class and business insight turkey

8/2/2019 Class and Business Insight Turkey

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Economic Liberalization and Class Dynamics in Turkey: New Business Groups and Islamic Mobilization

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urkish society, economy, and poli-tics have been going through unda-mental changes since the country shied romstate-centered import substitution policies to

economic liberalization. As o the early 1980s,the zal government began to promote a cul-ture o entrepreneurship. Scholars have longexamined the political and economic implica-tions o this change. What has not been clearlyanalyzed, however, is how these transorma-tions undamentally altered the class dynam-ics. In this article, we argue that the growth

o new capitalist classes transormed socialstratication, multi-party politics and the in-ternational political orientation o the coun-try. New business groups energized by Islamhave acilitated much needed class mobility. Inthis process, there also emerged a conronta-tional split in middle class positions betweenIslamic versus secular political outlooks. Te

Economic Liberalization and ClassDynamics in Turkey: New Business

Groups and Islamic Mobilization

GL BERNA ZCAN* and HASAN TURUN**

* Te School of Management, Royal Holloway, University of Lon-don, [email protected]

** Te School of Interdisciplinary Area Studies, University of Ox-ford, [email protected]

Te growth o new capitalist classes

since the 1980s has transormed social

stratication, multi-party politics and

the international political orientation

o urkey. New business groups

energized by Islam have acilitated

much-needed class mobility. In thisprocess, there has also emerged a

conrontational split in middle-class

positions between Islamic and secular

political outlooks. Tese new middle

classes are engaged in promoting

Islam as a strategic resource in the

class politics o urkey and seek

protection rom the negative eects o

market capitalism. More dramatically,

these new capitalist classes have

redened the allocation o marketsand the distribution o assets while

they have increased opportunities

or their afliated groups at home

and in oreign markets. However,

the paradox between modernity and

authenticity remains unresolved

or urkeys old middle classes and

the new pious elite alike. Although the

Islamic-leaning business groups have

become the winners o the new regime,

they have increasingly lost theircutting-edge idealism and originality

and are being normalized as the

new establishment.

ABSTRACT

Insight Turkey Vol. 13 / No. 3 / 2011pp. 63-86


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GL BERNA ZCAN and HASAN TURUN

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expansion o new middle classes uelled

economic growth, industrial diusionto Anatolian towns, and a rapid rise inexport capacity. More dramatically, thesenew capitalist classes redened the allo-cation o markets and the distribution oassets while they expanded opportunitiesor their aliated groups at home and inoreign markets.

Tis work should be seen as a contri-bution to the scholarly debate about social change and the rise o Islamic businessgroups through the analysis o social class and identity politics. We regard thegrowth o small and medium-sized enterprises (SME) and new industrial centersin Anatolia to be the engines o change in class dynamics. Although there has beenmuch discussion about Islam in urkish society and politics1 and the relationshipbetween economic liberalization and a new Islamic leaning bourgeoisie2 there areew empirically grounded sociological studies o new industrialists and the rise o

second tier industrial towns. In the ollowing sections, we illustrate how a betteranalysis o the Anatolisation o industrial capital can help us to understand thenew class dynamics and centre-periphery relations. Our analysis shows how Is-lamic mobilization emerges as a strategic resource in class dynamics, opportunityallocation and moral justication.

In the ollowing sections we will examine three arguments. First, we will showwhy the emergence o a new generation o Anatolian capitalists and their wealthaccumulation are important to understand changing class dynamics. Second, we

will show how the promotion o Islamic values energized business groups and ledto new political ormations. Tird, we will illustrate how the increasing inuenceo Islam has led to an identity contest and search or authenticity in class dynam-ics. Finally, we will explain the implications o these or oreign trade relations, asthe new business classes search to expand their opportunities abroad. Our conclu-sion will highlight the dilemmas o the uture relations between the new capitalistclasses and Islamist politics.

