 156; Cumhuriyet, 1 and 2 May 1988). Rising labour activism clearly worried employers. To prevent further labour unrest, TISK expressed its willingness to concede a real wage increase and advised the government to do the same in the public sector. The summit was followed by a collective agreement in the public sector. The agreement was a sort of compromise. The wage increase was higher than what the government and public sector employers’ associations had initially offered but lower than what Tu¨rk-Is had demanded (Cumhuriyet, 7 May 1988; Tu¨rk-Is 1989a, 131 – 2). It was significantly higher than wage increases in previous years. It was not “dialogue” but increasing labour activism that led the government to concede a higher wage increase. Nevertheless, the agreed pay raise was far from compensating for real wage losses over past years. By the end of 1988, real wages had been further eroded because of high inflation. According to official figures, average real wages declined by 14.8 per cent in the public sector and 4.9 per cent in the private sector (Table 3.2). There was no concerted effort by the government to tackle the problem of high inflation. When prices could freely be determined, high inflation turned into a tax on fixed incomes, including wages, and a mechanism of income transfer from wage earners to capital and the government budget. The Tu¨rk-Is leadership’s pay agreement with the government provoked a strong reaction from lower union echelons and workers. They accused Tu¨rk-Is officials of collaborating with the government instead of implementing the previously adopted programme of action (Cumhuriyet, 9 May 1988). This event demonstrated two things: first, the extent of distrust of the Tu¨rk-Is leadership within the union movement; second, the union membership’s great distrust of deal making by the central labour organization and state officials at the top level in light of recent experiences. Organized labour –state relations had reached a critical point where compromises with the government that did not satisfy expectations of the union membership now appeared likely to be frustrated by newly (re)gained activism at the grassroots level. Union

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leaders had to respond to pressure from below or risk losing legitimacy. The Tu¨rk-Is affiliate C¸imse-Is called a strike in twenty-four public workplaces immediately following the pay deal struck between the Tu¨rk-Is leadership and the government. Union officials announced that they did not accept the deal (Ayin Tarihi, 10 May 1988; Cumhuriyet, 11 May 1988). A number of other Tu¨rk-Is affiliates also went on strike in the public sector in the second half of 1988. The government’s reconciliation attempts continued with a series of changes to the Trade Unions Law and Collective Bargaining, Strike, and Lockout Law, passed by the National Assembly on 25 and 27 May 1988.17 The trade union movement refused to support the amending bills on the ground that they did not bring any substantial democratization of the labour legislation. The amendments were mostly “cosmetic”, as the press dubbed them. In other words, the amendments left major restrictions untouched and introduced small concessions of lesser significance. Several of the changes were not concerned with substance at all. Consequently, trade unions heavily criticized the legislative changes before both the Turkish public and the ILO because the most serious restrictions on trade unions remained intact (Cumhuriyet, 13 and 28 May 1988; International Labour Conference, Record of Proceedings, 75th Session, 1988, 13/26 – 27, 28/51). The amendment that caused the most controversy among union members and in the media was extension of the number of times that current union officials were eligible for re-election. The Trade Unions Act had introduced a limitation on the number of times that a person was eligible for office in the mandatory organs of trade unions. The maximum limit was four consecutive terms. A provisional article of the act allowed union officials who had already served, as of the date of the Trade Unions Act becoming effective, four or more consecutive terms to be re-elected two more terms. By an amendment to the provisional article, the number of consecutive mandates was increased from two to four for union officials who had already served four terms as of May 1983 and from four to eight for those who had not completed a four-term mandate as of the same date. This extension was a provisional regulation affecting only current union officers. Otherwise, the limitation remained in force. The present government or future governments could still use this restriction as an influential bargaining chip against union

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officials. The ruling MP thus made a concession to the professional interests of current union officials. It appears ironic that the MP government would save the same union leaders whom it repeatedly described as “union bosses”. This concession can be considered as an olive branch from the ruling party to union leaders. Another important reason can be found in a speech given by the ¨ nsal, in a general secretary of a public employers’ association, Naci O ¨ seminar in January 1988. Onsal stated that, “unless the legislation was amended, about two thousand experienced union officials would be leaving their office by the end of the next year”. He went on to say that “the government cannot risk such vacuum and turmoil. This is a big danger to social peace. . .” (quoted in Ketenci 1988). While union leaders had gradually become more militant and taken a political stance against the governing party, there was no guarantee that, when old union leaders were legally forced to leave their posts en masse, unions would not fall into the hands of more radical leaders.

Internationalization of Domestic Class Struggle and Internalization of International Pressure Although amendments to the trade unions legislation did not abolish major restrictions, it is important to probe the factors that led the MP government to pass such amendments. Doing so requires an examination of the interplay of domestic and international forces. In examining this event, the analytical distinction between “internal” and “external” dissolves. This warns against treating the distinction as an ontological absolute rather than an analytical construct. Keck and Sikkink’s boomerang model is helpful in explaining interaction of Turkish labour unions with international organizations in bringing pressure on the government to democratize trade union laws. The boomerang model posits that, when faced with repression or “blockage” at home, domestic non-state actors “bypass their state and directly seek out allies” in the international arena to bring pressure on the state from outside to effect desired political changes at home. The international contacts of domestic social movements and non-governmental organizations help to get their issues and demands onto the international agenda and then “echo back these demands into the domestic arena” (Keck and Sikkink 1998, 12 – 13).18 Keck and Sikkink emphasize state repression or an unresponsive

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state in explaining when and why domestic actors seek international allies. But as this study of the Turkish case shows, the effect of state repression or “blockage” at home is far from direct and automatic in motivating domestic non-state actors’ turn to foreign states and international organizations. The concerted efforts of Tu¨rk-Is to internationalize Turkish labour’s demands were a consequence, to a significant extent, of growing labour discontent and activism at home. Removal of extensive legal restrictions on organized labour was a primary demand of the trade union movement. Amendment of the trade union legislation was partly a response to pressure from organized labour at a time when it started to strengthen its position through collective struggles. This labour demand received the support of the two major opposition parties, the SDPP and TPP. It thus found expression in the legislative apparatus of the state. In March 1988, the two parties reached a deal in principle on democratization of the constitutional provisions regulating collective labour rights. Their references were ILO and European labour norms. Opposition parties’ support for the democratization of labour legislation strengthened the union movement’s position and put pressure on the government.

The ILO: A Source of External Pressure and an International Stage for Turkish Labour Struggle From the early 1980s on, Turkey had permanently occupied a place in the reports of the ILO supervisory organs, the Committee on Freedom of Association and the Committee of Experts on the Application of Conventions and Recommendations, for its violation of basic trade union rights, free collective bargaining, and the right to strike. Turkey was also constantly brought on the agenda of the Committee on the Application of Standards (previously Conventions and Recommendations) of the Annual International Labour Conference, the highest body of the ILO, for the same reason.19 In its 1983 meeting, the ILO Committee on the Application of Conventions and Recommendations had included a special paragraph on Turkey in its report, which stated that the recently enacted Turkish Trade Unions Law and the Collective Bargaining, Strike, and Lockout Law were not in conformity with the ILO Right to Organize and Collective Bargaining Convention (No. 98), which Turkey had ratified in 1952. “It hoped that the situation would be improved soon.”20 When

THE LABOUR POLITICS OF CONFRONTING NEOLIBERALISM 231

the civilian government took over from the military regime in November 1983, it was faced with ILO recommendations that the Turkish state bring its labour legislation and practice into conformity with the ILO Constitution and conventions that it had signed. The MP government’s initial response was to emphasize the progress made compared with the military regime period, such as the resumption of trade union activities, collective bargaining, and the right to strike, and to defend existing labour legislation.21 The government tried hard to convince the ILO that the labour acts were in conformity with the ratified ILO conventions,22 but to no avail. At the same time, it tried to appease the ILO by consenting to a direct contact mission at the 1984 International Labour Conference with regard to the application of Convention No. 98 in particular and the state of industrial relations in general (International Labour Conference, Record of Proceedings, 1984, 35/13, 35/46). Neither the direct contact mission nor persistent calls of the Application Committee and supervisory organs moved the Turkish state to amend the restrictive labour legislation. From the mid-1980s, the International Labour Conference was a primary forum for the Turkish trade union movement to internationalize the Turkish working-class struggle. Tu¨rk-Is unionists23 started criticizing with increasing intensity the country’s trade union legislation and the government’s actions in the ILO annual conferences after 1985.24 Tu¨rk-Is supported ILO decisions concerning the Turkish state’s violations of its international obligations under the ILO Constitution and ratified conventions. It also sought to mobilize the support of workers’ representatives in the ILO’s organs, particularly labour members affiliated with the ICFTU, of which it had been a member, and ETUC (Tu¨rk-Is 1989d).25 The objective was to keep the Turkish case on the ILO’s agenda to put pressure on the Turkish state. The ILO’s decisions concerning Turkey attracted a great deal of attention from the Turkish media and thus became widely known to the public. This gave further credence to, and bolstered Turkish unions’ demands for, legislative changes vis-a`-vis the state and employers. International pressure from the ILO was thus internalized at the same time that the Turkish labour struggle was internationalized.

The Turkish Government and Employers in the ILO The tripartite composition of the ILO organs allowed Turkish employers to defend their interests alongside and in opposition to Turkish labour

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representatives. TISK’s role was to defend the Turkish labour legislation in the ILO and stem pressure from the organization on the Turkish state.26 Thus, the ILO became the stage for a power struggle between the Turkish labour union movement and the Turkish employers’ organization. The ILO was not simply a passive stage but an agency with its own norms that favoured the labour side in this power struggle. TISK’s overall position was that Turkish trade union legislation was in compliance with ILO conventions and therefore did not need to be changed. At the 1986 International Labour Conference, Turkish employers’ delegates27 launched a campaign to obtain support especially from employers’ representatives and government officials from other countries (Cumhuriyet, 10 June 1987). They continued this campaign for several more years. Turkish employers’ representatives failed to obtain the support of other employers’ delegates, however. Employers’ representatives in the Application Committee were less critical and more conciliatory concerning the Turkish case than labour members were. Yet they agreed that Turkish labour legislation had to be amended to remove excessive restrictions on trade unions and collective bargaining that were in contravention of ILO conventions (International Labour Conference, Record of Proceedings, 1984, 35/45– 6; 1985, 30/63– 64; and 1987, 24/56–8). As members of an ILO organ whose mandate was to monitor member states’ compliance with ILO conventions and recommendations, employers’ delegates as well as labour and government members on the committee were bound by ILO conventions in examining particular cases. Turkish employers’ representatives found themselves isolated in the ILO as a result. This was not enough to convince TISK to withdraw its opposition to amendment of the trade union acts. Nevertheless, it was compelled to modify its role in the ILO from vocal opposition to a low-profile one.28 There was also a shift in the Turkish state’s ILO policy. The government abandoned its earlier and unsuccessful policy of defending the restrictive labour legislation before the ILO in favour of a preemptive strategy in 1986. It requested a technical advisory mission from the organization. The mission took place on 21 –25 April 1986. Its mandate was limited to examining amendments that the minister of labour and social security had drafted with respect to their (in)compatibility with ILO Convention No. 98. Following the ILO mission, the minister promised to take necessary measures to comply

THE LABOUR POLITICS OF CONFRONTING NEOLIBERALISM 233

with the ILO convention. He also pledged that ongoing tripartite consultation would be the basis of review of the industrial relations legislation (ILO, Committee on Freedom of Association, 245th Report, May– June 1986, 8402n/v.2; International Labour Conference, Record of Proceedings, 1986, 31/41). The government thus formally acknowledged that the trade union legislation was not in conformity with the ILO’s basic trade union rights. A bill amending the Collective Bargaining, Strike, and Lockout Act was approved by the Parliament on 3 June 1986. It was just one day before commencement of the International Labour Conference. The government thus intended to send a message to the ILO that it was willing to amend the labour legislation as it had promised. The approved amendments had nothing to do with the substance of the act. They aimed to solve practical difficulties arising during implementation. This undertaking shortly before the ILO conference sufficed for the Application Committee not to discuss the Turkish case at that time, but it concluded that “it expected the Turkish government [to] keep its promise in the shortest possible time” (International Labour Conference, Record of Proceedings, 1986, 31/41). In a communication dated 17 March 1987, the Turkish government, for a second time, requested a technical advisory mission from the ILO. It stated that it was preparing new legislative changes and that the object of the mission would be to have consultations on the proposed amendments. The mission took place from 22 to 29 April 1987. Subsequent to the mission, the government sent another letter dated 8 May 1987. It reiterated its earlier pledge to take all necessary measures to bring the laws into full compliance with ILO principles and standards (ILO, Committee on Freedom of Association, 252nd Report, May 1987, 8564n/v.3). The government’s simple reassurance was not sufficient this time to prevent the case of Turkey from being discussed in the Application Committee of the International Labour Conference in June 1987. The committee, particularly its labour members, including Turkish workers’ representatives, harshly criticized the labour situation in Turkey and the government for not honouring its promise and using delay tactics (International Labour Conference, Record of Proceedings, 1987, 24/56– 8). In its conclusion, the committee once again “expressed its concern with regard to the serious divergences which still existed between the national legislation and practice, and Conventions Nos 98 and 111 in spite of the promises which had been made by the

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government on several occasions”. It “expressed the hope that these promises would be fulfilled in the very near future”. The committee this time went further than just expressing concern and hope. It concluded that, “if this was not the case, the Committee would be obliged to have recourse to other means with a view to ensuring conformity with the Conventions” (ibid., 24/58). Yet what these other means would be was not explained. The ILO lacked effective instruments and powers of enforcement. But it still mattered. As explained earlier, the Turkish Parliament passed a series of amendments to the trade union laws in May 1988, just a few days before the International Labour Conference. The government rushed the bill to make sure that it was passed before the conference so that Turkey would not be brought to the Application Committee once more. The ILO’s constant criticism of Turkey for not respecting its international obligations and basic labour rights created bad international publicity for the country. This mattered especially at a time when the Turkish government was trying to project a democratic image abroad following its formal application for full membership in the EC in April 1987. For Minister of Labour Imren Aykut, “Turkey being pushed around in the ILO” had become “a matter of national pride.” She claimed that the amendments satisfied most of the ILO’s concerns.29 According to press reports, the original bill drafted by the Ministry of Labour to amend the trade union legislation included more substantial changes. Nevertheless, the Council of Ministers approved the bill only after narrowing the proposed amendments (Cumhuriyet, 6 May 1988, 1, 13; TU¨BA, IIC¸B No. 653, 9 May 1988, 6). That the Ministry of Labour favoured more substantial changes can be explained by the fact that it was the principal state organ to deal with the ILO and thus more subject to trade union pressure compared with other state institutions. The conjunction and fusion of international and domestic factors caused the Turkish state to make changes in its labour laws. The ILO mattered in conjunction with domestic conditions. The absence of these domestic conditions earlier had allowed the military regime to enact the restrictive labour legislation in spite of the ILO. The relevant domestic conditions of the late 1980s were intensifying pressure from the labour union movement and the major opposition parties’ support for the labour demand of democratizing the labour legislation.

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Legislative changes did not, however, abolish the most important restrictions. Removal of some of the major restrictions required amendments to the constitution, which the ruling party opposed. The May 1988 amendments to the labour laws were far from meeting either the ILO’s recommendations or the trade unions’ desires.30 The ILO concluded that the amendments resulted in “no changes whatsoever” with regard to the main legislative provisions, which still breached basic trade union and collective bargaining rights (ILO, Committee on Freedom of Association, 260th Report, November 1988; International Labour Conference, Record of Proceedings, 1989, 26/72). Turkish organized labour continued its struggle in the international arena. It tried to keep the situation of labour in Turkey on the ILO agenda. In the immediate wake of revision of the trade union legislation, “with encouragement from Tu¨rk-Is, hundreds of Turkish workers sent cables of protest to the ILO General Assembly session in June 1988”. They complained about continuing restrictions on trade union activity (Karaosmanoglu 1994, 128). The employers’ confederation sought to counter the trade unions’ international campaign by lobbying other countries’ employers and government representatives in the ILO (Isveren, July 1989, 9– 10). The Turkish class struggle expanded from the national to the international level. The outcome of this struggle was favourable to labour. In the late 1980s and early 1990s, Turkey continued to take its place on the Application Committee’s list of cases for examination with respect to violations of fundamental collective labour rights and freedoms every year except 1990 and 1992 until 1995. Even when the Turkish case was not discussed in the annual ILO conference, it was still included in reports of the Freedom of Association Committee and Committee of Experts during this period.31 The ILO patiently repeated its “recommendations” and “firm hope” that the Turkish state would bring its legislation and practice into full conformity with ILO conventions. Although the ILO lacked effective powers of enforcement, it was able to exert “moral” pressure on the Turkish state, and its decisions strengthened the trade union movement’s struggle for legislative changes.

CHAPTER 10 THE COUNTER-LABOUR MOVEMENT

A turning point in state-organized labour relations was the outbreak of labour actions from below in 1989–91. This was a reaction to the exclusion of working-class interests by the state as well as a result of workers’ dissatisfaction with the union leadership. Changes in the broader political environment, specifically intensifying internal conflicts within the power bloc and erosion of electoral support for the ruling political party, also created an opportune moment for labour mobilization at the grassroots level.

The Outbreak of Grassroots Labour Actions A Tu¨rk-Is – government summit meeting in April 1988, the government’s agreement to a relatively higher wage increase in the public sector, and a series of amendments to the labour acts in May seemed to point to a change in the government’s policy toward organized labour. All of this made an impression on the Tu¨rk-Is leadership. The confederation suspended the programme of action of a general strike and assemblies that member unions had approved in February. A widespread belief among workers was that Tu¨rk-Is put on hold the planned actions because union officials received a concession to their professional interest from the government. The concession was an extension of the number of times that incumbent union officials could get re-elected to their union posts by a change in the Trade Unions Act in May 1988. This situation

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was very damaging to the relationship between union leaders and members (Ketenci 1989c, 1990, 282– 3; Koc
1989a, 43). The MP government almost achieved as a result of this concession what it could not achieve by direct attacks on the legitimacy of trade unions. It is hard to claim that amendment of the union act was a deliberate attempt by the government to create a credibility gap between union leaders and workers,1 but this was the result. The union leadership was quick to respond to the real threat of denunciation by the membership. They launched a campaign in opposition to the governing party during yet another referendum, the third since 1982. The MP’s support had begun to decline rapidly after the November 1987 general election. Therefore, the government decided to hold local elections in November 1988 instead of the normal date of March 1989 before its support further declined. Since this measure required a constitutional change, the government put it to a popular vote on 25 September. As the opposition parties sought to capitalize on this event by turning the referendum into a vote of ¨ zal threatened to resign if the vote confidence, Prime Minister Turgut O went against the proposal. During the referendum campaign, Tu¨rk-Is urged workers and the electorate to vote against the government’s proposal. Its campaign couched a “no” vote in the referendum as a vote against the ruling party (Tu¨rk-Is 1989c, 62 – 71). In this way, Tu¨rk-Is leaders wanted to repair their damaged credibility in the eyes of union members. Hak-Is adopted a position opposite that of Tu¨rk-Is in the referendum. It supported the government’s proposal of early local elections. Its explanation was that “The current government should be removed from office as soon as possible. Economic conditions became unbearable. The way to an early general election should be paved by saying no to the MP in the local election” (Hak-Is 1989, 30). Its call for a “yes” vote did not mean support for the ruling party. However, unlike in the previous referendum, when both labour confederations urged a yes vote in opposition to the governing party, this time they were divided and created confusion. The government’s proposal was defeated in the referendum by a margin of 65 per cent to 35 per cent. The MP had won 36.3 per cent of the vote in the 1987 general election. The prime minister, who had threatened to resign in the event of a defeat in the referendum,

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announced that he was satisfied with the 35 per cent vote cast in favour (Keesing’s Archives, October 1988, 36195). The results of the local elections on 26 March 1989 were a disaster for the ruling party, however. It also suffered a substantial loss of support among the working-class electorate (A. Ayata 1993, 35). The political conjuncture at the turn of the decade was marked by intensified conflicts within the power bloc, strains in relations between the ruling MP and business, and the party’s slipping to third place in the local elections of March 1989. This conjuncture created new opportunities for the labour movement to defend its interests vis-a`-vis the state and capital. The eruption of rank-and-file labour militancy in the spring of 1989 (known as the spring actions or movement) marked a watershed in the recent history of the Turkish labour movement. Various forms of resistance and protest action that workers had developed mainly sporadically and at the workplace or enterprise level over earlier years culminated in country-wide labour actions in the spring of 1989. The spring actions constituted the largest and longest resistance movement in Turkish labour history. They were country-wide but mostly in the public sector. The proximate cause that triggered the actions was the deadlock in public sector collective negotiations between the Tu¨rk-Is-affiliated unions and public employers’ associations (PEAs). The negotiations involved some 600,000 workers. They had started in December 1988; however, because of delay tactics of the PEAs, they became deadlocked, thus jeopardizing the sector’s wage increases (Sakallioglu 1991, 67). The PEAs resorted to delay tactics mostly because of the coming local elections. At a time when the ruling party’s popularity was waning, a low wage offer on the eve of the election would be a great political liability.2 The deadlock of collective negotiations coincided with the Council of Ministers’ decision to postpone a strike by the non-affiliated Iron and Steel Workers’ Union (C¸elik-Is) on 2 March. By postponing this strike at a public enterprise, the government intended to send a warning to other labour unions negotiating labour contracts in the public sector. This action was another contributing factor to the spring actions.

The Steel Workers’ Strike Since the C¸elik-Is strike and the government’s various measures against it played a significant part in the spring actions, it is important to

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explain briefly the run-up to this event. Collective negotiations between C¸elik-Is and the Metal Good Industrialists’ Association (MESS) representing the Iron and Steel Enterprise, which had started in December 1988, collapsed in March 1989. Although the Iron and Steel Enterprise was a state enterprise, it had joined MESS, the main association of private metal sector employers, instead of one of the public employers’ associations. MESS was known for its hardline tactics in dealing with labour unions. The chief disagreement in the negotiations between C¸elik-Is and MESS was over wage increase. There was a huge gap between the union’s wage demand and the employer’s offer. The union called a strike for 24,000 workers at two steel plants to start on 22 March. But the Council of Ministers postponed the strike the day before it was to begin. Its justification was “national security” (Official Gazette No. 20116, 22 March 1989). However, several weeks later, ¨ zal said that the government had postponed the steel Prime Minister O strike because of the municipal elections on 26 March (Milliyet, 14 April 1989, 8). The two striking plants were responsible for a large portion of the country’s steel production. The steel workers and their union responded with slow-downs, various demonstrations, open-air assemblies, and the like. These actions lasted for several weeks, bringing production virtually to a halt. Both Tu¨rk-Is and Hak-Is condemned the government’s postponement of the strike and stated their support for the independent C¸elik-Is. More importantly, local people, small merchants, and shopkeepers sided with the workers. Traders and shopkeepers in the town of Karabu¨k, where one of the plants was located, shut their stores on 24 and 25 March as a show of solidarity with the steel workers (Cumhuriyet, 25 and 26 March 1989; Hu¨rriyet, 25 March 1989). This coincided with the C¸elik-Is rally in the town. The government was forced to reverse its decision to postpone the steel workers’ strike as a result of the determined struggle of C¸elik-Is and the significant support that the union received from the public and other labour unions as well as the fact that various actions by the steel workers proved as effective as a strike in bringing production to a halt.3 On 14 April, the Council of Ministers cancelled the postponement decision effective 18 April (Official Gazette No. 20143, 18 April 1989). Subsequently, 24,000 workers went on strike at the Karabu¨k and Iskenderun steel plants on 4 May. They continued their strike in spite of various measures by the state and the MESS campaign to undermine

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C¸elik-Is and its strike. For example, the government removed the customs duty on iron and steel imports for an indefinite period (C¸elik-Is 1989, 107). Although one aim was to minimize the effect on the economy of reduced steel production as a result of the strike, another was to weaken the strike. The independent C¸elik-Is and steel workers received significant support from Tu¨rk-Is, Hak-Is, and several major non-affiliated unions during the strike. Tu¨rk-Is and Hak-Is organized a labour rally and a general one-day lunch boycott, respectively, in support of the striking workers. They also organized fundraising campaigns. This was the first time that Tu¨rk-Is gave active support to a labour union that was not its affiliate. Subsequently, the confederation’s general convention of December 1989 would pass a policy decision to support all strikes regardless of the affiliation of the union that called the strike (Petrol-Is 1990, 344; Tu¨rk-Is 1989b, 6). Working-class solidarity was crucial for the steel workers’ determination to continue their struggle despite strong state pressure. An agreement was finally reached on 17 September, ending the strike after 137 days.4 To resolve the dispute more easily, MESS was left out of the final stages of negotiations. The public image of MESS was greatly tarnished not only because of its hardline tactics but also because of media reports that MESS was deliberately dragging its feet to reach an agreement because some private companies were making huge profits on ¨ ztu¨rk 2009, 354). The negotiations steel imports during the strike (O were concluded directly with the general director of the enterprise and the minister of state in charge of public economic enterprises. In the end, the contract largely met the union’s demands (C¸elik-Is 1989, 360, 365– 7). C¸elik-Is and the Karabu¨k and Iskenderun steel workers thus played a significant part in the rise of labour activism in 1989. C¸elik-Is lost its certificate to conclude collective agreements soon after it brought the steel strike to a successful end. According to the July 1990 industrial branch statistics, its membership was 9.54 per cent of all workers in the metal sector and thus fell below the 10 per cent minimum despite having over 40,000 members.5 Given that reliability of the Ministry of Labour and Social Security’s statistics used for unions’ certification was questionable and that they were open to manipulation, especially in borderline cases, it could not be a mere coincidence that C¸elik-Is failed to meet the 10 per cent prerequisite at this time. Its

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president also accused the Ministry of Labour for his union’s loss of certification (Interview with Metin Tu¨rker, August 1996). Subsequently, ¨ zdemir-Is (a Hak-Is affiliate) in the same sector C¸elik-Is merged with O in 1991 to clear the 10 per cent barrier. The merged union became a member of Hak-Is and was named O¨z C¸elik-Is.

The Spring Actions From mid-March to mid-May 1989, over half a million public sector employees were engaged in numerous non-violent actions across Turkey. These actions were rooted in various forms of resistance that workers in both the public and the private sectors had started using increasingly over several earlier years. The spring labour mobilization was characterized by workers’ use of more effective types of action. These actions not only allowed workers to express their grievances and demands but also halted or disrupted production without a lawful strike. The most common during the spring movement were slow-downs, collective medical visits during work hours (thus stopping or disrupting production), refusing to work overtime, sit-ins, refusing to use bus services provided by employers and walking to work instead (sometimes barefoot), boycotting lunch meals, mass marches, demonstrations, and the like (Table 10.1 and Table 10.2).6 A defining feature of the spring movement was that it took the form of spontaneous grassroots action. In other words, it developed from below rather than being directed and controlled by the union leadership. The earlier creation of informal workplace organizations such as strike solidarity committees significantly facilitated the spring movement (Dogan 2010, 9). The role of the union leadership in organizing and directing the actions was limited, as several keen observers of the Turkish labour movement also emphasize (C¸avdar 1989, 9; Ketenci 1989a, 1989b; Koc
1991a, 87–94). When public sector negotiations collapsed in mid-March, Tu¨rk-Is chose to give negotiations another chance instead of immediately calling a strike or other type of labour action (Mahirog˘ullari 2005, 372). It was only when labour actions started to spread that the Tu¨rk-Is Presidents’ Council decided, in an extraordinary meeting on 5 April, to escalate current labour activism in a way to decrease production (Cumhuriyet, 6, 7, and 10 April 1989). Trade unions’ role in the spring movement was still significant, however. Transformation of labour actions that were previously more

3 – – – – – 2 2 – – 2 1 –

– 1 – – – – – 2 – – – – –

3 2 – – 5 6 1

– –

1 – –

7

– 4 1 – – 8 –

1 –

3 2 –

3

2 28 3 2 11 22 –

5 6

7 21 –

25

6 33 8 3 17 66 9

15 2

18 34 8

63

– 42 16 – 13 24 2

4 9

6 58 21

42

5 38 – – 8 4 5

1 2

1 19 15

8

1984 1985 1986 1987 1988 19891 1990 1991 1992

Reported Labour Actions Other than Legal Strikes 1984 – 93

A. Actions Disruptive of Production 2 1. Work stoppages (not going to work, stopping the work for a definite or indefinite period, and similar actions) 2. Slow-downs – 3. Collective medical visits – 4. Factory occupation and refusing to – leave the workplace 5. Refusing to work overtime – 6. Sit-ins (workplace) – B. Actions Not Directly Disruptive of Production 1. Open-air or hall meetings and assemblies 2 2. Demonstrations – 3. Refusing to take service buses to work – 4. Walking barefoot en masse – 5. Hunger strikes – 6. Lunch boycotts – 7. Filing petitions, sending protest telegrams, – letters, and signature campaigns

Table 10.1

7 23 – – 7 2 3

– –

– 13 3

16

1993 until July

– – – –

– – – –

1

– – – 6

– – – –

1 4 – 5

2 2 5 6

11 12 7 6

– 2 24 3

1 2 12 1

1 – 5

Source: Compiled and classified from Sen (1993), which provides a chronological list of labour actions in Turkey. Note: The figures in this table should not be taken as conclusive since not all labour actions are reported, and when they are reported the information provided might not be adequate, or it might vary according to different sources. So one needs to be cautious when interpreting the given classification and number of actions other than legal strikes. They are still useful, however, with respect to changing trends in the level and form of labour militancy. 1 The source does not provide a list of all the different actions by workers involved in the 1989 spring resistance movement. Otherwise, the number of actions in most categories given for 1989 would be higher.

8. Protest by clapping 9. Growing beards as a protest 10. Sit-downs in front of the workplace or somewhere else 11. Other actions

1,104,942 45,638 – 141,967 – 25,446 1,317,993

1989 893,460 24,481 – 45,687 302,0004 – 1,265,628

1990 1,010,946 62,055 – 6,374 1,500,0005 102,278 2,681,653

1991 372,029 20,694 3,676 3,872 – – 400,271

1992 354,195 66,227 2,780 2,456 610,000 – 1,035,658

1993

393,751 19,880 8,338 – 1,857,630 4,369 2,283,968

1994

1

Source: Petrol-Is (1993, 279; 1995, 297). A person might be counted more than once if she/he participated in more than one action. Actions by civil servants are not included in the figures. 2 Workers organized in Tu¨rk-Is, Hak-Is, or non-affiliated unions participated. 3 11 March countrywide lunch boycott. 4 Mass actions in the metal sector (non-affiliated C¸elik-Is, Otomobil-Is, and Hak-Is-affiliated O¨zdemir-Is participated). 5 General strike of 3 January. 6 Includes non-unionized workers and those whose union affiliation could not be determined.

495,940 57,199 – 209,307 1,500,0003 – 2,262,446

1988

Workers Participating in Labour Actions Other than Lawful Strikes1

Tu¨rk-Is Hak-Is DISK Non-Affiliated Joint Actions2 Other6 Total

Table 10.2

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local or at the workplace level into a countrywide movement was dependent on the organizational structure and/or specific initiatives of trade unions. Most important in this regard was the success of Tu¨rk-Is in synchronizing collective bargaining timelines across the public sector. This laid the groundwork for the spring labour activism. Tu¨rk-Is also publicly supported the actions. So did Hak-Is. Tu¨rk-Is even claimed that the spring movement was its own achievement (Tu¨rk-Is 1989a, 160, 164; 1989c, 150– 1). Speaking to the media amid spreading labour actions, Tu¨rk-Is president Sevket Yilmaz also said that labour unions and Tu¨rk-Is were in control of the actions (Milliyet, 11 April 1989, 12).7 It is impossible to say that the unions were firmly in control of the labour mobilization. In some cases, workers continued their protest actions against their unions’ advice to suspend the actions for a time. When workers thought that they were not getting adequate support from their union, they protested their union or union leaders alongside the government (Cumhuriyet, 19, 20, and 21 April 1989; Milliyet, 7, 13, 14, and 18 April 1989). As labour activism spread and reached new heights in mid-April, workers often targeted their unions and Tu¨rk-Is as the focus of their actions. This situation requires explanation. At that time, the public sector collective negotiations, which had come to a standstill in mid-March, resumed. The negotiations were being conducted by individual labour unions and the PEAs at the enterprise level and the Tu¨rk-Is Bargaining Coordination Committee, the minister of state responsible for public economic enterprises, and the PEAs at the national level.8 As the negotiations continued, large groups of workers often paid visits to, or demonstrated in front of, their union branches and/or central headquarters. In these visits, workers warned union officials that they must defend workers’ interests and not retreat under pressure from the government. Tu¨rk-Is and union officials were thus under a great deal of pressure from below. Workers’ demands in the spring movement were primarily economic and concerned with collective bargaining issues, especially wages. In the demonstrations, workers often chanted “we are hungry”. They raised the issue of trade union rights as well. For example, another common slogan was “general strike is our right”. However, to say that the spring labour movement was “economistic” because the workers’ demands were predominantly economic (Pekin 1989) is to miss the political dimension of the movement. First, wages had been kept down by extra-economic or

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political means, not by market forces. In their struggle for higher wages, workers were simultaneously struggling against politico-juridical restrictions on collective labour rights as well as against state intervention in the industrial relations system in favour of capital. Second, in the course of protest actions, workers linked the dramatic decline of their living standards to government policies. Especially since the government exercised centralized political control over the collective bargaining system in the public sector and thus determined wages and other labour benefits, public sector employees, who led the spring actions, held the government responsible for their grievances. The government and the governing party became the main target of the resistance movement.9 In every demonstration, workers invited the government and ¨ zal in particular to resign. Prime Minister Turgut O The labour resistance movement won the hearts of the people. The public’s earlier largely unsympathetic, if not hostile, opinion of the trade union movement, cultivated first by capital’s ideological offensive in the late 1970s and later by the military regime of 1980–3, dissipated. The public empathized with demonstrating workers shouting “we are hungry” and demanding decent economic conditions. Even the traditional petty bourgeoisie, who had become hostile to labour unions in the late 1970s, now came to sympathize with, and in some cases to support actively, the labour resistance movement, as we saw in the case of shopkeepers and small traders in the town of Karabu¨k. The spontaneous outburst of grassroots labour activism caused great concern for capital. Employers were worried that the labour militancy that spread across the public sector would spill over to the private sector and that it could lead to a bigger social explosion. Strikes and other forms of labour action were already on the rise in the private sector. Besides, disruption of production and services for weeks in the public enterprises that provided vital inputs for the private sector, such as petroleum and electricity, could have adverse effects on private industry. However, the business community was not in agreement regarding how the government and employers should respond to the rising labour activism. Spokespeople for some business associations and some prominent businessmen publicly stated that workers’ demands for higher wages should be satisfied because real wages had declined as a result of inflation. They acknowledged that, since the share of wages in total production costs had dropped, wage increases would not have

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much impact on the inflation rate (Cumhuriyet, 13 and 29 April 1989; Milliyet, 29 April and 3 May 1989; Pekin 1989, 68). They were thus sending a message to the government that it should accept workers’ demands for higher wages to maintain labour peace at the same time that they were expressing their own readiness to offer higher wages in the private sector. The second reaction from the business community was to criticize unions for demanding unreasonably high wage increases and to raise concerns that high wage increases would fuel inflation and hence harm the economy. The third reaction was that TISK, as the top organization of employers, took the position that “illegal” labour actions were causing damage to the economy and the international competitiveness of companies, and therefore they should not be tolerated. The spring actions took the government by surprise. Prime Minister ¨Ozal’s initial reaction was either to attribute them to the opposition political parties inciting the workers or to claim that the actions were the work of a group of union officials approaching their mandatory retirement and hence trying to pressure the government to amend the Trade Unions Law to extend their legal time in office (C¸avdar 1989, 9; Cumhuriyet, 12 and 14 April 1989; Milliyet, 12 and 14 April 1989).10 ¨ zal also said that he would not meet with Tu¨rk-Is officials but would O accept representatives from among demonstrating workers to discuss the situation (Ayin Tarihi, 11 April 1989; Cumhuriyet, 12 April 1989). The prime minister was once again using his old tactic of creating a credibility gap between workers and labour unions by discursively separating “honest workers” from “union bosses who were exploiting workers for their own self-interest”. His diagnosis of the forces behind the rise of labour activism was greatly mistaken. The government did not have a plan in the event of large-scale labour mobilization. Repressive measures were highly likely to backfire, especially since the labour movement now had public opinion on its side. As the spring actions continued to spread, important disagreements emerged within the Council of Ministers. Minister of Labour and Social Security Imren Aykut openly empathized with workers and blamed two ministers of state for drawing too hard a bargain with labour unions and thus harming labour peace (Milliyet, 20 April and 24 May 1989).11 Only two days after his avowal not to meet Tu¨rk-Is officials, the prime minister invited them to discuss their demands and resolve the standstill

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in collective negotiations. The negotiations continued between Tu¨rk-Is, on the one hand, and the minister of state in charge of SEEs and PEAs, on the other, from mid-April to mid-May. The government made significant wage concessions in an accord with Tu¨rk-Is on 17 May. The average negotiated pay raise amounted to 140 per cent for 1989 and 60 per cent for 1990. The agreement also included safeguards for workers if the inflation rate reached a certain level. The wage deal was below what Tu¨rk-Is had demanded but above the government’s offer (Petrol-Is 1990, 259 – 60; Tu¨rk-Is 1989a, 167). Many workers – especially those in sectors in which base wages were significantly lower relative to other sectors – were not happy with the wage accord. There were even protest demonstrations after announcement of the deal. The collective negotiations continued in some sectors, such as sugar, shipping, and public works, several weeks after the Tu¨rk-Is wage accord with the government, and some resulted in strikes. In many public enterprises, there were collective agreements soon after the wage accord. Public sector workers won substantial wage increases as a result of the spring movement. Private sector workers also gained real wage increases in 1989. Through their determined collective activism, workers reversed the earlier trend of declining wages. This result likely increased workers’ and union leaders’ confidence in their struggle. The spring movement forced Tu¨rk-Is to adopt more radical measures. For example, its 15th General Convention of December 1989 endorsed the use of a general strike, stating that it was the most effective form of labour action. Convention delegates urged the confederation leadership to make necessary preparations for a general strike without any delay (Petrol-Is 1990, 343– 7; Tu¨rk-Is 1992b, 3– 11). Another consequence of the spring actions was the rise of new and younger leaders in union organizations. There were significant changes in the leadership cadres, especially in local branches of the Tu¨rk-Is-affiliated unions and central union organizations (Koc
2003, 105). However, the social democratic opposition, which had been pushing for a more consistent, active strategy, again failed to capture the Tu¨rk-Is administration in the general convention in December 1989. Yet the opposition was influential in terms of encouraging convention delegates to take a clear stance against the MP government (Mahirog˘ullari 2005, 329– 30, 374). Major turnover in the leadership cadres of many member unions eventually

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led to replacement of the incumbent Tu¨rk-Is Executive Committee, including President Sevket Yilmaz, in 1992.

