Economic crisis as an instigator of distributional conflict: The Turkish case in 2001

The Turkish Economy in Crisis

Volumn , Issue , 2003, Pages 92-120

  Şenses, Fikret ^a  

^a MIDDLE EAST TECHNICAL UNIVERSITY   (Turkey)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 20644456239     PISSN: None     EISSN: None     Source Type: Book    
DOI: 10.4324/9780203502044     Document Type: Chapter

References (65)

1. See, for example, Yilmaz Akyüz and Korkut Boratav, "The Making of the Turkish Financial Crisis," Discussion Paper, No. 158 (Geneva: United Nations Conference on Trade and Development, April 2002).
2. See James C.Knowles, Ernesto M.Pernia, and Mary Racelis, "Social Consequences of the Financial Crisis in Asia," Manila Social Forum, Nov.8-12, 1999, p. 1.
3. See Ahmet H.Köse and A.Erinç Yeldan, "Turkish Economy in the 1990s: An Assessment of Fiscal Policies, Labor Markets and Foreign Trade," New Perspectives on Turkey, Vol. 18 (Spring 1998), p. 52.
4. World Bank, Turkey-Economic Reforms, Living Standards and Social Welfare Study (Ankara: World Bank, 2000).
5. State Planning Organization (SPO), Main Economic Indicators (March 2002), p. 129;
6. Avrupa Eğitim Vakfi [Europe Education Foundation], Mesleki ve Eğitim Sistemi Raporu [Report on Occupation and Education System] (Ankara: Avrupa Eğitim Vakfi, 2002), p. 218.
7. United Nations Development Programme (UNDP), I˙nsani Gelişme Raporu Türkiye 2001 [Human Development Report Turkey 2001] (Ankara: UNDP, 2001), p. 3.
8. The share of indirect taxes in total tax revenue increased steadily from 47.8 percent in 1991 to 57.6 percent in 1995 and 59.1 percent in 2000. Başbakanhk Hazine Müsteşarhği{dotless} [Undersecretariat of Treasury], Ekonomik Göstergeler [Economic Indicators] (June 2002), p. 16.
9. Türkiye I˙şveren Sendikalan Konfederasyonu (TI˙SK-Turkish Confederation of Employer Associations), Avrupa Birliği'nin Sosyal Politika Gündemi [Social Policy Agenda of the European Union] (Ankara: TI˙SK, 2000), p. 10.
10. The corresponding ratio for the self-employed was 42 percent for men and 82 percent for women. See Aysit Tansel, "Wage-Earners, Self-Employed and Gender in the Informal Sector in Turkey," METU Economic Research Center Working Papers in Economics, No. 00/15 (Ankara: METU, 2000), p. 7.
11. For the role of financial liberalization in the emergence of crises in emerging economies, see Christian E.Weller, "Financial Crises after Financial Liberalisation: Exceptional Circumstances or Structural Weakness?," Journal of Development Studies, Vol. 38, No. 1 (Oct. 2001), pp. 98-127;
12. Erinç Yeldan, Küreselleşme Sürecinde Türkiye Ekonomisi, Bölüşüm, Birikim ve Büyüme [The Turkish Economy in the Process of Globalization: Distribution, Accumulation and Growth] (Istanbul: I˙letişim, 2001).
13. Türkiye Cumhuriyet Merkez Bankasi (TCMB-Central Bank of Turkey), Yi{dotless}lli{dotless}k Rapor [Annual Report] (Ankara: TCMB, 2001), p. 96.
14. Başbakanhk Hazine Müsteşarliği [Undersecretariat of Treasury], Ekonomik Gostergeler [Economic Indicators] (June 2002), p. 5.
15. 2.)
16. TCMB (2001), p. 227.
17. Mustafa Sönmez, "Hangi I˙I, Krizden Nasil Etkileniyor?" [What is the Effect of the Crisis on Individual Provinces?], BI˙A (May 8, 2001), see . The title of this piece was downloaded from .
18. See Sinan Aygün, "Türkiye Dönüm Noktasmda" [Turkey at a Crossroads], Zaman (Aug.15 2002), .
19. See Selüloz-I˙ş, No. 68 (May 2001), p. 29.
20. Kaya Güvenc, "Türkiye Siyasi I˙radenin Emekten Yana Tecelli Etmesiyle Kurtulabilir" [Turkey Can be Saved if Political Will manifests itself on the side of Labor], Tes-I˙ş Dergisi (June-July 2001), p. 26.
21. SPO (2002), p. 129.
22. Similar tendencies were observed during the 1994 crisis when some firms-to shield themselves against the rising severance pay rates of workers with more than five years of service-laid-off experienced workers and substituted them with inexperienced workers soon afterwards. See Özlem Onaran, "Labor Market Flexibility during Structural Adjustment in Turkey," Discussion Papers in Management Engineering, No. 00/1 (Istanbul: Istanbul Technical University, 2000), p. 5.