Emergence o a Post-1980 Social Stratifcation

Te oundations o the modern urkish Republic rested on a top-down statetradition governed by a state recruited elite in the civil service, the army, and inpolitics. Centralist tendencies in governance allocated a greater role to Ankara-based institutions in all spheres o public service (such as the State Planning Or-

New business groups energized

by Islam have acilitated muchneeded class mobility. Teexpansion o new middleclasses uelled economicgrowth, industrial diusion toAnatolian towns, and a rapidrise in export capacity


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ganization, government ministries, the

central bank and the army). Te statewas not only the major investor in heavyindustries, energy and inrastructure,but it also managed them with an exten-sive administrative bureaucracy until the1980s. Inrastructure and developmentinvestments were planned and executedcentrally without seeking local participation or regional involvement. In the mar-

ket, state-run enterprises were accompanied by a handul o large private businessconglomerates, which controlled major sectors o the economy.3 Te majority oprivately owned small businesses were localized micro enterprises. Business con-glomerates unctioned as the main conduits or western companies and trade.Tey, along with the state, controlled the entry o oreign technology, new productsand modern production to the domestic market. Te amily-run conglomeratesestablished and/or headquartered in Istanbul diversied their investments into avariety o sectors and they concentrated the private industrial capital o the wholeeconomy. Import substitution policies aimed to protect the domestic market rominternational competition, with a range o selective incentive mechanisms, aidedthe growth o indigenous industrial capacity. Industrial conglomerates initially es-tablished themselves in the Istanbul and Izmit axis and the port cities o Izmir andAdana. Later in the 1970s, large rms engaged in oreign ranchises and extendedtheir distribution networks across the country (especially in detergent, consumergoods, electronic appliances and pharmaceutical products).4

State procurement at both local and national levels helped private businesses

and gave a jump-start to the growth o the rst wave o entrepreneurs and theassociated urban bourgeoisie in many Anatolian towns. However, most o theAnatolian land mass remained rural and isolated despite development projectsand inrastructure investments. Tere was virtually no inter-regional or interna-tional trade outside o the state owned enterprises. Local economies rested onsmall artisanship, commerce, and agriculture. Increasing demand or consumergoods and the diusion o ranchised services uelled the growth o a small busi-ness elite within Anatolias emerging urban centers. Along with the civil servants

and proessionals, they shared local privileges and the benets o municipal inra-structure and services until the 1980s.5 A clear majority o the working populationwas employed in agriculture; they, along with small entrepreneurs and artisans,ormed the stratum beneath the state sponsored middle class proessionals andthe local elite.

Te oundations o the modern

urkish Republic rested ona top-down state tradition

governed by a state recruitedelite in the civil service, the

army, and in politics


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As the population grew and ur-

key urbanized, social dynamics beganto change rapidly. Migration rom thecountryside and the small towns o Ana-tolia to several large cities began in the1950s and accelerated in the decades toollow. By the 1970s, semi-legal housingareas (commonly known as Gecekondu)became widespread while low skilled ca-

sual or inormal jobs absorbed the majority o the working population in all majorcities.6 Rural migrants in urban areas ormed the bottom o the social strati-cation. Te growing size o the economically marginalized urban population inGecekondu areas, however, undamentally changed the seemingly stable politicalbalance established between the state elites and their private sector counterpartson the one side and peasants and the urban poor on the other. As demand or jobs and better living conditions rapidly rose, pressure on the political systemcontinued to mount. By 1980, the urban population overtook the rural populationor the rst time in modern urkish history and rural migrants moved rom themargins to the centre o local government politics.7

urkey witnessed widespread social unrest, as the urban poor became increas-ingly politicized throughout the 1970s. Te proessional middle classes and ur-ban youth combined their orces with the lower stratum against social injusticesand inequitable wealth distribution. However, the real cause o this unrest wasthe slowing down o opportunities or upward mobility, as the state controlledeconomy perormed badly under domestic and international constraints. Tus,

expectations or social mobility or the lower strata and revolutionary urban mid-dle classes induced them to unite their eorts to bring about a more equitable eco-nomic allocating regime. Tese groups were mobilized by socialist ideology andle wing politics. Starting rom the 1970s, this interclass alliance in most urbanareas ed into youth organizations, trade unions, and party politics. o capitalizeon this societal movement, the Republican Peoples Party (CHP) shied towardsleist politics. Its then new charismatic leader, Blent Ecevit, promoted the partyamong the young and disenranchised urban and rural populations. Te CHPs

campaign or equality and socialist ideals won over 33 per cent o total votes inthe 1973 general elections.8 In the 1977 general elections, the party had a stunningsuccess, as it received 41.4 per cent o total votes.9 In the three largest cities, theCHP received more than hal o the total votes; this was one o the strongest urbansupport given to a single political party in urkish electoral history.