Further Labour Actions Labour activism continued unabated in 1990–1 following the spring movement. Total lawful strikes reached a record level. In both the private and the public sectors, there was a jump in the number of strikes as well as the number of workers on strike during the same years (Tables 8.5.1 and 8.5.2). Workers and labour unions used other forms of collective action in addition to lawful strikes, including unlawful work stoppages (Tables 10.1 and 10.2). The main reasons were collective bargaining disputes, especially wage disputes, and layoffs.12 Private sector employers increasingly resorted to layoffs in 1990–1 in reaction to significant real wage increases. Solidarity strikes were on the rise. There were also large-scale actions the nature and purpose of which were principally political, such as the general strike of 3 January 1991. Besides workers’ growing militancy, at the turn of the decade, civil servants began to organize unions. They launched a collective struggle for legal recognition of their right to unionize as well as for improvement of their socio-economic conditions. The Government’s Janus-Faced Response The government’s response to increasing working-class militancy was Janus-faced. It conceded significant wage increases for public sector workers but only after protracted collective negotiations, widespread strikes, and non-strike actions. Since its tactic of discrediting labour unions mostly failed, the MP government started seeking dialogue instead of direct confrontation. Change in the Prime Minister’s Office following Turgut O¨zal becoming president in November 1989 played some role in the government’s move.13 Minister of Labour and Social Security Imren Aykut acted as the principal interlocutor in bringing together leaders of employer and labour confederations and government officials. Following the change in TISK’s leadership in December 1989, TISK also started emphasizing the significance of tripartite cooperation for the economy as well as industrial peace (Baydur 2008, 169– 72, 177).14 TISK’s new search for dialogue with labour unions possibly had an impact on the government. There were two tripartite meetings among officials of Tu¨rk-Is and TISK and the minister of labour in 1990. The meeting in March dealt

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with a variety of issues, such as the situation of industrial relations, mandatory payroll deductions that both employers and unions claimed were too high, and layoffs. TISK and Tu¨rk-Is agreed that mandatory payroll deductions, including deductions for various funds, should be reduced (TISK 1992a, 192; Tu¨rk-Is 1992a, 107– 8). The second meeting, in July, focused on wage earners’ social security system. The meeting resulted in a protocol that included a number of proposals regarding improving the Social Insurance Institution’s health services, solving the problem of uninsured labour, and collecting social security premium arrears (full text of the protocol in TISK 1992a, 192–4). TISK and Tu¨rk-Is officials together with the minister of labour later had a meeting with the new prime minister, Yildirim Akbulut, on 4 August to discuss the protocol. Shortly after the meeting, the government decided to raise the payroll deduction for the housing fund. This decision went against the spirit of the tripartite protocol, which had also been signed by the minister of labour. The government decision caught both Tu¨rk-Is and TISK off guard. Subsequently, TISK president Refik Baydur publicly criticized the government for reneging on its promise and thus undermining the efforts toward tripartite cooperation (Baydur 2008, 177). The minister of labour called a third tripartite meeting about a year later, in May 1991. The purpose was to discuss the issue of constitutional amendment and more particularly the views of TISK and Tu¨rk-Is regarding the labour clauses of the constitution. Thus, the labour movement finally succeeded in placing the issue of amending the restrictive labour provisions of the constitution on the state agenda. But it was not until after the transfer of power to a new government following defeat of the governing MP in October 1991 that the issue would be seriously considered by political authorities. Besides the tripartite meetings, two summit meetings took place between Tu¨rk-Is and government officials, including Prime Minister Akbulut, in March 1990. The meetings focused on collective bargaining issues in the public sector (Tu¨rk-Is 1992a, 106) but did not lead to major results. The other face of the government’s response to the steep rise in work stoppages was to postpone (in effect ban) strikes. In 1989, the Council of Ministers postponed strikes involving 26,000 workers in two enterprises. In 1990, banned strikes involved four labour unions and 26,291 workers in six different enterprises. Among the enterprises were

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public and private cement companies, big tire companies, and the stateowned Turkish Milk Industry Corporation (Petrol-Is 1991, 287). Strikes at these establishments were hardly a threat to general health or national security. This was also the verdict of the Council of State (high administrative court) in response to appeals by two unions whose strikes had been postponed (Petrol-Is 1991, 289). The start of the Gulf War in January 1991 provided the government with a pretext to make the biggest ever strike postponement decision.15 The government made the decision right after a one-day general strike on 3 January and a march by over 40,000 coal miners together with their families from Zonguldak (a western Black Sea city) to the capital, Ankara, on 4 –8 January in protest of the government. On 25 January, the Council of Ministers decided to ban all strikes that had been called or were continuing in the country. Its justification was this: “Because of the outbreak of the Gulf War, the strikes are deemed harmful and a threat to our national security” (Official Gazette No. 20768, 27 January 1991, 4). The ban affected 102,846 striking workers at 158 different establishments (Petrol-Is 1991, 289). Tu¨rk-Is and the affected unions challenged the government’s strike ban at the Council of State. The court ruled in favour of the unions and agreed to stop implementation of the government’s decision. This was an important legal and political victory for organized labour. In several cases in which the political executive organ of the state stretched the limits of its power to the extent of directly violating the right to strike as defined in the legislation, labour unions successfully challenged it in the courts. The rulings by the judiciary organ of the state were important in terms of delineating the boundaries of the executive’s authority to postpone strikes and thus protecting the right to strike against the government’s abuse of its power. The government’s simultaneous strategies of dialoguing with the union leadership and banning strikes were not successful in preventing the rise of labour militancy. Given the past labour record of the MP government and the strong anti-MP sentiments among union members, the government’s attempt at reconciliation with the union leadership was not likely to succeed. Nor could banning strikes bring about labour peace. Doing so was in fact counter-productive; it provoked unlawful work stoppages, slow-downs, or other forms of collective labour action equally effective in halting production.

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A General Strike and the Miners’ March The trade union movement’s relations with the MP government had reached a point of no return. Even if the union leadership preferred deal making with the government and/or the employers’ confederation, it was unlikely that they could get the membership to comply with less than satisfactory deals. After a number of meetings with the government, the Tu¨rk-Is Presidents’ Council decided that “the problems cannot be solved through dialogue with this government” and unanimously agreed at its meeting on 30 – 31 October 1990 to implement a “general action” (Tu¨rk-Is 1992b, 303 – 5). In late December 1990, Tu¨rk-Is announced that there would be a “general action” on 3 January 1991. The confederation leadership thus decided to carry out the 15th General Convention’s resolution calling for a general strike in the form of a one-day countrywide work stoppage. The general strike did not have a specific goal. According to Koray (1994, 206), that “the purpose of the action was not defined in terms of clear, concrete proposals” was one of its weaknesses. But the general action was not about a specific demand that could be immediately achieved. It was a further step in the labour movement’s struggle against the suppression of its demands through predominantly political means in the process of implementing the neoliberal economic strategy. The immediate context in which Tu¨rk-Is decided on the one-day general strike was defined by prolonged collective negotiations in both the public and the private sectors. A large number of workers were on strike or about to go on strike. The 1991 collective negotiations covering over half a million workers in the public sector was about to start. A countrywide labour action could strengthen the trade unions’ bargaining position. Yet the 3 January general action was not confined to collective bargaining or wage demands. In a public statement concerning the general action, Tu¨rk-Is defined its reasons and goals as the removal of legal restrictions on fundamental human rights and freedoms as well as labour rights and the adoption of policies to achieve more equitable income distribution (Petrol-Is 1991, 92– 4; Tu¨rk-Is 1992b, 15 –19). Hak-Is and non-affiliated unions also decided to participate in the general strike. This was the first time in the recent history of the Turkish union movement that rival labour confederations joined forces in such a countrywide action. A number of major professional associations, including the Union of Bar Associations, the Union of Engineers and

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Architects and the Union of Medical Associations, publicly expressed their support. The major opposition parties (SDPP and TPP) also announced that they considered the general action legitimate and justified. The SDPP declared the first week of January the week of solidarity with the workers (Koc
1991a, 167). The government’s reaction was not harsh in light of its past record. The prime minister first tried to persuade Tu¨rk-Is and Hak-Is not to go ahead with the general action and invited them to a meeting to discuss their demands. When both confederations refused, the government sought to dissuade workers from taking part in the action. On 26 December, the Council of Ministers issued a statement that described the planned work stoppage as illegal and warned that appropriate legal action would be taken. The statement also urged workers not to participate in this “illegal” action (Milliyet, 28 December 1990, 10; Petrol-Is 1991, 95). The minister of state responsible for SEEs, Cemil C¸ic
ek, sent a circular motion to provincial governors and public institutions warning public sector employees that their participation in the action could result in the termination of employment (Milliyet, 1 January 1991). State television gave large coverage to the government’s views. The chief prosecutor of the Ankara State Security Court instigated a legal inquiry into the Tu¨rk-Is decision of a general action. On the eve of the action, the three public employers’ associations separately went to labour courts, requesting an injunction against the action. The courts granted the request and notified both Tu¨rk-Is and Hak-Is of the injunction the day before the general action was to take place. Both confederations expressed their determination not to capitulate to the government’s threats, and they decided to defy the court injunction and carry out the general strike as planned. Private business’s overall position on the general strike was that the dispute was between the government and labour unions (Koc
1991a, 167; Koray 1994, 206). TISK claimed that the primary target of the general strike was the government, not private sector employers. It also maintained that the general action was against the law and would cause great damage to the economy. TISK decided on pecuniary sanctions against employees who participated in the general strike. It announced that employees who participated in the action would not get paid weekend payments in addition to the wage for the day not worked

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(Isveren, December 1990, 3 –4).16 Except for this threat, the employers’ organization avoided a direct confrontation with the unions. TISK’s stance was an indication of private capital’s distancing itself from the ruling MP, whose popular support had eroded substantially. Another important factor was that there was significant public support for the labour movement at that time. The trade unions successfully carried out the one-day general strike on 3 January despite the government’s efforts to prevent it and despite the court injunction.17 According to a Tu¨rk-Is survey of its member unions in 64 provinces, the participation rate was above 90 per cent in 14 provinces, between 70 per cent and 89 per cent in 18 provinces, and between 50 per cent and 70 per cent in 22 provinces. It was below 50 per cent in only ten provinces, most of which were in the least industrialized eastern part of the country (Tu¨rk-Is 1992a, 216–17). Hak-Is announced the overall participation rate among its members as 75 per cent (1992, 221). According to Petrol-Is (1991, 98), the average participation rate for all unions was 80 per cent. Public servants in some municipal governments did not go to work that day; medical staff in some public hospitals and railway employees held lunch boycotts to show their support for the general strike. However, overall participation among public servants was very low (Koc
1991b, 169). This was mainly because they were still mostly non-unionized. Unionization of public employees was only in its initial stages and met with state resistance at that time. In the aftermath of the general work stoppage, there were some disciplinary dismissals and fines in the private sector. Nevertheless, employers generally refrained from using layoffs and other sanctions against workers (Koc
1991a, 169; Koray 1994, 206; Petrol-Is 1991, 99). The lawsuit brought by the public employers’ associations against Tu¨rk-Is and Hak-Is was dropped because the plaintiffs preferred not to pursue it. The high rate of participation among unionized workers, the unity that the trade union movement displayed in the general strike, and wide public support for the workers were crucial factors in influencing the course of action that the government and employers chose in response. In these respects, the general strike was a success. As Koray (1994, 206) and Petrol-Is (1991, 100) point out, its major weakness was that it remained an isolated action. The trade union movement failed to coordinate it with other labour actions to follow.

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It tended to see the general strike as an end in itself rather than a means to an end. One of the biggest labour actions in Turkish labour history took place soon after the general strike. It was the coal miners’ march to the capital. About 42,000 miners in the Zonguldak coal mines went on strike on 30 November 1990; the strike was followed by demonstrations in the city centre every day. The mines were operated by the state-owned Turkish Coal Corporation (TTK). The miners were organized in the Tu¨rk-Isaffiliated General Mine Workers’ Union (Genel Maden-Is). On the same day as the miners’ strike, another nearly 6,000 members of the same union started a strike at the Directorate of Mineral Research and Exploration (MTA). The public employers’ association Kamu-Sen declared a lockout at the two establishments in response. The coal miners’ strike and the great march were both historical events not only because of the number of striking miners but also because until then there had not been any major labour action,18 including lawful strikes at the Zonguldak coal mines, which had been in operation since the midnineteenth century (Dogan 2010, 11). The miners’ union came to the bargaining table with a high wage demand (a 400– 500 per cent increase) on the ground that the miners’ wages were too low to afford even the basic necessities of life. While the formal collective agreement negotiation was conducted with the employers’ association Kamu-Sen, the final word as far as the wage increase was concerned actually belonged to the government. Both Kamu-Sen and the government insisted that the Coal Corporation could not afford the miners’ wage demand since it was running high losses. There were also official talks of closing ¨ zal also interfered in the dispute, down the coal mines. President O overstepping the boundaries of his office. He publicly criticized the Zonguldak coal mines for being inefficient and a financial burden on the government budget. From his neoliberal perspective, he claimed that it would be cheaper to import coal instead of continuing to operate the inefficient mines; hence, his solution was to shut them down.19 Such official remarks caused great concern for the miners in particular and the people of Zonguldak in general. The coal mines were the life blood of Zonguldak’s economy; thereby, the miners were able to mobilize a lot of support from the local populace.20 The Zonguldak miners’ and residents’ worry about the possibility of the mines’ closure rather than the wage dispute became the key driving force behind the mass mobilization.

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To calm the situation, Prime Minister Akbulut announced that the mines’ closure was not on the government’s agenda, thus contradicting the president (Milliyet, 15 December 1992, 11). A month of demonstrations, the lawful strike by the miners, and the active and widely based support by local people for the miners did not change the government’s stance on the wage dispute, however. The General Mine Workers’ Union then decided to organize a mass march to the capital city. On 4 January, the day after the general strike, 42,000 coal miners and their families started the long march on foot (since public authorities prevented the departure of buses chartered by the union), despite the winter conditions.21 The miners’ families, local people, and workers from nearby areas joined the march, swelling the number of demonstrators to some 80,000 to 100,000 people. The march received a lot of media coverage and evoked great public empathy. Tens of thousands of miners and their families peacefully marched kilometres, but they came face to face with the barricades of the police and gendarmerie at two different locations. On both occasions, after some discussions, security forces lifted the barricades and allowed the miners to continue their march. But, when they were stopped the third time, a tense standoff occurred between miners and security forces. At this point, the prime minister invited the union leaders to hold discussions in Ankara. The union leaders accepted the invitation and decided to call off the march upon the possibility of an agreement, according to their assessment of the situation. The action ended on 8 January without bloodshed with the return of the miners to Zonguldak, but the strike continued. The union leadership was not able to meet with Prime Minister Akbulut immediately. Akbulut refused to give them an appointment on the ground that his schedule was too busy because of the imminent Gulf War. The unionists were kept waiting for a week and thus humiliated before they finally met the prime minister. Before the two sides reached an agreement, the government announced on 25 January its decision to postpone all strikes for 60 days following the start of the Gulf War. Thus, the Zonguldak miners had to return to work before they could obtain a satisfactory collective agreement. Soon after, Genel Maden-Is signed a collective agreement with the employers’ association. The collective agreement was less than satisfactory for the miners who had just carried out a labour action of historical significance.

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Several important observations regarding the miners’ strike and great march are in order. First, Genel Maden-Is had undergone a leadership transformation starting in its 1986 congress and continuing in its 1989 congress. Replacement of the old cadre by a younger generation of unionists moved the union away from its earlier policy of seeking good collective agreements through lobbying the government, which no longer worked in the neoliberal economic conditions of the 1980s (Dogan 2010, 12). A young unionist, S¸emsi Denizer, who was to play a critical role in the miners’ strike and great march, was elected president of the miners’ union in the 1989 congress. The new union president supported the direct participation of miners in the union’s decision making through various local and workplace committees. When the strike started, the union also created a Zonguldak Strike Committee. It included representatives of local business associations and professional associations, and its purpose was to secure support of the local populace for the miners’ strike and accompanying demonstrations. The union’s creation of such networks of consultation beyond the central union organization was an important factor for large-scale support of the local community for the striking miners. Second, a number of Tu¨rk-Is affiliates and independent unions organized open-air assemblies and sent material aid to the miners. Many major professional associations declared their support for the miners while urging the government to reach an agreement. The major opposition parties from both the left and the centre-right publicly sided with the miners and used the occasion to attack the MP government. The Zonguldak miners’ great march attracted the attention of international media and labour unions. Upon the arrests of some 200 miners during the standoff with security forces, the International Federation of Chemical, Energy, and General Workers’ Unions (ICEF) and the Miners’ International Federation (MIF) warned the Turkish government that they would file a complaint with the ILO if it continued to mistreat the miners (Milliyet, 8 January 1991). In short, the Zonguldak miners obtained significant support both locally and nationwide in their struggle against closure of the coal fields and for better wages. Their great march also became an international event garnering some support from a number of international union federations and labour unions in Western Europe. Nevertheless, when investigating the miners’ strike and march, one cannot help but notice the lack of adequate support from the Tu¨rk-Is

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administration, for example in the form of organizing large demonstrations and solidarity strikes or joining in the miners’ march. This curious situation calls for an explanation, especially given that Tu¨rk-Is had begun to put into action a more activist strategy, including a general strike. One explanation, as argued by Dogan (2010, 11), is that the Tu¨rk-Is administration and some major unions affiliated with Tu¨rkIs had obtained good collective labour contracts in 1989 and that the MP government whose policies they campaigned against had started to suffer a significant loss of popular support as evidenced in the March 1989 local elections. For these reasons, the Tu¨rk-Is administration did not have enough motivation to support more adequately the miners’ strike. However, this explanation has major flaws. First, when the Zonguldak miners went on strike, the collective agreement negotiations of many Tu¨rk-Is affiliates in both the private and the public sectors had ended in a deadlock, and the unions had already called for strikes or were getting ready for strikes. Second, just one day before the miners’ great march started, the Tu¨rk-Is administration had led a countrywide work stoppage for the first time in its history, and the MP government was the main target of this action. The miners’ union president, S¸emsi Denizer, offered another explanation. In a media interview soon after the great march, Denizer claimed that some union leaders were worried about his rise and gaining more power, and therefore they refrained from supporting the march. He also revealed woefully that he had expected that “over two million workers from the industrialized regions of the country would join the Zonguldak miners in their great march”, which did not happen, but he added that, when deciding on the strike and march, Genel Maden-Is and miners relied first on their own strength (interview by ¨ zcan Ercan, Milliyet, 13 January 1991, 5). One can possibly accept O Denizer’s allegation about some union leaders, especially since the miners’ struggle and Denizer as their leader received great media coverage and public support. Denizer indeed soon rose to one of the highest positions in Tu¨rk-Is; he got elected secretary general at the 1992 convention. A third and better explanation is as follows. The old cadre of unionists who still controlled the confederation’s administration hardly had any experience with this type of labour action on such a great scale. They also feared that the miners’ action could get out of control.22 The outcome of the miners’ action is open to interpretation. The miners were forced to end their long march and strike before they could

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achieve their collective agreement demands. But their struggle was effective in securing the government’s public promise not to close down the coal mines. The miners’ strike and great march comprised an organic part of the rising working-class struggle against the existing form of state characterized by the exclusion of labour and the neoliberal economic strategy that marginalized labour interests. However, in their slogans and public statements, the Genel Maden-Is administration and miners often identified the former prime minister and current president, ¨ zal, as the primary culprit. This is understandable not only Turgut O ¨ zal was the most outspoken official advocate of neoliberalism because O but also because he took a public stance against the striking miners and pressured the government not to concede to the miners’ demands. ¨ zal possibly detracted Nevertheless, the frequent focus of attention on O from the broader system of neoliberalism that had become the structural feature of the Turkish political economy. Overall, the collective mobilization of labour during this period undermined the state’s and employers’ policy of wage repression. It also weakened the governing MP, the most ardent proponent of a neoliberal economic strategy and its hegemonic project. Equally important was transformation of the leadership of the Turkish labour union movement.

Employers’ Reaction to Wage Hikes The share of wages in total production costs had substantially declined through the 1980s since wages had been kept down by political means, while labour productivity had steadily risen. The decline in real wages was reversed in 1989 because of the outburst of working-class militancy, and organized labour continued to win significant wage increases in 1990 and 1991. Private capital initially did not strongly oppose real wage increases. High private sector profitability together with the low share of wages in production costs facilitated high wage settlements in the 1989 and 1990 collective bargaining rounds (OECD 1993, 64).23 As a result of the significant real wage increases in 1989 and the early 1990s, labour costs began to rise. The private sector could not make up for the real wage increases through labour productivity gains (OECD 1993, 49). Wages became a major production cost again. Employers started developing new strategies for lowering labour costs in response to substantial wage increases. Many of these strategies had often been employed in developed capitalist countries in the 1970s

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and 1980s and are still widespread throughout the capitalist world. One strategy was to shed labour on a massive scale. In Turkey in the early 1990s, it became a common practice to lay off large numbers of workers either just prior to or just after the new rounds of collective bargaining in an effort to reduce labour costs (for detailed documentation, see Petrol-Is Yearbooks 1991– 5). Companies tended to substitute capital for labour because of the surge in labour costs (OECD 1993, 65). But capital substitution was only one aspect of layoffs. Another aspect was the replacement of unionized or more senior workers at the high end of the wage ladder with inexperienced, lower-wage workers. In some cases, employers rehired dismissed workers after they agreed to start at the minimum wage and/or resign from their respective unions (Koc
1992b, 11). Another method of cutting labour costs was to subcontract or outsource some services or some components of the final product. Subcontracting was (and still is) generally done to small workshops and in some sectors to home-based producers, as in the garment industry, who were mostly women and teenage girls. Bigger companies resorted to subcontracting not only as a means of cutting labour costs but also as a strategy of preventing unionization, because it is much more difficult for workers to unionize in small workplaces. Hiring temporary and parttime employees also increased in this period (OECD 1993, 64; for detailed documentation of these practices, see Petrol-Is Yearbooks 1991–5). As with employees in smaller workplaces, it is more difficult to organize part-time and temporary labour. There was also a significant rise in informal employment, especially in private manufacturing industry in the early 1990s (Boratav, Yeldan, and Ko¨se 2000, 9–10, Table II-1). All of these changes in employment relations created new challenges for trade unions. Unless they developed new effective strategies for dealing with the special needs of subcontract, part-time, and temporary employees, they were certain to suffer a shrinking base of membership. Besides labour cost-cutting methods at the enterprise level, private capital formulated another solution to “the labour question”. This solution was a social contract among the trade union movement, the employers’ associations, and the state, which would include corporatist wage agreements at the national level, as explained in Part 3 of this book. The analyses of state-organized labour relations under the military regime of 1980–3 and in the post-military era lead to several

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conclusions. First, transition to the civilian regime after three years of military rule ushered in important changes in relations between the state and the trade union movement. Lacking an organizational base in civil society, the military administration had relied on authoritarian corporatist arrangements both as a mechanism of control over the working class and as a linkage of communication with it. In contrast, in the post-military era, the civilian government of the neoconservative Motherland Party had a hegemonic presence in civil society. Its rule was grounded on a hegemonic project that mobilized significant political support from different sections of society, including the working class. This allowed the ruling MP to pursue a policy of rejecting and undermining trade unions as intermediaries and appealing to workers directly as voters and citizens or as part of the ortadirek (“central pillar of society”). Second, although this change in the dynamics of organized labour – state relations was important, there was a basic continuity in the state’s labour policies. In other words, transition to the parliamentary regime did not lead to any significant changes in the state’s labour policies. The marginalization of labour representation in the policy-making process, the repression of wages and social benefits, and a highly interventionist industrial relations policy favouring employers characterized both periods. The restrictive trade union legislation of the military regime also remained in force without major changes in post-military years. The state’s sustained exclusion of working-class interests and its further expansion into the sphere of industrial relations to control and discipline organized labour inevitably created reactions from the labour movement. A turning point was the outbreak of rank-and-file militancy at the end of the 1980s. Although the objectives behind the mobilization of labour were primarily economic (better wages and social benefits), they were not limited to economic demands. In fact, the principal target of labour actions was the MP government as the architect and enforcer of anti-labour policies. Among the demands of the labour movement was also democratization. However, labour mobilization at the end of the 1980s differed from working-class militancy in the late 1970s. The labour movement in the late 1970s had included influential radical leftist elements that rejected the capitalist system as inherently exploitative and defined the ultimate goal of their struggle as transformation of the existing order toward socialism. In contrast, while labour actions reached

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record levels at the end of the 1980s and the beginning of the 1990s, they presented no radical challenge to the existing socio-economic order. This helps to explain why the state’s response to the eruption of working-class militancy was not particularly harsh in light of the earlier experience. It also helps us to understand why the initial response of private capital was to meet the trade unions’ wage demands and urge the government to do so in the public sector rather than to call upon the state to use repressive measures to prevent further labour actions as well as radicalization of the labour movement.

PART 4 THE FAILED SEARCH FOR A NEW SOCIAL SETTLEMENT AND THE SYSTEMIC CRISIS

There was an important attempt to create a new “national-popular” consensus in Turkey in the early 1990s. This attempt was represented by the formation of a new centre-right and centre-left government coalition, which promised further democratization and distributive justice. The new social and political settlement was to be inclusive of labour and other subordinate interests that had been marginalized over the past decade. This marked a move away from the earlier state policy of excluding organized labour from the political process and repressing its interests through predominantly coercive measures. The government wanted to sustain the outward-oriented economic strategy and the neoliberal economic reforms without fundamental changes while trying to institute a more inclusive political economy. Part 4 examines the political project of a more inclusive inter-class settlement and the structural limits imposed by the neoliberal economic strategy on this project. I argue that the changes in political discourse in favour of democratization and increased redistribution to subordinate interests were important, but the attempt at a new social and political settlement failed mainly because the neoliberal economic model in Turkey did not allow enough room for the state to mediate labour – capital relations to offer concessions to both economic and democratic demands of labour without undermining the interests of capital. The instability of the neoliberalized economy restricted the state’s ability to

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respond to the working class’s economic demands without risking capital’s interests within the existing economic order. This inability to rectify deepening socio-economic inequalities was a major reason for the state’s legitimacy crisis in the second half of the 1990s. It was also a major factor behind the rise of the Islamist movement as a powerful political force.

CHAPTER 11 THE POLITICAL PROJECT OF AN INCLUSIONARY STATE AND ITS NEOLIBERAL LIMITS

Democratizing the restrictive constitution and other major laws inherited from the military regime was a major part of the new settlement attempted by the TPP – SDPP government in the early 1990s. Turkey’s democratization was directly connected to the solution of two major problems: 1) increased redistribution in favour of labour and other subordinate groups; 2) the rise of Kurdish ethnic nationalism, suppressed for decades. The failure to find solutions to these problems that could obtain wide support constituted the main obstacle to democratization. Besides these two problems, the rise of the Islamist movement created another challenge. During the tenure of the TPP – SDPP government, some steps were taken toward the consolidation of democratic rights and institutions. But these steps fell substantially short of what the coalition parties promised in their electoral campaigns and government programme. This chapter first explains the social and political settlement formulated by the TPP – SDPP government and then discusses the major economic crisis of 1994 and subsequent economic and political instability, which caused the proposed settlement to be abandoned.

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The TPP – SDPP Coalition: A Programme for a New Political and Social Settlement In the elections of October 1991, the Turkish electorate voted the Motherland Party out of office but did not give a clear mandate to any other political party. The Social Democratic Populist Party and the True Path Party, each of which campaigned on a platform promising increased distribution to subordinate classes and attacked the social effects of the MP’s economic policies, formed a coalition government in November 1991. The social democrats agreed to be a junior partner in the coalition. This was the first time in the history of Turkish multiparty politics that a major centre-right party and a left-wing party agreed to share the government. Organized labour supported the coalition. The business community’s position was also favourable (Leander 1996, 150). The coalition government’s programme envisaged significant changes in the Turkish political economy.1 First, democratization was a major objective. Second, redistribution in favour of subordinate interests, particularly workers, public employees, and peasants/farmers, was high on the programme. Redistribution would be achieved through political and institutional reforms intended to strengthen subordinate voices in the political process and through expansion of social welfare functions of the state. The coalition protocol and programme emphasized the consolidation of a fully democratic regime. The 1982 Constitution was to be replaced by a new democratic constitution. All other laws that stood in the way of liberal pluralist democracy were to be repealed (“Coalition Protocol” 1993, 3–9; TPP–SDPP Government Programmes 1991, 3–5; 1993, 2–4). The coalition programme emphasized labour rights and signalled a significant change from the exclusionary state policies and practices of the past decade. The vision of an inclusionary state promised new labour legislation in conformity with ILO norms and conventions as they were implemented in developed democratic countries; a public employees’ union law that guaranteed civil servants’ right to unionize; measures against employers’ attempts to create a non-union labour force; and an unemployment insurance system (“Coalition Protocol” 1993, 5, 18; TPP–SDPP Government Programmes 1991, 15– 16, 25; 1993, 11, 14). The electoral platforms of both the SDPP and the TPP had emphasized the social welfare role of the state. Accordingly, the government

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programme promised to improve the social security system and the social welfare services of the state (“Coalition Protocol” 1993, 17– 18; TPP–SDPP Government Programmes 1991, 15– 16, 24; 1993, 11, 14). Democratization, more equitable distribution, and a better welfare state were to be pursued without any significant changes in the economic growth model, however. The coalition government did not envisage a break with the neoliberal economic strategy. It accepted the neoliberal reforms of the past decade. There were some differences between the first and the second coalitions’ economic policies. Whereas the first coalition’s position was more a resignation to the neoliberal reforms thus far implemented, the second coalition made an explicit commitment to neoliberal transformation of the economy (TPP –SDPP Government Programme 1993). The first reason was replacement of the TPP chair and prime minister, Su¨leyman Demirel, by Tansu C¸iller, leading to formation of the second coalition in June 1993. C¸iller, an Americaneducated economics professor, represented the neoliberal wing in the TPP and received strong support from the business community when she sought the party leadership. The second reason was the SDPP’s gradual change in its economic programme from the earlier strong emphasis on the state’s role in economic development to a perspective that looked at the market and the private sector more favourably (SDPP 1986, 1991). This change came mainly as a result of the triumph of the centrist faction in the intra-party struggle and the party leadership’s conscious decision to avoid antagonizing or frightening national and international capital (Ko¨mu¨rcu¨ 2009). The pro-neoliberal shift in the TPP–SDPP government’s economic policy was most pronounced with respect to privatization. The first coalition’s programme had not rejected privatization but had emphasized reforming SEEs to make them more efficient (TPP– SDPP Government Programme 1991, 9 – 10). This approach was in accordance with the position of the junior social democratic partner, reflecting its misgivings about privatization. The SDPP had mounted a campaign against privatization when in opposition. Despite the first coalition’s emphasis on the reform of public enterprises, the actual practice focused on privatization. The second coalition protocol and programme of June 1993 did not leave any ambiguity concerning the government’s position on the question of SEEs. They explicitly adopted the policy of rapid and comprehensive privatization, including the liquidation of enterprises

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that were not profitable enough for privatization (“Coalition Protocol” 1993, 11– 12; TPP– SDPP Government Programme 1993, 13 –14).2 The persistent fiscal constraint and the government’s inability or reluctance to increase taxes on capital income were important reasons for this move.

Social Consensus in Favour of Democratization The labour movement had emerged as a major pro-democracy force in the country. In demonstrations, meetings, and publications of the labour unions, a new democratic constitution, human and political rights and freedoms, as well as new democratic labour legislation were recurrent themes. Democracy and democratization were adopted by the labour unions as a unifying banner in their struggles, as we have seen. The labour movement thus played an important role in maintaining the issue of democratization on the public agenda. In the early 1990s, the business community began to declare its support for democratization. The capitalist class had offered full support to the military regime of 1980– 3. It had also continued to support the restrictive politico-juridical institutions established by the military regime after transition to the multiparty parliamentary system. There were several important reasons for the business community’s move to support democratization in the early 1990s. The first reason was the strengthening of pro-democracy forces in the country. The second reason was the dramatic change in the international political structure because of the end of the Cold War and the collapse of the Soviet Union, which had major impacts on Turkish domestic politics both directly and indirectly. The indirect impact was through major Western powers’ adoption of democracy and human rights as the new dominant ideology at the international level. This played an important role in influencing the political orientation of the Turkish capitalist class. Furthermore, collapse of the Soviet Union as well as weakness of the Turkish radical left freed Turkish capital of the “communist threat”. The third reason was that the business sector also saw an instrumentalist interest in democratization. It was concerned with Turkey’s relations with the European Union. Especially in the context of the dual trend toward the creation of regional trade blocs and economic globalization, Turkish capital started to provide strong support for Turkey’s EU

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membership. Turkey had to further democratize to become a credible candidate for membership in the EU. With regard to Turkey –EU relations, the Turkish business community thus started to pursue “internationalization through democratization”.3 The MP government had filed an official application for full membership in the EC in April 1987. In its decision, delivered in December 1989, the European Commission recommended not opening accession negotiations right away. Its justification was that the economic and political situation of Turkey would create adjustment problems (Eralp 1993, 37; full text of the commission’s report in Cumhuriyet, 21 December 1989). Given the low probability of Turkey’s admission into the EU in the near future, the Turkish government targeted a customs union, also what the EU proposed. The Turkish authorities saw a customs union as an important step toward full membership. Thus, the further development of Turkey’s relations with the EU was an important motivation for Turkish capital’s support for democratization at that time. Public debate on democratization gained momentum following the TPP–SDPP government’s adoption of democratization as a priority in ¨ SIAD submitted a report to the government in April its programme. TU 1992 that included its recommendations concerning amendment of the constitution.4 The report stressed the need for a clean break with the 1982 Constitution with respect to fundamental rights and freedoms. It also supported amendment of some of the restrictive provisions of the constitution dealing with trade unions, such as the ban on their political ¨ SIAD seemed to accept that activities (Cumhuriyet, 22 April 1992). TU democratization required lifting some of the legal restrictions on trade unions. TISK, as the employers’ organization responsible for industrial relations, on the other hand, was overtly concerned that labour provisions of the constitution might also be amended. Although it did not oppose amendment of the constitution to improve human rights and freedoms, TISK continued to oppose amendment of labour provisions of the constitution as well as amendment of the labour legislation (Isveren, June 1992, 22 – 3; TISK 1992a, 15). By the early 1990s, there had emerged an overall consensus among different social and political forces on the need for democratization. The discourse of democracy had gained such legitimacy that no one could speak openly against it. But there was no agreement about how far

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democratization should go and which particular features it should have. Broad public support for democratization led to the coalition government’s announcement of a democratization plan on 18 May 1994. The plan reaffirmed the government’s commitment to comprehensive changes in the constitution and a number of existing laws, including labour laws, with the intent of consolidating democratic rights and institutions. Nevertheless, implementation of the plan was feeble. A number of amendments were finally made to the constitution in July 1995. The changes brought about some improvements but fell far short of what was necessary to remove the extensive restrictions on democratic rights and freedoms. This was especially the case with respect to labour rights. The constitutional amendments were still significant. This was the first time in post-World War II Turkish history that major constitutional changes were made under a civilian regime.

Constitutional Changes: Important but Limited The government’s bill to amend the constitution and the final act approved by the National Assembly were products of fierce bargaining ¨ zbudun 1997).5 The and power struggle among the political parties (O National Assembly dominated by the right-wing political parties passed the bill after rejecting six of its provisions. Four of the rejected amendments were concerned with labour rights (Tu¨rkiye Bu¨yu¨k Millet Meclisi [TBMM] Tutanak Dergisi, Do¨nem 19, Vol. 93, B: 146, 22.7.1995, O: 3, 242). After long debates and disputes, the National Assembly passed a constitutional amendment that stipulated the recognition of public employees’ right to establish unions by a special act. But public employees’ unions were denied the right to conclude collective agreements and strike. The approved provision limited the powers of public employees’ unions to “appealing to judicial authorities” and entering into “collective talks” (toplu go¨ru¨sme) with the administration. In these talks, the public employees’ unions could present their demands but not conclude collective agreements. The final say over the agreement thus reached belonged to the Council of Ministers (Article 4, Law No. 4121) (Official Gazette No. 22355, 26 July 1995). This limited recognition of public employees’ union rights was a compromise reached only after the SDPP/RPP threatened to withdraw its support from the entire amendment bill unless public employees’ right to unionize was included in the constitution. The only other significant improvement in

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labour provisions of the constitution was the repeal of Article 52. This article banned trade unions from political activities. Since the late 1980s, trade unions had nibbled away at this ban with some success. With the constitutional change, the de facto situation became de jure. However, changes in articles of the constitution dealing with labour rights could not be effective until they were reflected in the Trade Unions Law. This law was accordingly amended on 28 June 1997. Other constitutional amendments removed some major restrictions on political parties and associations, reduced the minimum age for eligibility to vote and join political parties, and increased the number of seats in the National Assembly (Law No. 4121, Official Gazette No. 22355, 26 July 1995). Neither the government bill nor the final act passed by the National Assembly had anything to offer for the ethnic rights of Kurds. This was despite the promises in the TPP– SDPP coalition government’s programmes and protocols of November 1991 and July 1993 to guarantee the free expression and development of ethnic cultural and language rights. This showed that the country’s political elite, as well as the generals, who had major influence in determining the state’s policy concerning the Kurdish question, were not ready to grant minority ethnic rights (cultural and language rights) for Turkey’s citizens of Kurdish origin. The terrorist and violent actions of the armed secessionist organization Kurdistan Workers’ Party (PKK), which escalated in the early 1990s, also hampered Turkey’s democratization in this regard.

