Turkey’s capitalism is dealing with its stringencies through mobilisation of public funds and by continuing external support, particularly from Germany. Recent developments, such as increasing external debt and interests, unsteady Turkish lira, the distress over the diversification of product and market, are increasing the vulnerability even more. Yet, “public mobilisation”, in short-term, is being a saver. In the case of external support, whose aim is to guarantee its investments in such an important market as Turkey, as well as its political accounts, Europe stands out with Germany being in the first place. Both the probability of change in political accounts and the creation of production and market alternatives in the mid-long term are limiting the horizon with a short term.
WHERE THE HELL DO PUBLIC EXPENSES COME FROM?
Tax deductions, the restructuring of the loans within the scope of Credit Guarantee Fund (CGF) which are in bankruptcy or have a risk of being bankrupt, and incentives to do production and consumption are main elements of “public mobilisation”. External debts, which are the public support’s main source, stand out as an increase on the public banks’ debiting via syndication. While, in the first quarter of 2017, the sum of outstanding external debts rises to the highest level of the last 15 years with 412.5 billion dollars, the main factor was the 3-billion-dollar increase of public banks’ debt stock. During the increase of external debt stock, increasing debt cost and shortening maturity are riveting developments.
By broadening the scope of CGF, increase in the volume of credits was achieved. The banking system, public banks being in the first place, by trusting CGF’s warrantee, restructured the credits, which were in fact already in bankruptcy but weren’t declared so by banks. Instead of consumer credits, the corporate loans that are intended for companies were effective in the increment of credit volume.
Support to monetary capital was not only turning on the credit taps through broadening the scope of CGF. Consumption was excited with Special Consumption Tax (SCT) deduction on durable consumer goods, such as white goods and furniture, and producers were indirectly subsidised. A similar support was seen on house sales and construction materials. Also, when practices such as employment and exportation supports are included, increase in transfers towards monetary capital was achieved through the tax deduction, direct cash support or benefits of consumption increase.
“EXTERNAL SUPPORT”
In the first five months of the year, the automotive production increased more than 20%. Due to the increment of SCT, while the domestic market was tightening over 10%, the increase of production resulted from 30% increase in exportation. European market and export of three new models TOFAŞ, Toyota, Hyundai were determinant factors on increase in exports. While the growth in the first quarter of 2017 was interrogated among economists with statements such as “growth without employment” or “growth without investment,” there seems to be a support for the growth from automotive and the promoted sectors mentioned above. There is a strong external support in both axes. Strong European demand for durable consumer goods, automotive being in the first place, should be about not seeing a political gain in Turkey’s capitalist system’s uncontrolled collapse as much as it is about the need of European capital’s lookout on its investments in Turkey.
In the domestic market, there is again an external support for finance towards excitation of consumption. Finance institutions originated in Germany, Holland, and England play the main role in the banks’ increase in syndications.
IS GROWTH A LIE?
While automotive industry demonstrated a high growth in 2016, it dazzled in the first five months of 2017. The influence of industry, with its forward-backward connections, on the increase of gross national product, is estimated to have reached to 1-1.5 points in the first quarter of the year. Evaluated as the key industry and side industry, compared to other sectors, capital intensity seems to be high and working conditions based on overtime work, instead of employment, seems to be effective in the increase of production. In the production increase which surpassed 20% in the first five months, the fact that TOFAŞ, Toyota, and Hyundai’s new models are effective and that also these models’ investments were made in the past few years should be considered. The continuing increase in the sale of the mentioned models in 2018 and personal autos of Turkey automotive industry in the European market is expected. By adding the growth of construction-housing and the promoted durable consumer goods in the domestic market to that of automotive, it is possible to fill under some parts of the 5% growth. The right to discuss over the authenticity of TurkStat’s new GNP series is on the condition to be reserved. Yet, because saying that there is no growth would lead to deceptive political results, it is an argument which should be approached cautiously. On the contrary, it seems necessary to contemplate on the possible political results of sectorial asymmetry in the growth.
PUBLIC-PRIVATE COOPERATION MODEL IS A ROBBERY BUT...
As the developer institution of the public-private cooperation model, upon the observations of the Development Ministry’s works, big projects mean the direct transfer of sources to the capital and there is an apparent big robbery. Nevertheless, it seems insufficient that critics remain limited only with the cost to the public budget because warranty conditions could be overcome in mid-long term with additional policies and guidance. The fact that these projects are not direct load to the public budget does not mean that there are not societal costs. İzmir-İzmit Highway and Osmangazi Bridge could be given as examples. Osmangazi Bridge, tolling numbers of which are very low and will probably stay same for few more years, might surpass its expected crossing numbers in ten years. It might be possible to bring this date forward with some economic, societal, and environmental costs, but forthcoming fractures in political dynamics should also be added to this. It could be said that, unlike what their financial model suggests, this kind of projects imposes their short-term burdens on the public. But, as much important as these, projects’ direct negative effects should be discussed. A very well-known from Istanbul’s bridge examples, the project itself means the formation of new residential areas, industry, and commercial basis and the implementation of a fund transfer mechanism far beyond a bridge or a road. It is not right to push back the environmental and societal costs and focus on monetary problems. So, before financing the project, it is necessary to interrogate deeply the project itself, its effects on the environment, social life, and labourers and big societal costs which it created.