Although eorts were

undertaken to liberalize theeconomy during previousgovernments, it was zal whobrought about long-lastingchanges in the undamentalstructure o the economy


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Te shortage o goods, especially

oodstus, uelled deep insecurity andpublic protests across the country dur-ing the nal years o the 1970s. Despiteits electoral victory, the CHP had to ormweak coalition governments and got em-broiled in a deepening ri between rightand le politics. Facing a tough US-ledembargo in the aermath o the 1974

urkish military intervention in Cyprus,the government had almost no room to maneuver. Hostile US policies and tough-ening internal opposition by powerul business groups paralyzed the policy arena,orcing the CHP to shelve some o its much-publicized projects. Tese includedthe critical town and village development projects and enterprise reorms throughthe establishment o multi-ownership companies.10

Following the 1980 coup and the subsequent partial withdrawal o the gen-erals rom politics in 1983, the ormer technocrat, Prime Minister urgut zal,

shied policies rom import substitution to economic liberalization. Although e-orts were undertaken to liberalize the economy during previous governments, itwas zal who brought about long-lasting changes in the undamental structure othe economy. For example, the 24th January 1980 Decisions were announced inorder to curb ination and to attain a more outward-oriented and market-basedeconomic system. Within the ramework o these decisions, export subsidies weregranted and exchange rates were allowed to depreciate in real terms. However,with almost no political opposition and a disoriented society, bold reorm poli-

cies were put orward and rigorously implemented by a centre-right political al-liance headed by the Motherland Party (ANAP). Subsequent policies avored bythe army and right wing parties supported a so-called urkish-Islamic synthesisto deend against communism and threats o social disintegration. In less than adecade, predominantly le-leaning urban voters transerred their alliance to thecentre right. ANAP became a patchwork o the centre right, liberals, Islamists,and secularists while promoting the ideology o right wing neo-liberalism. Tisnew regime aimed to deepen the market and curb the direct role o the state

in the economy through de-regulation and privatization. Export-led economicgrowth policies and subsequent liberalization and privatization ollowed IMF pre-scriptions and the models o Reaganomics and Tatcherism. An entrepreneurialsociety and the pursuit o wealth ormed the core principals o this neo-liberalthinking. Small and medium-sized businesses emerged as a panacea or economic

An entrepreneurial society and

the pursuit o wealth ormedthe core principals o this

neo-liberal thinking. Smalland medium-sized businesses

emerged as a panacea oreconomic re-structuring and

privatization


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re-structuring and privatization, and de-

regulation aimed to reduce state controland to break down the resistance o or-ganized labor. Multi-ownership compa-nies, village, and town projects and otherstate led planning and investments dis-appeared rom the agenda.

As the urkish economy recoveredrom endemic shortages, exports steadily rose rom 2.9 billion USD in 1980 to

12.9 billion USD in 1990 and continued to increase thereaer. By 2009, this gurehad reached 132 billion USD (see able 1). However, export-led growth also in-creased urkeys exposure to international nancial markets and oreign debt andcreated a highly imbalanced export and import regime. Economic liberalizationand new entrepreneurialism stimulated urban growth and industrialization inAnatolia. Industrial production, mostly in the traditional manuacturing sectorso textiles and oodstus, began to spread into medium-sized Anatolian townswhile capital ight rom rural to urban areas increased. Agriculture ceased to be

the leading export sector as manuacturing came to account or over 75 per cento total exports by 2000. Between 1980 and 1999, the urban population increaseddramatically, rom 44 to 74 per cent o the total population. Tis massive increasein the urban population was in part a result o diused industrialization but itwas also linked to increasing regional inequalities, rising societal expectations andthe lack o personal security in conict zones. In addition to large cities, regionalurban centers attracted a signicant share o this migration and led to a growthspurt o second tier regions such as Diyarbakr, Gaziantep, Konya, and Kayseri, all

o which exceeded one million in population during this period.

