The year 2007 was a perfect storm for Turkey
“Countries don’t disappear, it has been said, but sometimes they encounter perfect storms,” wrote Jorge Castaneda, a Mexican politician and academic, the other day in the New York Times. “These do not threaten their existence, yet they can represent major challenges to their welfare and integrity.” The year 2007 was such a year for Turkey. Let me explain why it is important today.
A group of researchers at the Paris School of Economics started a rather important project in 2017 called the World Inequality Lab, which housed more than thirty researchers led by people like Thomas Piketty and Emmanuel Saez. It is nice to see the French are becoming more interested in issues beyond their borders. Perhaps this is fuelled by the same force that brought us Macron. Either way, the World Inequality Lab is publishing a yearly World Inequality Report as its flagship project. The first issue of the report was out last December and includes information on the income and wealth distribution of 57 countries, including Turkey and the United States. If you are wondering how much of your country’s wealth is held by your top 1 percent, google this guidebook.
I find the Turkish figures rather telling. The national income share of the top 1 percent of Turks was around 28.3 percent in 1994, then declined to 23.4 percent by 2016. At the same time, the national income share of the bottom 50 percent has improved quite impressively, from 7.9 percent in 1994 to 14.6 percent in 2016. Yet, this is only one way of looking at it.
Let me compare this with U.S. income distribution figures. In 2014, the American top 1 percent held 20.2 percent of their country’s income, which is considerably lower than Turkey’s 23.4 percent. But Turkey’s percentage has been decreasing, while the U.S.’ has been increasing. To be specific, the total ratio of Turkey’s decrease was 12 percent higher than the U.S.’ increase.
Then, I see idiosyncrasy when it comes to Turkish figures. While national income shares are either increasing or decreasing in other countries, in Turkey the national income share of the top 1 percent declined until 2007 and then started to increase. As the figure has showed, the national income share of the top 1 percent declined from 28.3 percent to 17.4 percent and then increased again. Something happened in 2007 and it only happened in Turkey.
Two things happened in 2007, if you ask me. First, it was the year President Sezer’s term ended. Second, it was the year Nicholas Sarkozy became the French president. Both were bad for Turkey. The first led political thinking to dominate economic thinking, limiting Turkey’s ability to deal with the global economic crisis. The second led populist politics to dominate the rule-based EU process, halting the Turkish accession process and effectively leaving the country’s political transformation process anchorless.
In short, it was the year Turkey lost its hope for a smooth political transformation. A weakened EU anchor, combined with the end of the illiberal checks and balance system of the old Republic, exposed the country to its pent up political storm.
Just have a look at the chronology of events. We first had a rather peculiar discussion on electing a president in parliament—rules were invented by the old elite to make it harder for the Justice and Development Party (AKP) to elect their president. When that failed, a case for the closure of the AKP was brought to the Constitutional Court in 2008 as the second attempt of the old elite. Then, the counterattacks started against one of the veto players of Turkey’s illiberal checks and balance system, with the Ergenekon show trial of 2008 and a military purge.
In 2009, we saw the second act of the purge process through another sham trial, Balyoz, as well as many smaller ones across other institutions. Then in 2010, a referendum opened the gates for judicial “reform” and the purges moved through the justice system, knocking out the second veto player of Turkey’s old illiberal checks and balance system. Our new political elite saw the Gülenists as a tool in these operations, but by 2011, came to realize that they did not have as much control as they thought. Then in 2013, the power bloc cracked and all hell broke loose. That was the process that brought Turkey on the verge of chaos by the failed coup in 2016.
In retrospect, there are three things about 2007 that are important. First, regardless of their political orientation, Turks were not good at managing political transformation or normalization processes, let alone liberal democratic ones. We are just not used to them. Second, President Sarkozy was the harbinger of a political era that unhinged Turkey’s political transformation process. This took a toll on the country’s inclusive economic transformation process. Third, it revealed Turkey’s inability to deal with a combination of problems. This is important. Countries always have very few serious long-term problems they have to deal with. The best countries plan ahead and overcome their challenges. Turkey, alas, does not appear to have that ability.