23. For a list of measures taken during 1994 to restrain and cut back public employment, see Aysit Tansel, "Public Employment as a Social Protection Mechanism," Economic Research Center Working Papers in Economics, No. 00/14 (Ankara: Middle East Technical University, 1999), p. 10.
24. See SPO (2002), p. 130.
25. For details of the effects of the Asian crisis on unemployment, see Manila Social Forum (1999). Contrary to the figures of 2001, 2000 showed a very sharp increase in both these indicators. This, coupled with the fact that, compared with informal channels, the Turkish Employment Service is not regarded as the most effective channel for searching for a job-a tendency which may have been strengthened during the crisis when all channels probably lost their effectiveness-leads to the puzzling results shown above.
26. Avrupa Eğitim Vakfi (2002), p. 229.
27. Based on Avrupa Eğitim Vakfi (2002), p. 218. The underemployment rate, which might be another indicator in this respect, actually declined from 6.9 percent to 6.0 percent during this period.
28. World Bank (2000), p. 70. In the manufacturing sector, for example, the real wage index declined by a massive 25 percentage points during the period from the last quarter of 1993 to the second quarter of 1997.
29. See Köse and Yeldan (1998), p. 74.
30. See Petrol-I˙ş, Yeni Gibi Sunulan Eski Bir Program [An Old Program Presented as New] (Istanbul: Petrol-I˙ş, 2001), p. 20.
31. It seems that even large and modern firms such as Brisa have resorted to such practices. See Selüloz-I˙ş (2001), p. 29.
32. The non-wage adjustments in 1994 were confined largely to the adoption of "flexible" arrangements like part-time work, subcontracting to other firms, and reduction of working hours through paid and unpaid forced holidays. Although there was an increase in unemployment by around 600,000 persons, this was primarily the result of depressed domestic activity rather than mass redundancies- as in 2001. For a discussion of the effect of the 1994 crisis on the labor market, see Onaran (2000), pp. 18-19, and Köse and Yeldan (1998), pp. 73-5.
33. The Turkish workforce is characterized by a notoriously low average level of schooling. In 2000 only 37.2 percent of workers had received more than five years of schooling. See Avrupa Eğitim Vakfi (2002), p. 200.
34. This is confirmed by one recent study which-while accepting the role of unemployment, along with inflation, in increasing poverty-places casual/seasonal workers and the self-employed above the unemployed in the ranking of major poverty groups, with the self-employed constituting 45 percent of the poor. See World Bank (2000), p. ix.
35. World Bank (2000), p. 51.
36. See Mustafa Sönmez, 100 Göstergede Kriz ve Yoksullaşma [100 Indicators of Crisis and Impoverishment] (Istanbul: I˙letişim, 2002), p. 51.
37. See, for example, Necmi Erdoğan (ed.), Yoksulluk Halleri, Türkiye'de Kent Yoksulluğunun Toplumsal Görünümleri [Conditions of Poverty, Social Aspects of Urban Poverty in Turkey] (Istanbul: Demokrasi Kitapli{dotless}ği{dotless} Yaymevi, 2002);
38. Sönmez (2002); unpublished studies as widely reported in the press by Sencer Ayata, Milliyet (July 6, 7, and 9, 2002);
39. Ayşe Buğra and Çağlar Keyder, Milliyet, Oct. 22, 2002. All were quoted in the column by Meral Tamer at .
40. For the sharp increase in the number of applicants to the Istanbul office of the SASF for aid, see Milliyet, Oct.6, 2002. It seems the number of people utilizing the various soup kitchens operated by different municipalities in Istanbul has also increased substantially. See Milliyet, Oct. 12, 2002.
41. TCMB (2001), p. 65.