Democratizing Labour Legislation through Internationalization When the SDPP and TPP entered into a coalition, the TPP as senior partner took charge of economic policy, while the SDPP assumed responsibility for improving labour rights and social security. The Ministry of Labour and Social Security was given to the social democrats. One of the first initiatives by Minister of Labour Mehmet Mog˘ultay was to push through the cabinet and National Assembly seven ILO conventions.6 Partly to improve Turkey’s standing before the ILO and EU, and partly in response to pressure from the trade union movement, all seven ILO conventions were approved by the National Assembly in November 1992. Six of the seven conventions became national law after

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¨ zal.7 But using his constitutional their ratification by President Turgut O ¨ zal returned the Convention Concerning Termination of authority, O Employment at the Initiative of the Employer (No. 158) to the Parliament for reconsideration. Employers were strongly opposed to the ratification of this convention, as explained below. The Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87), and the Labour Relations (Public Service) Convention, 1978 (No. 151), were particularly important for trade union rights and freedoms. The former was concerned with universal principles and guarantees concerning freedom of association for all employees, including public servants. Convention No. 151 specifically dealt with public employees and guaranteed their freedom of association. The convention did not cover the right to strike, however. With ratification of these two ILO conventions, public employees’ right to unionize was recognized. Many articles of the Trade Unions and Collective Bargaining, Strike, and Lockout Acts of 1983 as well as some labour provisions of the 1982 Constitution were in contravention of ILO Conventions Nos 87 and 151. Ratification of these two conventions and approval of ILO Convention No. 158 by the National Assembly diverged from the traditional Turkish pattern of approving international conventions concerning human rights in general and ILO conventions in particular. According to Gu¨lmez (1992, 14), a defining characteristic of this pattern was ratification of only those conventions that were in conformity with existing national legislation and thus did not require revision of that legislation. The relevant national laws were not in conformity with the approved ILO Conventions Nos 87, 151, and 158, however. This situation was a departure from the traditional pattern of adopting international treaties. A ratified international convention has the force of law, and its unconstitutionality cannot be challenged in the Constitutional Court according to the Turkish constitution. The higher courts also tended to uphold an international convention in cases in which there was the absence of a special national act regulating its implementation or in which the national legislation was in contravention of the international convention (Gu¨lmez 1992, 14– 15). Nevertheless, full effectiveness of ratified ILO conventions required changes in national laws or enactment of new legislation. The Turkish state’s failure to comply with these

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conventions could lead to a bad reputation and invite pressures from the ILO and international trade union movement. Their ratification bolstered the Turkish labour movement’s demand for the democratization of union laws. A number of amendments were made to the Trade Unions Act on 4 March 1995 to bring it into conformity with ratified ILO conventions. But this took place before amendment of the constitution in July that year. Therefore, the changes remained within the restrictive framework of the 1982 Constitution. Further amendments to the Trade Unions Act followed in 1997 in accordance with earlier changes in the constitution and adopted ILO conventions. But earlier extensive restrictions concerning collective bargaining and strikes remained in the Collective Bargaining, Strike, and Lockout Act. In revising the trade union legislation, the government acted on the principle that the revisions were acceptable to the capitalist class, or at least would not encounter its strong opposition, while removing some of the restrictions to bring the legislation more in line with ILO standards and to offer some benefits to labour. A bill on public employees’ unions was submitted to the National Assembly in the wake of the constitutional amendment, but its legislation did not materialize. It was not until 2001 that the Public Employees’ Unions Law was enacted. Since the constitutional amendment of July 1995 did not allow public servants’ unions the right to sign collective agreements and the right to strike, the Public Employees’ Unions Law (No. 4688) of 2001 only provided for the right to “collective talks” with the administration.8

Business Opposition to Job Security and Unemployment Insurance In addition to his campaign to democratize the trade union legislation through internationalization, Minister of Labour Mog˘ultay led a second campaign for workers’ interests as part of the coalition government’s and more particularly his party’s promise of a new political and social settlement (Ministry of Labour and Security 1992). As discussed in Chapter 10, in the early 1990s, employers reacted to rising wages by layoffs, outsourcing, and subcontracting. In collective negotiations, employers turned the threat of layoffs into a bargaining chip to deter labour unions from demanding high wage increases. As a result, job security became the main concern for workers and labour unions. Soon

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after the coalition government came to power, the Ministry of Labour drafted a bill on employment protection. The purpose of the bill was to provide protections and the right to judicial recourse for workers against wrongful dismissals.9 The bill thus proposed to limit employers’ longenjoyed prerogative to terminate the employment of their workers almost at will. The job security bill caused quite a stir in the business community. ¨ SIAD declared their opposition to it and put pressure Both TISK and TU on the minister of labour to withdraw it. TISK organized a public campaign, claiming that if adopted the bill would damage Turkish industry’s competitiveness in the global market and discourage private entrepreneurship as well as foreign investment (Isveren, January 1992, 2– 5; TISK 1992a, 17 –18, 93 – 101; 1992b; 1995a, 225– 39). As a result of strong business opposition, the Ministry of Labour made significant concessions before submitting the bill to the Council of Ministers.10 Even the revised bill was not acceptable to employers. The looming possibility of increased job security for workers united the business community in opposition. The Free Enterprise Council, which included all the major business organizations (TISK, TU¨SIAD, TOBB, and the Union of the Chambers of Agriculture),11 convened on 16 May 1992. The meeting was in reaction to the Ministry of Labour’s submission of the bill to the Council of Ministers (Isveren, May 1992, 2– 3). There were two main reasons for the strong business reaction. First, employers had been highly protective of their management prerogatives and freedom to hire and fire. Second, they became suspicious of the intentions of the social democratic partner of the government coalition. They believed that, if the job security bill were enacted, it could open the door for further changes against capital. TISK officials even suggested that the bill might be a step toward an “e´tatist” economy (Isveren, January 1992, 3; February 1992, 5). Whereas business organizations led an effective campaign to pressure the government to abandon the job security bill, labour unions largely failed to organize a concerted campaign in defence of the bill (Koray 1994, 219; Petrol-Is 1992b, 76). In the end, the government removed the draft bill from its agenda. The draft job security bill was in accordance with the ILO convention concerning Termination of Employment at the Initiative of the Employer, 1982 (No. 158). But it included greater protections for

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labour than the ILO convention. While the national bill on job security was effectively removed from the government agenda in the face of strong business opposition, the international labour convention of the same nature was eventually ratified by the state. Unlike adoption of the national bill, ratification of the international labour convention served a double purpose. On the one hand, it appeased the national labour movement; on the other, it played to the international institutions, especially the ILO and EU. The Turkish state could use adoption of the ILO convention as evidence of bringing Turkey’s labour and human rights up to the standards of the ILO or Europe. ILO Convention No. 158, together with six other ILO conventions, was approved by the National Assembly in November 1992 in spite of employers’ opposition. But President Turgut O¨zal refused to sign the act ¨ zal once again threw his and sent it back to the Parliament for review.12 O weight, this time in his capacity as president, in favour of employers. It was about a year and a half later, on 9 June 1994, that the Parliament debated and approved the controversial ILO convention the second time.13 But without a national law giving effect to its provisions, the convention did not come into force. Nevertheless, it helped labour unions to keep the issue on the public agenda. Another significant attempt by the Ministry of Labour to give voice to labour concerns was the creation of unemployment insurance. Its creation was in the TPP– SDPP government programme. The ministry convened the tripartite Work Council to discuss the matter on 27 –28 April 1992 and again on 24 September 1992. The last time that the Work Council had met was in 1984. The meeting of the Work Council to discuss unemployment insurance signified a reversal of the past decade’s policy of limiting workers’ social security rights. Nevertheless, like the job security bill, the coalition government failed to enact a law creating unemployment insurance. One reason was the serious conflict between organized labour and employers concerning the issue of severance compensation. From TISK’s position, if unemployment insurance were to be instituted, employers should not have to pay severance compensation on the termination of employment. Employers also objected to new premiums for financing unemployment insurance (Isveren, April 1992, 2– 5; TISK 1992a, 104– 7). As a result, the senior conservative partner of the coalition was reluctant to support the unemployment insurance bill of the Ministry of Labour (Koray 1994,

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220; Senses 1996, 11). Labour unions’ response to employers’ demand that unemployment insurance replace severance compensation was unequivocal opposition (Hak-Is 1992, 264– 9; 1995, 248– 50; Tu¨rk-Is 1992a, 146– 8). The financial difficulties of the social security system at the time created another obstacle to the creation of unemployment insurance. So democratization and new legal and social protections for labour were major elements of the new political and social settlement that the TPP–SDPP coalition had proposed. By the early 1990s, a consensus had emerged among the major political and social forces in favour of democratization, but there was no agreement on how far democratization should go. Opposition from the rightist political parties prevented more fundamental legal changes, though a number of pro-democracy amendments to the constitution were enacted. Strong opposition from capital also frustrated the government’s initiatives to expand legal and social protections for workers. Although the change in political discourse in favour of democratization and the social welfare state was important, it did not translate into concrete measures in most respects.

The Crisis of the Neoliberalized Economy and the End of the Inclusionary State Project A major economic crisis and the subsequent adoption of austerity and further structural adjustment policies in 1994 marked abandonment of the inclusionary social settlement project. The root cause of the crisis was the structural contradictions of the neoliberal economic model implemented since 1980; the policy response was to carry on with structural adjustment and to deepen neoliberal reforms in the economy. In contrast to the 1980s, the political context of the 1990s was not very permissive of the successful implementation of such structural adjustment programmes that entailed uneven burdens on different social classes and were hardest on the working class. The political party system was highly fragmented; no party was able to win enough votes to form a government without the support of one and even two of the other political parties. Political representation of the capitalist class was also divided between two major centre-right parties, the MP and the TPP. Although the two parties became more similar, especially in their economic programmes as the formerly traditional conservative

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TPP moved toward neoliberalism, they continued to be major rivals throughout the 1990s. Moreover, disagreements and power struggles among the partners of several different coalition governments, starting with the TPP and SDPP coalitions of 1991 – 5, defined Turkish politics of the 1990s. Collapse of the TPP – SDPP/RPP coalition in September 1995 caused several months of governmental uncertainty, followed by a series of short-lived coalitions. The country had five different governments of various parties (four coalitions and one minority government) and went to national elections three times from December 1995 to November 2002. A major source of political instability in the 1990s was the rise of the Islamist movement and the electoral success of the Islamist Welfare Party, which successfully capitalized on growing mass discontent with the existing order through its anti-status quo discourse. In addition to frequent changes in government and political instability, which seriously undermined state capacity to implement a coherent economic programme, the labour union movement effectively resisted the implementation of an IMF/World Bank-prescribed austerity and structural adjustment programme in the 1990s.

Structural Weaknesses and Contradictions of the Neoliberal Strategy At the root of the 1994 crisis and persistent problems of the Turkish economy in subsequent years were structural weaknesses of the neoliberal strategy.14 Neoliberal reforms were effective in reorienting the pattern of accumulation from ISI to export-led growth. The share of exports (excluding services trade) in GDP was only 3.2 per cent in 1980. It consistently grew to 8 per cent of GDP on average in 1991 –5 and to 15.7 per cent and further to 16.5 per cent in 2006– 10. The share of manufacturing in the country’s exports also increased significantly. Manufactures constituted 36 per cent of Turkish exports in 1980. Their share rose to 88.2 per cent by 1995 and remained in the range of 92 – 5 per cent from 2000 to 2010 (SPO 2012, Tables 3.2 and 3.3). An important weakness of Turkey’s export growth is the fact that nearly half of Turkish manufacturing exports are low-technology goods. As of 2003, low-technology goods, such as textiles and apparels, were responsible for 45 per cent of all manufacturing exports, though this represented a decline from 58.7 per cent on average for 1991– 5 (OECD

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2006, 244–7). In 2012, basic metal manufactures accounted for 20.3 per cent of Turkey’s total manufacturing exports, textiles and clothing 17.6 per cent, and motor vehicles 11.3 per cent (TSI 2013a). Despite recent increases in the shares of medium-high-technology and high-technology goods in Turkish exports, low-technology goods constitute a much higher proportion of Turkish manufacturing exports compared with comparable emerging market countries such as Mexico and South Korea (OECD 2006, 247).15 The Turkish state was not able to pursue a consistent strategy of promoting high-tech industries. That was partly because the export orientation of the Turkish economy took place simultaneously with far-reaching neoliberal reforms. As a result, unlike the South Korean and Taiwanese states in the 1970s and 1980s and China today, which promoted export-oriented growth without neoliberalization of their economies, neoliberal restructuring of the Turkish political economy restricted the state’s capacity to provide selective supports to targeted export industries. From the mid-1990s, Turkey’s commitments under the WTO’s rather intrusive trade agreements and the EU customs union agreement of 1995 also made it more difficult for the Turkish state to provide export incentives for select industries without contravening its international trade agreements. Since the major portion of Turkey’s exports continued to consist of lower-technology and labour-intensive manufactures, labour costs remained a key factor for the international competitiveness of Turkish industry. A persistent problem of the Turkish economy has been a large trade deficit. While the amount of Turkish exports grew significantly both in dollar value and relative to the GDP, so did Turkey’s imports. The annual average proportion of imports covered by exports was 63.4 per cent in 1990 – 4, 58.4 per cent in 1995 – 9, 65.9 per cent in 2000 – 4, 65.4 per cent in 2005 – 9, and 60.6 per cent in 2010 – 12. Just before the 1994 and 2000 – 1 crises, the ratio of exports to imports had recorded declines of 12.2 and 14.4 percentage points respectively compared with previous years (TSI 2013a). Other types of receipts from abroad could not compensate for the trade deficit. As a result, Turkey ran current account deficits every year between 1980 and 2012 except for two years in the 1980s, three years in the 1990s, and one year between 2000 and 2012. Its current account deficit tended to increase in the second half of the 2000s compared with the previous two and a

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half decades. The annual average of the current account deficit for 2005 – 11 was 5.8 per cent of GDP, with some fluctuations from year to year. Turkey’s current account deficit was among the highest in the OECD during the same period (OECD 2013; SPO 2012, Table 3.1). Fast economic growth of the Turkish economy during this period increased the demand for imports, whereas exports failed to keep pace with imports. The current account deficit was financed mostly by foreign borrowing. The amount of total foreign debt continuously grew over the last three decades from $49 billion in 1990 to $337 billion in 2012 (Table 11.1), but there was not a significant consistent increase in foreign debt as a percentage of GNP over the same period (SPO 2012, Table 3.11). However, more important was the increase of short-term debt as a proportion of total debt and as a percentage of current account revenues. The share of short-term foreign debt in total foreign debt was below 20 per cent in the 1980s, and it rose to the low 20s per cent in the 1990s (except 1993). While the percentage was in the low 20s or below from 2001 to 2009, it jumped to 27 per cent in 2010– 11 and to 29.9 per cent in 2012. Turkey’s short-term foreign debt both as a percentage of current account revenues and in dollar value reveals a clear pattern. The financial crises of 1994 and 2000– 1 were preceded by huge inflows of shortterm, speculative funds added to the total short-term debt. There was a big increase in short-term debt as a percentage of current account revenues from 39.7 per cent in 1991 to 52.7 percent in 1992 and 59.5 percent in 1993. The surge in short-term financial inflows and shortterm debt, followed by a sudden reversal, created conditions for the occurrence of a major economic crisis in 1994. Similarly, the country’ short-term debt as a percentage of current account revenues jumped to 48.9 per cent in 2000 from 33.6 per cent in 1998 just prior to eruption of the November 2000 and February 2001 crises (Table 11.1). In both cases, huge financial inflows were followed by huge financial outflows (see also Balance of Payments Table 3.9 in SPO 2012). Turkey also experienced a flight of international financial investments in the years of international financial crises, for example in 1998 as a result of the Asian financial crisis and in 2009 following the international spread of the American subprime mortgage crisis. Thus, as the Turkish economy became fully integrated into global financial markets, it became subject to all of the volatilities and frequent overreactions of global financial

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Table 11.1 Foreign Debt and Short Maturity Debt as a Percentage of Current Account Revenues in Millions of US$ Year

Total Debt

Short-Term Debt

Short-Term Debt/Current Account Revenues %

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

40,722 43,911 49,035 52,381 58,595 70,512 68,705 75,948 79,299 84,356 96,351 103,123 118,602 113,592 129,559 144,079 160,992 169,919 207,736 249,478 280,367 268,374 289,387 304,207 336,863

6,417 5,745 9,500 9,500 12,660 18,473 11,187 15,500 17,072 17,691 20,774 22,921 28,301 16,790 16,424 23,013 32,205 38,283 42,623 43,135 53,104 49,711 78,217 81,996 100,951

32.0 25.8 36.1 39.7 52.7 59.5 33.8 36.5 33.6 30.6 33.6 43.5 48.9 30.2 26.9 31.3 33.8 34.7 34.0 28.2 28.7 33.0 48.5 43.2 47.3

Sources: SPO (2012, Tables 3.9, 3.10; 2013, Tables 5.1, 5.24).

flows, especially short-term flows. The private sector also became more reliant on short-term international debt. Nearly all of the short-term foreign debt belonged to the private sector in the 2000s. While the public sector was responsible for the greater portion of total foreign debt in the 1990s and early 2000s, the private sector’s foreign debt started to surpass the public sector’s foreign debt and nearly doubled it by 2010,

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even though the dollar amount of the public sector’s foreign debt also grew (SPO 2012, Table 3.10). To sum up, Turkey’s dependence on short-term financial inflows increased in financing the widening current account deficit. The Turkish economy became exposed to the vagaries of hot money movements following full capital account liberalization in 1989. Like a number of other emerging market countries, Turkey became attractive to shortterm and mainly speculative international financial investments that search globally for opportunities for fast, large profits and then flee at the first perceived sign of weakness in the local economy. Not only international financial firms but also Turkish banks, other financial firms, and even manufacturing companies became heavily involved in financial arbitrage. Especially in the 1990s and early 2000s, local banks and other firms borrowed short term in global financial markets and invested their borrowed foreign currency funds in high-yield local financial instruments, especially treasury bills and government bonds. They often made huge gains as arbitrage rates remained very high during this period, mainly because of the high public sector borrowing requirement (PSBR) and overvalued local currency. The rates at times were as high as over 100 per cent in the 1990s and early 2000s (Cizre and Yeldan 2005, 394– 5).16 International financial in/outflows played a major role in determining the Turkish pattern of capital accumulation and economic growth in the 1990s and 2000s.17 Short-term international capital flows fuelled fast economic growth for a certain period of time; then the sudden reversal of capital flows triggered major economic crises, as in 1994 and 2000–1. Each crisis caused great economic hardship and forced the Turkish government to acquiesce to a wide range of intrusive loan conditions of the IMF. An important effect of Turkey’s opening to the global financial market was subordination of the real economy to financial activities. There was a diversion of resources from fixed investment in production to money making through financial transactions. The financial revenues of manufacturing companies relative to their total profits can be used as evidence. The biggest 500 manufacturing firms’ financial revenues as a percentage of net profit before tax rose from 24 per cent in 1985 to 219 per cent in 1999 (Demir 2004, 855). In short, financial liberalization contributed to the creation of a business environment that encouraged private investors to pursue opportunities for fast returns in contrast to

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THE ECONOMIC TRANSFORMATION OF TURKEY

investing in industrial production, which requires strategic planning and a long-term perspective. A major weakness of the Turkish neoliberal strategy was the declining share of manufacturing in total fixed investments. The impressive increase in the share of manufacturing in total exports since 1980 took place against the background of very poor performance in manufacturing investments. Industrialization based on import substitution had been the core of state economic policy during the 1960s and 1970s. The era of neoliberalism, however, was marked by the virtual absence of an industrial policy by the state. The policy framework was shaped by the expectation that export promotion and the state’s withdrawal from production activities would automatically encourage private investment in the industrial sector. Contrary to expectations, private investors shied away from manufacturing and preferred instead non-production sectors such as residential construction, transportation, and communication. The neoliberal policy of withdrawing the state from production activities and privatization of public enterprises naturally resulted in a sharp decline in public investments in manufacturing. Consequently, the annual amount of manufacturing investments in fixed prices was often lower in the 1980s and early 1990s than in the 1960s and 1970s; thereafter, it tended to improve. Fixed investments in the manufacturing sector as a percentage of total fixed investments also declined in the 1980s and 1990s compared with the earlier ISI period of the 1960s and 1970s. It was only in the second half of the 2000s that the manufacturing sector’s share of total fixed investments improved relative to other sectors and resembled its share in the 1960s and 1970s (SPO 2012, Tables 2.1 and 2.9). The share of manufacturing in GNP and total investments is normally expected to decline relative to the services sector as an economy reaches the stage of advanced industrialization. The Turkish economy has not reached this stage yet; therefore, it is not possible to claim that the decline of the manufacturing sector’s share of investments followed the pattern that advanced industrialized countries went through in the late twentieth century. Attracting foreign direct investment (FDI) was a significant component of neoliberal restructuring of the Turkish political economy. The dollar amount of annual FDI flows into Turkey showed a significant upward trend, especially following full capital account liberalization in 1989. However, as world FDI flows and stocks grew substantially from

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the early 1980s, Turkey was not successful in increasing its share. Its FDI stock as a percentage of world FDI stock was 1.26 per cent in 1980, 0.54 per cent in 1990, 0.26 per cent in 2000, and then 0.69 per cent by 2011. If we look at Turkey’s share of total FDI stock in developing countries, the same pattern emerges. Turkey accounted for 2.96 per cent of developing countries’ FDI stocks in 1980; its share declined to 2.16 per cent in 1990 and further to 1.11 per cent in 2000. It improved in the 2000s to reach 2.17 per cent by 2011, but it was still lower than in 1980 (calculated from UNCTAD 2013). In the pre-1980 period, FDI was heavily concentrated in the manufacturing sector. Significant growth of FDI in Turkey since the mid1980s was accompanied by a marked shift away from the manufacturing sector into the services sector. From the mid-1980s, the share of the services sector in annual FDI inflows tended to rise. The manufacturing sector’s share was still somewhat higher in the 1990s, but in the 2000s the services sector received far greater amounts of FDI, and its share far surpassed that of the manufacturing sector. FDI’s preferred services sectors were banking, commerce, and tourism.18 In the manufacturing sector, FDI was concentrated in several branches, such as transportation vehicles, electronics, and food and beverages. Thus, the contribution of FDI to the development of Turkish industry remained very limited under the neoliberal open door policy. The increased role of FDI in the Turkish services sector in the 2000s was in line with the significant growth of global FDI in services. This growth occurred because of the removal of many earlier national restrictions on foreign capital in many services sectors following signing of the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Investment Measures (TRIM) within the WTO in 1994 and the privatization of state-owned firms in various services, such as banking, telecommunication, and air transportation.

The Financial Crash and Further Neoliberal Adjustment These structural weaknesses of the Turkish economy, which emerged in the process of its neoliberal restructuring, persisted and constituted the underlying causes of two devastating crises in 1994 and 2000– 1.19 This section focuses on the 1994 crisis and the policy response to it. My reasons for focusing on this crisis are as follows. First, the 1994 crisis

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THE ECONOMIC TRANSFORMATION OF TURKEY

was the first structural crisis of the Turkish economy since the onset of its neoliberal restructuring. It also presaged the 2000– 1 crisis, which occurred only six years later. Second, the 1994 crisis not only resulted in abandonment of the government’s attempt to build a politico-social settlement inclusive of labour interests but also demonstrated the limits of the possible with regard to “compensatory neoliberalism”.

Budget Deficit and Interest Payment Inflation The 1994 crisis resulted from the contradictions and imbalances generated during the implementation of a neoliberal strategy. But the ever-expanding public fiscal deficit was the proximate cause of the crisis. A growing budget deficit and recourse to monetization and borrowing to finance the deficit created tensions in the domestic financial market. The cause of the deficit was not, however, independent of neoliberal transformation of the Turkish political economy. Fiscal orthodoxy and balanced budgets were not an aspect of the Turkish version of neoliberalism implemented by the MP governments of 1983– 91. The priority was on growth-oriented policies, especially after the mid-1980s. The IMF and World Bank regularly monitored the Turkish economy, and Turkish governments tried to maintain amicable relations with both institutions. Yet there were no formal agreements with the IMF between 1985 and 1994; Turkish governments thus had more flexibility in the area of fiscal policy. When it came to power in November 1991, the coalition government of the TPP and SDPP inherited a large budget deficit from the former MP government. During its rule, the fiscal deficit further expanded. The PSBR had increased from 3.6 per cent in 1988 to 7.7 per cent in 1993 as a percentage of GDP (Table 11.2). It is necessary to explain briefly the factors behind the widening fiscal deficit in the 1990s to disclose its socio-political nature and its relation to neoliberal restructuring of the state’s economic role. Because of popular backlash and labour mobilization against neoliberalism, at the end of the 1980s, the MP government had started to allocate more funds for social welfare expenditures and public employees’ wages after substantial cuts. This budget trend continued under the rule of the TPP–SDPP coalition, which came to power on a platform of increased distribution to subordinate classes (Tables 2.3, 11.3, and 11.4). Increases in public employees’ salaries and social welfare expenditures contributed

2 minus indicates surplus. Source: SPO (2012, Table 5.4).

3.2 0.5 3.0 0.6 0.0 0.2 0.9

2.3 2.5 2.3 3.8 2 0.6 2 0.2 2 0.4 1.0 1.6 1.3 3.0 0.3 0.2 0.0 0.1 0.0 0.0 2 0.3 2 0.3 2 0.2 2 0.4 0.3 0.5

2.6 0.2 0.0 0.1 0.7

7.9 3.3

4.0 1.3

5.5 7.5 1.7 2.9

3.6 0.7

11.6 8.9 0.2 2 4.3

1.0 0.5 0.0 0.4 0.6

0.3 2 0.3 2 0.1 2 0.2 0.3 0.2 0.2 0.2 0.0 0.0 0.0 0.0 0.4 0.3 0.0 0.1 0.7 0.5 0.1 0.0

1.0 1.8 1.6 0.3 0.3 0.3 0.0 2 0.1 2 0.1 0.3 0.2 2 0.2 0.0 0.5 2 0.9

5.0 2.9 3.0 6.2 5.8 5.5 8.9 8.2 0.6 2 2.8 2 2.5 2 1.3 2 0.1 2 3.3 2 1.4 2 4.0

7.7 4.6 3.7 6.5 5.8 7.1 1.5 2 3.5 2 3.4 2 2.2 2 0.9 2 2.5

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Public Sector Borrowing Requirement (PSBR) as % of GDP

Total PSBR Total PSBR Excluding Interest Payments Consolidated Budget Consolidated Budget Excluding Interest Payments SEEs Local Governments Revolving Funds Social Security Institutions Extra Budget Funds

Table 11.2

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THE ECONOMIC TRANSFORMATION OF TURKEY

to widening budget deficits of the early 1990s. Large sums of money spent on military measures against the PKK in southeastern Turkey also made it difficult to control the deficit. However, the principal reason for the increasing fiscal deficit was a vicious circle of interest payments on debt and further borrowing from domestic and international markets to service the debt. For example, just prior to the 1994 crisis, PSBR/GDP was 7.7 per cent in 1993 compared with 1.5 per cent when interest payments were excluded. The government thus faced a serious situation of “interest payments explosion”. When looking at the budget problem from the revenue side, one is struck by the very low ratio of tax revenue to national income. The ratio was in the range of 10 – 13 per cent in the late 1980s and early 1990s, several percentage points below the ratio in the late 1970s (SPO 2006, Table 5.6).20 Turkey’s tax revenue as a percentage of GNP was the lowest among OECD countries and 10 percentage points below the OECD average in the early 1990s (OECD 1995, 42). One reason for low tax revenue relative to GNP was widespread tax evasion and avoidance by firms and self-employed groups as well as the existence of a large informal economy.21 Inefficiency and ineffectiveness of the tax administration and inadequate state capacity to formalize the informal economy were partly responsible for this situation. But the growth of subcontracting and outsourcing relations in the neoliberalizing economy also fostered the large informal economy. Furthermore, the external liberalization of the financial sector made it easier for companies and wealthy individuals to evade taxes through the use of offshore financial centres and complicated international financial transactions. An equally significant reason for low tax revenue was the policy of lowering taxes on capital income and business. As explained in Chapter 2, in the 1980s, far-reaching changes were effected in the tax system by the neoconservative MP government as part of neoliberal economic transformation. The changes involved, on the one hand, reducing the progressiveness of personal income tax, excluding dividends, interest income, and capital gains on financial assets and real estate from personal income tax, and, on the other, replacing direct taxes by regressive indirect taxes as the main source of public revenue. In the face of growing public debt and widening fiscal deficit, the TPP–SDPP government adopted a tax reform in 1993 that aimed to increase the minimum effective corporate tax rate while reducing the

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legal rate by eliminating and narrowing numerous exemptions on corporate tax (Boratav, Tu¨rel, and Yeldan 1995, 20; SPO 1995, 114). The second major purpose of the tax reform was to improve the system of tax collection. But this reform was too late and too little to solve the problem of the interest payment explosion and thus to prevent the 1994 financial crash. Efforts to improve the efficiency of tax administration and collection procedures, including a better tax auditing system and tighter accounting and tax registration requirements, continued in later years. The outcome was gradual improvement in tax revenue as a percentage of GNP, rising to 23 –4 per cent by 2005 (SPO 2006, Table 5.6). Nevertheless, the share of regressive indirect taxes in total tax revenues continued to increase from just below 50 per cent in 1990– 2 to the 51 – 60 per cent range in the rest of the decade and even higher to 65– 70 per cent in the 2000s. Thus, the tax system continued to be highly inequitable (SPO 2012, Table 5.12). Despite improvements in the central government’s tax revenues, the vicious circle of ever higher interest payments, larger budget deficits, and further borrowing continued after the 1994 crisis. On the eve of another major crisis of the neoliberalized economy in 2000– 1, despite the primary fiscal surplus of 4.3 per cent when interest payments were excluded, the total PSBR amounted to 8.9 per cent of GDP in 2000. In other words, interest payments on public debt amounted to 13.2 per cent of GDP in 2000; 12.2 per cent comprised the central government’s interest payments (Table 11.2). In the 1990s, fiscal deficit and public debt became major items on the Turkish public agenda. In many countries, governments with neoliberal agendas often used the discourse of deficit and debt to justify cuts in social spending. But large public debt restricts the range of policies available to a government. Especially in cases in which a state is dependent on global financial markets for its financing needs, not only is its national policy autonomy significantly restricted by the exigencies of these markets, but also it becomes more accountable to international creditors than its citizens because of the overriding policy need to maintain a good credit rating.

The IMF-Supported Crisis Solution The immediate event that triggered the 1994 financial crisis was the downgrading of Turkey’s sovereign debt rating, in January 1994, below

16.2 10.2 10.3 2 0.1 10.4 2.9 39.8

1991 17.0 9.2 10.0 2 0.8 11.0 2.8 40.0

1992 17.6 10.0 9.9 0.1 13.9 2.3 43.8

1993 12.3 6.7 7.3 2 0.6 7.9 2.0 28.9

1992 12.7 7.3 7.2 0.1 10.1 1.7 31.7

1993 10.7 3.6 4.9 2 1.3 12.5 2.6 29.4

1994 9.6 3.8 4.2 2 0.4 11.6 1.1 26.1

1995

New GNP Series

9.8 5.3 5.1 0.2 14.5 1.1 30.8

1996

11.1 6.0 5.5 0.5 12.5 1.4 30.9

1997

Source: 1995 Transition Programme (73); 1997 Annual Programme (Table III.25); 1998 Annual Programme (Table III.24). Note: The official sources abandoned the old GNP series in favour of the new series that the SIS first announced in 1993. The amount of GNP in the new national income series is significantly larger (about 30 per cent) than in the old series. This accounts for the lower amount of public expenditures as a percentage of GNP in the new series table compared with the old series table. For the purpose of meaningful comparison with the period prior to the rule of the TPP– SDPP government, I calculated the ratio of public expenditures to GNP according to the old series, for the years 1992 and 1993. The old GNP series (1967 – 93) is given in 1995 Transition Programme (26). The amount of public expenditures used in my calculation is also from that source (73). The old GNP series after 1993 is not available. Although meaningful comparison between the 1980s and the post-1993 years in terms of the ratio of total public expenditures to GNP is not possible, the figures are still useful with respect to the composition of total public expenditures. 1. Budget interest payments, included in transfers, amounted to 10.0 per cent and 7.7 per cent of GNP in 1996 and 1997 respectively. This means that interest payments accounted for the bulk of transfer payments..

13.9 12.1 9.8 2.3 10.3 2.2 38.4

1990

Old GNP Series

Economic Composition of Total Public Expenditures as % of GNP 1990– 97

Current Expenditures Investment Fixed Investment Change in Stock Transfers1 Stock Evaluation Fund Total

Table 11.3

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the investment-grade level by Moody’s and Standard & Poor’s, two leading New York-based private credit-rating agencies (CRAs). The lowering of Turkey’s debt rating followed the Turkish government’s announcement of its 1994 budget, in which the programmed PSBR was over 10 per cent of GDP (albeit 2.5 per cent lower than the realized 1993 level) (OECD 1995, 22). As international private creditors increasingly relied on major CRAs’ assessments of the creditworthiness of both sovereign and private borrowers in the context of globalizing financial markets, the dramatic lowering of Turkey’s credit rating meant cutting the Turkish government off from international loan markets. The downgrading of Turkey’s sovereign debt rating caused a massive flight from the Turkish lira (TL) into major international currencies. The value of the TL plunged. A number of commercial banks were caught holding open positions in foreign currencies. Some banks suffered huge losses as a result of the dramatic depreciation of the TL and the skyrocketing of interest rates. Three small private banks collapsed. The government and the Central Bank took a number of immediate measures to stabilize the currency market and restore public confidence in the banking system. These measures included devaluing the TL, raising interest rates, intervening in the currency market by market operations, and extending insurance coverage to 100 per cent of all saving deposits by real persons. Nevertheless, all of these measures failed to stabilize the financial system and placate international creditors. The government was compelled to adopt a more comprehensive stabilization and structural adjustment programme on 5 April 1994, officially named the Economic Measures Implementation Plan. The programme was very similar to the typical IMF stabilization programmes of the 1980s and 1990s. The government launched the programme without a formal agreement with the IMF. Nevertheless, the government’s subsequent effort to obtain the IMF’s approval showed that anticipation of what would be acceptable to IMF officials informed stabilization measures. The IMF’s approval was essential for Turkey to convince international lenders that it was creditworthy again. In adopting its “own” austerity plan and trying to get IFIs to approve this plan before they imposed their own version, the government sought to stem opposition from within the coalition parties and harsh criticisms from the opposition parties, especially the Islamist Welfare Party and the Democratic Left Party, as well as organized labour (Yesilada and

Transfers to SEEs

Foreign Borrowing

Domestic Borrowing

Interest Payments of Which

Transfers

Investment5

Other Current Expenditures4

Personnel3

Current Expenditures

Total Expenditures

100.0 20.1 51.5 10.3 42.4 8.5 9.1 1.8 13.2 2.6 35.3 7.1 18.2 3.7 13.8 2.8 4.4 0.9 3.7

1992 100.0 24.3 42.2 10.3 34.9 8.5 7.3 1.8 11.0 2.7 46.8 11.4 24.0 5.8 19.1 4.6 4.9 1.2 5.3

1993 100.0 23.1 38.6 8.9 30.4 7.0 8.2 1.9 8.1 1.9 53.3 12.3 33.2 7.7 26.0 6.0 7.3 1.7 2.3

1994 100.0 24.3 45.6 11.1 38.4 9.3 7.3 1.8 7.5 1.8 46.8 11.4 24.0 5.8 19.1 4.6 4.9 1.2 5.3

1993* 100.0 23.1 41.1 9.5 32.9 7.6 8.2 1.9 5.6 1.3 53.3 12.3 33.2 7.7 26.0 6.0 7.3 1.7 2.3

1994 100.0 21.8 37.7 8.2 29.4 6.4 8.3 1.8 5.4 1.2 57.0 12.4 33.7 7.3 27.8 6.1 5.9 1.3 2.7

1995 100.0 26.3 32.6 8.6 24.7 6.5 7.8 2.1 6.0 1.6 61.4 16.2 38.0 10.0 33.7 8.9 4.3 1.1 1.3

1996 100.0 27.2 34.8 9.5 25.9 7.1 8.8 2.4 7.4 1.6 57.8 15.7 28.5 7.7 24.7 6.7 3.7 1.0 1.5

1997 100.0 29.2 33.1 9.7 24.8 7.2 8.3 2.4 6.4 1.9 60.4 17.6 39.6 11.5 36.1 10.5 3.5 1.0 1.0

1998 100.0 35.9 32.6 11.7 24.6 8.8 8.0 2.9 5.6 2.0 61.8 22.2 38.2 13.7 34.9 12.6 3.2 1.1 1.5

1999

100.0 37.3 28.9 10.8 21.2 7.9 7.7 2.9 5.8 2.2 67.1 24.3 43.5 16.3 40.0 14.9 3.5 1.3 1.9

2000

Table 11.4 Central Government Consolidated Budget Expenditures (Yearly Realizations), Economic Distribution (%)1 and as % of GNP2 1992– 2000

0.7 4.9 1.0 1.8 0.4 6.8 1.4

1.3 4.4 1.1 2.8 0.7 10.3 2.5

0.5 3.5 0.8 4.4 1.0 9.8 2.3

1.3 4.4 1.1 2.8 0.7 10.3 2.5

0.5 3.5 0.8 4.4 1.0 9.8 2.3

0.6 3.7 0.8 6.3 1.4 10.6 2.3

0.3 2.7 0.7 8.5 2.2 10.9 2.9

0.4 3.1 0.8 9.5 2.6 15.1 4.1

0.3 3.5 1.0 8.9 2.6 7.4 2.1

0.5 4.1 1.5 9.8 3.5 8.2 2.9

0.7 3.5 1.3 7.1 2.6 9.2 3.5

Sources: SPO (1996, Tables 5.6 and 5.7; 1998, Tables 5.6 and 5.7; 2002, Table II.3; 2012, Table 5.7). Note: The SPO began to include wages related to investment in personnel expenditures from 1993 onward, whereas they were previously included in investment expenditures. For the purpose of consistency and meaningful analysis, the first 1990– 4 figures include wages related to investment in investment expenditures, as in Table 2.2. And the 1993* – figures include wages related to investment in personnel expenditures, not in investment expenditures. 1. Top entry in each row. 2. Bottom entry in each row. 3. Personnel expenditures from 1993 also include wages related to investment. Otherwise, decline in personnel expenditures following implementation of the April 1994 austerity measures would be higher. 4. Other current expenditures include purchase of goods and services. 5. Investment expenditures for 1993* – 7 exclude wages related to investment.