A new generation o indigenous entrepreneurs and conservative Anatolian ur-banites began to undermine the state elite and their middle class allies. Te popu-larity o traditional right wing parties diminished throughout the 1990s, as theybecame embroiled in banking scandals, political sleaze, and the war with the PKK.Troughout the early years o liberalization, as was the case previously, SMEs hadalmost no access to aordable nancial capital, export markets, and new technol-

ogies. Tus, their engagement with the export-led liberal growth regime was ini-tially peripheral while the major beneciaries were the amily conglomerates andmultinational capital. Similarly, the urban poor, pensioners, and low wage earnerswere among the losers o the new economic order. In the political arena, the lewing parties ailed to recover rom the ground they had lost aer the purges that

A new generation o

indigenous entrepreneursand conservative Anatolianurbanites began to underminethe state elite and their middleclass allies


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ollowed the military coup, the disintegration o the communist regimes in East-

ern Europe, and the dissolution o the USSR. Te Reah Party benetting romdisillusion with mainstream politics, and mobilized by Islamist ideals drew sup-port rom the disenranchised lower social classes. In a society with much resent-ment but no clear opposition, Islamist politics emerged as a new political orce.

Te Islamist political discourse was not entirely new to urkish politics; itsroots can be ound in the intellectual discourse over the early modernization at-tempts o the Ottoman Empire in the nineteenth century. Te modern revival oIslamist politics was initially subsumed within the Democrat Party (DP) aer its

electoral successes in the 1950s. It came out o the shadows o the centre rightpolitics when the predecessor o the Reah Party, the National Salvation Party(MSP), was ormed under the leadership o Necmettin Erbakan in 1972. Islamistpolitics played a signicant role in the party until the MSP was closed down alongwith other political parties by the 1980 military coup government. Te party ob-tained over 10 per cent o votes in the 1973 elections and even joined a short-livedcoalition government led by CHP in 1974. As the speed o liberalization intensi-ed in the 1980s and 1990s, this created new winners and losers. Tus, Islamic

groups expanded their societal inuence through Islamic brotherhoods and busi-ness networks.

With the Islamic brotherhoods extensive network o charity and philan-thropy, they were able to reach out to the dispossessed and marginalized groups.Troughout the 1990s, they aggressively recruited and expanded their social base.Te Reah Party took over the management o urkeys two major cities (An-kara and Istanbul) or the rst time when they won mayoral elections in 1994.

Decentralization increased the powers o elected local governments in economicdevelopment and generated new opportunities or local businesses. Tis gave wayto the rise o the economic power o Islamic groups at the local level through mu-nicipal procurement, construction, and real estate development. Te Reah Partypropaganda initially maintained its MSP line and propagated an anti-western andan anti-EU stance. Te Party, like their leist political counterparts two decadespreviously, claimed to bring about societal justice on a grand scale through a JustOrder (Adil Dzen) by conronting what they then saw as the corrupt moral val-

ues o capitalism. Tese policies included the establishment o an Islamic curren-cy and an Islamic common market, along with the promotion o multi-ownershipcompanies and heavy industries under state-led developmentalizm. Tese ideaswere especially eective among the urban poor and those small businessmen whoconsidered themselves as the losers o the early years o neo-liberalism.11


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Small business owners developed a strong antipathy towards the amily cartels

that controlled the countrys economy as well as the inecient state enterprises.Tis crystallized around an idealized notion o hard-working, genuine Anatolianpeople with Islamic traditions, as opposed to cosmopolitan and disingenuous Is-tanbul capitalists. When the secular establishment and the army began to see theReah Party as a growing and seemingly popular threat to the secular regime, theysought to ban it rom politics and they intervened to dissolve the coalition govern-ment in 1997. Te turning point was the 2002 general elections, which resultedin the victory o the newly ormed AK Party under the leadership o a young

cadre that had split rom Erbakans Reah Party. Tis new generation o leaders,who came rom lower and middle class amilies, saw their uture opportunitiesin alliance with the neo-liberal economic order. Instead o promoting an Islamicunion, they saw engagement with the USA and EU as a strategic asset in domes-tic political power building. Without questioning the basis o their predecessorsscal and economic policies, the AK Party government continued to implementmacroeconomic stability and nancial responsibility practices that were part othe IMF stability program. Tese directly ollowed suit and were in line with theEcevit governments reorms in the aermath o the 2001 banking and nancialsector crises. Te AK Party modied Reahs political platorm to accommodatethe ambitions o Anatolian business groups and their middle class allies.