42. Some observers argue that even this may be underestimating the exact figure due to lack of transparency for such expenditures. For a discussion of this issue, see C.Emre Alper and Ziya Öniş, "Finansal Küreselleşme, Demokrasi Açi{dotless}ği{dotless} ve Yükselen Piyasalarda Yaşanan Sürekli Krizler: Sermaye Hareketlerinin Liberalleşmesi Sonrasinda Türkiye Deneyimi" [Financial Globalization, Democratic Deficit and Persistent Crises in Emerging Markets: The Turkish Experience after Capital Account Liberalization], Doğu Bati, Vol. 4, No. 14 (2001), p. 215.
43. BHM; Temel Göstergeler (June 2002), p. 18.
44. In the third quarter of 2001, for instance, non-wage public consumption fell by a massive 29.8 percent-as opposed to 14.3 percent for total public sector consumption. TCMB (2001), p. 26.
45. Avrupa Eğitim Vakfi (2002), Tables 1, 2, and 3.
46. In the second quarter of 2001, when the drop in consumption was the most severe, expenditure on consumer durables fell by a massive 36.1 percent, light consumption goods by 12.5 percent, food by 4.5 percent, and services by 11.5 percent-as opposed to 11.6 percent for total private consumption. TCMB (2001), p. 26.
47. See World Bank (2000), p. 26.
48. See Başbakanhk Hazine Müsteşarli{dotless}ği{dotless} (June 2002), p. 16.
49. On the first day of the crisis, for example, interbank overnight interest rates rose from 45 percent to 6,200 percent. See Alper and Öniş (2001), p. 217.
50. From the outbreak of the crisis at the beginning of 2001 until March 2002, a total of 45 firms sold more than 50 percent, 31 firms 50 percent, and another 58 firms less than 50 percent of their shares to foreign buyers. See Milliyet, May 4, 2002.
51. Manila Social Forum (1999), p. 1, and IMF, "Mitigating the Social Costs of the Asian Crisis," Finance and Development, Vol. 35, No. 3 (Sept. 1998), p. 20.
52. IMF (1998), p. 21.
53. See Nora Lustig and Michael Walton, "Latin American Crisis and Social Costs: What Lessons for Asia?," International Herald Tribune, May 29, 1998.
54. See Sosyal Demokrat Halk Partisi (Social Democratic Populist Party), Yoksulluğu Yenmekiçin Acil Plan (2003-2005) [Emergency Plan to Fight Poverty] (Ankara: Sosyal Demokrat Halk Partisi, 2002), p. 30.
55. See Başbakanlik Yüksek Denetleme Kurulu [The Supreme Audit Board of Prime Ministry], Sosyal Yardimlaşma ve Dayamşmayi Teşvik Fonu, 2001 Raporu [2001 Report on the Social Assistance and Solidarity Encouragement Fund] (Ankara: Başbakanlik Yüksek Denetleme Kurulu, 2002), p. 20.
56. A proposal to impose a one-off poverty tax to alleviate the plight of people in distress also fell upon deaf ears. See Fikret Şenses, "Yoksullukla Savaşim için de Yeni Bakiş Açilari Gereklidir" [New Perspectives are also Necessary to Fight Poverty], Cumhuriyet, Dec. 30, 2001, p. 2.
57. See IMF (1998), pp. 20-21.
58. For details, see World Bank, Project Appraisal Document on a Proposed Hybrid Investment/Adjustment Loan in the Amount of US$500 Million to the Republic of Turkey for a Social Risk Mitigation Project/Loan Report No: 22510-TU (Washington DC: World Bank, 2001), p. 2.
59. The same applies to the efforts of the UNDP in Turkey, which cover a wide range of spheres-from supporting poverty studies to the reduction of social, economic, and gender disparities in the least developed regions. For details, see .
60. See TI˙SK, I˙şveren, Vol. 40, No. 12 (Sept. 2002), p. 41.
61. On the strength of these mechanisms, see Oğuz Işi{dotless}k and M.Melih Pmarcioğlu, NöbetleşeYoksulluk Sultanbeyli Örneği [Taking Turns in Poverty, The Case of Sultanbeyli] (Istanbul: I˙letişim, 2001).
62. For multigenerational factors, see World Bank (2000), p. 83.
63. On the issue of a simple poverty index, see Fikret Şenses, "Yoksulluk, Kaygi{dotless} Veriyor" [Poverty is Worrying], Milliyet, Dec. 2, 1997; .
64. In Latin America during the 1980s, for example, poverty increased in 55 of the 58 cases of recession. Conversely, a drop in poverty occurred in only 22 out of the 32 recoveries. See John Gafar, "Poverty, Income Growth, and Inequality in Some Caribbean Countries," Journal of Developing Areas, Vol. 32 (Summer 1998), p. 474.
65. Dani Rodrik, "Understanding Economic Policy Reform," Journal of Economic Literature, Vol. 34, No. 1 (March 1996), pp. 9-41.