Other Transfers

Social Security

Tax Rebates

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THE ECONOMIC TRANSFORMATION OF TURKEY

Barria 1995, 32 – 3). The social democratic partner of the coalition government was particularly vulnerable to such criticisms and risked alienating its own supporters by applying to the IMF given that it was against the policies prescribed by the IMF when it was in opposition earlier. The TPP– SDPP government signed a 14-month stand-by agreement with the IMF in July 1994. Turkey thus came full circle: from the 1980 stand-by agreement that had put the Turkish economy on a neoliberal course to the 1994 agreement to solve the conjunctural crisis of the Turkish neoliberal strategy by further deepening it. The IMF thus approved the April programme but only after it imposed strict performance targets. The performance criteria targeted lowering the PSBR through spending cuts, higher taxes, and fast privatization; bringing down the inflation rate; increasing the Central Bank’s foreign currency reserves; and limiting the Central Bank’s domestic lending (Yesilada and Barria 1995, 35). The stand-by agreement was not limited to short-term stabilization measures but included institutional restructuring. More autonomy for the Central Bank was part of the April programme; the stand-by agreement also emphasized it. Restructuring of the state’s economic organs in the process of neoliberal reforms during the 1980s had involved increasing the Central Bank’s independence from the political executive. But in the early 1990s, the government, through the Treasury, made increased use of Central Bank resources to finance the budget deficit. Doing so weakened the Central Bank’s ability to set monetary targets and implement them. The April programme and the stand-by agreement aimed to correct this situation. Soon after adoption of the April package, the Parliament amended the Central Bank Law to increase the bank’s autonomy and restrict the Treasury’s access to its resources. The Central Bank was already one of the major state organs most insulated from public scrutiny. The independent policy role of the Central Bank, which is not democratically accountable directly, was further enhanced. In addition to the IMF’s support, the TPP– SDPP government also sought the World Bank’s financial support for solving the crisis of the neoliberalized Turkish economy. In return for structural adjustment loans, the World Bank demanded faster privatization and closure of SEEs that could not be sold. A major overhaul of the social security system, which had started running deficits, was also among the World Bank’s conditions.

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The April 1994 economic programme was comprised of two parts: stabilization and structural adjustment policies.22 The stabilization programme focused on reducing the fiscal deficit through both revenueraising and spending-cutting measures. It planned substantial cuts in investment, transfer, and current expenditures (except defence and security). But the government promised to fully respect its debt obligations to both domestic and international creditors. The stabilization plan targeted substantial cuts in public sector wages in real terms by freezing nominal spending on wages/salaries despite high inflation and eliminating the indexation clauses that trade unions had successfully included in collective agreements from the late 1980s. The revenue-raising measures included steep price increases on many products and services of the public enterprises and a number of one-off taxes mostly on businesses and real estate. The structural adjustment part of the April programme aimed to accelerate some ongoing neoliberal reforms and to reverse any earlier diversions from these reforms. It emphasized further focusing the industrial sector on exports and encouraging other foreign exchange-generating activities such as tourism and construction contracts abroad. Reform of the public sector featured prominently in the April package. Reform meant privatization, closure of unprofitable public enterprises, and downsizing employment through attrition and strict controls on hiring. It also included a major overhaul of the social security system to solve its financial bottlenecks; the key aspect of the overhaul was to cut back wage/salary earners’ social security benefits. The April programme planned further structural adjustment of the agricultural sector by streamlining the subsidy system. In its last couple of years in office, the previous MP government had started to relax its neoliberal policy of lowering agricultural subsidies because of political considerations; the TPP –SDPP government carried this further in its first two years of rule (Kepenek and Yentu¨rk 1994, 309–13). The structural adjustment agenda of the April package aimed to refocus state policy on the neoliberal principle of an agricultural sector integrated into the free-market economy and responsive to changes in global markets. In the prevailing political conditions of the mid-1990s, the stabilization and structural adjustment programme had mixed results. The government pursued major components of the austerity package until the end of 1995. It was not able, however, to carry out effectively

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THE ECONOMIC TRANSFORMATION OF TURKEY

the agenda of further neoliberal reforms because of the weakness of the coalition, political opposition, and resistance from organized labour. Collapse of the TPP– SDPP coalition at the end of 1995 and ensuing governmental instability and weak coalitions for the rest of the 1990s ended the stabilization measures as well. The government’s failure to meet its obligations and performance criteria in the agreements with the Bretton Woods institutions soon resulted in these institutions’ withdrawal of support; the World Bank ended its support in March 1995, followed by the IMF at the end of 1995. Although IFIs pressed for another shock austerity programme, weak coalition governments of assorted colours in the second half of the 1990s had neither the capacity to implement such a policy nor the will to endure the likely reaction from subordinate sections of society to the effects of an IMF-prescribed austerity package. There was not another stand-by agreement until December 1999 when another left– right coalition of the Democratic Left Party (DLP), Nationalist Action Party (NAP), and Motherland Party (MP) negotiated a three-year stand-by agreement with the IMF shortly after it came to power following the April 1999 elections.

The Labour Reaction The 1994 economic crisis and the economic programme adopted to solve it hit workers and public servants hard. The wage/salary gains that they had won over the previous several years were significantly eroded in the mid-1990s, as the real wage index shows in Table 11.5. The wage index uses 1994 as the base year; as a result, it underestimates wage declines because there were substantial drops in both public and private sector wages and public servants’ salaries in 1994 compared with those of the previous year. Workers’ real wages declined 5.2 per cent in the public sector and 20 per cent in the private sector in 1994; public servants’ real salaries in 1994 were 22 per cent less than they were in 1993 (Central Bank 1997, Table II.1.7). Workers responded to the policy of wage freeze with mass demonstrations and strikes. The number of workers on strike, and the number of workdays lost as a result of strikes, reached record highs in 1995. A large majority of striking workers were in the public sector (Tables 8.5.1 and 8.5.2). Besides lawful strikes, other forms of labour action spread rapidly. The number of workers participating in labour actions other than lawful strikes jumped to 2,283,968 in 1994,

Source: SPO (2006, Table 8.4).

82.9 91.7 95.2

1995 62.2 93.4 102.5

1996 74.1 90.6 119.3

1997

Real Net Wage Index (1994 ¼ 100)

Public Sector Workers Private Sector workers Civil Servants

Table 11.5 73.1 105.9 117.8

1998 103.8 118.2 123.1

1999 111.1 119.4 108.9

2000 98.2 95.3 104.8

2001 89.2 94.3 110.8

2002

86.8 93.9 109.9

2003

88.3 97.1 112.7

2004

95.0 97.7 115.7

2005

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3,428,811 in 1995, and 3,566,928 in 1996, compared with 400,271 in 1992 (Table 10.2; Mahirog˘ulları 2005, 371). Civil servants, who had recently started establishing trade unions, also engaged in various collective actions (Petrol-Is 1995, 392– 8, 447– 69). The austerity and structural adjustment programme of 1994 thus generated a second wave of labour actions. The coming to power of the TPP–SDPP coalition on a programme supported by the trade union movement had led to a significant decline in labour actions in 1992– 3 (Table 10.2). The policy U-turn of the coalition government amid the economic crisis caused organized labour’s withdrawal of its support and provoked counter labour mobilization. The labour movement’s reaction was not only to the policy of wage freeze but also to the government’s plan of a major overhaul of the social security system. Deliberate neglect of the system in the process of neoliberal reforms in the 1980s eventually resulted in financial difficulties for all of the social security organizations. Neglect had been accompanied by various measures aimed to curb wage earners’ social benefits and rights. The social security system began running an overall deficit after 1990. The declining ratio of active versus inactive insured (retired, widowers, orphans, and invalids) and the weak relationship between the amount of premiums collected and pensions paid by these organizations were among the reasons for financial difficulties of the system. But another major reason for financial bottlenecks of the wage earners’ Social Insurance Institution (SII) was poor premium collection (SPO 1994, 234; 1995, 120). Low penalties on employers’ arrears and frequent pardons of employers’ late payment penalties were the primary reasons for poor collection rates. In accordance with the April programme, the government prepared a bill on the restructuring of wage earners’ social security system with technical aid from the World Bank. The bill, sent to the National Assembly in April 1995, provided for increasing the minimum period of premium payments to qualify for retirement pension, health insurance coverage, and disability compensation; raising the portion of wages subject to premiums; and introducing user fees for the SII’s health services. The bill also reintroduced a minimum retirement age, which the same government had lifted just three years earlier. The long-awaited unemployment insurance scheme was presented to the Parliament as part of the social security reform package. The inclusion of unemployment

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insurance in a reform package curtailing workers’ social security benefits was expected to help avert or reduce potential opposition from the trade union movement. Nevertheless, the bill encountered strong opposition from that movement. The three trade union confederations coordinated a campaign to prevent its legislation, including assemblies and demonstrations in various cities in April–May 1995. The employers’ confederation, TISK, also rejected the social security reform bill, claiming that the adoption of an unemployment insurance scheme without first eliminating the system of seniority compensation would only serve to increase the premium burden on employers (TISK 1995a, 226–31, 235–6, 244–7). In the face of a concerted opposition campaign from organized labour and the lack of support from the employers’ confederation, the bill was not even debated before the TPP– SDPP coalition collapsed and the Parliament was dissolved in December 1995. An important part of the structural adjustment agenda had thus failed. But the continuing financial difficulties of social security institutions as well as the rising public fiscal deficit kept the issue of social security reform on the political agenda. The IMF and World Bank kept urging the Turkish government to reform the social security system. The issue was on the agenda of every government formed in the second half of the 1990s. Yet the lack of social and political consensus on the nature of reform, resistance from organized labour to changes impinging on their existing rights, as well as frequent government changes in the second half of the 1990s prevented the enactment of a social security reform bill until August 1999. The coalition government of DLP, NAP, and MP was able to push through the Parliament a social security reform bill on 25 August 1999, several months after coming to office. The Social Security Law provided for a graduated rise in the pensioned retirement age and an increase in premiums.23 It also introduced a limited system of unemployment insurance, but it was not sufficient to obtain the labour movement’s support for the reform bill. The bill passed despite strong opposition of the labour movement, including the recently organized public employees’ unions, which organized various large-scale actions ¨ zu¨m 2011, 278– 80). (U The objective of accelerating privatization had been adopted by the TPP–SDPP coalition before launching the April economic programme and the subsequent stand-by agreement with the IMF. The stabilization

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package and the IMF agreement reinforced this policy and scheduled a number of struggling public enterprises for immediate closure. But this policy was hindered owing to legal delays, ongoing opposition from within the ranks of the SDPP, and resistance from the labour movement. Not only the privatization of some major public enterprises (e.g., the public telecommunication company Tu¨rk Telekom) but also the speedy privatization plan as a whole were frequently interrupted by legal and political obstacles. Pursuant to the April economic package, a privatization law was hastily passed in the Parliament on 5 May 1994. This law (No. 3987) allowed the Council of Ministers (via a high-level board) to implement privatization and regulate related employment issues by statutory decrees. But it was challenged in the Constitutional Court. The suit was filed by two deputies, Mu¨mtaz Soysal and Nami C¸agan, from the SDPP, and supported by 89 other deputies from various parties. The court annulled the law on 7 July 1994. Its ground was that the law allowed the executive to usurp the powers of the legislature. It also found the act incompatible with the constitutional principle of “the protection of national interests and of political and economic national independence” (Article 5) because it did not discriminate between foreign and domestic capital and failed to introduce restrictions on foreign companies’ purchase of SEEs (Constitutional Court Decision, 7.7.1994; Official Gazette No. 22047, 10 September 1994, 40). A new act (No. 4046) was passed on 24 November 1994 after long negotiations between the coalition partners and in the Parliament. The new Privatization Act was also challenged in the Constitutional Court by 90 MPs from different political parties. The court gave its decision on 4 April 1997. It annulled two provisions of the act concerned with the methods of privatization and value assessments. Its reason was the unconstitutional transfer of power to the Privatization Administration in an area where the legislature had sole authority according to the constitution (Milliyet, 4 November 1997). The speedy privatization programme was thus frequently interrupted as a result of legal and political obstacles. Labour resistance also slowed down privatization, though it could not stop it. Employees and trade unions in public enterprises scheduled either for immediate privatization or closure in the April stabilization plan carried out mass protest actions against the plan in 1994 and 1995. In cases in which a particular public enterprise had been the foundation

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or a major part of the local economy, such as the Karabu¨k Steel and Iron Company for the town of Karabu¨k, and the Turkish Coal Mine Company for the city of Zonguldak and its environs, local residents also joined workers in protest actions against the government’s decision to stop or scale back these enterprises (Milliyet, 5 and 8 April 1994; Petrol-Is 1995, 299). As a result, the planned closures of many enterprises were cancelled; they were instead scheduled for privatization. However, the trade union movement was not able to form a unified front with respect to privatization. Various components of the labour movement found it hard to agree on which grounds to oppose privatization and which alternative to propose instead. The participation of several labour unions from Hak-Is and Tu¨rk-Is in tenders for public enterprises caused a serious fracture in the labour front with respect to privatization. The first major case of a labour union taking over a public company in the privatization drive was the government’s transfer of ownership of the Karabu¨k Iron and Steel Company to its employees, two local business associations, and local residents for a symbolic one Turkish lira in November 1994. The company had initially been scheduled for closure. ¨ z C¸elik-Is The proposal for transfer came from the Hak-Is-affiliated O Union, which represented employees at Karabu¨k Steel and Iron. The union acted as the interlocutor for the transfer of 35 per cent of company ¨z shares to employees. In an interview in July 1996, the president of O C¸elik-Is at the time, Metin Tu¨rker, said that The O¨z C¸elik-Is Union was strongly opposed to the privatization of Karabu¨k Steel and Iron and led a struggle to prevent it. But the situation came to the point that the government said “The company would be either closed or privatized.” In this case, we agreed to take over its assets after the government consented to the union’s conditions that the plant would be rehabilitated first and then transferred to the workers. ¨ z C¸elik-Is Executive Committee obtained the authority to The O appoint, on behalf of the shareholder workers, four of the seven members of the Kardemir Company’s Executive Board. Thus, the union controlled the majority of seats on the board. The Kardemir case was an important example of employees becoming major shareholders of a public company that they worked for in partnership with local business. But soon the

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union’s dual role started creating problems as O¨z C¸elik-Is negotiated and signed collective agreements on behalf of workers who were also shareholders and had a large role in management of the company through members of the Executive Board whom it selected (Erso¨z et al. 2004; Monaco 2009). This interesting model of employee ownership as an alternative to privatization ended in 2010 as a result of the buy-out of Kardemir by some local companies in the steel industry. Confronted by the government’s policy of fast privatization and its plan to close down unprofitable enterprises following the 1994 crisis, a number of other unions were attracted to the idea of turning workers into owners of these public enterprises. Several unions either offered to buy shares or took part in bidding on some enterprises in which they ¨ z Gida-Is were organized. Among these cases were the Hak-Is affiliate O Union’s participation in the auctions of the Meat and Fish Company and the Milk Industry Company; the Tu¨rk-Is affiliate Tu¨rk Metal-Is Union’s tender for state shares of the Eregli Iron and Steel Company; and the Tu¨rk-Is affiliate Dok Gemi-Is Union’s creation of a company (GESTAS) to buy the operating rights of several dockyards, all in 1995. The first two unions did not succeed in buying the companies (Cumhuriyet, 17 November 1995; O¨z Gida-Is 1995, 273– 347). The Dok Gemi-Is tender was successful, but most workers refused to sign on the buy-out deal. As a result, the union was unable to meet the conditions of the Privatization Administration; hence, the transaction failed (Cumhuriyet, 3 November and 29 December 1995). The trade union movement split over privatization in the mid-1990s. Hak-Is became an advocate of the idea that public enterprises scheduled for privatization should be offered to employees first and then local people and industrialists. Tu¨rk-Is opposed labour unions’ participation in buying shares of public enterprises or tendering for enterprises scheduled for privatization. It argued that industrial democracy was impossible to achieve in this way and that labour unions’ participation in privatization would actually result in their degeneration (Tu¨rk-Is 1995a, 291– 2). However, unlike DISK, consistent in its strong opposition to privatization, Tu¨rk-Is was not unequivocal in its opposition after privatization got under way in the mid-1990s. In short, the programme of speedy privatization was impeded largely because of political and labour opposition as well as the refusal of the Constitutional Court to uphold the laws and decrees that authorized

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the government to implement fast-track privatization, by-passing the Parliament. However, privatization remained high on the government’s agenda and went a long way, albeit at a much slower pace than officially planned. The privatization of several large public companies was completed in the mid-2000s. To sum up, the new form of state –labour relations that the TPP– SDPP government’s programme envisaged was never seriously implemented. Persistent instability of the neoliberalized economy imposed structural constraints on the construction of a form of social compromise that involves state-mediated or other concessions to the economic and democratic demands of labour but in such a way that the long-term interests of capital are not endangered. Of course, the structural factors did not simply operate on political and social agencies. They were translated into particular policy actions through the choices of political and social actors. The government’s promise to improve the economic positions of workers, public employees, and other disadvantaged groups through expansion of the welfare state encountered fiscal constraint. The adoption of a stabilization and structural adjustment programme in April 1994 in response to the financial crisis marked the unequivocal failure of the government to forge a new political economy inclusive of labour interests.

The Post-1994 Crisis Economy: Major Developments The second half of the 1990s was a period of political instability and weak coalition governments. The period was characterized by the governmental incapacity to design and implement a coherent set of medium-term economic policies. Because of frequent changes in government as well as disagreements between political parties of coalition governments, economic decisions were made mostly on a dayto-day basis. Structural weaknesses of the Turkish political economy that led to the 1994 crisis remained unresolved. Besides, deeper neoliberal integration of the Turkish economy into global financial markets exposed it even further to volatilities and great uncertainties of global financial flows largely delinked from the real economy of production and trade. As noted earlier, the Turkish economy was struck by another severe financial crisis in 2000– 1. This time the crisis occurred in the midst of the implementation of a three-year IMF stand-by agreement. The left – right coalition government of the DLP-NAP-MP had signed

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the agreement in December 1999, not long after the April 1999 national election. The stand-by agreement was preceded by an IMF staffmonitored programme dated 1998, the core objective of which was to control chronic high inflation and thus bring down high real interest rates. The core of the 1999 stand-by agreement was an exchange ratebased disinflationary programme. The outbreak of a major financial crisis during its implementation provided a stark reminder to the IMF and Turkish officials that, as long as there was a free international flow of finance capital without any restrictions, a crawling peg-type of exchange rate policy geared to objectives such as lowering inflation was likely to be a target for financial speculation. The same government renewed the stand-by agreement for another three years in February 2002. The November 2002 election marked a watershed in Turkish politics not only because it produced a majority government for the first time since the 1988 election but also because it brought to power a newly created neo-Islamist party, namely the Justice and Development Party (JDP). The socially conservative JDP embraced neoliberalism as its economic programme from the beginning. It remained loyal to the previous government’s stand-by agreement and concluded another three-year stand-by agreement with the IMF in May 2005. Thus, the IMF was again directly involved in making and implementing Turkish economic policy for an extended period of time, from 1999 to 2008. Although the 2000s are outside the scope of this study, it is important to offer a brief summary of the major developments pertaining to the arguments of this chapter. The IMF-supported disinflationary programme was effective in bringing both inflation and budget deficit under control through a combination of public revenue raising and expenditure cutting. Especially important was the programme’s success in substantially reducing interest payments of the central government budget as a percentage of both total budget expenditures and GDP. Another achievement was the creation of a better prudential regulatory system for the banking sector in the wake of the 2000–1 crisis (Bakir ¨ nis¸ 2010). Banking reform also helped to prevent another financial and O market crash in Turkey, even when the subprime mortgage market crisis spread from the United States to the EU in 2008–9 and the subsequent Euro-zone crisis nearly devastated several EU countries’ economies. Of course, the Turkish economy was not immune to the international crises. There was a sharp drop in economic growth in 2008, followed by

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a nearly 5 per cent shrinkage of real GDP. While the solution to the problem of interest payments and the accompanying reduction of the PSBR were important positive developments, major structural weaknesses of the neoliberalized economy persisted in the 2000s. Trade and current account deficits continued to rise. The country became highly dependent on volatile short-term international financial flows to cover the deficit and to fuel its economic growth. Turkish exports continued to concentrate in the lower-technology sectors, more so than in a number of comparable countries. The contribution of FDI to promoting an advanced-technology industry and higher-technology exports also remained limited.

CHAPTER 12 NEOCORPORATISM AND SOCIAL DIALOGUE

In the early 1990s, Turkish employers started to advocate tripartite corporatism. They were successful in putting the issue on the public agenda. This development took place in Turkey long after tripartite corporatist arrangements had crumbled or substantially weakened in many Western European countries, first as a result of the rise of labour militancy in the late 1960s and early 1970s and later under a neoliberal offensive from business and governments. It seems rather ironic that Turkish employers became strong proponents of tripartite corporatism at a time when the Turkish economy further opened to global market forces, and as a result national policy autonomy was increasingly constrained. Increased global market integration, capital mobility, and the resulting erosion of national policy autonomy were the main factors underlying the disintegration of business–labour–state pacts in northwestern European countries, such as Sweden, Belgium, and the Netherlands, which were typically neocorporatist in the decades after World War II (Kurzer 1993). To understand how and why Turkish business came to advocate tripartite corporatism in the 1990s, it is necessary to study the particular historical contexts of class struggles as well as the strategies of collective agencies involved.

Employers’ Calls for Social Dialogue and Reconciliation “Societal reconciliation” and “social dialogue” became key phrases in the discourses of major business associations in the early 1990s. These terms

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were primarily articulated to labour– capital relations. They signified a new capital strategy in response to increased labour actions and subsequent wage increases in the early 1990s. The new strategy aimed at institutionalized cooperation between the central organizations of trade unions and employers’ associations and state officials. Cooperation at the leadership level supposed control at the membership level, especially for labour unions. When organized labour went on the offensive at the turn of the 1990s after recovering earlier wage losses, employers complained loudly of unions’ “excessive” wage demands and frequent use of work stoppages. In this context, employers’ representatives began to speak publicly of the necessity of government intervention in the determination of wages. This was not a call for government imposition of a mandatory wages policy. Such a policy would directly violate the right of collective bargaining and likely be resisted by the trade union movement. Employers’ solution was a national wages policy based on tripartite cooperation of labour and employers’ confederations and state officials (Isveren, October 1990, 25 – 6, 32). Income policies were also the core of neocorporatist arrangements in Western European countries in the 1960s and 1970s (Lehmbruch 1977; Panitch 1977, 1981). Since the objective of an income policy is to influence the behaviour of trade unions, their cooperation is essential. State coercion can be used as the primary means to secure trade unions’ cooperation in administering the income policy to their members. This would entail subordination of trade unions to the state and hence abrogation of freedom of association. Since democratization had become a major legitimating force and received broad support in the existing conjuncture of Turkish politics, the repressive imposition of a statutory income policy on organized labour was not a real option. It was certain to provoke strong resistance from organized labour and, as a result, be self-defeating. The alternative, then, was to secure the more or less “voluntary” cooperation of trade unions. To prepare the ideological and political ground for corporatist arrangements, TISK frequently discussed the issue of wage policy and tripartite cooperation in its publications, convention reports, and public declarations. It also organized a number of conferences on the subject. In its March 1991 issue of its monthly magazine Isveren (Employer), for example, TISK published a long editorial entitled “State Intervention in

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Wages in Industrialized Countries.” The article discussed various forms of government intervention in wage determination in Western Europe, the United States, and Japan in the 1960s– 80s, including income policies, wage freezes, social contracts, and tripartite commissions. It suggested that the most suitable system for Turkey’s conditions would be found through negotiations between the “social partners” and the state (21). Isveren published similar articles in subsequent issues. In examining developed democratic countries’ relevant experiences, TISK’s publication intended to show that state intervention in the collective bargaining system was not necessarily incompatible with democracy and a free-market economy. TISK (1992c) presented its views on tripartite cooperation in more detail in a book entitled Social Dialogue in the World and Turkey.1 Like the earlier article, the book first examined tripartite state organs in the area of economic and social policies and various types of income policies in a large number of countries. It also made a case for social dialogue in Turkish industrial relations. According to TISK’s publication, the early 1980s had been the years of relative social peace, but it was replaced by conflictual labour relations after 1987 because of labour unions’ excessive wage demands and work stoppages. TISK’s solution was institutionalized cooperation between labour and employers’ organizations and the government and an Economic and Social Council (ECOSOC) to facilitate such cooperation.2 In the early 1990s, the TISK president also became a vocal advocate of an ECOSOC for tripartite cooperation (Baydur 2008, 185– 8).

Toward an Economic and Social Council TISK had first proposed a tripartite ECOSOC during preparation of the 1982 Constitution under the military regime. The confederation’s recommendations for the new constitution had included two new state organs. They were called the High Board of Employer – Labour Relations and the Economic and Social Council. The former would be composed of representatives of the state, employers, and labour and make binding decisions concerning minimum wages, wage and price increases, and basic principles for collective agreements. The proposed Economic and Social Council would include members of the Employer–Labour Relations Council and representatives of other economic sectors and consumers. TISK wanted the ECOSOC to be an advisory organ on economic and social issues (Aker 1990, 196; TISK 1982, 20). The draft constitution

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included TISK’s proposal for an ECOSOC. But the relevant article failed to pass in the plenary session of the Consultative Assembly. If the two organs proposed by TISK had been included in the constitution, then they would have institutionalized a compulsory income policy and substantially restricted the right of collective bargaining. TISK shelved the idea of a tripartite council during the 1980s when organized labour was weak and real wages kept falling. But, as labour militancy and wages tended to increase in the early 1990s, it began to campaign for an ECOSOC that would determine a wage policy.3 The campaign was politically effective. In July 1991, following a cabinet shuffle, the minister of labour and social security of the MP government announced that the ministry would set up a tripartite Wages and Incomes Commission. Its role would be to determine binding guidelines for collective bargaining in accordance with the country’s economic and social conditions. The commission never came into existence. First, such an institution, the main function of which would be to impose wage restraint, was unacceptable to highly mobilized and organized labour. Second, the trade union movement was very distrustful of the MP government because of its years of anti-labour policies. Indeed, a primary goal of organized labour at the time was to vote the MP out of office in the coming election. At this political conjuncture, the MP government’s attempt to create a wage commission was bound to fail. The MP was voted out of office in the October 1991 election before it could take steps toward a wage policy. Replacement of the MP government by the TPP – SDPP coalition following the election created a new opportunity to establish tripartite corporatism. As previously explained, the coalition promised a new political – social settlement inclusive of labour interests without infringing on the prerogatives of capital. Studies of neocorporatist institutions in Western Europe of the postWorld War II decades showed that trade unions were more likely to participate in corporatist arrangements if they believed that they had a good prospect of having influence in public policy making. This normally meant when social democrats were in power or shared office in a governing coalition. Similarly, the SDPP’s participation in the coalition government and its pro-labour programme could induce trade unions to cooperate with employers’ organizations and the government within corporatist structures.

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TISK intensified its pro-corporatism campaign after the TPP– SDPP coalition formed the government. From employers’ viewpoint, the establishment of tripartite corporatism became even more important because amendment of the constitution and labour legislation was on the government’s agenda. Removal of the legal restrictions on trade unions could enhance the power of organized labour in its relations with capital. At the same time, Turkish industry was about to face greater competition from European exports because of a customs union with the EU, expected to come into effect in 1995. TISK’s revised proposal of a tripartite organ suggested a 24-member ECOSOC. It would be composed of eight representatives each from the largest labour and employers’ organizations and eight state officials. Its role would be to regulate the collective bargaining system. TISK proposed that in performing its role the ECOSOC take into account economic growth, enterprises’ competitiveness, productivity, price stability, connection of wage increases to productivity, and employees’ welfare (Isveren, June 1992, 19; July 1992, 31; TISK 1992a, 85 – 6; 1992c, 84, 87). Thus, the key objective of the proposed ECOSOC was to integrate the growth, productivity, and competitiveness criteria into the determination of wages. The success of this plan obviously depended on trade unions’ acceptance of responsibility for enforcement vis-a`-vis their members. Besides TISK, TU¨SIAD advocated new mechanisms for facilitating cooperation between organized labour and employers. For example, a ¨ SIAD-commissioned study (1992)4 recommended the creation of new TU institutional structures within which organized labour and employers’ associations could cooperate. It also emphasized the importance of more egalitarian income distribution for societal reconciliation (87–94). The ¨ SIAD but those of the authors. views in the study were not those of TU ¨ SIAD, However, since the study was commissioned and published by TU it must have meant something to the association as well. All of the major business organizations were in favour of establishing a new tripartite organ for the purpose of social reconciliation. But organizational rivalries prevented them from agreeing on the membership of such an organ. The conflict over who would represent business came into the open in the course of public debates in 1992 and 1993. Given that TISK was the only employers’ confederation responsible for industrial relations, the main rivalry was between the Union of the Chambers of Commerce, Industry, Maritime Trade, and Commodity

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Exchanges (TOBB) and the Association of Turkish Industrialists and Businessmen (TU¨SIAD). TOBB traditionally regarded itself as the sole legitimate representative of business interests on the basis of the size and nature of its membership. Membership in TOBB was compulsory for all firms; therefore, TOBB members were drawn from all parts of the country. Its membership totalled about 700,000 in the early 1990s. Small and medium businesses dominated the organization for most of its life as a result of their numerical weight and the system of one vote for each member in the elections for the organization’s ¨ nis and Webb 1994, 143–4). TU¨SIAD, on the other administration (O hand, was a voluntary association of large companies headquartered ¨ SIAD-affiliated companies were mostly in the Istanbul region. TU members of TOBB at the same time because of its compulsory membership. In the course of public debates on the ECOSOC, TOBB insisted that it was the only organization qualified to represent business ¨ SIAD interests in the council. According to TOBB chair Yalim Erez, “TU cannot be given privileges in this council just because its members have a certain amount of wealth” (Cumhuriyet, 5 November 1993). The organizational rivalry between the two business associations was partly a product of the division between small-medium capital and big capital. The rivalry created difficulties for the formation and functioning of corporatist arrangements. The TPP –SDPP government adopted the idea of a new tripartite organ to promote institutionalized cooperation among business associations, trade unions, and state officials, albeit not exactly in the same format as TISK proposed. The government linked the idea to the objectives of democratization and democratic participation in public policy formation. Prime Minister Su¨leyman Demirel entrusted the minister of state in charge of economic affairs with the task of drafting a bill on an Economic and Social Consultation Council shortly after coming to power. This move was also related to the ratification of ILO Convention No. 144 concerning Tripartite Consultations to Promote the Implementation of International Labour Standards in 1992 and thus putting the convention into effect (Koc
1999b, 7). The government had another motive, related to a different ILO convention. The government’s relations with the business community had deteriorated at that time because of the government’s submission of the ILO’s Termination of Employment Convention (No. 158) to the National Assembly for

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ratification and the Ministry of Labour’s draft bill on job security, which included even more protections than the ILO convention for employees against wrongful dismissal. The entire business community strongly opposed the job security bill and ILO convention. The creation of a tripartite ECOSOC could help the government to improve relations with the business community. Trade unions’ reaction to the planned tripartite organ was not favourable. The unions put forth important preconditions before they would participate. According to Tu¨rk-Is, before tripartite cooperation could be institutionalized, democratic rights and freedoms had to be consolidated, extensive legal restrictions on trade unions had to be abolished, and job security and social security rights had to be guaranteed. Only after these conditions were realized would it agree to an ECOSOC. The Tu¨rk-Is conception of a tripartite organ was quite different from that of business associations. It proposed that the role of the council should be to formulate policy proposals concerning macroeconomic and social problems. It must not interfere in industrial relations. Hak-Is insisted on similar prerequisites and maintained that it was opposed to the creation of a tripartite organ whose purpose would be to control the trade union movement and restrain wages. Both organizations shared the view that, unless trade union and social security rights were improved, trade unions would be at a great disadvantage in terms of power and influence within corporatist structures. Their role would be reduced to legitimating the state’s and employers’ policies (Hak-Is 1992, 231 –5; 1995, 337– 42; Tu¨rk-Is 1995a, 301– 3). Ironically, DISK, which had pursued, in the pre-1980 period, a strategy of class unionism based on the idea of inevitable class conflict, initially received more favourably the government’s plan to establish a tripartite council. This was partly because the confederation had only recently been reopened, and it was in search of a new strategy and identity as it faced greatly changed domestic and international conditions. Its officials agreed to participate in an ECOSOC but only if the planned council were similar in structure and function to similar councils found in Western European countries. In their view, such a tripartite council could serve as a mechanism to defend labour interests. They would participate in so far as it served as a forum on democratizing the political regime and industrial relations.5 Not all unions affiliated with DISK shared the confederation’s views. Some unions, for example Petkim-Is

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(petroleum, chemicals), were very critical of the planned tripartite council on the ground that its main function would be to further limit labour rights (Petkim-Is 1993). To sum up, trade unions adopted overall a highly sceptical and critical view of initiatives of business associations and the government to establish a new public organ to promote institutionalized cooperation among organized labour, business, and the government. They demanded important preconditions for participation in an ECOSOC.

Creation of the Economic and Social Council The first draft bill on the Economic and Social Council was announced to the public in early 1993. The proposed council was dominated by state officials. It included TOBB and TISK as representatives of the private ¨ SIAD was left out. The Union of the Chambers of business sector. TU Agriculture (TZOB) and the Confederation of Shopkeepers and Artisans (TESK) were also included. Tu¨rk-Is was the sole representative of labour. The draft bill described the functions of the council as “to submit its views and policy proposals to the government on main economic and social issues, to ensure participation of socio-economic groups in the formation of government economic and social policies, to investigate socio-economic problems and formulate solutions, and to develop dialogue among various functional groups” (Hak-Is 1993, 71–2). Trade unions had major objections. Tu¨rk-Is president Bayram Meral objected that the proposed council was undemocratic in composition and dominated by employers and other property owners (Mu¨lkiyeliler Birligi Dergisi, May 1993, 13). Hak-Is president Necati C¸elik criticized the draft bill for proposing a business-dominated organ “whose role would be to freeze wages and thus to undermine the trade union movement” (Mu¨lkiyeliler Birligi Dergisi, May 1993, 15). DISK, too, opposed the bill. Faced with strong opposition from the trade union movement, the government did not proceed with the bill. But only two years later an ECOSOC was created by a prime ministerial circular dated 17 March 1995.6 The council was not a product of consensus formation among the parties concerned. There was no prior consultation with the trade union movement. The prime minister at that time was Tansu C¸iller, also responsible for the draft bill in her earlier role as the minister of state in charge of economic affairs from the TPP. To explain why such a state organ for the representation of functional interests was established at this

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particular time and in such a manner, one only need recall the economic crisis and the adoption of an austerity and structural adjustment programme in April 1994. As explained in Chapter 11, the U-turn in the TPP– SDPP government’s policy provoked counter-labour mobilization and caused massive labour unrest. The prime minister’s primary motive in creating the ECOSOC was to enlist cooperation of the union leadership in legitimating and implementing the austerity and structural adjustment programme. More specific reasons were the policy of wage freeze and the consequent disagreements in public sector collective negotiations. In a personal interview in July 1996, a high-level official in the State Planning Organization commented that the deadlock in public sector collective bargaining was a significant factor behind establishment of the ECOSOC. The prime minister’s circular founding the ECOSOC referred to Turkey’s further integration with the EU as a result of the customs union in explaining the reasons for establishment of the council. In other words, according to the founding document, the ECOSOC could serve as the counterpart of the EU’s Economic and Social Committee. However, for this purpose, the Ministry of Foreign Affairs had already organized a committee of labour unions, business associations, and a number of other non-governmental organizations as part of the Turkey –EU Association Council. The real purpose for linking the ECOSOC to the EU in the prime minister’s circular was to legitimate the council.7 The circular also referred to ILO Convention No. 144 concerning Tripartite Consultations in justifying the ECOSOC. The prime ministerial circular explained the ECOSOC’s purpose as working toward the formation of social consensus through the expression and representation of different interests in the formulation of economic policies. An enduring peace in labour– employer relations was among its aims. The tripartite council would advise the government on major economic issues such as employment, productivity, and income, and it would give its opinion on bills concerning these issues. The ECOSOC included more state officials than representatives of major organized interests. It was more an organ of cabinet ministers and high-level bureaucrats than a public body for representation of major interests in public decision making. It was chaired by the prime minister or a minister designated by the prime minister. Of 19 members, 12 were government officials; three were representatives of

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business (two from TOBB and one from TISK); one was a representative of the agricultural sector (TZOB); and one was a representative of the Shopkeepers’ and Artisans’ Association (TESK). Labour had two representatives, and both seats were given to Tu¨rk-Is as the largest labour organization. DISK and Hak-Is, each with about 300,000 members, were excluded. The ECOSOC encountered strong opposition from the trade union movement. Labour organizations criticized its undemocratic composition and objected to its mandate in the field of industrial relations. In contrast, the employers’ confederation welcomed creation of the ECOSOC but did not approve of its composition. Its criticism focused on domination of the council by state officials. According to TISK, for the ECOSOC to function effectively as a mechanism of cooperation between labour and business organizations and the state, its composition should be reorganized to ensure more balanced representation (Isveren, June 1995, 7; TISK 1995a, 147). Equal representation for labour, business, and government could indeed help to legitimate both the council and its decisions. Formal equality in representation could make its decisions appear as the outcomes of true negotiations among equals despite actual power imbalances. There were divergent views, however, among union leaders, even among those who belonged to the same confederation, regarding labour unions’ participation in a tripartite ECOSOC. Three major positions emerged in my interviews with trade union leaders from Tu¨rk-Is, DISK, and Hak-Is in July– September 1996. A number of union leaders said that they did not support the existing ECOSOC because it was dominated by government officials and employers. However, they were in favour of participating in a tripartite council on the condition that it was more democratic in composition and allowed trade unions to have a real say in the making of public policies. This was the most frequently expressed opinion. The second position was opposed to trade unions’ cooperation with the government and employers in an institutionalized framework under the existing socio-economic and political conditions of the country. The main reason given was that such cooperation would only serve to maintain the status quo characterized by great income inequalities and many restrictions on labour rights. This view was adopted by several union leaders from Tu¨rk-Is and DISK. The third position was expressed by several other union leaders who were even

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more sceptical of the ECOSOC in particular and organized labour’s cooperation with the state and employers within such institutional structures in general. They were from DISK affiliates and a leftistoriented affiliate of Tu¨rk-Is. The union leader from Tu¨rk-Is said that the ECOSOC’s main function was to legitimate neoliberal policies by obtaining the cooperation of working-class organizations. In the view of a DISK-affiliated union president, “trade unions cannot protect labour interests by following a policy of social dialogue and conciliation in a capitalist system founded on profit and exploitation”. He also claimed that, since the balance of power was very unfavourable to the working class at the time, labour organizations had no real bargaining power with the government or employers in a tripartite council. There was clearly stronger opposition among DISK unionists compared with the other two labour confederations at the time of the interviews. This opposition among DISK unionists was also based more on a class conflict perspective. The first ECOSOC had no success. It met only once. The meeting took place not during the TPP –SDPP coalition government that had created the council but soon after the formation of a minority TPP government by Tansu C¸iller as prime minister.8 She summoned the ECOSOC on 11 October 1995 (i.e., seven months after its creation). The reason was the deadlock of collective negotiations in the public sector and the start of public sector-wide strikes by Tu¨rk-Is about two weeks earlier. The public sector labour dispute was the only item on the ECOSOC’s government-prepared agenda. Tu¨rk-Is, the sole labour organization in the council and the main party to the labour dispute, boycotted the meeting on the ground that the government was trying to use the ECOSOC to impose its position concerning public sector collective negotiations (Koc
1999b, 10). Refik Baydur, TISK president at the time, attended the ECOSOC meeting and confirmed the claim of Tu¨rk-Is in his memoirs. He explained that government officials tried to use the meeting as an occasion to criticize Tu¨rk-Is and wanted the ECOSOC to issue a declaration accusing Tu¨rk-Is of the public sector labour dispute. But he and some other ECOSOC members objected to such a declaration (Baydur 2008, 196). Thus, the first ECOSOC was a complete failure in terms of promoting tripartite cooperation. This failure did not lead to its abandonment. The idea of an ECOSOC to develop cooperation among the major organized interests and the

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government outlived particular governments and thus became state policy. TISK was particularly active in maintaining the issue on the public agenda through conferences and publications.9 Each of the four coalition governments and the minority DLP government from the December 1995 election to the November 2002 election created a new ECOSOC by a prime ministerial circular. In other words, during this period of frequent government changes, six different ECOSOCs were created, including the first one of 1995.10 Each government made some changes in the composition of the council and its mandate. As a result, the ECOSOC was not able to play any significant role in promoting and institutionalizing cooperation among the major organized socioeconomic interests and the state during the period. Several organizations were included in every ECOSOC of the period. These permanent members were TISK, TOBB, TZOB, and TESK on the private business and agricultural sectors’ side and Tu¨rk-Is, Hak-Is, and DISK on the labour side (except the first ECOSOC, which excluded DISK and Hak-Is). Besides these unchanging members, several other nongovernmental organizations received seats in one or two of the six ECOSOCs but found themselves replaced by another organization in the next ECOSOC as the government changed. Among these organizations ¨ SIAD, the Association of Exporters, the Union of the Chambers were TU of Engineers and Architects, the consumers’ association, and the association of the disabled. There were also some variations among the ECOSOCs with respect to how many state officials and which state agencies had seats. Nevertheless, cabinet ministers and heads of various major state economic agencies occupied at least half of the seats in five of the six ECOSOCs and nearly half in one. With this somewhat diverse and changing membership, the ECOSOC could not focus on industrial relations. It thus diverged from TISK’s tripartite corporatist project. This situation led TISK president Refik Baydur to regret that, whereas the ECOSOC’s main concern should have been with labour – employer relations, the organizations directly representing labour or employers became a minority in the council (TISK 1996a, 11). The labour confederations, on the other hand, often criticized the ECOSOC’s “undemocratic” structure, pointing out that, not only was the government overrepresented, but also there were more employers’ representatives (including TISK, TOBB, and TESK) than labour representatives.