Table 1. urkeys Foreign rade Since 1923

Balance o Volume oExports Imports Foreign Foreign Proportion

Trade Trade oImports

covered

Yllar Value Change Value Change Value Value by ExportsYears 000 $ % 000 $ % 000 $ 000 $ %

1923 50 790 86 872 -36 082 137 662 58.5

1930 71 380 -4.6 69 540 -43.7 1 840 140 920 102.6

1940 80 904 -18.8 50 035 -45.9 30 869 130 939 161.7

1950 263 424 6.3 285 664 -1.6 -22 240 549 088 92.2

1960 320 731 -9.3 468 186 -0.4 -147 455 788 917 68.5

1970 588 476 9.6 947 604 18.3 -359 128 1 536 081 62.1

1975 1 401 075 -8.6 4 738 558 25.4 -3 337 483 6 139 633 29.6

1980 2 910 122 28.7 7 909 364 56.0 -4 999 242 10 819 486 36.8

1985 7 958 010 11.6 11 343 376 5.5 -3 385 367 19 301 386 70.2

1990 12 959 288 11.5 22 302 126 41.2 -9 342 838 35 261 413 58.11995 21 637 041 19.5 35 709 011 53.5 -14 071 970 57 346 052 60.6

2000 27 774 906 4.5 54 502 821 34.0 -26 727 914 82 277 727 51.0

2005 73 476 408 16.3 116 774 151 19.7 -43 297 743 190 250 559 62.9

2008 132 027 196 23.1 201 963 574 18.8 -69 936 378 333 990 770 65.4

Source: urkish Statistical Institute: http://www.tuik.gov.tr/VeriBilgi.do?tb_id=12&ust_id=4


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Table 2. Distribution o Manuacturing Industry Enterprises (MIEs) in New AnatolianIndustrial Centers (According to Size Groups)

Provinces MIEs 1980 1990 2000

Denizli Groups MIEs % MIEs % MIEs %10-49 88 1.34 55 0.95 268 3.8450-199 22 1.53 25 1.21 95 3.23200+ 7 1.02 19 1.83 53 4.41Total 117 1.34 99 1.12 416 3.74

Gaziantep 10-49 116 1.76 70 1.21 174 2.5050-199 16 1.11 32 1.54 60 2.04200+ 8 1.17 15 1.45 25 2.08Total 140 1.61 117 1.32 259 2.33

Kayseri 10-49 68 1.03 59 1.02 94 1.3550-199 19 1.32 29 1.40 58 1.97200+ 15 2.19 21 2.03 26 2.16Total 102 1.17 109 1.23 178 1.60

orum 10-49 52 0.79 59 1.02 52 0.7550-199 3 0.21 20 0.97 32 1.09200+ 1 0.15 2 0.19 3 0.25Total 56 0.64 81 0.91 87 0.78

Kahraman Mara 10-49 15 0.23 31 0.54 43 0.6250-199 2 0.14 3 0.14 15 0.51

200+ 2 0.29 7 0.68 10 0.83Total 19 0.22 41 0.46 68 0.61

Other Provinces 10-49 6247 94.85 5488 95.24 6341 90.9550-199 1375 95.69 1963 94.74 2684 91.17200+ 651 95.18 973 93.83 1085 90.27Total 8273 95.02 8424 94.96 10110 90.23

urkey 10-49 6586 100 5762 100 6972 10050-199 1437 100 2072 100 2944 100200+ 684 100 1037 100 1202 100Total 8707 100 8871 1003.84 11118 100

Source: State Institute o Statistics Database (2004) cited in zaslan (2005)

New Entrepreneurship Energized by Islam

Te growth o entrepreneurialism energized by Islam accelerated the rate ocapital accumulation and export-led growth, which in turn acilitated the rise oindigenous Anatolian entrepreneurs.12 A new pattern o wealth and capital accu-mulation changed the outlook o Anatolian towns along with the growth o the

new middle classes. For the rst time in several centuries, large numbers o Mus-lims, who had previously shied away rom capitalist endeavors, engaged in entre-preneurship. Tese middle classes relied upon indigenous private sector develop-ment and opportunistic entrepreneurship. Following the Customs Union agree-ment, signed in 1995, EU-urkey relations deepened in trade and other orms


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o exchange. Many SMEs began looking

or new business opportunities in Euro-pean markets as well as Russia and theCIS (Common Wealth o IndependentStates) and they ound many niche mar-kets to penetrate. However, they wereunwilling to support a political partythat was promoting an Islamic currencyor the establishment o an Islamic com-

mon market. Capitalizing on this busi-ness pragmatism and realizing the newopportunities abroad, this second wave o Islamic politics ollowed a diametricallyopposite path to what the Reah Party developed; they took a pro-EU and west-ern stance. Subsequently, the AK Party moved towards the centre right o urkeyspolitical spectrum with a resh neo-liberal outlook under its new leader, Recepayyip Erdoan, supported by a pragmatic cadre o businessmen and proession-als. Te newly ormed party, a political coalition similar to ANAP, came to powerin the 2002 elections with a plurality o 34 per cent o total votes. It went on to winhal o the municipal governments in 2004. Te party increased its votes to almost47 per cent in the 2007 general elections but lost some local governments in 2009(its votes ell rom 42 per cent to 38.8 per cent). Te graduates o state schoolsproviding religious education and many private education institutions linked to Is-lamic brotherhoods provided the young cadres o the party. Tus, moving rom theringe, a visibly devout Muslim middle class took the centre stage in politics andthe civil service, capitalizing on the ability o their sponsors to promote their own.

Te spread o Islamic brotherhoods was a primarily urban phenomenon andit built successul alliances with SME owners. Decentralization to markets andcivil society in diverse orms acilitated the growth o municipal powers and thespread o Islamic brotherhood networks at the grassroots level throughout the1990s. Te inadequacies o the central states ability to provide sucient health,education, and general welare services were exploited by these groups as theysought to re-allocate resources and social benets to their aliated communities.Municipal resources played a key role in the new allocation regimes and they

paved the way to the popular success o the AK Party. Erdoan, himsel, gainedinitial popularity as the mayor o Istanbul. New entrepreneurialism and a senseo independence gave rise to a diverse range o business ventures in growing ur-ban markets. Small scale manuacturing, all orms o trade and land developmentand new housing created earnings and speculative interests or local businessmen.

Te AK Party moved towards

the centre right o urkeyspolitical spectrum with a reshneo-liberal outlook under itsleader, Recep ayyip Erdoan,supported by a pragmaticcadre o businessmen andproessionals


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By winning the municipalities o several

large towns, Islamist politicians beganto channel municipal procurement andspending to their avored businessmenstarting rom the mid-1990s. zcansstudy o three Anatolian towns, Denizli,Gaziantep and Kayseri, reveals a deepen-ing ideological split as Islamic businessgroups and their raternity organizations

pursued their own political agendas, most notably in Kayseri.13

Another study byzcan illustrated how old established business groups, who initiated large localdevelopment projects in Kayseri, were eliminated rom decision-making posi-tions and new allocation regimes by Islamist mayors and their business allies.14

However, despite their growing role in the economy and society, SMEs andtheir Islamic networks developed strong resentment towards state elites.15 Whilethey sought more economic and political power, they were undermined and re-quently blocked by the centralist bureaucracy in Ankara. Tey also saw urkeys

large conglomerates as their rivals and inhibitors in accessing international -nancial and industrial markets. A heated debate around secularism and religiousrevivalism deepened the ault line between urkeys old and new middle classes.A discourse o marginalization and injustice galvanized Islamic politics as theyaced sharpening opposition rom the establishment, most notably rom the armyand the judiciary. Trough their social and community engagement and discourseo injustice, Islamic groups managed to capture the moral high ground and gainedthe political support o the lower social strata. Teir prolic use o grassroots net-

works, civic associations, and neighborhood social circles paid dividends at theballot box, even when they aced legal threats.

Islamic groups have long had the ambition to create autonomous institutionsseparate rom the secular state. By orming solidarity platorms and networks theyaimed to insulate their regime, protect business niches, and create new oppor-tunities or network members. By launching new business development modelsand capital ormations, they built alternative routes to avoid state institutions and

strengthen their networks. One notable case was the establishment o Anatolianholding companies, which quickly spread across many towns, including Deniz-li, Konya, Yozgat, and Sivas, throughout the 1990s. Promoted and established bymerchant entrepreneurs and resting mostly on inormal structures, these compa-nies collected small savings rom thousands o local amilies and urkish workers