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A significant omission in the ECOSOC was public employees’ unions. Although by 1995 several hundred thousand public employees had organized in unions and three major confederations of these unions, none of the ECOSOCs included these unions. While the ECOSOCs of the MP– TPP government of March – July 1996 and the Islamist Welfare Party– TPP government of July 1996–June 1997 allowed one seat for public employees, no representative was actually invited.11 The official explanation for the omission was the absence of a law regulating public employees’ unions even though public employees’ right to join unions was incorporated into the constitution in 1995. The Confederation of Public Employees’ Unions of Turkey (Kamu-Sen) vigorously campaigned for a seat in the ECOSOC but to no avail. The first general convention of the leftist Confederation of Public Employees’ Unions (KESK), on the other hand, decided against participation in the ECOSOC on the ground that it was controlled by the government (Milliyet, 26 August 1996). Thus, during the latter half of the 1990s, much debate and criticism concerning the ECOSOC was about its composition and operation. That the ECOSOC was created not by a parliamentary act but by a prime ministerial circular each time a new government came to office, and that each government made changes in the ECOSOC’s composition according to its political preference, caused increasing discontent among both business associations and labour unions. This situation also gave rise to competition among the major organizations for seats in the council. Another major source of dissatisfaction, especially for the unchanging members of the council, was the lack of a regular meeting schedule. Whichever government was in office summoned the council according to its own agenda and usually when it needed the support and cooperation of business and labour members in making legislative changes, for example regarding the social security system, and implementing its economic programme.

The ECOSOC Meetings Although the ECOSOC was first created in March 1995, it did not become functional until the second half of 1997.12 That was because of the frequent government changes and a major political crisis subsequent to an Islamist political party’s (the Welfare Party) formation of a coalition government as the major partner for the first time in the

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history of the Republic of Turkey. Furthermore, both the employers’ confederation and the labour unions had important objections, as explained above. The second ECOSOC, created by the MP– TPP government on 6 May 1996, did not convene even once before the government resigned two months later. The third ECOSOC came into existence again through a prime ministerial circular dated 18 March 1997 during the coalition government of the WP – TPP. Its only meeting took place on 25 March 1997. At the time of the meeting, the ruling WP was under increasing pressure to leave office because of its actions, which went against secular principles and traditions of the Turkish state and alarmed the military as well as the secularists. Although the ECOSOC’s agenda was the state of the economy, the government’s motive for summoning the council was clearly political. It hoped to obtain support from the ECOSOC members to stem increased pressure to resign. The ECOSOC’s non-government members refused to support the government, and about two months later five business and labour members of the council joined forces as the “Civil Initiative of Five” in opposition to the government, specifically the WP.13 These organizations – namely, TISK, TOBB, TESK, DISK, and Tu¨rk-Is – issued a joint statement on 21 May accusing the WP of dragging the country into a political crisis as a result of its reactionary Islamist actions. Several days later they agreed on a series of actions to pressure the government to resign, including a one-hour shut-down of workplaces (Baydur 2008, 205; Milliyet, 22 and 29 May, 6 June 1997). Ironically, while the ECOSOC thus far was inconsequential in terms of promoting labour–capital cooperation, the political crisis unleashed by the coming to office of an Islamist political party and its Islamist practices brought together the major labour and business organizations in opposition to the government.14 The WP’s programme of “Just Economic Order”, which it presented as an alternative to both capitalism and communism, was also cause for concern among the business associations (Erbakan 1991; Welfare Party n.d.). The ECOSOC became more active during the coalition of the MP, the DLP, and the much smaller Democratic Turkey Party (30 June 1997–11 January 1999). It met six times under this government. Its increased role can be explained in terms of growing macro-economic imbalances and the government’s adoption of a medium-term disinflationary austerity programme to address the economic problems.

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The government started implementing this economic programme in 1998 as an IMF staff-monitored programme. The key role that the government assigned to the ECOSOC was to secure the support and cooperation of business and organized labour in implementing its economic programme. According to the government, if the antiinflationary austerity programme were to succeed, labour unions and companies had to abandon the practice of indexing wage and price increases to past inflation rates and adjust these increases to the current trend of falling inflation. Clearly, it was easier to enforce this wage and price policy with respect to wage increases than price increases (in the absence of a mandatory price control policy) because wage increases were determined by collective agreements in contrast to companies’ ability to make price adjustments unilaterally. Besides, the state was the single biggest employer, and the government unilaterally set salary increases for public servants. Thus, during the MP-DLP-DTP government, the ECOSOC’s agenda was defined primarily by the IMF-monitored austerity programme. A major item on the ECOSOC’s agenda was reform of the social security system to reduce its burden on the government budget. Reform included raising the retirement age and the amount of premiums required for retirement with pension. Social security reform caused the most disagreements among members of the ECOSOC. It was not able to reach an agreement on this issue, but it was not entirely ineffective. It produced consensus on a tax reform law, the key objective of which was to fight tax evasion. The tax law also included measures, with the agreement of all ECOSOC members, to prevent informal employment. As the ECOSOC became primarily a mechanism for governments to enforce their political agendas and economic measures that involved substantial burdens for the working class, labour confederations came under pressure from below to boycott the ECOSOC. The DISK leadership in particular faced serious accusations from some of its affiliated unions. DISK’s General Convention of September 1997 turned into an occasion for critical member unions to publicly voice their concerns regarding DISK’s participation in “the government- and employers’-dominated ECOSOC, which expected more and more concessions from the labour unions alone in the name of compromise” (Milliyet, 8 September 1997). At the convention, the DISK leadership was most criticized by delegates with respect to DISK’s participation in the ECOSOC and the Civil

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Initiative together with the organizations of capital (Milliyet, 14 September 1997). Among a series of decisions adopted at the convention was Decision No. 35, which criticized the ECOSOC for its unbalanced composition and intention “to legitimate the structural adjustment policies vis-a`-vis labour”. The convention passed a resolution against participating in the ECOSOC if DISK’s proposals for turning the council into a more democratic and inclusive organ were not adopted (DISK 1997).15 The general convention of 28– 30 July 2000 also approved a similar decision (DISK 2000). Partly because of such pressures from its members, DISK boycotted approximately one-third of the ECOSOC meetings from 1996 to 2002, and on two occasions at least the DISK president attended the meeting but left in protest. Tu¨rk-Is, too, came under pressure from some of its affiliates for withdrawing from the ECOSOC. For example, the meeting of the Harb-Is (military workplaces union) Executive Committee on 4 – 5 September 1997 called on Tu¨rk-Is and the other labour confederations to leave the ECOSOC. Several days later a similar call came from the Istanbul Labour Unions Platform, an informal association of union branches (Milliyet, 8 and 11 September 1997). Subsequently, the Tu¨rk-Is Presidents’Council discussed the issue; their decision was to continue to participate in the ECOSOC. Hak-Is frequently voiced its concerns regarding the ECOSOC’s structure and demanded improvement in labour representation. Nevertheless, its perspective on labour – capital relations significantly facilitated its participation in the ECOSOC. This perspective emphasized the compatibility of interests between employees and employers and hence the importance of social partnership and dialogue as the preferred strategy.16 Another three-party coalition of the DLP–NAC–MP, which formed the government following the April 1999 election and stayed in office until November 2002, continued the earlier practice of convening the ECOSOC when it needed the council’s cooperation with its programme. The DLP and MP were also in the previous coalition, but this time the DLP was the bigger party. Soon after the government received the vote of confidence, it entered negotiations with the IMF for a three-year agreement as macro-economic imbalances continued to worsen. The ECOSOC met three times, approximately a year apart, under the DLP– NAC–MP government. The meeting of 1 July 1999 focused on the ongoing issue of social security reform; again there was no agreement. The

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government submitted the reform bill to the Parliament; the bill was condemned by labour unions as well as some professional associations but approved by business associations. The bill was passed on 25 August amid mass protests and demonstrations. These various actions were organized by the Labour Platform created by the labour union confederations, the confederations of public employees’ unions, and a number of professional associations on 14 July 1999. Anti-labour social security reform was the catalyst for creation of the Labour Platform to fight against anti-labour policies (Koc
2001; Mahirog˘ullari 2005, 379). After the government concluded a three-year loan agreement with the IMF in support of a disinflationary austerity programme in December 1999, the ECOSOC’s agenda was focused on the IMF-supported programme. The government treated the ECOSOC as a forum in which to convince the organizations of major economic interests to assist in the implementation of an economic programme that had been prepared outside the ECOSOC. The business associations were in general agreement about the necessity of austerity and further structural adjustment measures in the programme. A key component of the programme was wage restraint. The government tried to use the ECOSOC meetings to put pressure on the labour confederations to agree to wage restraint, fast privatization of the remaining SEEs, and measures to reduce employment in the public sector, including forced retirement. Pressure on the labour unions increased in the wake of the major financial crisis in February 2001. The labour organizations, often together through the Labour Platform, responded with various protest actions against IMF-supported austerity and further neoliberal reforms (Mahirog˘ullari 2005, 337, 380). The only important concession to labour interests by the DLP–NAC–MP government was the enactment of a job security law on 9 August 2002. The job security bill was part of the National Programme for the Adoption of the Acquis announced by the government in March 2000 to meet the EU membership criteria. Furthermore, the Turkish state had ratified ILO Convention No. 158 concerning job security eight years earlier. The labour movement had long struggled for legal protection of employees against wrongful dismissals. The job security law (No. 4473) was passed in spite of strong business opposition. However, its implementation was postponed until 15 March 2003 because of this opposition.17 The experience of the ECOSOC was far from successful in the late 1990s and early 2000s in terms of promoting institutionalized

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cooperation among the government and organizations of labour and capital. It hardly functioned as an important institution for inclusion of major organized interests in the formation of economic and social policies. To address the problem of the ECOSOC’s lack of a stable structure and legally defined operational procedures and thereby to turn the council into a more effective and legitimate organ, the DLP–NAC – MP government agreed to regulate it by a legislative act, thus meeting the demand of the non-government members of the council. A draft bill on the ECOSOC was jointly prepared by the council’s unchanging nongovernment members; this draft became the government bill after some small changes (Koc
2003, 131). The bill was passed on 11 April 2001. According to the ECOSOC law,18 the council was composed of 13 cabinet ministers (including the prime minister as the chair); the heads of three major state agencies; and TOBB, TISK, TESK, TZOB, Tu¨rk-Is, Hak-Is, and DISK (three seats for each organization). Soon after the legislation, the ECOSOC membership was expanded to include “the public employees’ confederation with the biggest membership”. This amendment was made by the Public Employees’ Unions Law, finally passed on 25 June 2001. The ECOSOC law also established a regular schedule for council meetings: every three months upon the prime minister’s invitation. But the new, legally created, ECOSOC did not meet even once in the following 20 months (Go¨rmu¨s¸ 2007, 131). The council met regularly in accordance with its founding law in the first year of the neo-Islamist Justice and Development Party (JDP), which came to power following the November 2002 election. But the JDP government did not continue this practice. It did not summon the ECOSOC in 2004, and it convened the council only twice in 2005. In short, the ECOSOC did not make much of an impact in the early years of the JDP government, which continued the IMF-supported neoliberal austerity programme.

New Divisions in the Capitalist Class The emergence of new divisions within the business class also made it politically difficult to institutionalize and operate a tripartite economic and social council. The most important new division started to form from the early 1990s. That division was a result of the rise of an Islamistoriented group of capitalists. Although the new division overlapped to a

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significant extent with the traditional fractionalization of capital on the basis of size, in other words, small businesses versus big corporations, it could not be reduced to the traditional division based on enterprise size. It had a new politico-ideological dimension. As discussed earlier in the book, the neoliberal economic reforms and the export-orientation strategy disproportionately benefited large conglomerates with strong ties to transnational capital. But the neoliberalization of the economy also gave rise to new economic opportunities and niche activities for small and medium scale enterprises (SMEs). SMEs rapidly grew in number in the late 1980s and 1990s.19 They were concentrated predominantly in export-oriented and labour-intensive manufacturing industries and located in the provincial centres of inner Anatolia (such as Gaziantep, Konya, C¸orum, and Denizli). Because of their location, these SMEs came to be referred to as “Anatolian capital” or “Anatolian tigers” reminiscent of Asian tigers. They were connected with large national and transnational capitals directly and indirectly. Many became subcontractors of larger domestic and/or transnational corporations. But the new Anatolian bourgeoisie resented Istanbul-based, established big capital because they saw Istanbul-based big capital as favoured and provided with most benefits by the state. Political Islam gained strong support among this new breed of Anatolian capitalists. Not all small and medium entrepreneurs, including Anatolian ones, were Islamist in politico-ideological orientation, but Islamism had a strong base of support in the new group of Anatolian bourgeoisie (Demir et al. 2004; Hosgo¨r 2011). Following the external and internal liberalization of Turkey’s financial sector from the 1980s onward, Islamic interest-free financial institutions were also born and quickly multiplied in the country.20 They often had links to international Islamic capital of Saudi Arabian and Arab Gulf origin; they also solicited the savings of Turkish migrants in Europe. The Islamic financial institutions contributed to the growth of the SMEs. Islamist-owned or controlled companies created in 1990 their own business association, the Association of Independent Industrial¨ SIAD’s members were mostly ists and Businessmen (MU¨SIAD). MU small and medium firms and geographically dispersed. But the association also included some larger Islamist enterprises among its members as such enterprises became more numerous from the mid¨ SIAD discursively positioned itself in opposition 1990s onward. MU

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to the Istanbul-based and established large capital represented by TU¨SIAD, which according to MU¨SIAD, received the lion share of state benefits. Not only were TU¨SIAD’s members large conglomerates dominating their respective sectors, but also they were pro-secular and ¨ SIAD’s pro-western in their politico-ideological orientation. MU membership quickly grew to reach nearly 3,000 establishments in the mid-1990s.21 However, as of the late 1990s, the total contribution of ¨ SIAD’s membership to the national economy was still quite small, MU no more than 10 per cent of GNP, and thus minuscule compared to ¨ nis and Tu¨rem 2002, 448). ¨ SIAD-affiliated big business (O that of TU ¨ MUSIAD served an important function in fostering social networks of trust among its members through its appeal to Islamic religious ¨ SIAD favoured a values and ethics. The economic approach of MU market economy grounded in Islamic business ethics and religious morality. According to the association, in a socio-economic order embedded in Islamic moral values, mutual trust among the community of believers would order labour– employer relations instead of formal labour laws and collective labour contracts. A market economy based on Islamic ideals of justice and social responsibility would ensure harmonious and productive relations between labour and capital. This avowedly Islamist approach to labour – capital relations rejected labour strikes and even unions as disruptive of social harmony and anathema to the virtues of hard work and productivity (Bug˘ra 2002, 194–5; Hosgo¨r 2011, 349– 50). MU¨SIAD’s perspective was diametrically opposed to the commitment of the Islamist-oriented Hak-Is as a labour union to labour union rights and state-enacted redistributive social ¨ SIAD members were cause policies. Anti-labour union practices of MU for concern for Hak-Is leaders (Bug˘ra 2002, 199). Thus, in spite of Islamic identity and values constituting major markers for both organizations and their links to the biggest Islamist political party of the time, Hak-Is and MU¨SIAD stood in opposing class positions with respect to capital –labour relation. It is important to acknowledge that anti-labour union attitudes and practices among MU¨SIAD’s members cannot be explained only and perhaps not even primarily in terms of their Islamist values. Small-medium scale enterprises typically tend to be more anti-labour union. Thus, the position of MU¨SIAD and its members on labour unions and labour rights also reflected their economic class interests.

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MU¨SIAD’s political influence grew briefly under the short-lived rule of the Islamist Welfare Party-led coalition during 1996 –7. After the removal of the WP from power under pressure from the military, the association was legally charged with anti-secular views; but the charges were later dropped. MU¨SIAD’s political influence as well as economic fortunes would grow after the Justice and Development Party came to power in 2003 as Islamist companies close to the JDP received selective benefits such as various public contracts and privatization tenders.22 However, MU¨SIAD was not able to remain the only representative of Islamist capital because Islamist capital was not entirely unified or homogeneous either. For example, another association of Islamist capital named the Turkish Confederation of Businessmen and Industrialists (TUSKON) came into existence in 2004. TUSKON was affiliated with a particular Turkish Islamist movement known as the Gu¨len movement after its founder Turkish Muslim preacher Fethullah Gu¨len.23 So, new divisions emerged within the capitalist class from the 1990s onward. These divisions often gave rise to new rival business associations, thus rendering more difficult the development of a tripartite corporatist mechanism such as the Economic and Social Council. The clientelistic type of relations between the political executive and individual firms, which took new forms and became extensive since the 1980s as a direct result of the reorganization of the state apparatus (Chapter 2), also undermined the institutionalization and effective functioning of the ECOSOC. Tripartite corporatism relies on institutionalized cooperation among the representative organizations of labour and capital and the government on the basis of policy principles and mutually established procedures, whereas the clientelistic relations involve particularistic intervention and selective provision of benefits according to personal and/or political ties.

Corporatism outside the State? A number of factors, including frequent government changes and shortlived governments’ attempts to use the ECOSOC primarily as an instrument for their political and economic agendas and the rise of new divisions within the capitalist class, did not allow the tripartite ECOSOC to develop into an effective mechanism for the participation and cooperation of business and labour organizations in policy formation

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in the 1990s. But, during the same period, a significant development took place in relations between the peak organizations of labour and employers outside the state apparatus. For the first time in the history of Turkish industrial relations, central organizations of trade unions and employers’ associations agreed to maintain permanent dialogue. The objective was to work out common grounds for cooperation in the field of industrial relations as well as to discuss the country’s major economic and social issues. The initiative came from TISK in the midst of the economic crisis in 1994, which caused a large number of plant closures and layoffs, giving rise to an explosive social situation. Layoffs were a major cause of various labour actions in the private sector in 1994 (Petrol-Is 1995, 308– 17). Since a tripartite body for which it had campaigned had not yet been created, TISK sought to establish cooperative relations with trade union confederations outside the institutional framework of the state in dealing with the crisis. It invited the leaders of the three labour confederations to a meeting on 1 July 1994.24 The agenda focused on the economic crisis, layoffs, and possible solutions. The meeting produced a joint statement addressed primarily to the government. It urged the government to take necessary measures to stimulate the economy and encourage productive investments. It also emphasized that the government must consult with labour and employers’ organizations on economic policies and industrial relations (Joint Declaration, 2 July 1994). TISK’s membership was composed predominantly of industrial firms. TISK thus primarily represented the interests of industrial sector employers. Its officials often complained that the balance had shifted against the industrial sector and that the economy had been transformed into an “interest/rent economy” (Baydur 1995; Isveren, July 1994, 4; TISK 1995a, 32– 6). Thus, in the mid-1990s, an agreement emerged between labour organizations and TISK in this respect. They concurred that the state should adopt new policy measures to encourage the industry and productive investment, which in their view had been largely neglected over the past decade. But this shared view did not necessarily mean an agreement concerning the type of measures that they wanted the state to adopt. The first summit between labour and employers’ confederations produced an understanding to hold regular meetings to develop

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common grounds. They determined a number of issue areas in which they believed they could cooperate toward common policy proposals. The selected issues were not confined to labour –employer relations. They were major political, economic, and social issues, such as reform of tax and social security systems, reduction of the informal economy, legal and constitutional reforms for democratization, income distribution, and industrialization strategies (Joint Declaration by TISK, Tu¨rk-Is, Hak-Is, and DISK, 2 July 1994). It was a strategic decision to exclude, at least initially, highly contentious issues of the collective bargaining system, particularly wage determination. Subsequent to the leaders’ summit, two expert committees were established to work on reform of the social security system and reduction of the tax burden on wage earners. A major overhaul of the social security system was high on the government agenda at that time pursuant to the stabilization and structural adjustment package of April 1994. Therefore, social security reform was clearly a priority for both labour and employers’ organizations. Organized labour had long demanded major reform of the taxation system to make it more equitable and reduce the heavy tax burden on wage income. TISK had also been complaining for the past few years that the difference between what workers cost employers and what they took home in paycheques was too wide because of the high amount of compulsory deductions in the form of social security premiums and contributions to off-budget public funds. It demanded that the state reduce such obligations on employers. In this context, TISK also became an advocate of lowering the tax burden on wages by cutting personal income tax rates for the lowest tax brackets and exempting the minimum wage from taxation. The rationale was to increase workers’ disposable incomes while lowering (or at least not increasing) labour costs. According to TISK, the high amounts of tax and other compulsory deductions from employees’ paycheques caused trade unions to demand excessive wage increases to maintain or improve their members’ real disposable incomes. TISK also criticized low tax rates on agricultural, interest, and rent incomes (TISK 1992a, 21–2, 116–17, 166– 8; 1995a, 17, 162– 4). The employers’ confederation thus articulated workers’ interests to employers’ interests. This articulation in the area of taxation was based on the assumption that corporate taxes would not be raised to compensate for the state’s revenue losses as a result of reduced payroll deductions and lower taxes on wage income.

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The three labour confederations and TISK had a second leaders’ summit on 29 August 1994. The highlight of the summit was the approval of two reports containing their agreed principles and policy proposals on reform of the social security system and the tax system. The reports were presented to the government.25 The report on the tax system established three major objectives: to make the tax system more equitable, to reduce the tax burden on wage earners and employers, and to increase tax revenues. The proposed measures to achieve these objectives included bringing the informal economy into the tax system; preventing tax evasion; taxing agricultural, interest, and rent incomes more effectively; adjusting tax brackets to inflation more frequently to prevent bracket creep; exempting the minimum wage from taxation; and eliminating the compulsory funds functioning as a form of payroll tax (Hak-Is 1995, 331– 4; Tu¨rk-Is 1995b, 651– 7). The labour and employers’ confederations also agreed on a number of points regarding problems in the workers’ social security system and solutions to these problems. According to their joint report, frequent interventions by the political executive in the administration and finances of the Social Insurance Institution (SII) were a main reason for the system’s problems. Accordingly, the report recommended more operational autonomy for the SII. The report also proposed that the state should start making regular financial contributions to the SII either by means of premiums or through allocations from the government budget to lower the premium rates for both employees and employers (Hak-Is 1995, 329–31; Tu¨rk-Is 1995b, 641– 7). TISK had been campaigning for some time in favour of the state’s regular financial contributions to the SII. In other words, it advocated financing the workers’ social security system at least in part by general tax revenues to lower employers’ premium costs and hence total labour costs. In promoting this idea, TISK often used the discourse of the welfare state (Isveren, May 1996, 21– 3; TISK 1992a, 176–86; 1995a, 133– 44). In pressuring the government to meet a particular interest of employers, TISK thus emerged as an advocate of the welfare state. At the same time, however, it defended a system of private pension and health insurance schemes on the ground of more choices. While the two summits between the labour confederations and the employers’ association in the wake of the 1994 economic crisis produced agreement on a number of important issues concerning reform of the

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social security system, there were still major disagreements. In contrast to the labour unions, TISK maintained that a minimum retirement age should be (re)introduced and raised progressively. It also supported increasing the number of days for which premiums were paid to qualify for health services and disability benefits (Isveren, May 1996, 21 –3; TISK 1995a, 141– 2). These major disagreements persisted and made it more difficult for weak, unstable coalition governments to carry out a major overhaul of the social security system in the years to follow. Agreement of the labour and employers’ confederations regarding payroll taxes generated a favourable response from the state. The 1996 budget law cancelled the compulsory payroll deduction for the Mass Housing Fund for that financial year. The coalition government of the WP– TPP moved to abolish the compulsory savings scheme, formally called the Employees’ Savings Encouragement Fund, in August 1996. The fund had been used by successive governments as a source of lowcost and long-term credits to finance budget deficits since its creation in 1988. The WP –TPP government’s initiative to abolish it was partly in response to pressure from employers and organized labour and partly because the fund had become unmanageable and run into financial problems. But the bill abolishing the fund did not provide adequate guarantees for employees’ savings and accumulated capital gains. Therefore, it was protested by the trade union movement (Milliyet, 6, 10, and 29 –31 August; 2 and 9 September 1996). Consequently, the legislative act concerning the Employees’ Savings Encouragement Fund was vetoed by the president. The labour and employers’ confederations’ initial agreement to institutionalize their dialogue did not materialize. There were no summit meetings in 1995. The confederations held another leaders’ meeting on 17 May 1996, the third one nearly two years after the last summit. TISK once more initiated the meeting. This meeting focused on the same issues as the previous meetings: namely, problems and reform of the social security and taxation systems. The agenda also included the issue of the newly formed ECOSOC. The meeting did not, however, produce significant concrete outcomes. As the political regime question occupied the public agenda following the Islamist Welfare Party’s coming to office in July 1996, the Civil Initiative of Five came into existence in May 1997 as the main formation of labour– capital cooperation. As explained above, the labour

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confederations Tu¨rk-Is and DISK (but not Hak-Is) and the business associations TISK, TOBB, and TESK got together as the Civil Initiative to force the WP– TPP government to resign. This formation caused a crack in the labour front because Hak-Is not only refused to join but also accused the Civil Initiative of “acting against democracy and serving an undemocratic operation” (i.e., the military’s ultimatum to the WP– TPP government to leave office) (Hak-Is 1999, 146; Milliyet, 23 March 1998, 6). The Hak-Is position stemmed mainly from the Islamist orientation of its officials.26 The Civil Initiative continued to exist as a pressure group even after the WP was forced out of office in June 1997 because of intense pressures from the military and secular civilian groups. What initially brought the five labour and capital organizations together was their common view of an Islamist threat to secularism. But what motivated their continued cooperation in subsequent years was also the legitimacy crisis of the state and political regime that resulted from the inability of existing political parties to form a stable government; increased corruption reaching the top ranks of state administrators and politicians; and shadowy links between the state security apparatus and a group of former ultra-nationalist militias who reinvented themselves as crime bosses and secret agents tasked with extra-judicial killings of persons suspected of aiding the secessionist armed Kurdistan Workers’ Party (PKK). The Civil Initiative members held a series of meetings among themselves and with the MP– DLP–DTP government and issued joint public statements in 1998. These statements included a series of shared concerns and demands regarding the secular nature of the state, democracy, and the economic situation, and they were primarily addressed to the government and political parties (Milliyet, 24 February and 26 March 1998). Nevertheless, since relations between labour unions and business associations deteriorated significantly as economic interests of labour and employers diverged over proposed social security reform, the Civil Initiative did not show any activity in 1999. That year saw the three labour confederations, public employees’ unions, and a number of professional associations join forces as the Labour Platform to fight the anti-labour social security bill and other neoliberal policies supported by the business sector. The Labour Platform played an important role in bringing together major labour organizations and a number of professional associations, and it organized a variety of actions in opposition to IMF-approved austerity and neoliberal policies at the

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turn of the 2000s (Koc
2001). But the Civil Initiative of the labour and business organizations also tried to gain a new lease on life by institutionalizing itself. Its agenda was refocused on economic and social issues as the perceived threat from the political Islamist movement subsided. On 7 December 1999, the five member organizations met again, and this time they were joined by Hak-Is and TZOB. The meeting led to an agreement on principles of working procedures and an institutional structure for the Civil Initiative to ensure dialogue on a continuous basis. This attempt to create an institutional framework for a continuous labour – capital dialogue can be explained with respect to the near-crisis situation of the economy and public finances and the government’s adoption of an austerity and neoliberal restructuring programme supported by an IMF loan agreement of December 1999. But soon after the Civil Initiative’s framework agreement for institutionalization, DISK announced its withdrawal for the reasons that “its priority was the development and strengthening of the Labour Platform and that the objective of such institutionalized cooperation was to weaken DISK and pacify the labour unions” (Milliyet, 28 February 2000, 8). DISK also defended its decision on the ground that the attempt to institutionalize the Civil Initiative would hamper ongoing efforts to create a more desirable Economic and Social Council (Milliyet, 22 February 2000). Pressure from its affiliated unions was an important factor behind DISK’s withdrawal. As explained above, the DISK officials were subjected to serious criticisms by some affiliated unions for collaborating with the organizations of capital. The reconstituted Civil Initiative created expert committees to prepare reports on a number of economic and social issues to be submitted to the government. In the subsequent years of 2000–1, it held periodic meetings to discuss the economic, political, and social issues of the country (Baydur 2008, 209– 21). The labour and business organizations forming the Civil Initiative were at the same time members of the ECOSOC. An important reason why they sought to establish institutionalized cooperation outside the council was their dissatisfaction with the ECOSOC’s dependence on discretionary decisions of successive governments for its composition and modus operandi until adoption of the ECOSOC law in April 2001. The role of the Civil Initiative was limited, however. It hardly went beyond producing agreements on non-contentious issues (e.g., fighting corruption and

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reducing the informal economy) and broad objectives (e.g., stabilizing the economy and increasing investment and employment). When the labour union confederations and business organizations started discussing issues directly concerned with labour – employer relations, such as legal regulation of job security, major conflicts emerged.

The State and Corporatism Corporatist cooperation between labour and employers’ organizations inevitably involves the state even when this cooperation does not take place within the framework of state organs. Continuing cooperation of the labour confederations with the employers’ organization in Turkey was indeed premised on the state’s ability to mediate labour– capital relations by providing compensations for labour in exchange for certain compromises in the context of corporatist arrangements. Conversations between the labour and employers’ confederations in fact focused on public policy areas that had substantial impacts on labour– employer relations, such as tax and social security policies, rather than directly on the collective bargaining system and wages. This shows how important the mediating role of the state was for the institutionalization of labour – capital cooperation. In addition to its mediating role, the state was the single biggest employer in the country. Moreover, union membership was concentrated in the public sector. Therefore, the state’s cooperation was crucial if corporatist arrangements between trade unions and employers’ associations were to be successful. The state’s ability to offer tax and social benefits to wage earners was very restricted in the politico-economic conditions of the 1990s. First, the state’s capacity was limited because of frequent crises of the neoliberal economic strategy. Second, persistent fiscal constraints narrowed the scope for reducing the tax burden on wage earners and funding the social security system from the government budget. To generate more tax revenues, it was necessary to tax capital income more effectively (including profits). But doing so required overcoming opposition of the capitalist class or particular fractions of it. Furthermore, raising taxes on corporations would go against the international trend of lowering corporate taxes to maintain domestic capital at home and/or attract international capital. Better protective labour legislation in return for trade unions’ acceptance of wage restraint or a national wage policy

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based on the principle of productivity within a corporatist arrangement was likely to provoke a negative reaction among employers. The business community’s campaign against the job security legislation was a good indication of this. Like their counterparts in the advanced capitalist countries, in the 1990s Turkish business associations began to advocate labour market flexibility and flexible work organization. “Flexibility” meant deregulating the labour market, undoing protective labour legislation, and upholding employers’ prerogatives over the organization of work (TISK 1994). As a result, the state’s restricted ability to offer organized labour compensations in exchange for compromises within the framework of either the tripartite ECOSOC or bipartite cooperation was partly responsible for why both the ECOSOC and attempts to institutionalize bipartite cooperation were ineffectual to a great extent in the 1990s and early 2000s. Another important reason was division of the trade union movement into three rival confederations. The creation of separate public employees’ unions and their organization into three major rival confederations with different ideologies and strategies in the 1990s ¨ zu¨m 2011) added a further impediment to (Mahirog˘ulları 2011; U successful corporatist cooperation.

Deunionization of Workers The labour union movement experienced two opposite processes from the mid-1990s: unionization of civil servants and deunionization of workers. As discussed above, neoliberal restructuring of the economy and accompanying transformation of the state’s functions had a dramatic effect on public servants. Their economic position, as well as their social status and prestige, suffered drastic deterioration. The decline of their socio-economic position and the gradual translation of this objective condition into subjective feelings of being “underprivileged”27 led public servants to establish trade unions in the early 1990s. Although the Public Employees’ Unions Law was not passed until 2001, public employees created and rapidly joined unions in the 1990s. Their establishment of unions was part of their struggle for the state’s recognition of their union rights. According to the official statistics of public employees’ union membership, which the Ministry of Labour started publishing in 2004, 787,882 of the total 1,564,777 public employees were union members. Thus, the rate of unionization was

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50.4 per cent in 2004. Although public employees’ unions did not have the right to collective bargaining even after passage of the 2001 law and until 2012, their membership continued to increase in the 2000s. According to July 2013 statistics, 1,468,021 of 2,134,638 public employees were union members, and thus the unionization rate rose to 68.8 per cent.28 At the same time that public employees made great strides toward gaining union rights and organizing in unions, workers were faced with deunionization. Although according to the Ministry of Labour’s statistics there was no drop in the number of union members, the level of workers’ unionization as a percentage of all wage/salary earners tended to decline after peaking in 1994 (Table 8.1). The decline in the unionization rate was actually higher than the official membership statistics reveal because membership numbers that unions reported to the ministry were not verified frequently enough to take into account union members who had retired or ceased to be due-paying members for various reasons. The total number of workers in workplaces for which unions signed collective agreements each year provides a good indication of the level of unionization or deunionization.29 This method shows that the total number of workers in workplaces covered by collective agreements in the public sector peaked in 1992– 3 and thereafter declined drastically from 1,003,770 to 576,969 in 2000– 1 and further to 308,273 in 2010–11. This drastic fall was a result of the privatization of many SEEs and the consequent decline of employment in the public sector (Table 3.6). There was no corresponding increase, however, in the number of workers in private sector workplaces for which collective agreements were signed during the same period. There was actually a decline from 663,967 workers in 1990–1 to 407,104 in 2000–1 and 453,200 in 2010 – 11. These figures point to the increasing deunionization of workers and the declining influence of labour unions in the area of collective bargaining. Privatization was the most important reason for deunionization of workers because public enterprises were historically the main base of union membership. Other major reasons were increased use of “flexible” types of employment and work organization, such as temporary and part-time employees; subcontracting and outsourcing various services and production activities to smaller firms; employers’ various union avoidance tactics, such as dividing a company into smaller units; and

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dismissing unionized workers and hiring in their stead non-unionized workers. Employers first adopted these various strategies on a large scale in reaction to substantial wage increases in the early 1990s and continued to pursue them in subsequent years. These strategies to reduce labour costs were also effective in arresting unionization. They were part and parcel of capital’s concerted efforts to undermine the power of organized labour. Another recent obstacle to workers’ unionization resulted from the rapid proliferation of small and medium scale enterprises in manufacturing from the late 1980s onward. Many industrial SMEs were founded after the shift to an export-led regime of accumulation. They were predominantly in export-oriented, labour-intensive industries including textile and clothing. Many established subcontracting relations with bigger national and foreign companies (Gu¨lalp 2001, 437; Hosgo¨r 2011, 344– 5). They were thus part of the more recent global chains of production and trade. A docile labour force and low labour costs were crucial to the economic success of that new breed of smaller enterprises. As is typical of SMEs in general, they were hostile to labour unions because of their economic class interests. But the cultural background of these entrepreneurs added another dimension. As explained earlier, an important characteristic of the new SMEs was their location. They were based in inner Anatolia. Cultural conservatism of inner Anatolian towns posed a challenge to the organization of workers in labour unions. Furthermore, the new Anatolian bourgeoisie tended to be Islamist in their perspective on social order and constituted a major social support base for political Islam in the 1990s and 2000s. The proliferation of Anatolian-based SMEs thus created another hurdle to workers’ unionization. A parallel development to the trend of deunionization of workers from the mid-1990s on was the substantial decline in the number of strikes and workers on strike after they climbed to new heights in 1995 (Tables 8.5.1 and 8.5.2). The number of workers participating in labour actions other than legal strikes also dropped significantly after 1996. Workers had often resorted to non-strike labour actions on massive scales in the last two years of the 1980s and the early 1990s (Table 10.2). There was a major jump in non-strike labour actions in 1995 and 1996 in reaction to the government’s austerity and neoliberal measures following the 1994 crisis. Participation in such actions reached 3,428,811 and

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3,566,928 workers in 1995 and 1996 respectively. There was a substantial drop in subsequent years, however. Participation dropped to 762,627 and 636,828 workers in 1997 and 1998. There was again a significant rise in non-strike labour actions, with participating workers numbering 1,411,165 in 1999; the rise was due mainly to large-scale demonstrations against overhaul of the social security and retirement system.30 But the trend was a significant decline in both strike and non-strike labour actions after the mid-1990s. The decline in labour actions can partly be explained in terms of labour and employers’ organizations’ efforts toward dialogue and cooperation in the economic and political crisis conditions of the second half of the 1990s and early 2000s. But a more important reason was that the labour union movement increasingly became weaker as a result of deunionization from the mid-1990s on. The weakening of organized labour and the decline of labour activism largely removed the raisons d’eˆtre of employers’ earlier attempts at neocorporatist cooperation at the national level.