Trough their social and

community engagement anddiscourse o injustice, Islamic

groups managed to capture themoral high ground and gained

the political support o thelower social strata


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in Germany. With the promise o high

uture dividends, no use o interest, anda mission to industrialize the homeland,they channeled unds to their aliatedcompanies inormally and without usingintermediary nancial institutions. Fol-lowers o Fetullah Glen, Nakibendi andSleymanc brotherhoods emerged asthe key conduits or campaigning amongurkish workers in Germany. By using

religious symbols and signals, companies such as Kombassan and Yimpa collect-ed millions o dollars rom amilies. However, some ailed to keep their promise totheir investors and built some audaciously scandalous ponzi schemes.16

Te Fetullah Glen community has been especially active in promoting busi-nesses and by 2009 is said to have been associated with at least 500 rms. TeGlen movement promotes a synthesis between Islam and ree market, where Is-lam assumes a moral value involving economic activity. Among its aliated assets

are Asya Bank and Ik Insurance, and the highly inuential newspaper, Zaman,in addition to the hundreds o schools and seven universities or which the move-ment is best known. Tis large number o businessmen, employees, and ormerstudents provide a loyal mass o economically motivated adherents to the move-ment.17 Tese ties expanded business opportunities at home and abroad or itsaliated SME owners.

Te increasing number o SMEs led to the emergence o new industrial centersand uelled business diversity and competition (see able 2). Te growing rivalry

between rst and second-generation business elites resulted in the ragmenta-tion o business interest representation. Te rst Islamist business association,MSAD, established in 1990, became a major representative body within a de-cade.18 MSAD rivals SAD, which was ormed in 1971 to represent leadingestablishment business groups and has oces in the US (Washington), Europe(Brussels, Berlin, and Paris), and China (Beijing). MSAD is more aggressiveinternationally with representatives in 40 countries. O its almost 90 oces, manyare in Islamic countries. Contrary to SAD, which advocates an open trade

regime and integration with EU markets, MSAD promotes economic relationswith Muslim countries and has a wider regional representation in Anatolian cit-ies. Most o its member businesses were established in the late 1980s and tendto be smaller than their SAD counterparts. As business interests continueto diverge along with the increasing number o export oriented businesses, new

Although Islamic values are

widely employed as social glueor interpersonal trust, thesenew capitalist classes and theirsolidarity platorms are asmotivated by sel-interest andprot making as others


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solidarity groups and lobbying platorms

emerge. A new Islamic-leaning group,the urkish Businessmen and Industri-alists Conederation (USKON), estab-lished in 2005, brings together 151 busi-ness associations with over 14,000 busi-nesses across the country.

Although Islamic values are widelyemployed as social glue or interpersonal trust, these new capitalist classes and

their solidarity platorms are as motivated by sel-interest and prot making asothers. While aligning their interests with the poor and disadvantaged at the low-er tier o the social strata and by championing justice and airness, this movementormed broader social alliances. During its rst government (2002-2007), the AKParty pursued neo-liberal populism with a veneer o Islamic morals. Tey ap-pealed directly to the masses and circumvented, where possible, state institutions.Islamic groups allied with the AK Party developed their own power elite and em-ployed avoritism and corrupt business practices when necessary. Consequently,

the newly emerging conservative middle classes and large businesses began re-ceiving new economic privileges.19 For instance, two urkish state-owned banks,Halk Bankas and Vakfank, had stepped in to provide 750 million USD in loansto alk Holding, which is known to maintain close relations with Prime MinisterErdoan, in order to enable it to purchase the second largest media group (AV-Sabah). In another transaction, the urkish government gave alk Energy andthe Indian Oil Corporation (IOC) permission to build a 300,000 barrels a day(b/d) renery at the Mediterranean port o Ceyhan. Another example o extra-

mural avoritism occurred in Hatay where AK Party aliates won a vast majority,over 250, small and medium-size government contracts, with even more rumoredto have been awarded to relatives and riends o party ocials.