CHAPTER 13 CONCLUSION

Turkey constitutes an important early case of neoliberal economic transformation. It was one of the first test cases for IFIs’ neoliberal structural adjustment programmes for developing countries. What is particularly important about the Turkish case is that neoliberal restructuring of the political economy was sustained despite political regime changes. There was continuity of the exclusionary form of the state founded on the dominance of big capital in the Turkish social formation and the exclusion of organized labour from the policymaking process. The exclusionary state was the key agency for economic transformation toward an outward-oriented open-market economy. Its role in this process included two primary functions: dismantling the regulative mode associated with the interventionist ISI of earlier decades, and creating a new set of institutions and regulations that would constitute the mode of regulation for export-led accumulation in an openmarket economy. While the state played a key role in neoliberal economic restructuring in the 1980s, the internal articulation of its apparatuses and the distribution of policy powers also underwent major changes. Crucial for the state’s new role were the concentration of policy powers in the executive and the creation of new state economic organs tasked with major functions geared to requirements of the new pattern of accumulation. Also important was the rise of a new group of technobureaucrats committed to economic liberalism. Reorganization of the state apparatus and policy powers had major consequences for the representation of class interests in the policy-making process. A major

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consequence was the marginalization of labour representation in the state. Organized labour could hardly gain access to or exert influence on the new dominant centres of economic policy making, whereas business, particularly big business, became further advantaged in getting access to, and having its interests represented in, policy formation. Furthermore, the ideological perspective of the top bureaucracy became more favourable to business interests. The particular configuration of the state’s accumulation and social welfare functions was also transformed in the process of neoliberal restructuring. In the 1980s, there was a pronounced shift in favour of the state’s accumulation functions at the expense of its social welfare role. The neoliberal exclusionary state was also characterized by extensive interventions in the system of industrial relations to discipline and control organized labour. The detailed juridification of the collective bargaining system was an important aspect of the state’s anti-labour interventionist policy. After explaining the continuities in state form and the neoliberal economic strategy, this study argued that political regime change was also important with respect to the particular modality of how the state was situated in social class relations. The ground for neoliberal restructuring of the Turkish economy had been prepared by national big capital in cooperation with IFIs before the 1980 military intervention. But prevailing political conditions were a major barrier to implementation of the new politico-economic project. Moreover, the state lacked the institutional capacity to carry out the required policies. A repressive military regime laid the institutional foundation of the exclusionary state and made possible the implementation of a structural adjustment programme that set the Turkish economy on a neoliberal course. The resumption of a multiparty parliamentary regime after three years of military rule was the moment of the capitalist class’s attempt (under the leadership of big industrial/financial capital) to establish its hegemony. It sought to construct a new will in civil society instead of continuing to rely primarily on state coercion to maintain its dominance. Since the military regime had led to a substantial shift in the balance of power in favour of capital because of suppression of the leftist movement and organized labour, there was no serious challenge to the capitalist class’s attempt to establish its hegemonic leadership. The neoconservative Motherland Party was the principal agency for the construction of capitalist hegemony following transition from the military

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regime. Its hegemonic project included two principal components: conversion of the economic doctrine of neoliberalism into a populist discourse, and an ideology based on the contradictory unity of competitive individualism and conservative nationalism. The successful construction of hegemony enabled the MP government to continue neoliberal restructuring with popular consent in the post-military years. State coercion continued to be important, however, and could be used if popular consent or acquiescence was denied or withdrawn. Extensive state intervention in the industrial relations system in favour of employers, a policy of wage repression, and curtailment of workers’ social benefits were principal aspects of the state’s policy toward labour both during the military regime and in the years after democratic transition. But the passage to multiparty parliamentary politics brought about important changes in the dynamics of state-organized labour relations. Relations between the state and organized labour under the military regime can best be understood within the framework of authoritarian corporatism, which served two principal functions: first, to control and discipline the working class through its own organizations; second, to provide a mechanism of linkage or communication between the military administration and the working class. Although the organizational structure of the trade union movement showed authoritarian corporatist features in the post-military era (e.g., the largest labour organization, Tu¨rk-Is, monopolized representation in many industrial sectors) because of restrictive provisions of trade union legislation, the interactive dimension of the state’s relations with trade unions ceased to be corporatist. The principal feature of the neoconservative MP government’s policy toward organized labour was to discredit and reject trade unions as the representatives of workers while it carried out major neoliberal reforms in the economy. The MP government also simultaneously sought to appeal to workers as voters with multiple interests and identities. This book has shown that this government’s persistent efforts to delegitimize and weaken trade unions were counter-productive in the medium term. The union leadership, which had constantly sought dialogue with the government initially, was eventually compelled to adopt a strategy of confrontation. Growing pressure from lower union ranks and members was pivotal in forcing Tu¨rk-Is to change its strategy. The state’s very policies intended to disorganize the working class later became a focus of unity for the labour

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movement, which gradually developed new forms of action to defend its interests not only against employers but also against the neoliberal exclusionary state. Part of the new strategy was to internationalize the Turkish labour struggle by bringing workers’ complaints and demands to international forums, particularly the ILO. In the late 1980s and early 1990s, labour unions also began to make astute use of existing democratic institutions and rights. Furthermore, there was the rise of grassroots labour activism, which developed largely outside the control of union leaders and sometimes despite their disapproval. Labour activism defied and weakened the restrictive legal – political framework. Large-scale labour mobilization was effective in reversing years of declining wages. The neoconservative hegemonic project began to unravel toward the end of the 1980s because of counter-movements from below and intensification of conflicts within the power bloc. The MP government’s neoliberal economic programme was responsible for increasing socioeconomic inequalities and lowering the living standards of large sections of society. This situation inevitably provoked counter-movements from below: the most influential was the outbreak of labour militancy at the turn of the decade. Public servants also started to unionize in the early 1990s. Neoliberal transformation of the economy affected the relative positions of different fractions of capital. It entailed differential benefits and costs for different fractions, which aggravated conflicts within the power bloc. Financial and money capital emerged as the biggest beneficiary, while the relative position of industrial capital declined. There was a significant attempt to build an inclusive form of state in the early 1990s. The new political and social settlement was represented by the centre-right and centre-left coalition of the TPP and SDPP. Key components of the proposed settlement were further democratization and increased distribution to labour and other subordinate interests, which had been marginalized in the process of neoliberal reforms both under the military regime and during the rule of the neoconservative MP. The centre-right and centre-left coalition secured both the confidence of business and the support of organized labour. There was a series of pro-democracy legislative changes, but they fell short of creating a liberal democracy. Turkey’s further democratization was connected to the peaceful resolution of two major problems: the ethnic Kurdish “problem” and political tensions resulting from the rise of the

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Islamist movement and intensified conflict over the place of Islam in the public sphere. These two major issues have continued to shape Turkish politics and restrict the country’s democracy. Democratic consolidation also depended on addressing great socio-economic inequalities, a major source of social discontent and a significant factor behind the rise of the Islamist movement. I have argued that the attempt to achieve an inclusive inter-class social settlement failed mainly because the neoliberal economic model in Turkey did not allow enough room for the state to mediate labour – capital relations in such a way as to offer concessions to both economic and democratic demands of labour without undermining the interests of capital. Persistent instability of the neoliberalized economy restricted the state’s ability to respond to the working class’s economic demands without risking capital’s interests in the existing economic order. Furthermore, the Turkish economy’s neoliberal transformation and further integration into global flows of trade and finance restrained the government’s ability to intervene in the economy on the principle of social justice. Employers’ idea of a new social settlement in the 1990s was centred on institutionalized tripartite cooperation in wage determination and public policies regarding labour–capital relations. The explosion of labour actions and resultant wage increases in the early 1990s explain why business associations became a strong advocate of neocorporatist arrangements. They saw tripartite cooperation primarily as a means of controlling wage increases as well as ensuring labour peace. The government adopted the idea of a tripartite organ to create institutionalized cooperation among state, labour, and capital representatives in the mid-1990s. It was in response to both the employers’ campaign and the labour unions’ demand for participation in making economic policies. However, a major economic crisis and the subsequent adoption of an austerity and structural adjustment package in 1994 were the catalyst for the creation of an Economic and Social Council, which constituted the institutional framework of tripartite cooperation. The government’s motive was to ensure labour unions’ cooperation in legitimating and implementing the austerity and structural adjustment programme. Frequent changes of government and the short-lived governments’ attempts to use the ECOSOC primarily as an instrument for their political and economic agendas in the latter half of the 1990s did not permit the tripartite

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council to develop into an effective institution for participation and cooperation of business and labour organizations in public policy formation. Moreover, as the ECOSOC became primarily a mechanism for governments to enforce anti-labour policy measures in the economic crisis conditions of the late 1990s and early 2000s, labour confederations often came under strong pressure from below to withdraw from the council. While neocorporatist arrangements as advocated by business organizations aimed to sustain the neoliberal economic strategy through the cooperation of organized labour, the same strategy was the main reason for the failure of consensual tripartism to develop. In the context of a crisis-prone neoliberalized economy, there was little room for the state to offer policy trade-offs to organized labour in return for its cooperation in the implementation of a wage policy and ongoing neoliberal reforms, such as privatization. There was even less guarantee that organized labour’s current compromises within the corporatist arrangements would yield more material benefits in the longer term given that the Turkish economy became highly exposed to the vicissitudes of global markets. Furthermore, as major organizations of capital promoted tripartite cooperation at the central level, employers pursued a systematic strategy of deunionization at the enterprise level. As a result, the weakening of organized labour and the decline of labour activism from the mid-1990s on largely eliminated the raisons d’eˆtre of employers’ earlier campaign for neocorporatist cooperation at the national level. This book has systematically investigated the constraints and permissiveness of world order pressures in shaping the Turkish political economy. Trends toward globalization and market liberalization in the world economy transformed the limits of the possible for the Turkish state. However, world order pressures did not act on the state merely from the outside. They were consequential to the extent that they were internalized and reproduced within the Turkish social formation through networks of linkages and relations or to the extent that they affected the internal balance of power among social forces and shaped dominant ideas. For example, the key event that led to the abandonment of state-led ISI in favour of an outward-oriented growth strategy in 1980 was concurrence between the interests of Turkish big capital and the policy demands of IFIs. Subsequent neoliberal reforms in the economy enhanced the structural power of internationally oriented capital. The

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Turkish economy’s integration with global financial markets also resulted in diminished policy autonomy for the government because of constraints arising from high capital mobility. Furthermore, the country’s increased dependence on short-term financial inflows since the late 1980s meant that the Turkish state became more accountable to global financial investors. Although Turkey’s opening to global financial markets limited the policies available to the state, it did not guarantee effective implementation of those policies demanded by IFIs and international investors. Through my analysis, we can see that the internal balance of power and domestic political conditions were crucial in this regard. The neoconservative hegemonic condition of the post-military 1980s greatly facilitated neoliberal restructuring of the economy. In contrast, in Turkey of the 1990s, disintegration of the neoconservative hegemonic project and subsequent political conditions of a highly fragmented party system, frequent government changes, and strong resistance from the labour movement often frustrated the implementation of further neoliberal reforms. Nevertheless, no political party was able to formulate a viable alternative to neoliberalism that could muster enough support to become state policy. The questions that this study investigated are expected to generate and inform further research projects. One important project is the proble´matique of reconciliation between neoliberalism and Islamism. The November 2002 election marked a watershed in Turkish politics. For the first time, a political party with Islamist roots won enough parliamentary seats to form a majority government. The Justice and Development Party was new, created about a year before the 2002 election. But its organization and leadership cadre had roots in earlier Islamist parties. The JDP effectively tapped into widespread discontent with established parties of both the left and the right because of their inability to solve the country’s economic and political problems, including rampant corruption. The JDP sought to distance itself from earlier Islamist parties and create a new political identity described as “conservative democratic”. In the area of economic policy, the JDP clearly distinguished itself from its predecessor, the Welfare Party. The WP had proposed a “just economic order” as an alternative economic system based on Islam’s relevant precepts and ethical norms, including a highly regulated and interest-free financial system and distribution of the value produced by “experts” according to the divine principles

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of “justness” (Erbakan 1991; Welfare Party n.d.). The neo-Islamist JDP was a convert to neoliberal economics.1 During its first election campaign, it repeatedly assured Turkish capital and international investors that it would continue the neoliberal course of the Turkish economy. Indeed, after it came to power, it remained committed to the neoliberal economic reform and austerity programme that the outgoing government had agreed with the IMF following the 2000– 1 financial crisis. It also signed a new three-year agreement with the IMF to be implemented during 2005– 8. The JDP offered a synthesis of moderate Islamism in the social sphere and neoliberalism in the economic sphere. It is important to ask whether its synthesis represents a new type of hegemony within the framework of a neoliberal capitalist economy.2 This question is warranted especially since the JDP continued to increase its electoral support in the national elections of 2007 and 2011 and established its dominance in Turkish politics. It is beyond the scope of this book to discuss the above question, but it is important to offer some reflections in concluding. First, the JDP’s discourse and actions in power hardly put to rest secularists’ suspicions of the party’s “real” agenda of weakening secularism and reshaping the public sphere according to Islamist ideas step by step.3 In fact, after the JDP’s huge victory in the 2011 election, secularists and liberals became more fearful as the JDP government adopted a more socially conservative agenda. Its increased tendency to enforce its agenda in an authoritarian manner increasingly intolerant of dissenting voices has further intensified the division between secularists and liberals on the one hand and JDP supporters and Islamists on the other. Second, the JDP has a strong support base in the small and medium capitalist class of Anatolia and the emerging group of big Islamist-oriented companies. However, while its commitment to neoliberal economics pleased Istanbul-based big capital, its Islamist side continued to disturb these Western-oriented big capitalists. Thus, the JDP’s synthesis of moderate Islamism and neoliberal economics failed to unify the capitalist class. Rather, it added a strong religio-ideological dimension to the traditional divisions of Turkish capital. Third, the Islamist-neoliberal synthesis offered no systemic solution to socio-economic inequalities continuously generated by the neoliberalized economy except the promotion of charity and limited means-tested welfare provisions that are often demeaning to their beneficiaries.

NOTES

Chapter 1

Introduction and Historical Overview

1. Studies of corporatism grew rapidly in the late 1970s and 1980s. Influential studies of neocorporatism include Berger (1981); Cawson (1986); the special issue of Comparative Political Studies 10, 1 (1977); Goldthorpe (1985); Grant (1985); Lehmbruch and Schmitter (1979, 1982); Panitch (1977, 1980, 1981); and Schmitter (1974). Studies of authoritarian corporatism in Latin America by Latin American specialists helped to clarify differences between liberal and authoritarian variants of corporatism (Collier 1979; Collier and Collier 1979; Malloy 1977). 2. The idea of “the internal articulation of state apparatus” and its differential impact draws on Jessop’s Poulantzian strategic-relational approach to the state (1990). 3. The Gramscian account I offer in this book relies on Gramsci (1971) and draws on applications of Gramsci’s ideas by political theorists Stuart Hall and Bob Jessop, and international political economists Robert Cox and Stephen Gill. 4. Cox’s idea of state–society complex resembles Gramsci’s notion of “integral state”. 5. Boratav (1982) and Tezel (1982) offer detailed analyses of the period. 6. Karpat (1959) and Toker (1970) are good sources on the political transition. 7. The reasons for the coup were the ruling Democratic Party (DP)’s increasing use of repressive measures to silence its critics and economic instability. Another major motive was that, according to the pro-secular military, the DP had become a danger to the secular nature of the state because of its toleration of religious reactionary groups. 8. The term “embedded liberalism” was coined by Ruggie (1982) to describe the postwar international economic order. It refers to a compromise between the social welfare responsibilities of the state at home and the requirements of a relatively liberal international economic order. 9. This argument draws on Keyder (1987a, Chapter 3).

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10. For an analysis of the historical development and characteristics of wage labour in Turkey, see Koc (1986a, 1986b). 11. The growing influence of leftist radicalism among public servants’ unions, as well as their increasing resort to collective actions, were the main reasons for the abolition of public servants’ right to unionize (Saylan 1975). 12. For the Turkish ISI model and its crisis, see, for example, Barkey (1990); Boratav (1988); Boratav, Keyder, and Pamuk (1984); Keyder (1987a, 1987b); the special issue of Metu Studies in Development (1981); and Ramazanoglu (1985a). 13. There is a large amount of literature on the 24 January Decisions. It includes Baskaya (1986); C¸o¨lasan (1983); Kafaoglu (1981); Senses (1985); Ulagay (1983); and Yesilada and Fisunoglu (1992). 14. Several months prior to the coup, a high-ranking general, Haydar Saltik, later named the brain behind the coup, reportedly said that “there was no alternative to the 24 January Decisions” (Ulagay 1987, 61). The programme of the Ulusu government of the military regime also praised the 24 January Package and emphasized that it needed to be complemented by legal and political arrangements, including new labour legislation (“Ulusu Government Programme” 1980– 83, 4 – 5). 15. For O¨zal’s background and views, O¨nis¸ (2004) is a good source in English. 16. The term “state capacity” problematizes the effective implementation of state policies and strategies (Evans, Rueschemeyer, and Skocpol 1985).

Chapter 2 Neoliberal Restructuring and State Interventionism 1. This chapter partly relies on my journal article (1998). 2. According to Kazgan (1988, 377), in the 1980s the conjunctural economic cycles became shorter and more frequent compared with those of the 1960s and 1970s. In the 1980s, their average duration was three years, while they had spanned from eight to 12 years in the earlier period. Furthermore, the expansion and contraction phases of the cycles became equal in duration in the 1980s. In the 1960s and 1970s, however, the average expansion phase had been about six years, and the average contraction phase had been four years. The Turkish economy continued to experience serious economic crises after many of the major neoliberal reforms were completed, for example the financial crises in 1994 and 2000– 1, discussed in Chapter 11. 3. For the evolution of the Parliament in Turkish political history from the late Ottoman period to the late 1980s, see Tano¨r (1990). For the legal structure and powers of the Parliament under the 1982 Constitution, see Tano¨r (1983). 4. The 1961 Constitution had not granted the government the authority to issue decrees having the force of law. This authority was granted by a constitutional change in 1971. 5. According to Petrol-Is (1990, 375– 7), from 1971 to the 12 September 1980 military takeover, a total of 35 law-decrees had been enacted by several different

346

6.

7.

8. 9. 10. 11.

12. 13. 14.

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governments. From the time that it came to office in November 1983 to 1989, the Motherland Party (MP) government passed more than 300 law-decrees. Subsequent governments formed by various parties in the 1990s also resorted frequently to law-decrees, especially in the economic policy area, particularly regarding privatization. The president’s powers included the ability to ratify laws; to send them back to the Parliament for reconsideration; to submit proposed constitutional amendments to popular vote; to appeal to the Constitutional Court for the annulment of parliamentary legislation, cabinet decrees, and internal regulations of the Parliament; to dissolve the Parliament and call for new elections under certain conditions; to appoint the prime minister and ministers (upon nomination by the prime minister); and to proclaim martial law or a state of emergency with the approval of the Council of Ministers that would be summoned under his/her chairship. The president also had important powers of appointment, including appointing the chief of the general staff, a significant number of members of various higher tribunals and councils, and university ¨ zbudun 1988). rectors (for a discussion, see O This provision of the 1982 Constitution was retained until 2007. The constitution was amended in May 2007 to allow the president to be elected directly by popular vote. The amendment was approved in a referendum on 21 October 2007. ¨ ncu¨ and This section benefited significantly from Heper (1990a, 1990b); O ¨ nis (1991); O¨nis and Webb (1994); Sayari (1992); and Sunar Go¨kce (1991); O and O¨nis (1992). The Undersecretariat of Foreign Trade joined the new Ministry of Economy in June 2011. This role was taken over by the new Ministry of Development created to replace the State Planning Organization in 2011. The tradition of five-year development plans has continued to this day. However, unlike in the 1960s and 1970s, as a result of the neoliberal shift in economic policy in the 1980s, the purpose of planning became more to forecast than to enforce specific economic targets. All of the plans since 1963 are available on the website of the Ministry of Development at http://www.kalkinm a.gov.tr/Kalkinma.portal. From 1962 to 1977, the Work Council was summoned four times: the third in 1962, the fourth in 1965, the fifth in ? (not available), and the sixth in 1977. My choice of the gender-specific word businessmen is deliberate because nearly all decision-making members of the big business community at the time were men. In The State in Capitalist Society, Miliband (1973) advances this argument with respect to Western advanced capitalist democratic societies. He argues that high-ranking civil servants are not “neutral”. They are the allies of capital against labour. His argument is also valid for the Turkish case during the period under study.

NOTES TO PAGES 35 – 45

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15. TU¨SIAD’s current publications and reports can be found on its website. Some of its older publications and reports dating from 1995 are available in its online archives (www.TUSIAD.org.tr). 16. Law No. 3300, dated 4 June 1986, which amended the Social Insurance Institution Foundation Law (No. 4792). 17. I do not intend here to establish a cause – effect relationship. Indeed, low labour costs were a strong disincentive to invest in expensive technological improvements, especially when this was coupled with high real interest rates during the period. 18. It is not possible to ascertain the exact amount of fictitious exports during the period. According to some estimates, they accounted for 12.6 per cent of total exports to OECD countries from 1981 to 1985 (Senses 1994, 58). 19. I calculated this from Table V.15 (SPO 2001). 20. It was created by Banking Law No. 4389. 21. The banking regulatory reform was too late and not enough to prevent the serious financial crisis of 2000– 1. 22. The economic programme was an exchange rate-based disinflation programme. It was initially an IMF staff-monitored programme without a stand-by agreement. The Turkish government submitted a letter of intent to the IMF in December 1999 requesting financial support. A major section of the letter concerned strengthening the banking system and banking regulation. The section mentioned enactment of a new banking law and creation of the BRSA in June 1999 as part of this plan, and it promised revisions to the banking law and BRSA to bring them into better conformity with relevant international standards (Letter of Intent of the Government of Turkey, 6 December 1999, http://www.imf.org/external/np/loi/1999/092999.HTM). 23. The Social Democratic Populist Party (renamed the Republican People’s Party in 1995), the biggest leftist party of the 1980s and 1990s, and deputies from this party put up a strong fight against privatization and often brought lawsuits against privatization implementations. 24. Before the neoliberal turn in Turkish economic policy in 1980, public sector workers’ earnings were 1.33 times those of private sector workers on average; in some sectors, the difference was as high as 1.83 (Krueger and Tuncer 1980, as reported in Gu¨ran 2011, 43). 25. The reduction of employment often took place both before and after a public enterprise was privatized (Karatas¸ 2001, 115). 26. Privatization Act No. 4046, passed by the centre-right and centre-left coalition of the True Path Party and Social Democratic Populist Party in 1994, provided for the payment of redundancy compensation to SEE employees laid off during or after privatization; this was missing in the earlier privatization legislation. 27. Directorate of Privatization Administration, http://www.oib.gov.tr/program/ uygulamalar/1985-2003_gerceklesenler.htm. 28. Directorate of Privatization Administration, http://www.oib.gov.tr/program/ uygulamalar/1985-2003_1.htm.

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29. “A wider distribution of share ownership” was among the main objectives of the privatization master plan that Morgan Guaranty Trust Company of New York prepared in 1986 as commissioned by the Turkish government (Karatas¸ 2001, 95). 30. The remaining 5 per cent came from sales of shares on the Istanbul Stock Exchange and transfers. Directorate of Privatization Administration, http:// www.oib.gov.tr/program/uygulamalar/yillara_gore.htm. 31. I follow O’Connor (1973) in distinguishing between the “accumulation functions” and the “legitimation functions” of the state. 32. MP Government Programmes (1983, 1987) are available in Hu¨ku¨metler ve Programlari 3: 24 –110. 33. Total public expenditures include the central government’s general budget, the annexed budget, the SEEs, the off-budget funds, the revolving fund institutions, and the local administrations. 34. For evolution of the Turkish social security system, see Talas (1983, 1992) and Us¸an (2009). 35. Total public health spending includes expenditures of the social insurance institutions in addition to those of the government. 36. There were also increases in the number of public hospital beds, but they were less striking, especially given the substantial growth of the country’s population during the period. As a result, the population per hospital bed, including private hospital beds, continued to rise (SPO 2012, Table 8.16). 37. For the legislation regulating the MASF and the General Directorate for Social Assistance and their organization, see http://www.sosyalyardimlar.gov.tr/tr/. 38. Total VAT rebates as a proportion of the minimum wage steadily declined to 6 per cent in 1994 after increasing to 20 per cent from 10 per cent during 1984– 6 (Tu¨rk Harb-Is 1994, 91, Table 3.12). 39. For both 1990–4 and 1995–9, the percentage was 58.5. I calculated the figures from the SPO’s (2012) Economic and Social Indicators 1975–2010, Table 5.1. 40. The effective tax burden is defined as the ratio of taxes paid by a section of society to its factor income.

Chapter 3 Interventionist Labour Relations Policy 1. The trials concluded in July 1991 in favour of DISK. It and its affiliates resumed their activities in 1992. 2. Act No. 2364, 24 December 1980. 3. This observation is based on my review of Tu¨rk-Is’s monthly magazine Tu¨rk-Is Dergisi for 1981 to 1983. 4. Calculated from the Ministry of Labour and Social Security’s Industrial Branch statistics, January 1985 and July 1992. The following industrial branches were included in the strike ban: mining; petroleum, chemicals, and rubber; banking and insurance; energy; trade, office, education, and arts; land, sea, and rail transportation; health; national defence; and general works (municipal services).

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5. This observation is based on my compilation of relevant figures from the Ministry of Labour and Social Security’s periodic publication C¸alisma Hayati Istatistikleri (Labour Statistics), various issues. 6. The Ministry of Labour’s regular publication since the early 1980s, Labour Statistics (C¸alıs¸ma Hayatı) Istatistikleri), gives the figures for collective agreements according to public and private sectors. 7. The main regular source of information on wages was the Social Insurance Institution’s wage statistics in its annual yearbooks, going back to the 1950s. But the MP government prohibited the institution from publishing its wage statistics from 1985 to 1987. The institution was again allowed to publish its wage statistics in 1988, yet the data for the above three years are lacking. Moreover, the SII’s wage statistics have some significant deficiencies. 8. A constitutional amendment in 1995 recognized public employees’ right to unionize and enter “collective talks” but not their right to conclude collective agreements. The Public Employees’ Unions Law dated 2001 defined and put into effect the right to collective talks. Public employees finally obtained the right to collective bargaining by an amendment to the 2001 law in 2012, but they continued to be denied the right to strike. 9. Besides general budget institutions and SEEs, the public sector includes local administrations and annex budget institutions, such as universities, and a number of other public institutions, such as the General Directorate of Village Affairs, the General Directorate of Highways, and the General Directorate of State Water Works. The armed forces are subject to a special law and are not included in this analysis. 10. The principal sources of data on public personnel are the Ministry of Finance’s records and state personnel surveys conducted by the State Personnel Department every other year. There are some discrepancies between the two sources, but both show the same trend. The reason for using the Ministry of Finance’s figures, as compiled in a study entitled “Genel Bu¨tceli Kuruluslarda Kamu Personeli Istihdami” (SIS 1998a), in this study is that a number of public institutions failed to fill out the survey forms of the State Personnel Department in some years. As a result, an important portion of public employees was not accounted for in these surveys. The study referred to above also provides the results of the State Personnel Department’s surveys of 1976 – 94 pertaining to public servants in GBIs. The Personnel Department publishes its survey results in book form. The Undersecretariat of Treasury and Foreign Trade (1994, 29) also gives summary results of the 1994 survey. 11. Some of the increase from 1.95 per cent in 1977 to 2.29 per cent in 1978 was due to better recording of the number of workers as a result of the introduction of a permit system in 1978. In subsequent years, the number of public employees in GBIs as a percentage of the general population continued to rise from 2.29 per cent in 1978 to 2.55 per cent in 1980. The latter figure was not surpassed in the years 1981– 95 (SIS 1998a, Table 3).

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12. The total number of regular workers in GBIs was 105,661 in 1983. It dropped to 76,602 in 1984. As of 1995, the figure was 73,067 (SIS 1998a, Table 1). According to the same source, the sharp decline in the number of workers in GBIs in 1984 was due to the transfer of workers in the Ministry of Village Affairs and Cooperatives to the General Directorate of Village Services (an annex budget institution, not a general budget institution) as a result of this ministry’s amalgamation with another ministry in 1984. The source fails to mention the conversion of many worker cadres to the legal status of public servant during the period. Thus, some of the decline was due to this conversion. 13. For a concise review of the evolution of legislation concerning the employment status of public servants (memurlar), see U¨nsal (1999). 14. Petrol-Is (1988, 288– 307; 1990, 371– 8; 1991, 333– 5; 1992a, 276– 8; 1995, 423– 44) are good sources for developments concerning the legislation and use of contract personnel. My study greatly benefited from their reviews. Ko¨rog˘lu (2012) provides a review of the evolution of legal regulations concerning employment in SEEs. 15. The court’s decision (No. 1988/55) with its justification was published in the Official Gazette (No. 20232, 25 July 1989). Only one of the 11 judges dissented. 16. In repealing this provision, the court stated that there must inevitably be certain permanent public service tasks in SEEs requiring the exercise of administrative powers and that these tasks could be performed only by public servants or employees according to the constitution (Constitutional Court’s Decision, Official Gazette No. 20232, 25 July 1989, 47 –9). 17. Decree-Law No. 399, 22 January 1990, Official Gazette No. 20417 (Mu¨kerrer), 29 January 1990. 18. In its reply to the allegations, the government stated that no workers were forced to change their status to contract employee. Employees with the status of public servants themselves decided to become contract employees to take advantage of better wage conditions (ILO Committee on Freedom of Association, 273rd Report, 1990, paragraphs 25 – 28). 19. The Constitutional Court had annulled the provision of the decree-legislation stipulating the same prohibition on the procedural ground that it was unconstitutional to regulate fundamental individual and political rights and freedoms by governmental decree. They could be regulated only by law within the scope of the constitution. Ratification of the ban by a parliamentary act removed this procedural ground for annulment. 20. To protect contract employees against ill-willed performance evaluations, a contract employee would be assigned to another supervisor for a six-month period in the event that her/his performance grade fell to D in two consecutive terms (Serim 1995, 439). 21. I am not aware of any study that investigated whether municipal governments dominated by different political parties followed different policies and practices regarding subcontracting and privatizing public services in their domain. On the basis of my own observations, these policies and practices were not

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confined to municipal governments dominated by a particular political party but widely practised across party lines. Based on its union experience in local governments in the 1990s, the Municipal and General Public Services Union (Hizmet-Is) made the following observation supporting my own: “Whichever political party controlled a municipal government made no difference in the use of subcontracting” (1995, 73). All of this illustrated that, though it took different forms in practice, the policy of privatizing the public sector deeply permeated every level of the state, regardless of the political party in power either at the national level or at the local level and regardless of what it claimed to stand for.

Chapter 4 The Military Coup and Suppression of the Labour Movement 1. For a good journalistic account of events leading up to the coup, see Birand (1984), also published in English (1987). 2. Official figures for arrests, detentions, and imprisonments during the military regime released by the authorities at different times as well as those provided by different sources vary. See, for example, Birand (1984, 320); Info-Turk (1986, 178– 9); and Pevsner (1984, 88 – 9). 3. According to the Prime Minister’s Office report entitled “Terror and Evaluation of the Fight,” dated May 1983, of 60,481 people in military prisons as of February 1983, 54 per cent were leftist, 14 per cent rightist, 7 per cent (Kurdish) separatist, and 25 per cent others or unknown (cited in Info-Turk 1986, 178–9; and Pevsner 1984, 88). 4. This point was initially brought to my attention by Heper (1987, 142). 5. The Red Crescent, the Children Protection Institution, and the Turkish Aeronautics Institution (a fundraising association for the Turkish Air Force and aeronautics research). 6. Just after the coup, Mehmet Yazar, chairman of the Union of the Chambers of Commerce and Industry at the time, sent General Kenan Evren a telegram wishing him success. Yazar also stated that “the Union of the Chambers would make every effort and extend support for the success of the Turkish Armed Forces in their endeavour” (Cumhuriyet, 15 September 1980). 7. According to the Report of Activity submitted to DISK’s 6th General Convention, December 1977, the confederation’s membership stood at 600,000 (251). 8. The figures refer to estimates of actual membership, not highly exaggerated membership numbers claimed by labour confederations. 9. For a list of unions belonging to these confederations as well as to DISK, Tu¨rkIs, MISK, and Hak-Is, see the circular by the minister of labour published in the Official Gazette, 17 – 18 September 1980. 10. Convention delegates also voted against the Report of Activity submitted by the Executive Committee.

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99 –103

11. In his defence before the court, later published as a book in 1986 with the title Yargi O¨nu¨nde Savunma (Defence before Court), Abdullah Bastu¨rk, DISK’s president at that time, says that about 1,500 DISK unionists surrendered to martial law authorities (52). According to Institut Syndical Europeen (1989, 47), following the coup, 5,000 unionists from DISK or its affiliates either surrendered to or were captured by martial law authorities. 12. Interviews with Su¨leyman C¸elebi, Kemal Daysal, and Mehmet Mihlaci in 1996. At the time of military intervention, C¸elebi was a member of DISK’s Executive Committee and deputy president of the Tekstil (textile) Union. Daysal was deputy president of Maden-Is Union (metal workers’ union) and served on the Administrative Board of DISK in the late 1970s. Mihlaci was a member of DISK’s Administrative Board and deputy president of the Gida-Is Union (food workers’ union). 13. In a personal interview, 6 July 1993, a former Executive Committee member of OLEYIS (Hotel-Restaurant Workers’ Union, an affiliate of DISK) claimed that, after the coup, he and a few other unionists from DISK created a group that they named Solidarity after the Polish Solidarity movement in order not to attract attention. The OLEYIS official explained the aim of their Solidarity group as not only to support their unionist friends in jail but also to provide a nucleus for mass resistance against the 12 September regime. Yet, the unionist said, he and his friends were captured in 1982. 14. This statement was among the decisions made by DISK and affiliated unions in one of their first large meetings following their acquittal by the court in July 1991. 15. Mehmet Mihlaci, president of the DISK-affiliated Gida-Is Union (food workers’ union), interview on 3 July 1996. Mihlaci was a member of DISK’s Administrative Board and deputy president of Gida-Is at the time of the coup. 16. Tayfun Go¨rgu¨n, president of the DISK-affiliated Dev-Maden-Sen Union (revolutionary mine workers’ union), interview on 8 July 1996. Go¨rgu¨n was a member of the Administrative Board of that union at the time of the military takeover. His explanation concerned the Dev-Maden Sen Union, not the entire DISK organization. 17. In 1963, the Workers’ Party of Turkey asked the Constitutional Court to repeal sections 141 and 142 on the ground that they were unconstitutional. The Constitutional Court rejected this request but, in explaining its reasons, stated that these sections did not prohibit political parties aimed at establishing socialism within the limits allowed by the constitution and propagation of this aim (Aren 1993, 91 – 2). 18. For instance, DISK’s Executive Committee members were tried by the Civil Court of Bakirko¨y (No. 2) with respect to the “Warning to Fascism” action on 20 March 1978. They were accused of having called an illegal strike in contravention of the Collective Bargaining, Strike, and Lockout Act of 1963 (DISK 1980, 389– 90). On 3 July 1981 (i.e., during the military regime), the court sentenced the Executive Committee members to six months of

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imprisonment and a fine of 500 TL (ILO Freedom of Association Committee, 211th Report, November 1981, 122). However, in the military prosecutor’s indictment against DISK before the martial law court, the same action was presented as evidence of the union’s alleged illegal attempts to create a proletarian dictatorship. DISK (1980) and Bastu¨rk (1986) provide detailed information on the legal proceedings brought against DISK officials in the late 1970s. 19. 1,473 according to the Turkish government (ILO Freedom of Association Committee, 240th Report, May– June 1985, 123); 1,477 according to Cumhuriyet (23 December 1986); and 1,478 according to Institut Syndical Europeen (1989, 47). 20. DISK president Abdullah Bastu¨rk was released not on 24 August but on 18 September because of his prior sentence of six months of imprisonment in a different trial. But the Court of Cassation decided to release him before the six months had passed.

Chapter 5 Authoritarian Corporatism 1. After transition to the civilian regime, S¸ide became the scapegoat for collaboration between Tu¨rk-Is and the military regime and was abandoned by many of his colleagues. At the December 1986 convention, S¸ide responded to other Tu¨rk-Is unionists who attacked him for having served in the military government by accusing them of hypocrisy. To prove that he had accepted the ministerial post in compliance with the decision of the Executive and Administrative Boards of the confederation, he showed the convention delegates the Tu¨rk-Is decision books (Cumhuriyet, 28 December 1986). 2. In the same interview, Basoglu (who ran against S¸ide for the position of secretary general at the Tu¨rk-Is convention in December 1983) also confirmed that S¸ide had not acted alone when accepting the ministerial office. He said that, in the wake of the military coup, Tu¨rk-Is officials had welcomed the idea of having Tu¨rk-Is unionists in the new cabinet. Basoglu also made it known that he had been strongly opposed to the idea. 3. Cassette tapes of the interviews with a number of Turkish union leaders conducted by Koc in 1989 are available from the International Institute of Social History in Amsterdam. I transcribed the ones cited in this study. The responsibility for any mistakes made in the transcriptions or English translations is mine alone. 4. In a public statement issued on 11 November 1982, S¸ide stated that “He was ready to take a leave of absence from his post of secretary general of Tu¨rk-Is as long as he remained in his ministerial office with a view to normalizing and improving Tu¨rk-Is’s relations with the ICFTU” (Tu¨rk-Is 1983a, 123). 5. For biographies of the cabinet ministers, see Cumhuriyet, 22 September 1980. 6. The Consultative Assembly was created in October 1981 to prepare a new constitution.

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7. This summary is based on my reading of Tu¨rk-Is publications and documents. 8. Long after transition to the civilian regime, some Tu¨rk-Is leaders still believed that, “under the existing conditions, Tu¨rk-Is did everything possible to protect ¨ zdemir, former education secretary of labour rights” (interview with Kaya O Tu¨rk-Is, by Yildirim Koc, 26 January 1989). A publication, dated 1986, of Teksif (the textile workers’ union), one of the largest Tu¨rk-Is affiliates, whose chairman was the elected president of Tu¨rk-Is in May 1982, also claimed that “the only way to get military regimes to agree to certain views is through dialogue, explaining problems, complaints, and reaching a consensus. The opposite of this strategy is to make the military regime agree to certain things by force. To attempt the second way is just utopian” (7). 9. For example, Tu¨rk-Is president Denizcier’s address and a number of other unionists’ speeches at the General Convention of the Yol-Is Federation, 11 –13 November 1980 (Tu¨rk-Is Dergisi, November 1980, 22 – 5); the Aegean Mining Workers’ Union’s 14th General Convention, the union’s president’s address; the ¨ zdemir’s speech; the TezAgac-Is Union’s 8th General Convention, Kaya O Bu¨ro-Is Union’s 9th General Convention, the union’s president’s speech (Tu¨rk-Is Dergisi, December 1980, 26 – 32). 10. Ketenci (1990, 235, 251) claims that the conditions in the collective agreements of Tu¨rk-Is members renewed by the SBA were better compared with those offered to DISK members. Although this could be considered as a reward for Tu¨rk-Is unionists’ continued participation in the board, the relative advantage could by no means compensate for, or conceal, the great losses incurred by Tu¨rk-Is members as well as the working class as a whole. 11. This relies on the interview that I conducted with Mustafa Basoglu, president of Saglik-Is (the Tu¨rk-Is-affiliated Health Services Workers’ Union), on 18 July 1996. He was also the same union’s president at the time of the Tu¨rk-Is convention of May 1982. Basoglu said at that time that he had supported the idea that the leadership change should take place after the transition to civilian rule, not during the military regime, so that they would make a new beginning. 12. Interview with Mustafa Basoglu, president of Saglik-Is, 18 July 1996. 13. These changes in the Tu¨rk-Is leadership’s position can easily be seen in the Reports of Activities submitted to the confederation’s May 1982 and December 1983 conventions. 14. Law No. 2485, Official Gazette No. 17386 Reiterated (Mu¨kerrer), 30 June 1981. 15. For the occupations of the assembly members, see Cumhuriyet, 16 October 1981. Dodd (1983, 92n8) provides summary figures. 16. The unionists were Mustafa Alpdu¨ndar, the administrative and financial secretary of the Tu¨rk-Is-affiliated Harb-Is Union (defence); Vahap Gu¨venc, the former general secretary of the Teksif Union (textile) (from 1961 to 1979) and a current member of the Tu¨rk-Is Administrative Board; and Feridun Sakir O¨gu¨nc, the former chairman of the Deniz Ulas-Is Federation (maritime transportation), a former member of the Tu¨rk-Is Administrative Board, and the

NOTES

17. 18.

19. 20. 21. 22.

23.

24.

25.

26.

TO PAGES

115 –121

355

general advisor to Tu¨rk-Is at that time (Tu¨rk-Is Dergisi, November – December 1981, 14; Cumhuriyet, 16 October 1981). TISK’s secretary general was selected to the Consultative Assembly from the Ankara provincial list. Yildirim Koc’s 26 January 1989 interview with Kenan Durukan, president of the Tu¨rk-Is-affiliated Harb-Is Union and a member of the confederation’s Administrative Board at the time of creation of the Consultative Assembly; my transcription of the tape-recorded interview. For Tu¨rk-Is statements and reports on the draft constitution, see Tu¨rk-Is (1983b, 25 – 43); and Tu¨rk-Is Dergisi, September (special issue) 1982. For example, In Search of Healthy Democracy, Tu¨rk-Is’s Views and Recommendations on the Draft Constitution (English translation of Saglikli Bir Demokrasi Icin, Anayasa Tasarisina Iliskin Tu¨rk-Is’in Go¨ru¨sleri ve O¨nerileri) (Tu¨rk-Is 1982). Yildirim Koc’s 1 October 1998 interview with former Consultative Assembly member and former Tu¨rk Harb-Is Union secretary general Mustafa Alpdu¨ndar, in Koc (1999a, 120– 1). For the assembly debate on the constitutional articles concerning collective labour rights, see Danisma Meclisi Tutanak Dergisi (Journal of Records of the Consultative Assembly Proceedings), B: 135, 25 August 1982, O: 1 – 3, 526– 602; B: 144, 6 September 1982, O: 3, 627– 35, 738– 48; B: 154, 21 September 1982, O: 4, 596– 607; and B: 156, 23 September 1982, O: 1, 826. The text of the constitutional draft of the Constitutional Committee is in Danisma Meclisi Tutanak Dergisi 7, No. 166, Appendix 1. For the Tu¨rk-Is amendment proposals, see Tu¨rk-Is (1983b, 113– 34). For detailed studies of the draft constitution with respect to labour rights, see Go¨ktu¨rk (1982) and Gu¨lmez (1986). In an interview in July 1996, the long-time president of the Tu¨rk-Is-affiliated Health Services Workers’ Union, Mustafa Basoglu, said at the time that the original speech had explicitly called for a yes vote. He said that he and two other union officials had strongly criticized it, and after discussions the speech had been changed. Basoglu said that he had opposed Tu¨rk-Is issuing any statement in favour of the constitution. The Trade Unions Act of 1983 clarified the nature of the political ban by stipulating that “those professional activities of trade unions or their confederations undertaken exclusively with the purpose of protecting and promoting the social and economic rights and interests of their members shall not be considered as political activity” (Article 37). The military regime passed a number of other acts and made changes in some public institutions that rolled back or limited labour rights in the areas of social security, job security, representation in the management of SEEs, and similar other areas. Koc (2010) provides a detailed list of such anti-labour legislative and institutional changes during the military regime. The texts of the acts used in this study are the original texts as published in the Official Gazette (No. 18040, 7 May 1983). C¸elik’s Is Hukuku Dersleri (1988), an annotated text of Turkish labour legislation, was also used.

356

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27. Milli Gu¨venlik Konseyi Tutanak Dergisi, S. Sayisi: 573, 144. Birlesim 2 May 1983, Sosyal Gu¨venlik, I˙s¸ ve I˙s¸ci I˙lis¸kileri Komisyonu Raporu, 6. 28. The ILO Freedom of Association Committee expressed a similar criticism of the provision (260th Report, November 1988, 13; 237th Report, November 1984, 212– 13). 29. The lawmaker’s justification for the 10 per cent requirement was “to encourage strong trade unionism” (Milli Gu¨venlik Konseyi Tutanak Dergisi, S. Sayisi: 574, 145. Birlesim 3 May 1983, Sosyal Gu¨venlik, I˙s¸ ve I˙s¸ci I˙lis¸kileri Komisyonu Raporu, 3). 30. The ILO Committee on Freedom of Association found these conditions for union certification in the Turkish law in contravention of ILO principles on freedom of association (235th Report, May– June 1984, 210– 11; 237th Report, November 1984). The ILO Committee of Experts considered the certification of competence as “an administrative permission” (Report III, Part 4A, 1984, 186– 7). 31. Aker (1990) compares the labour legislation with TISK’s proposals. 32. The trade union acts were amended in 1986 and 1988, but the changes were inconsequential.

Chapter 6

The Military Regime and Turkish Labour in the International Context

1. For example, the Secretariat of the Miners was founded in 1890, that of the Metal Workers in 1893, that of the Typographers in 1893, and that of the Textile Workers in 1894. Many of these early international trade secretariats developed from the institution of viaticum, a type of travel and unemployment benefits that trade unions extended to their members when they travelled in search of jobs (Sturmthal 1948, 630). The International Federation of Trade Unions was created in 1903. It was dissolved in 1945, giving way to the World Federation of Trade Unions the same year and the International Confederation of Free Trade Unions in 1949. 2. Exceptions include Diceonu and O’Brien (2007); O’Brien (2004); and O’Brien and Harrod (2002). 3. This is explicitly described in the memoirs of James W. Spain, the American ambassador to Ankara in 1980. His memoirs were published under the title American Diplomacy in Turkey: Memoirs of an Ambassador Extraordinary and Plenipotentiary (1984). Also see the interview with Spain in Cumhuriyet, 30 December 1984–3 January 1985, especially Part 4 in the 2 January issue. 4. DECA covered three main areas: American security assistance to Turkey, use by the United States of military facilities in Turkey, and co-production of military hardware and supplies (Spain 1984, 31). 5. The United States has operated military facilities in Turkey since signing the Military Facilities Agreement in June 1954, followed by a series of similar bilateral Turkish– American military agreements.

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6. Both Turkish and American officials maintained that the air bases were to be used only for NATO purposes, not for American interventions in the Middle East, which were outside the scope of the NATO alliance. But during the Gulf War of 1991, the MP government would permit American forces to use these bases against Iraq, which was outside the framework of NATO purposes. 7. A Turkish delegate to the Parliamentary Assembly of the European Council, Turan Gu¨nes, said that, “At the first meeting of the assembly after the coup, representatives of member countries were generally understanding toward the coup, especially those belonging to liberal and conservative parties as well as Italian communists” (quoted in Cemal 1986a, 173). 8. Resolutions dated 1 October 1980; 29 January 1981; 5 October 1981; 28 January 1982; 6 October 1982; 28 January 1983; 30 September 1983 (see InfoTurk 1986). Info-Turk (1986) is a good source for the chronicle of Turkish – European relations as well as Turkish domestic events between 1980 and 1986, though it is openly (leftist) partisan. 9. For the parliamentary debate on the resolution, see Official Journal of the European Communities, Debates of the European Parliament No. 1-270, 264–77. 10. The first ministerial-level meeting between the EC and the Turkish government after the military coup was held in September 1986. But the Greek representative boycotted the meeting (Keesing’s Archives, May 1987, 35137). Greece effectively used its veto power when the EC began to consider reactivating association with Turkey. 11. From an explanation by the vice-president of the commission before the European Parliament in Official Journal of the European Communities, Debates of the European Parliament No. 1-287, Sitting 7, July 1982, 147. 12. In May 1981, the seventeen member countries of the OECD agreed to grant Turkey $944 million worth of new and rescheduled loans. Of this total, the US government pledged some $350 million and the West German government about $200 million. This latter amount was reported to be lower than the previous offers of the German government. It was under great pressure from the Parliament and democratic organizations in the country to reduce economic aid to Turkey given the repressive political conditions in the country (Keesing’s Archives, 22 January 1982, 31287). Following the coup, there was indeed a sizeable drop in the amount of German aid to Turkey. But the German government was still the second largest bilateral economic aid donor, after that of the United States, in the first half of the 1980s; it would regain its status as the single largest bilateral donor by 1986 (Morrissey 1996, 90 – 1). 13. For a very good study, from the Gramscian perspective on IPE, of the role of the ILO as part of the regulatory mechanism of the postwar liberal world order, see Cox (1977). 14. For summaries of ILO conventions, see ILO (2008). 15. The WCL, originally founded by Christian- (mostly Catholic-) oriented unions in Europe, had national affiliates in 52 countries as of 1982. The communistoriented WFTU had a total of 206 individual members in 67 countries as of the

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17.

18. 19.

20. 21.

22. 23. 24.

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same year. The ICFTU affiliated 134 social democratic, or non-political and nonconfessional, labour union organizations with 85 million individual members in 93 countries as of 1983 (Union of International Associations 1984). The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) had been a key player in the ICFTU in the first decade of its formation. But in the general atmosphere of international de´tente of the mid1960s, major Western European unions, such as the British Trades Union Congress and the Deutscher Gewerkschaftsbund (DGB), became discontented with the inflexible anti-communist position of the AFL-CIO and began to disassociate themselves from the leadership of American organized labour. When it saw its influence within the ICFTU waning, the AFL-CIO withdrew its membership in 1969. It did not return until 1982. DISK’s efforts to develop international relations in this period were in accordance with two resolutions approved by its 5th General Convention in June 1975 (Resolutions No. 18 and No. 19, in DISK 1975a, 47). Its 6th General Convention held in December 1977 also approved the same resolutions (DISK 1978, 36). Genel-Is was a member of Public Service International, which had close links with the ICFTU. DISK explained its reasons for seeking membership in ETUC as “Turkey’s getting prepared for membership in the EEC; Turkey’s economic, political, and military dependence on Europe; the presence of over a million Turkish immigrant workers in Western Europe; and more importantly the necessity of cooperation with the European trade union movement in the struggle against the MNCs” (1980, 47). Another important reason appears to be DISK’s view at that time that ETUC could play a significant role in bridging the ideological and political rift in the international trade union movement at least at the European regional level (DISK 1975b, 39; 1980, 47). Ketenci (1990, 241) claims that ETUC’s decision on the applications of DISK and Tu¨rk-Is was delayed because of the latter’s opposition to DISK’s membership. In fact, any contact between DISK and the WFTU and its associated organizations in the pre-military period was used by the military administration to condemn the DISK movement. In the indictment, the military prosecutor used contact between DISK and its member unions and the WFTU and labour unions from socialist countries as evidence to support his allegation that DISK was an illegal Marxist-Leninist organization trying to overthrow the existing politico-economic order. Economic and Social Bulletin 29, 3 – 4 (1981): 17 – 18. All the assets of DISK and its affiliated unions had been frozen and placed in the hands of trustees. This situation would continue until after they were finally acquitted in July 1991. See Economic and Social Bulletin 30, 3 (1982): 30; 30, 5 –6 (1982): 31 – 2; and 31, 4 (Special Issue) (1983): 21 –2.

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25. As far as I could determine, the WCL sent a lawyer to attend the DISK trial from 23 to 29 December 1981 (ILO Freedom of Association Committee, 220th Report, November 1982, paragraph 21). The WFTU sent a mission from 17 to 23 January 1982 (ibid., paragraph 23). The Trade Unions International of Textile, Clothing, Leather, and Fur Workers also sent a mission from 25 January to 5 February 1982 (ibid., paragraph 24). The DISK-affiliated Textile Workers’ Union was a member of Trade Unions International of the WFTU. 26. Economic and Social Bulletin 29, 3 – 4 (1981): 18 – 19. 27. The resolution passed by the ICFTU’s Executive Board at its meeting on 13 –14 May 1982; Economic and Social Bulletin 30, 3 (1982): 30. 28. The resolution on Turkey adopted by the 13th World Congress of the ICFTU, Oslo, June 1983; Economic and Social Bulletin 31, 4 (1983): 21 – 2. 29. See, for example, “ICFTU Statements to the 38th Session of the UN Commission on Human Rights, 1 February –12 March 1982”, in Economic and Social Bulletin 30, 1 – 2 (1982): 5 – 8. 30. The General Confederation of Trade Unions of Norway was the only foreign national trade union to lodge official complaints with the ILO against the Turkish state. Its complaints dated June 1982 were concerned with the Right to Organize and Collective Bargaining Convention (No. 98) and the Right of Association, Agriculture, Convention (No. 11). 31. Tu¨rk-Is would be admitted into ETUC in April 1988 after it started an active struggle for the recognition of democratic and labour rights in Turkey. 32. DISK filed its complaint in June 1970 concerning Act No. 1317, dated June 1970, which made a number of undemocratic amendments to the Trade Unions Law of 1963. The Constitutional Court later cancelled most sections of this act. DISK’s complaint was the first and only complaint (until 1985) filed by a Turkish labour organization against the government with the ILO. 33. Information concerning the ILO’s examination of complaints against Turkey relies on my review of the ILO Official Bulletin, 1970– 4, and the ILO Official Bulletin, Series B, 1975– 85. 34. The Turkish government’s reply, dated 30 September 1981, read thus: “If the aim sought by recourse to special procedures [direct contact mission as described by the government] is to carry out on-the-spot investigations to meet the wishes of the complainant organizations, it goes without saying that, for obvious reasons, that have nothing to do with the trade union situation, the government cannot even think of agreeing to this” (ILO Freedom of Association Committee, 211th Report, November 1981, paragraph 466). 35. For the military government’s replies to the ILO, see, for example, ILO Freedom of Association Committee, Reports 207, 1981, paragraphs 287–91; 211, November 1981, paragraphs 466, 481–3; 214, March 1982, paragraphs 553–61; 220, November 1982, paragraphs 26–38; and 224, March 1983, paragraphs 33–44. 36. For the ILO’s comments on the draft legislation and subsequent amendments by the NSC, see Freedom of Association Committee, 228th Report, 1983, paragraphs 56 and 57.

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37. For the ILO’s views on the Turkish constitution, see Freedom of Association Committee, 220th Report, November 1982, paragraphs 100– 06; and 224th Report, March 1983, paragraphs 28 – 30. 38. See, for example, Kenan Evren’s first post-coup press conference, including questions by journalists and his replies (Cumhuriyet, 17 September 1980). His press statement, but without reporters’ questions, is also provided in 12 September in Turkey (1982, 291–300). Also see Evren’s speech in Van on 2 October 1980 (extracts from this speech are printed in Cumhuriyet, 3 October 1980). 39. The following public speeches or statements by Evren directly addressed the issue of foreign pressure: Amasya, 12 June 1981; Erzurum, 24 July 1981; speech on the occasion of the inauguration of the Consultative Assembly, 23 October 1981. Extracts from or entire texts of these speeches are available in 12 September in Turkey (1982). Also see his speech at the Ankara Journalists’ Society, 18 December 1980; his televised speech, 1 February 1982; and his speech in Bursa, 4 April 1982 (Cumhuriyet, 19 December 1980; 2 February 1982; and 5 April 1982). 40. In an association meeting on 5 June 1981, the Turkish ambassador to the EC expressed his government’s decision to accelerate preparations at home toward Turkey’s application for full membership as soon as democracy was restored (Dagi 1996, 129; Keesing’s Archives, 22 January 1983, 31287). The Turkish minister of state for external economic affairs reportedly reaffirmed, during his talks with the European Commission on 23 – 24 September 1982, Turkey’s plan for full EC membership when conditions were right (Official Journal of the European Communities, Debates of the European Parliament No. 1-296, 37). 41. For example, European pressure and bad international publicity were important reasons for the military government’s decision in September 1981 to reduce the detention period without trial to 45 days after it had been increased to ninety days following the coup. The government also took measures to address torture in prisons (Dodd 1983, 47).

Chapter 7

From Military Authoritarianism to Hegemony

1. According to Poulantzas (1976), internal contradictions of the military dictatorships in Spain, Portugal, and Greece were decisive in setting in motion the transitions and provided room for the subordinate classes to play important roles in the process. O’Donnell (1978, 1979) also emphasizes the significance of internal contradictions of bureaucratic authoritarianism in the transitions to civilian regimes in Latin America. 2. Kenan Evren’s address to cadets at the War Academy in Ankara on 30 September 1980 is a good example (12 September in Turkey 1982, 301– 2). 3. A letter that Vehbi Koc (the founder of Turkey’s largest conglomerate) sent to Evren on 3 October 1980 warned the military to hand over power as quickly as possible (Gu¨lfidan 1993, 93).

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4. This argument draws on Poulantzas’ study (1976) of the military regimes in Spain, Portugal, and Greece. 5. The terms “right” and “left” refer to the positions of the parties in relation to each other rather than their ideological stances. 6. According to Ahmad (1984, 6), the number of former politicians barred from politics was 723; McFadden (1985, 74), citing the daily Milliyet, gives the following numbers: 230 former politicians were banned for a period of ten years, another 480 for five years. 7. For events and personalities involved in formation of the major political parties during this period, see Cemal (1986b) and Turgut (1986). 8. Boratav (1991, 84) cites an interview with E. Abrams, assistant secretary of state of the United States at the time, in the Turkish daily Hu¨rriyet (13 March 1989): ¨ zal to win. We had a positive “Our fear was that the military would not permit O ¨ view of Ozal. He was trustworthy. He was seen as someone who could respond to current needs . . . We used embassy channels and some visitors, including Haig, to make sure that the elections would be competitive.” 9. Its share of total votes cast was 42.9 per cent. The difference between total votes cast and total valid votes was not significantly higher in the 1983 transitional election compared with earlier and later national elections. This means that spoiling a vote as a form of protest was not used much in the transitional election. Total votes cast were 18,238,362 compared with 17,401,510 valid votes. 10. One source of discomfort for President Evren was the MP government’s offer of some concessions to Islamists. 11. In the local elections, the MP did enjoy the advantages of being in power. Moreover, the government called the local elections at such an early date that the other new parties did not have enough time to get well prepared. 12. For the period studied, there were no systematic, regularly conducted election surveys in Turkey. The results of the surveys that I cite here should be taken as indicative. 13. This survey was spatially very limited. It was carried out in a predominantly working-class district in the province of Istanbul. 14. This description was used by Hall (1988b, 47) in reference to Thatcherism in Britain. 15. The Turkish agricultural sector is predominantly composed of owner-occupied small farms. However, land distribution in some regions, especially in the southeast, is characterized by great inequality. 16. The posited division between diversified holding companies and big specialized firms draws on Boratav’s study of the structure of Turkish capital (1991, 65 – 8). 17. TU¨SIAD’s regularly updated publication Members’ Company Profiles provides information on its members; see www.tusiad.org.tr. 18. See, for example, TU¨SIAD’s survey measuring its members’ assessment of MP government policies as of 1988 (Istanbul Sanayi Odasi Dergisi, 15 December 1988, 38).

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19. O¨zal’s close relatives also made great fortunes. This situation greatly tarnished the popularity of the MP and O¨zal in particular. 20. This move toward a more liberal pluralist conception of democracy was visible in the party’s democratization programme included in its 1991 election manifesto. 21. After the Parliament elected Turgut O¨zal president on 31 October 1989, Yildirim Akbulut, speaker of the National Assembly and former minister of internal affairs, became prime minister and MP leader. Akbulut was a weak prime minister and party leader. During his premiership, the strings were in ¨ zal. fact controlled by O

Chapter 8 Neoliberal Exclusion and Immobilization of the Labour Movement 1. The number and division of industrial branches were previously determined by bylaws, which allowed the government to manipulate the number and division of industrial branches. The 1983 legislation repealed this system and specified the industrial branches itself. Milli Gu¨venlik Konseyi Tutanak Dergisi, S. Sayisi: 573, 144. Birlesim 2.5.1983, Sosyal Gu¨venlik, I˙s¸ ve I˙s¸ci I˙lis¸kileri Komisyonu Raporu, 6, 11. 2. It is not clear whether the 28 unions affiliated with DISK and the unions affiliated with MISK were included in these statistics of the Ministry of Labour. 3. For the years from 1984, the number of registered unions is very close to the number of unions that filed their membership cards with the Ministry of Labour for the purpose of certification. In other words, most of the unions included in the post-1983 statistics were operating unions. 4. These were the Federation of Mining Workers’ Unions, Railway Workers’ Union (DYY-Is), Federation of the Electric, Gas, and Water Workers’ Unions (Tes-Is), Federation of the Road Construction Workers’ Unions (Yol-Is), Federation of the Municipal Workers’ Unions, and Federation of Turkish Sea Transportation. 5. The nine branches included the mining and leather branches, in which there were officially two MISK unions, but they did not have actual membership. 6. For the branch of agriculture, forestry, hunting, and fishing, the 10 per cent minimum was not required. In this sector, there were seven unions. Three of them were very small, with memberships ranging from nine to 149. 7. In three industrial branches, Tu¨rk-Is had two affiliates in each. 8. This observation relies on Ministry of Labour industrial branch statistics published in the Official Gazette in January and July every year. 9. The change was in the position of general organization secretary. Yusuf Ziya Kara was replaced by Orhan Balaban from Yol-Is Union. Balaban had the support of social democratic unions. The other unionists elected to the Executive Committee were from the right wing of the confederation.

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10. Formally only an advisory body, the Tu¨rk-Is Presidents’ Council was composed of presidents of the affiliated unions, one Executive Committee member for unions with more than 50,000 members in addition to their presidents, and the confederation’s Executive Committee members. 11. At the same time, Tu¨rk-Is also demanded a number of changes in the Labour Code regulating individual workers’ rights and obligations vis-a`-vis employers and the social security legislation. These proposed changes were concerned with job security, seniority, severance compensation, and the (re)inclusion of workers’ representatives on the administrative boards of SEEs. They were aimed at recovering the rights that the military government had either rolled back or abolished. 12. TBMM Albu¨mu¨ 1920–2010, Cilt 3 1983– 2010, http://www.tbmm.gov.tr/ TBMM_Album/Cilt3/index.html. For a summary of deputies of trade union backgrounds from the 1983 to 2002 elections, see Mahirog˘ulları (2005, 416– 17). 13. TBMM Albu¨mu¨ 1920– 2010, Cilt 2 1950– 80, http://www.tbmm.gov.tr/ TBMM_Album/Cilt2/index.html. 14. The Tu¨rk-Is contacts with, or lobby activities directed at, President Evren included Tu¨rk-Is president Sevket Yilmaz’s visit on 25 April 1984; submitting a report containing the Tu¨rk-Is proposals for amendments to the labour legislation about a week after this visit; two more visits by Yilmaz on 4 September and 28 December 1984 to communicate unions’ problems in the industrial relations arena and their demands; another visit by the Tu¨rk-Is president and secretary general on 8 April 1985; and, shortly after this visit, presenting President Evren with a report in which Tu¨rk-Is complained about the MP government’s anti-labour policies and actions. Tu¨rk-Is also sent a copy of these reports to the government and political parties. In addition, it made appeals to the president, on several other occasions, to attract his attention to workers’ increasing economic and social security problems (compiled from Cumhuriyet and Tu¨rk-Is Dergisi). 15. In his public addresses during his tour of the country’s provinces in May 1984, President Evren repeatedly emphasized his strong opposition to changing the constitution (Cumhuriyet, 29 May 1984). 16. According to the system of seniority or severance compensation (maybe better translated into English as severance compensation), first introduced into Turkish labour legislation in 1936, workers were entitled to severance benefits in cases such as the termination of employment (except for disciplinary dismissals), retirement, and death (C¸elik 1988, 193– 218). After labour unions were granted the right to strike in the early 1960s, they successfully expanded the scope and amount of seniority or severance compensation in collective agreements over the minimum benefits provided for in the legislation. The severance payment was in principle a lump sum corresponding to one month’s (legal minimum) or several months’ salary (depending on the collective agreement) for each completed year of service. These benefits had reached

364

17. 18. 19.

20. 21.

22.

23.

24.

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significant levels in the 1970s, which led the military regime of 1980– 3 to impose a legal ceiling in response to employers’ demands. TISK first adopted the idea of a fund to reduce the financial burden of seniority compensation in its 1976 Report of Activities (Dinc 1984). Koc (2002) provides a good review of the Turkish legislation regarding job security from the 1920s to 2002. The prime minister, many of the cabinet ministers, and a number of senior bureaucrats (including the undersecretary of treasury and foreign trade and the governor of the Central Bank) were present at the meeting. The Tu¨rk-Is mission included only its top officials and several staff experts (Tu¨rk-Is Dergisi, January – February 1985, 3). Unlike the first summit, there were no representatives from the affiliated unions. The Tu¨rk-Is mission paid visits to the governors and mayors of the provinces or subprovinces as part of the extended trip (Tu¨rk-Is Dergisi, September – October 1985, 1– 3). The 12 social democratic unions elaborated their views, prescriptions, and goals in a comprehensive 380-page report. The report was published in 1971 with the title Tu¨rk Isci Hareketi Icin Sosyal Demokrat Du¨zen: Ilkeler, Amaclar, Yo¨ntem (Social Democratic Order for the Turkish Labour Movement: Principles, Goals, and Strategy). The numbers of collective agreements concluded during the same period were 1,778 and 4,795 in the public and private sectors respectively. They included 1,143,371 and 823,764 workers in the public and private sectors respectively (Ministry of Labour 1996, 40). As in the previous labour legislation, the 1983 Collective Bargaining, Strike, and Lockout Act explicitly prohibited employers from using scab employees during strikes (Article 43). But it did not provide an effective mechanism to give effect to this provision except stipulating a monetary fine for its breach (Article 78). There are no data available concerning how many strike votes were held and how many of them failed to obtain the required majority. According to the daily Cumhuriyet dated 16 March 1985, 15 strike votes failed to carry in contrast to nine strikes from resumption of the collective bargaining system to March 1985.

Chapter 9 The Labour Politics of Confronting Neoliberalism 1. The term is from Mann (1993, 659). The argument developed here draws on Mann’s arguments concerning the role of the nation-state in shaping workingclass movements in Western countries. 2. Act No. 3299, Official Gazette No. 18139, 19 June 1986. 3. See President Evren’s speeches during his visits to different provinces in 1985, for example his Antalya speech, in Cumhuriyet, 29 April 1985, and his Kastamonu speech, in Cumhuriyet, 19 October 1985.

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4. Both Otomobil-Is and Laspetkim-Is joined DISK when it reopened in 1992. 5. This account of the 1986 Tu¨rk-Is General Convention draws on my survey of daily Cumhuriyet for 16 – 30 December. 6. This is based on the lists of Presidents’ Council members given in Tu¨rk-Is (1983a, b; 1986a, b). Note that three of the 11 members who did not make it to the new Presidents’ Council were the three Executive Committee members replaced in the convention elections. 7. According to Su¨kran Ketenci (1986), a resolution condemning the banning of DISK was drafted by Tu¨rk-Is staff experts. But the right-wingers were opposed to passing a resolution concerning DISK. In the end, the draft resolution did not make it to the convention floor. Instead, a diluted paragraph was included in the final declaration (Cumhuriyet, 25 and 28 December). 8. In an interview with me on 19 July 1996, Tu¨rk Metal Union president Mustafa O¨zbek, who had taken part in the failed march, accused Tu¨rk-Is president Sevket Yilmaz of having prepared the entire scenario in advance in collaboration with state authorities. O¨zbek said that he himself and a number of other union leaders had criticized Yilmaz for having called off the march in their meeting immediately following the incident. O¨zbek had competed against Yilmaz for the Tu¨rk-Is presidency in the 1986 and 1989 General Conventions. Faruk Pekin (1987, 134), highly critical of Tu¨rk-Is, makes a similar accusation. 9. For Tu¨rk-Is campaign declarations, speeches, and explanations, see Tu¨rk-Is (1989a, 72 – 80; 1989b, 99 – 103, 215– 17; 1989c, 26 – 35); and Turkish dailies July – August 1987 (e.g., Cumhuriyet, 8 July 1987; 25 July 1987; 4 September 1987). 10. Hak-Is support for the yes vote was partly motivated by the fact that the yes vote would also benefit former politicians of the banned Islamist National Salvation Party, with which Hak-Is had had close relations in the 1970s. 11. For Tu¨rk-Is campaign activities, explanations, and statements, see Tu¨rk-Is (1989a, 80 – 9; 1989b, 106– 25); and Turkish dailies dated November 1987 (e.g., Cumhuriyet, 28 November 1987; Milliyet, 18 November 1987). 12. The Tu¨rk-Is Executive Committee of the December 1986– December 1989 period was dominated by union leaders more inclined toward the TPP. But the active Tu¨rk-Is stance against the governing MP in the referendum and the elections cannot simply be explained in terms of the Executive Committee members’ affinity for an opposition party. 13. The Tu¨rk-Is Report of Activities (1989a) does not even mention the meeting and agreement with Hak-Is, whereas the Hak-Is Report of Activities (1989, 65 – 74) includes a section about it. 14. For example, the resolution passed at the Tu¨rk-Is December 1986 convention included the decision that state supervision of religious education be more effective and that the principle of secularism of Atatu¨rk must be fully guarded (full text of the resolution is in Petrol-Is 1987, 253). 15. The additional wage increase seems to have caused a dispute within the TISK administration. In his memoirs, the then vice-chair of TISK, Refik Baydur,

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16. 17. 18.

19.

20.

21. 22. 23.

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writes that he was strongly opposed to the additional wage increase decision on the ground that it would harm regular functioning of the collective bargaining system, and he consequently fell out with the TISK chair, Halit Narin, with whom he had worked for many years (2008, 162). This tactic was widely used during the 1987 strikes in the leather-processing industry in Istanbul (Milliyet, Aktu¨alite, 18 October 1987). The Act Amending the Trade Unions Law (No. 3449) and the Act Amending the Collective Bargaining, Strike, and Lockout Act (No. 3451), Official Gazette No. 19830, 2 June 1988. Although the boomerang model was applied mostly to human rights movements, it is applicable to other issue areas as well. Alemdar (2009) applied the model to Turkish trade unions’ relations with the European Union with respect to defending the rights and interests of Turkish labour. Although Alemdar offers a very good analysis, the study suffers from its a priori assumption that the Turkish trade union movement’s “natural” ally was the EU instead of investigating which international organizations Turkish unions actually turned to in their efforts to find international allies vis-a`-vis the Turkish government. The Application Committee of the ILO Conference selects among the individual cases discussed in the reports of the Committee of Experts of the Governing Body regarding the implementation of ratified conventions on the basis of the interest or seriousness of these cases. The Committee of Experts indicates the interest or seriousness of certain cases by way of footnotes, which inform the Application Committee’s selection of cases for examination. It is at liberty to examine cases that have not been listed in the footnotes. International Labour Conference, Record of Proceedings, 69th Session, 1983, Report of the Committee on the Application of Conventions and Recommendations; “Special Paragraph on Turkey”, 31/16–17; discussion of Turkey with regard to Convention No. 98, 31/45–46; and discussion of Turkey with regard to Convention No. 111, 31/64–65. Another convention with regard to which Turkey was discussed and included in the special paragraph was the Discrimination (Employment and Occupation) Convention (No. 111). The issue was the earlier dismissals in public enterprises, institutions, and universities for political reasons under martial law powers following the military takeover in 1980 (ibid., 31/45– 46). This constituted another permanent item concerning Turkey’s inclusion on the ILO’s agenda until the early 1990s, when the situation improved following a court decision to reinstate the wrongly dismissed public employees. Minister of Labour Mustafa Kalemli’s address at the plenary session, International Labour Conference, Record of Proceedings, 1985, 12/4. Turkish government representatives’ statements to the Committee on the Application of Conventions and Recommendations, International Labour Conference, Record of Proceedings, 1984, 35/45– 46; and 1985, 30/63– 64. Turkish labour was represented in the ILO by unionists from Tu¨rk-Is as the biggest labour organization in the country. This privilege was based on the law founding the Ministry of Labour.

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24. In his addresses at the 1984 and 1985 ILO conferences, Tu¨rk-Is president Sevket Yilmaz spoke of the violation of freedom of association and trade union rights without directly referring to Turkey (International Labour Conference, Record of Proceedings, 1984, 17/10– 11; and 1985, 14/39– 40). In subsequent ILO conferences, he openly criticized the labour situation in Turkey (International Labour Conference, Record of Proceedings, 1986, 22/18– 19; and 1987, 11/29– 31). 25. Tu¨rk-Is was admitted into ETUC in 1988. 26. In his memoirs published in 2008, former TISK president Refik Baydur, who participated in ILO meetings in the 1980s, criticizes Tu¨rk-Is for having adopted “an aggressive and uncompromising” attitude in the ILO in those years (158). 27. Turkish employers’ representatives in the ILO were (still are) selected by TISK as the biggest employers’ organization. 28. According to Cumhuriyet, 10 June 1987, delegates representing Turkish employers preferred not to participate in the plenary and committee sessions of the 1987 International Labour Conference. Even when they participated, they did not speak out. 29. See Aykut’s address on behalf of the government during the parliamentary debate on the amendment bill, in Tu¨rkiye Bu¨yu¨k Millet Meclisi Tutanak Dergisi, B: 70, 25.5.1988, O: 1, 259– 64; also see her statements in Cumhuriyet, 24 May 1988, 1. 30. For the ILO’s recommendations, see Committee on Freedom of Association, 237th Report, November 1984; and 260th Report, November 1988. For comparison of the legislative changes and ILO recommendations, see Isikli (1988); for the Tu¨rk-Is amendment proposals, see Tu¨rk-Is (1989a, 197– 209). 31. This account relies on my reviews of ILO, Annual Reports (III, Part 4A) of the Committee of Experts on the Application of Conventions and Recommendations; International Labour Conference, Record of Proceedings; and Official Bulletin Series B, Reports of the Committee on Freedom of Association. Turkey was not discussed in the International Labour Conference in 1992 because of the coming to power of the TPP–SDPP government, which promised democratization.

Chapter 10 The Counter-Labour Movement 1. Union leaders had lobbied for the legislative change regarding their re-election (Ketenci 1990, 283), but, as explained in Chapter 9, the government also could not risk the departure of hundreds of professional unionists all at once, especially given the possibility of capture of union offices by a new generation of more radical unionists. 2. Note that the PEAs acted according to directives from the government and thus cannot be considered independent organizations. 3. C¸elik-Is challenged the postponement decision of the government at the Council of State. There was a real possibility that the court would overturn the government’s decision.

368

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TO PAGES

240 –247

4. The C¸elik-Is (1989) publication entitled 137 Gu¨n Su¨ren Grevimiz (Our 137-Day Strike) provides a chronology of the strike and clips from major newspapers regarding the strike. Major Turkish dailies, such as Cumhuriyet and Milliyet, closely followed developments concerning the C¸elik-Is strike. TISK’s monthly magazine Isveren (September 1989, 5 – 9) provides an account of the strike from the employers’ point of view. 5. According to the Ministry of Labour’s July 1989 and January 1990 statistics, C¸elik-Is organized 10.80 per cent and 10.92 per cent of all workers in the sector respectively (Official Gazette No. 20224, 17 July 1989). 6. Koc (2003, 132) gives a nearly exhaustive list of the types of labour action in the spring mobilization. 7. Sakallioglu (1991, 68n38) cites the secretary general of education of Tu¨rk-Is ¨ zdemir, as claiming in a personal interview that “all was at that time, Kaya O being directed from the corridors and meeting rooms of Tu¨rk-Is”. My interview with another union leader from Tu¨rk-Is, Izzet C¸etin, who played a prominent role in the spring actions, revealed a different story, however. At the time of the interview, conducted on 6 September 1996, C¸etin was the president of Harb-Is (military workers’ union), an affiliate of Tu¨rk-Is. C¸etin was chairman of the Kocaeli Branch of Harb-Is at the time of the spring actions. C¸etin said in summary that “the spring resistance movement developed spontaneously from below. It was not planned or initiated by the union leadership. As the resistance actions gained momentum, the trade unions and Tu¨rk-Is leadership were compelled to embrace and support them. But in some cases and in some units, union officials sought to prevent them.” Yildirim Koc (1991a, 90 –1), who worked as a staff expert in a Tu¨rk-Is-affiliated union and later in the confederation, expresses a similar view. 8. Tu¨rk-Is affiliates were responsible for negotiating clauses in labour contracts concerning administrative matters and certain social payments at the establishment level in accordance with the general guidelines determined by the Bargaining Coordination Committee. The negotiations for wage increases and certain non-wage payments, on the other hand, were conducted between the Tu¨rk-Is Coordination Committee and the minister of state and officials of the PEAs. 9. The most common slogan chanted in the actions was “government resign” or “O¨zal resign”. In the latter slogan, Prime Minister and leader of the ruling party Turgut O¨zal personified the government, the ruling party, and its policies. 10. Amendments to the labour legislation in May 1988 included increasing the number of times that existing union officials could stand for re-election to their union posts. But they left unchanged the restriction that labour union officials whose mandatory time of retirement from active employment was up were not eligible for union office. 11. Aykut named Kazim Oksay and Is¸ın C¸elebi.

NOTES

TO PAGES

249 –258

369

12. This account relies on the detailed lists of labour actions provided in Petrol-Is (1990, 1991, 1992a). The lists give the reasons, dates, numbers of workers, and workplaces involved. Another source used is Sen (1993), which provides a chronological list of labour actions in Turkey. ¨ zal continued to exert great 13. After he became president in November 1989, O influence in daily governmental affairs as well as in the Motherland Party, often transgressing the constitutional boundaries of his role and powers. 14. The new TISK administration adopted a set of principles that included finding an agreement with unions on basic principles. But this agreement was to be based first on the principle of companies’ competitiveness and production. The issue of income distribution would be secondary (Baydur 2008, 172). 15. Tayanc (1980) provides a detailed analysis of the strike postponement acts by the Council of Ministers from 1963 to 1980. 16. The TISK president at the time, Refik Baydur, writes that TISK advised employers not to fire workers who participated in the general strike but only to apply the described financial sanction (2008, 179). 17. Tu¨rk-Is decided to exclude some workplaces from the general strike because of their nature to prevent damage to the equipment, such as power stations, hightechnology-using branches of postal services, firefighting services, and blast furnaces of steel and iron enterprises. The exclusion of some workplaces could not easily be explained by the stated reason and in fact could be argued to have diminished the effectiveness of the general strike. 18. According to Koc (2003, 83), a major labour unrest broke out in the Kozlu coal mines in the province of Zonguldak in 1965. Security forces brought the miners’ action under control with difficulty, and two miners lost their lives. ¨ zal used rather inflammatory language with reference to the miners’ 19. President O strike and demonstrations (Milliyet, 4 December 1990, 10; 6 January 1991, 15; 8 January 1991, 15). 20. The province of Zonguldak had a total population of over 600,000 and 118,000 residing in the city of Zonguldak as of 1990, according to the 1990 population census (http://www.tuik.gov.tr). Zonguldak was a stronghold of social democracy in the 1970s – 90s. The Motherland Party never came first or even second in the general elections of the 1980s – 90s except when it came second behind the People’s Party in the 1983 election, marking transition from the military regime. 21. There are a number of video clips showing the march on youtube. The following two are the better ones: http://www.youtube.com/watch?v¼-K8e_c-dIfU; http://www.youtube.com/watch?v¼_mwlc_sVZdw. There is also a documentary film, Yu¨zbin Kis¸iydiler (They Were One Hundred Thousand) directed by Metin Kaya in 2009. 22. The Tu¨rk-Is administration was rather alarmed when a long standoff occurred between miners and security forces. At this point, the confederation’s president, S¸evket Yilmaz, attempted mediation between the government and the miners to bring the great march to a peaceful end.

370

NOTES

TO PAGES

259 –273

23. According to the OECD’s survey of Turkey (1993, 64), profitability was especially high in some export sectors. It argues that “exporting firms, having gained shares in foreign markets, appear to have had a strong preference for social peace, in order to consolidate their success abroad”.

Chapter 11 The Political Project of an Inclusionary State and Its Neoliberal Limits 1. There was actually more than one coalition government formed by the two parties between 1991 and 1995. Upon election to the presidency of Su¨leyman Demirel in June 1993, the prime minister and TPP leader at that time, Tansu C¸iller became the new TPP leader. This led to the formation of a new coalition with C¸iller as the prime minister. Another political development during this period was the defection of a number of deputies from the SDPP to form the Republican People’s Party (RPP) in September 1992. The two parties finally merged under the name of the RPP in February 1995. During the tenure of the government coalition, the SDPP/RPP was led by four different leaders. Given the continuity of principles and policies of these coalitions, they are not distinguished in this study unless specified otherwise. 2. Reportedly, the SDPP was forced to accept the policy turn in favour of rapid privatization after the TPP’s new leader, C¸iller, threatened to call early elections if her reforms were not endorsed (Keesing’s Record of World Events, News Digest, June 1993, 39530). 3. The term is from Otto Holman (1989, 91), who contrasts “internationalization through democratization” with “democratization through internationalization” in the context of Spanish politics and specifically Spain’s relations with the EU. 4. TU¨SIAD had the report prepared by a number of university professors. It was entitled “For a New Constitution”. 5. Turkish daily newspapers covered the process leading to the amendments in detail. See the June and July 1995 editions of Cumhuriyet and Milliyet. These papers (22 – 25 July 1995) detail the last round of the parliamentary debates. The Economist (29 July 1995) also provides an overview. 6. As of 1991, Turkey had ratified 29 ILO conventions from the time of its becoming a member of the ILO in 1932. Twenty-eight of them had been adopted before 1980. The MP government signed another in 1991 (Minimum Wage Convention, Underground, No. 123). 7. The Tripartite Consultation (International Labour Standards) Convention, 1976 (No. 144); the Human Resource Development Convention, 1975 (No. 142), and the Minimum Age (Industry) Convention, 1937 (No. 59); the Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87); the Labour Relations (Public Service) Convention, 1978 (No. 151); and the Workers’ Representatives Convention, 1971 (No. 135). Official Gazette No. 21507, 25 February 1993. 8. Public employees were deprived of the right to collective agreement until 2012. Their collective agreement right was finally recognized by a constitutional

NOTES

9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

20. 21.

22. 23.

TO PAGES

274 –297

371

amendment in May 2010. The right to collective agreement was put into effect by a parliamentary act revising the 2001 public employees’ law on 4 April 2012. But the revision did not include the right to strike. The bill proposed changes to the Labour Code (No. 1475) and the Trade Unions Law (No. 2821). For comparison of the original and revised bills and the texts of their important articles, see Petrol-Is (1992a, 293– 9). The full texts are provided in Hak-Is (1992, 323– 9, 335– 47). The Association of Shopkeepers and Artisans did not attend the council’s meeting on the job security bill. If the National Assembly readopted a proposed law returned by the president for reconsideration, then he was obliged to ratify it. ¨ zal in Su¨leyman Demirel, elected president upon the sudden death of Turgut O April 1993, ratified the law approving the convention (Official Gazette No. 22079, 12 October 1994). Guran and Tosun’s econometric study (2008) also provides evidence that Turkey’s macro-economic performance in the 1960s and 1970s was better and more stable compared with that of post-neoliberalization. The share of low-technology goods was 15.3 per cent for Mexico and 11.4 per cent for South Korea in 2003 (OECD 2006, 247). Financial arbitrage return is a function of the difference between the domestic interest rate and the depreciation rate of the exchange rate. For the relationship between financial flows and real output growth in Turkey, see Alper (2002). This information relies on my review of FDI statistics in the SPO’s periodic publication Main Economic Indicators. Some analysts refer to the 2000– 01 crisis as two crises, the first one in November 2000, the second one in February 2001, which occurred in the form of huge depreciations of the Turkish lira and banking crises. However, it is better to treat the problems as one crisis because the February 2001 financial crash was a continuation of the November 2000 crisis. The figures are for the consolidated government budget revenues. The estimates of the size of informal economy vary according to methods and definitions used. Several different estimates were in the range of 8.5– 35 per cent of GNP for 1993 (O¨zsoylu, 1995: 773). According to the results of official audits carried out between 1984 and 1992, the declared tax base was 46.1 percentage points below the actual tax base. This meant that for every 100 TL declared to tax authorities, the actual taxable base was 146.1 TL (SPO 1995, 114). This gives an idea about the magnitude of tax losses due to tax evasion. The full text of the plan is in Petrol-Is (1995, Appendix 3). OECD (1995) and Parasiz (1995) also provide a detailed list and an evaluation of the measures in the April plan. Law No. 4447, Official Gazette No. 23810, 8 September 1999.

372

NOTES

Chapter 12

TO PAGES

306 –316

Neocorporatism and Social Dialogue

1. The book was prepared by TISK’s Research Office, and TISK president Refik Baydur authored the preface. The book’s Turkish title is Du¨nyada ve Tu¨rkiye’de Sosyal Diyalog. 2. These views were repeated in TISK’s Report of Activities for its General Convention of December 1992 (1992a, 82 – 4, 87). 3. TISK’s 1986 convention report did not even mention a tripartite council or a similar idea. Its report for the December 1989 convention included only a brief statement. But the 1992 convention report gave much greater attention to the issue (82– 4, 87). TISK’s publication Social Dialogue in the World and Turkey (1992) was mentioned above. I did not come across the subject in TISK’s magazine Isveren until its issues in 1990. From 1990 on, it often appeared in the magazine. 4. The study was published under the title Sanayilesmede Yo¨netim ve Toplumsal Uzlasma (Administration and Societal Reconciliation in Industrialization). The authors were Ilkay Sunar and Ziya O¨nis. ¨ ncesi Komisyon O¨n Raporu: 5. This account relies on “DISK, O¨ren Toplantisi O Ekonomik ve Sosyal Konsey” (August 1993); an interview with DISK’s president at that time, Kemal Nebiog˘lu, in Mu¨lkiyeliler Birligi Dergisi (May 1993, 17); and a personal interview with Su¨leyman C¸elebi, DISK’s secretary general from 1992 to 1994 (8 July 1996). 6. Prime Ministry, General Directorate of Personnel and Principles, Circular on Economic and Social Council, dated 17/3/1995, No. B.02.0.PPG.O., 12-3833592. It is available on the Economic and Social Council’s website, http://esk. dpt.gov.tr/ESK.portal. 7. Koc (1999b, 9) claims that the prime minister’s circular confused the ECOSOC and the EU’s Economic and Social Committee, which were two different institutions. The EU’s committee was composed only of non-governmental organizations, while the ECOSOC was dominated by government officials; they also had different mandates. 8. The C¸iller government failed to receive the vote of confidence in the National Assembly on 15 October 1995. 9. Its important publications and conferences on this issue include U¨clu¨ Anlasmalar, Ekonomik ve Sosyal Konseyler: Gelismis U¨lke Uygulamalari ve Tu¨rkiye (Tripartite Agreements, Economic and Social Councils: Practices in Developed Countries and Turkey) (Publication No. 17, 1996b) and AB ve Tu¨rkiye’de Sosyal Diyalog, Ekonomik ve Sosyal Konseyler Konferansi (Conference on Social Dialogue and Economic and Social Councils in the EU and Turkey), 14 – 15 May 1996, Ankara (1996a). The conference was co-sponsored by the Konrad Adenauer Foundation. 10. The six circulars creating a new ECOSOC are available on the ECOSOC website, http://esk.dpt.gov.tr/ESK.portal. 11. The founding circulars did not specify how the public employees’ representative would be selected.

NOTES TO PAGES 316 –327

373

12. My discussion of the ECOSOC’s meetings relies on the information that I gathered from the daily Milliyet and the detailed information provided in Koc (1999b). The ECOSOC’s official web archive (very limited in content) also provides a list of the dates and agendas of its meetings from 1995 to 2005. 13. Hak-Is did not join the initiative because of the Islamist orientation of its leadership. 14. At a time when the military threatened to intervene on the ground of safeguarding secularism, the Civil Initiative’s actions in opposition to the government came under criticism from several other major organizations, including KESK, the Union of the Chambers of Engineers and Architects, and the Physicians’ Association. These organizations emphasized that they were opposed to both political Islam and military coups. The DISK and Tu¨rk-Is officials also faced major criticisms from within their organizations regarding the Civil Initiative. 15. The DISK convention supported including public employees’ unions, professional associations, and public interest groups in the ECOSOC. 16. These views were highlighted as “a new approach to labour unionism” in the HakIs Charter (Tu¨zu¨k), as revised in its convention of 30 November–3 December 1995, and Convention Decision No. 4 (Hak-Is Dergisi, January 1996, 27, 31). 17. The Justice and Development Party government, which came to office following the November 2002 election, revised the job security act to make it more acceptable to employers. The revised act was included in the new Labour Code (No. 4857), which came into effect on 10 June 2003. 18. “Ekonomik ve Sosyal Konseyin Kurulus¸u, C¸alıs¸ma Esas, ve Yo¨ntemleri Hakkında Kanun No. 4641”, Official Gazette No. 24380; also http://esk.dpt. gov.tr/ESK.portal. 19. As reported in Hosgo¨r (2011, 345), over 500,000 firms were created from 1983– 2000. 20. Their share of the country’s banking sector remained small; it was around 4 per cent in the year 2000 (Demir et al. 2004, 171). ¨ SIAD’s website (accessed 24 December 2014), it currently has 21. According to MU over 11,000 members which are comprised of nearly 45,000 affiliated firms. Its members altogether employ 1,600,000 people. 22. Such cases were widely reported in the independent media. 23. The movement calls itself Hizmet (service). 24. Hak-Is (1995, 309– 34) provides summary minutes of the meetings between labour and employers’ confederations. Isveren (July 1994) provides detailed information about the first summit meeting. Copies of the joint declarations, dated 2 July and 30 August 1994, were obtained from DISK’s archives. The first joint declaration was also printed in Isveren (July 1994) and Tu¨rk-Is (1995a, 254– 5). The then TISK president, Refik Baydur (2008), is also a source of helpful information about these meetings. 25. Summaries of the reports as prepared by the inter-organizational Coordination Committee of the four organizations were published in Hak-Is (1995, 329– 34) and Tu¨rk-Is (1995b, 643– 57).

374

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329 –343

26. The former long-term president of Hak-Is (1981– 95), Necati C¸elik, was elected to the Parliament as a deputy from the WP and became the minister of labour and social security in the WP-TPP government. 27. According to a survey from November 1994 to January 1995, the proportion of public servants who considered themselves part of the “low strata” was thus higher than that of the workers surveyed (TU¨SES 1995, 91). 28. C¸alıs¸ma ve Sosyal Gu¨venlik Bakanlıg˘ı, http://www.csgb.gov.tr/csgbPortal/ csgb.portal?page¼sendikauye. 29. The Ministry of Labour statistics provide the total number of workers in all workplaces covered by collective agreements signed each year. Since collective agreements are typically signed for a two-year period, I added the numbers for two consecutive years from 1984 for public and private sectors separately to find out if there were important changes. 30. The numbers are from Petrol-Is (1997, 2000), as cited in Mahirog˘ulları (2005, 371). These figures are comparable to the figures in Table 10.2, also from the Petrol-Is yearbooks.

Chapter 13

Conclusion

1. The JDP programme adopted the principle of a minimalist state in the economic sphere. For the programme, see http://www.akparti.org.tr/site/akparti/ parti-programi. 2. Tug˘al (2009) studies the transformation of Islamist politics toward moderation and its absorption within neoliberal capitalism in Turkey from a Gramscian perspective. His focus, however, is on the cultural and ideological aspects of hegemony. When he includes the political-economic and class foundations of hegemony in his analysis, he does so largely as an afterthought rather than as an integral dimension of a hegemonic project. 3. The large demonstrations known as the Gezi Movement lasted weeks in May – June 2013 and were partly triggered by the JDP government’s actions driven primarily by its socially conservative agenda and partly by its increasingly authoritarian character.

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INDEX

Asian-American Free Labour Institute (AAFLI), 141 –2, 216 Association of Independent Industrialists and Businessmen (MU¨SIAD), 322 –4 Association of Turkish Industrialists and Businessmen (TU¨SIAD), 15 corporatism, 107, 308 –9 democratization, 269 Economic and Social Council, 308, 311, 315 job security bill, 274 military regime, 96, 110 Motherland Party government, 32 – 3, 173, 175, 226 MU¨SIAD vs., 323 Banking Regulation and Supervision Agency, 42 –3, 347 n.22 bourgeoisie, see capitalist class budget central government, 49 –52, 290 –1 deficit, 166, 284 –7, 292, 302, 328 inflation, 227 spending on education, health, and social security, 52 – 6, 58 see also public expenditures

Caesarism, 91 –2, 106 capitalist class, 7, 18, 125, 175 divisions within, 158 –9, 171 –2, 321 –4 hegemony of, 162 –3, 337 –8 Islamism, 321 –4, 334, 343 military regime, 155 state, 10, 33 –4, 70, 71 Central Bank financial crisis of 1994, 289, 292 financial deregulation, 39, 40, 41 reorganization of, 28, 30, 42, 292 civil society, 7, 8 capitalist class, 163, 164, 179 –80, 337 democratization, 177 military regime, 89, 92 – 3, 261 post-military rule, 90, 170 transnational/global, 124 Collective Bargaining, Strike, and Lockout Act, 17, 66 –7, 121, 122 –3, 183, 185, 223 amendment of, 211 – 12, 233 ILO conventions, 230 –2, 272 –3 see also Trade Unions Act Confederation of Employers’ Associations of Turkey (TISK) Civil Initiative, 329

Constitution of 1982, 115 –16, 120 –1 corporatism, 107, 305–6, 308 democratization, 269 Economic and Social Council, 306 –9, 311, 313, 314, 315, 317, 321 general strike, 253 –4 government, 31 –2, 201, 222, 226, 227, 249 –50 ILO, 232 job security bill, 274 labour unions, 201, 222, 223, 226 – 7, 325 –9 military regime, 95, 96, 107, 115 – 16 public employers’ associations, 72 – 3, 222 Supreme Board of Arbitration, 65, 72 trade unions law, 121, 123, 201 unemployment insurance, 275, 297 wage statistics, 73 –4 Confederation of Nationalist Trade Unions (MISK), 95, 97 –8, 99, 191 –2 Confederation of Pro-Justice Trade Unions (Hak-Is) Civil Initiative, 329 –30 Economic and Social Council, 310, 311, 313, 315, 319, 321 general strike, 216 –17, 252 –5

396

THE ECONOMIC TRANSFORMATION OF TURKEY

international labour organizations, 137 –8 labour actions, 244 labour-capital summits, 325 –30 membership, 190 –2 military regime, 95, 97 –8 MU¨SIAD, 323 political campaigns, 219, 220 –21, 237 privatization, 299 –300 steel workers’ strike, 239 –41 Confederation of Public Employees’ Unions (KESK), 316 Confederation of Public Employees’ Unions of Turkey (Kamu-Sen), 316 Confederation of Revolutionary Trade Unions (DISK), 12 –13 Civil Initiative, 317, 318 –19, 330 Economic and Social Council, 310 –11, 313 –15, 321 ILO 144 –5, 146 international labour organizations, 136 –7, 138 –9, 141 labour actions, 244 labour-capital summits, 325 –30 membership, 97, 185, 191 –2 military regime, 64, 93, 95, 98, 99 –101 organizational structure of, 189 –90 privatization, 300 reopening of, 190 trial of, 101 –4 Tu¨rk-Is, 215 –6 Confederation of Shopkeepers and Artisans (TESK), 311, 313, 315, 317, 321, 329 Confederation of Trade Unions of Turkey (Tu¨rk-Is) Civil Initiative, 317, 318 –19, 329 –30 collective bargaining, 201 –4, 227, 238, 247 –8, 252 Constitution of 1982 amendment of, 212

making of, 115 –19 DISK vs., 12 – 13 divisions within, 214 –15, 227 –8 Economic and Social Council, 310, 311, 313 –14, 315, 317, 319, 321 government, 30 –2, 111 –12 ILO, 85, 115, 145, 228, 231, 235 international labour organizations, 72, 110, 114, 117, 136, 137, 141, 142 labour actions, 113–14, 194–5, 200, 203, 204–8, 213–14, 223–6 action programme, 210 –12, 216 –7, 222 –3, 236 coal miners’ march and strike, 255 – 9 general strike, 252 –5 spring actions of 1989, 238, 241 –7 steel workers’ strike, 239, 240 labour-capital summits, 325 –9 membership, 97, 191 –2 military regime, 98, 108 –15 authoritarian corporatism, 105 –6, 111 – 15, 338 reaction to, 108 – 9 Motherland Party government, 193 –6, 198 – 205, 216, 221, 222, 225, 226 –9, 236, 237, 247 –8, 249 –52, 338 organizational structure of, 189 –90 political campaigns, 218 –21, 237 President, 197 –8 Supreme Board of Arbitration, 66, 107, 113, 194, 202, 208 Trade Unions Act of 1983 enactment of, 120 –3 amendment of, 228 – 9 Constitution, 85 of 1961, 11 –12, 14, 102, 103

compared to the 1982, 25, 6, 60, 197 of 1982, 25 –6, 60 – 1, 156, 160, 170, 197 amendment of, 178, 198, 212, 218 –9, 220, 237, 266 labour rights, 230, 231, 235, 250, 270, 273 democratization of, 269 –71, 276 ECOSOC, 306 ILO conventions, 146, 272, 273 industrial relations, 64, 66, 120 –1, 123 making of, 93, 112, 115 –19 Tu¨rk-Is’s campaign, 141, 156 privatization, 298 public servants, 86, 270, 316 corporatism authoritarian corporatism, 105, 183 – 4, 261, 338 business associations, 107 –8 contrasted with tripartite corporatism, 106 –7 functioning of, 108 –13 labour reactions, 113 – 15 trade unions legislation, 120 –3 neocorporatism, 324, 335, 340 –1 employers’ campaign for, 260, 304 –9 labour unions’ reaction, 310 –11 outside the state, 324 –31 and the state, 324 – 31 see also Economic and Social Council theory of, 3, 6–7, 8, 106 –8, 304 –5, 324 –5, 331 Council of Europe, 129, 130, 139 –40, 148 Cox, Robert W., 5, 8 crisis financial, 283 –94 hegemony, 171 –4, 182 ISI, 14 –19

INDEX neoliberalized economy, 42 –3, 154 –5, 276 –83 political, 17 –18, 91 –2, 316 –7 state legitimacy, 264, 329 debt domestic, 52 foreign, 14, 40, 173, 279 –81 interest payments on, 49 –52, 286 –7 rating, 287, 289 rescheduling, 15 statistics, 280 Demirel, Su¨leyman, 267, 309 Democratic Left Party (DLP), 161, 289 elections, 162, 180 compared with the SDPP, 179 democratization, 212 ideology of, 179 minority government, 315 MP and DTP coalition, 317, 318 MP and NAP coalition, 294, 297, 301, 319, 320 –1, 329 Tu¨rk-Is, 220 democratization, 2–3, 89 –90, 177, 268 –70 Economic and Social Council, 309 Europe/European Union, 147 –9, 269 Kurdish “problem”, 265, 271, 339 labour unions, 215, 228, 261 Motherland Party, 160 social democrats, 178 TPP– SDPP coalition, 263 –4, 265 –7, 269, 276, 339 transition from the military regime, 4– 5, 153 –6 elections, 156 –60 deunionization, 184, 225, 332 –5 Economic and Social Council, 340 –1 Civil Initiative, 330 creation of, 311 –16, 340 DISK, 310 –11, 313 – 15, 321

divisions in the capitalist class, 321, 324 functioning of, 316 –21, 332, 340 – 1 Hak-Is, 310, 311, 313, 315, 319, 321 public employees, 316 TISK, 306 –9, 311, 313, 314, 315, 317, 321 TOBB, 308 –9, 311, 313, 315, 321 Tu¨rk-Is, 310, 311, 313–14, 315, 317, 319, 321 TU¨SIAD, 308, 311, 315 European Trade Union Confederation (ETUC), 136, 138, 139 DISK, 103, 137 Hak-Is, 138 Tu¨rk-Is, 141, 231 European Union, 37, 127, 168, 218, 312 customs union, 278, 308, 312 military regime, 130 –4, 139 –40 Turkish business, 268 – 9 Evren, Kenan Constitution of 1982, 26, 117 coup, 94 –5 democratization, 148, 160 Motherland Party, 157 –8, 160 Tu¨rk-Is, 117, 198 export-oriented growth, 1–2, 23, 30, 61, 63, 336 fractions of capital, 172 – 3, 322 military regime, 18 –19, 154 –5 shift to, 15 –16, 36 –9 structural weaknesses of, 277 –82 finance, 15, 52, 126, 171, 302, 340 capital, 18, 45, 162–3, 171, 337, 339 deregulation/liberalization, 9, 14, 16, 36, 39 –41, 154, 281 tax evasion, 286 financial flows, 32, 279–81, 301, 303, 342 hegemonic discourse, 16

397 prudential regulations, 41 –3, 155 see also crisis, financial foreign direct investment, 40 –1, 282 –3 free trade zones, 40, 66 –7 Gill, Stephen, 5, 8–9 Gramsci, Antonio, 91, 169, 171 Gramscian analysis, 5, 7 –9, 91 –2, 169 –71 hegemony American, 10, 11, 142 capitalist, 162 –3, 337 –8 Gramscian, 7, 9, 106, 151, 169, 171 hegemonic project, 90, 151, 162, 164 –9, 209, 222, 261, 338 disintegration of, 338, 342 conflicts within the power bloc, 171 –5 counter-movements from below, 169 –71 political opposition, 175 –9 end of, 179 –82 Justice and Development Party, 343 import substitution industrialization, 1, 23, 282 clientelism, 33 –4 crisis of, 14 –15, 19 inclusionary state, 11 –14 International Confederation of Free Trade Unions (ICFTU), 72, 136, 138 –9, 140 Hak-Is, 138 DISK, 103, 137 Tu¨rk-Is, 110, 114, 117, 136, 141, 211, 231 international financial institutions austerity programme, 289, 294 financial liberalization, 40 military regime, 18, 19, 126, 134, 147, 157 Motherland Party, 157 neoliberal restructuring, 128, 176, 336, 337, 342

398

THE ECONOMIC TRANSFORMATION OF TURKEY

prudential regulations, 43 shift to ISI, 15 – 16, 341 see also International Monetary Fund; World Bank International Labour Organization (ILO), 4, 140 –1, 257 DISK, 102 –4, 138, 146 employers, 231 –2 labour unions, 72, 228, 230 –1, 235, 339 Tu¨rk-Is, 85, 115, 212 Turkish state, 134–5, 232–5, 266, 309–10, 312, 320 democratization of labour legislation, 271 –3, 274 –5 military regime, 143 –6 International Monetary Fund (IMF) capital account liberalization, 40 crisis of ISI, 14 – 16 economic monitoring, 284 financial crises, 281 of 1994, 284, 287 –92, 294 of 2000 –1, 301 –2 labour opposition, 277, 329 –30 military regime, 134, 155 neoliberal technocrats, 29 privatization, 297 –8 prudential regulations, 43 social security, 297 stand-by agreement, 16, 292, 319 –20, 321, 343 see also international financial institutions Justice and Development Party (JDP), 302, 321, 324, 342 –3 Justice Party (JP), 162, 175, 176 in government, 15 –17, 26, 28, 71, 129 labour actions, 113 – 14, 194 –5, 204, 208 –9, 210, 217, 236 coal miners’ march and strike, 255 – 9 drop in, 334 –5

economic crisis and austerity programme of 1994, 294 –5, 296, 325 employers’ reaction, 238, 246 –7, 253 –4, 305, 307, 340 general strike, 252 –5 political campaigns, 115 –19, 218 –21, 237 rise in, 74, 213 –14, 223 –6, 249, 261 –2 spring actions of 1989, 238, 241 – 9 steel workers’ strike, 239, 240 Tu¨rk-Is’s action programme, 210 – 12, 216 –17, 222 –3, 236 see also strikes Marxism, 5, 7 Motherland Party (MP), 19, 26, 90 capitalist hegemony, 162 –4 elections, 159 –60, 160 –2, 180, 181, 221 hegemonic project, 164 – 8, 337 –8 disintegration of, 169 –71, 181 –2, 339 in government business relations, 33, 171 –5, 226 –7, 201, 246 –7 economic liberalization, 39 –40 ILO, 232 –3 labour actions against, 208 –9, 213, 217, 246, 247, 249 –51, 252 –4 labour relations, 66, 184, 223 –5, 261 –2, 338 –9 Tu¨rk-Is, 193, 194–7, 198–201, 201–4, 211, 214, 218–19, 220, 222, 226–9, 236, 237, 247–8, 252–4 public expenditures, 47 military regime, 157 –8 opposition parties’ challenge, 175 –9 subordinate classes, 151

Nationalist Action Party (NAP), 294 Nationalist Democracy Party (NDP), 157, 159, 160, 161, 162, 197 neoliberalism compensatory, 284 definition of, 9–10 disciplinary, 8–9 political Islam, 302, 342 – 3 O’Donnell, Guillermo, 108, 111 Organization of Economic Cooperation and Development (OECD), 38, 59, 133 – 4, 141, 279, 286 ¨ Ozal, Turgut, 26, 110, 198 24 January Decisions, 18 financial crisis of 1980, 154 –5, ideology of, 168 ILO conventions, 272, 275 labour actions, 213, 224, 239, 247, 255, 259 labour unions, 221, 224, 239, 249 Tu¨rk-Is, 193, 194, 203 –4, 226 military regime, 157, 159 see also O¨zalism O¨zalism, 164 –5, 170 Polanyi, Karl, 63 political regime, 2–3, 4– 5, 89 –90, 155, 336 –7 Populist Party (PP), 157, 161 power bloc conflicts within, 155, 171 – 5, 180, 236, 238, 339 formation of a new, 18 military regime, 153, 154 Motherland Party, 162 state form, 8 privatization foreign direct investment, 283 labour, 35, 81, 333 labour unions, 72, 298 –301, 320 Motherland Party, 166 neoliberal reforms, 36, 58, 267, 292 – 3 neoliberalism, 9

INDEX opposition to, 178, 298 – 9 public investment, 47, 282 state economic enterprises, 35, 43 –6, 72, 333 subcontracting, 87 public employees, 78 – 81, 84 –6 military regime, 94 salaries, 77 –8, 284, 286, 294, 295, 318 social insurance, 54 public employees’ unions, 86, 254, 297, 320, 329, 332 –3, 339 Economic and Social Council, 316, 321, 332 law, 14, 266, 270, 272, 273, 349 n.8 public employers’ associations, 70, 72, 195–6, 203, 222, 245 labour actions, 238, 253 public expenditures, 47 –9, 56 –7, 288 see also budget public sector borrowing requirement, 281, 284 –6, 287, 289, 292, 303 Public Sector Collective Agreements Coordination Committee (PSCACC), 64, 70–2, 195–6, 201, 202, 203 Social Democracy Party (SDP), 158, 161 Social Democratic Populist Party (SDPP), 161, 164, 175, 266 decree law concerning SEEs, 84, 86 democratization, 212 elections, 162, 180 – 1, 197 ideology of, 177 –9, 267 labour, 230, 253 privatization, 267, 297 – 8 Tu¨rk-Is, 220 see also True Path Party and Social Democratic Populist Party coalition state developmental, 1, 11, 18 form, 2, 3, 5–6, 8, 89 – 90, 124, 153, 337 exclusionary, 1–2, 9, 19, 32, 89, 266, 336

inclusionary, 1, 11 – 14, 265 –7, 276, 339 functions, 2, 4, 17, 23 changes in, 46 – 62, 79, 332, 337 –8 paternal vs. tyrannical, 179 theories, 5–9 state economic enterprises, 35, 38 budget transfers, 49, 50, 290 employment in, 68 –9, 70, 79 –80, 81 –6, 333 public sector borrowing requirement, 285 see also privatization State Planning Organization (SPO), 34, 65, 199 capital account liberalization, 40 labour representation in, 30 –1 reorganization of, 28, 29 wage series, 73 –4 strikes, 2, 16 – 17, 74, 170, 214, 246, 249 coalminers, 255 –9 general strike, 245, 249, 251, 252 – 5 DISK, 102 Hak-Is, 216 –17, 252 –5 Tu¨rk-Is, 216–17, 222–3, 236, 248, 252–5, 258 government postponement of, 238, 239, 250 –1, 256 legislation, 12, 64, 120 –1, 122 –3, 273 military regime, 64, 95, 100 public employees, 270 spring actions of 1989, 224 –5, 241 statistics, 16 –17, 205 –7, 221 –2, 294, 334 –5 steel workers, 238 –41 Supreme Board of Arbitration, 66 –7 Tu¨rk-Is, 213 –15, 228 structural adjustment, 15 –16, 29, 336 fractions of capital, 172 labour relations, 64, 113 –4, 296 –7, 319 financial crisis of, 1994, 276, 289, 292–3, 301, 312, 340

399 military regime, 18 –19, 337 see also International Monetary Fund; World Bank subcontracting, 260, 273, 286 deunionization, 333, 334 public sector, 43, 87 Supreme Board of Arbitration (SBA), 65, 66, 67, 71, 194 Constitution of 1982, 120 legislation, 64 –5, 120, 123 TISK, 72 Tu¨rk-Is, 66, 111, 112, 113, 194, 202 taxes, 59 –60, 286 –7 corporatism, 331 employers, 227, 326 – 7 evasion of, 286 rebates, 37 –8, 49, 52, 172 –3, 291 reform, 286 –7, 318, 326 –8 revenues from, 286, 287, 293 private universities, 54 trade, 10 –11, 36 – 7, 159, 166 deficit, 278 exports, 37 –9, 158, 277 –9, 293, 303, 308 imports, 240, 278 –9 see also export-oriented growth Trade Unions Act, 17, 121 –2, 123, 183, 219 amendment of, 226, 228 –9, 236, 273, 225, 247, 271 employers’ associations, 188 –9 ILO conventions, 230 –2, 272 union structure, 185, 189 True Path Party (TPP), 161, 266, 277 democratization, 212, 265 elections, 162, 180, 181 ideology of, 175 –7 labour, 230, 253 minority government, 314 Motherland Party, 276 –7 Motherland Party coalition, 317

400

THE ECONOMIC TRANSFORMATION OF TURKEY

Tu¨rk-Is, 220 Welfare Party coalition, 316, 317, 328 –9 True Path Party and Social Democratic Populist Party coalition, 27, 86, 60, 277, 297, 339 corporatism, 307 –8, 309 –10 financial crisis of 1994, 284 –7 government programme, 266 –8, 269, 271, 275, 276, 301 labour, 296, 297, 301, 312 response to the 1994 financial crisis, 287 –94 Undersecretariat of Treasury and Foreign Trade, 27, 29 Union of the Chambers of Agriculture (TZOB), 226 Civil Initiative, 330 Economic and Social Council, 311, 313, 315, 321 job security bill, 274 Union of the Chambers of Commerce, Industry and Commodity Exchanges of Turkey (TOBB)

Civil Initiative, 317, 329 corporatism, 107 Economic and Social Council, 308 –9, 311, 313, 315, 321 job security bill, 274 Motherland Party government, 177, 226 United States, 10, 138 hegemony, 10, 142 military regime, 126 –9, 134, 147 Pax Americana, 11 wages in the 1960s and 1970s, 12, 70 corporatism, 305 –6, 331 ECOSOC, 307, 308, 310, 311 employers, 155, 222, 227, 246 –7, 259 –60, 273 wages policy, 305, 306, 307 export-oriented growth, 16, 37, 39 financial crisis of 1994, 293, 294, 296 labour actions, 173, 205, 208, 224, 245 –6, 248, 257, 261, 339 minimum wage, 87, 112, 260, 306, 326

privatization, 35 statistics, 73 –7, 227 Supreme Board of Arbitration, 65 –6, 107 taxation, 59, 326 Tu¨rk-Is, 202, 216, 222, 226 Welfare Party (WP), 289, 316 –7, 324, 328 –9, 342 –3 World Bank agricultural sector, 170 crisis of ISI, 14 – 16 economic monitoring, 284 military regime, 134 neoliberal technocrats, 29 social security reform, 296 –7 structural adjustment loans, 16, 292, 294 see also international financial institutions World Confederation of Labour (WCL), 136, 139, 140, 144 DISK, 103, 137, 138 World Federation of Trade Unions (WFTU), 136, 138, 139, 140, 144 DISK, 103, 137 World Trade Organization (WTO), 37, 278, 283