Search or a New Identity

A crucial actor in the ormation o this new middle class has been its iden-tity crisis. Rapid urbanization, the penetration o new media, and globalizationdislocated many traditional values and worldviews in urkey, as elsewhere. Tis,

combined with the increasing role o money and power in society, prompted asearch or authenticity and a moral anchor to balance the turbulence brought bymassive societal changes. Tis trend was urther aected by growing economicliberalization and the ideological dissolution o the Cold War in the 1980s. Eco-nomic liberalization took money and entrepreneurialism to the centre o soci-

Secular or Islamist, urkeys

middle classes are convergingtowards similar consumptionstyles while the new Islamist

business elite surroundthemselves with luxury brands,new villas, and private beaches


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etal relations, undamentally changing

consumer habits, norms, and values. Aprolieration o television channels withreality shows and sexually provocativesoap operas, tabloid gossip columns andvacuous radio talk program were seen tobe promoting new values and behaviors

that deepened an already widely elt sense o insecurity. Many conservatives sawthese as a sign o cultural decay and an attack on amily values. Women, especially,became objects o this materialization as well as contestation.20

Te end o the Cold War destabilized traditional-conservative (right wing)and modern-progressive (le wing) politics, urther deepening the insecurityo the middle classes. Tey responded in an entrepreneurial spirit and sought al-ternative modus operandi to state sponsored economic modernization and top-down management. MSAD, USKON, and other political-business alliancesprovided one kind o mobilization that served as local social and cultural institu-tions in addition to their commercial roles. Tere was also an associated growth o

community services outside the public sector, including Islamist-leaning privateschools, hospitals, and NGOs.

However, a discourse o victim-victor dichotomization, narrated through Is-lamist orums, gave pious Muslims a renewed perception in the 1990s that theyhad long been a kind o underclass. Tese ideas ed into a rhetoric o suppression,alienation, and state conspiracy against the moral and righteous. Te act that theurkish Republic had outlawed Islamic brotherhoods and monopolized religionas part o the state administration contributed to this new rhetoric o victimiza-

tion. Islamic groups were depicted as dangerous and backward in the main-stream media and such propaganda urther uelled societal alienation, uniting thenew middle classes and their allied marginal urban groups against their secularoppressors.

As Islamists strived to orm a distinct identity, they used specic symbolsto signal the link with each other to mobilize their combined eorts, to protectthemselves, and gain power. However, there is no homogenized Islamic group or

community, nor is there one unied Islamic ideology and culture in urkey. Is-lamic groups requently present contradictions and ambiguities in their own in-terpretation o money and morality. It is not always easy to dierentiate Islamicbusiness groups rom others, the so-called secularists, as they are now deeplyembedded within the urkish economy. Unlike their eorts to avoid the state in

In response to growing

convergence between twodistinct middle classes, Islamistgroups are searching or newpillars o authenticity


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the 1990s, since the ormation o the rst

AK Party government in 2002, they haveconducted most o their business withormal state institutions and pursuedmodern corporate goals. Symbols o au-thenticity and moral living have beenincorporated into their core identity, themost signicant o which has been the urban orm o headscar (turban).21 Teprohibition against wearing the headscar in public oces and state schools was

rst used by the new establishment deliberately to galvanize the sense o exclusionand injustice among pious Muslims. While or others who adhered to Islam, butconsidered themselves modern secularists, the politicized headscar was not an es-sential part o their identity or religion; they saw it merely as a central element oIslamist politics. Te headscarves gained a new status in urkish politics and soci-ety when most o the leading AK Party ministers wives appeared in public wearingstylized covers. Paradoxically, the ban on the headscarves has not been lied andthe AK Party leaders and their powerul business allies continue to exploit the is-sue as a symbol o their continuing victimhood. Nevertheless, the piety and justicesymbolized by headscarves also carries oddities and contradictions. Young womenincreasingly wear headscarves in urban areas along with seemingly immodest andun-Islamic dresses. Headscarves are now requently seen accompanying tightjeans, heavy make-up, and revealing dresses. Secular or Islamist, urkeys middleclasses are converging towards similar consumption styles while the new Islamistbusiness elite surround themselves with luxury brands, new villas, and privatebeaches. Tus, the gap between urkeys old and new establishment is narrowing.

In response to this growing convergence between two distinct middle classes,Islamist groups are searching or new pillars o authenticity. Direct appeals topopular sentiment on issues o private morality and community behavior appearto be a growing and seemingly perilous trend. Neighborhood restrictions on thesale and drinking o alcohol, suocating the production and sale o pork products,encouraging women to give birth to three children and other actions to encour-age Islamic values seem to be creeping into the public discourse. Tis is leadingto spatially more dierentiated and contested responses, as urban neighborhoods,

coastal and inner Anatolian towns and South-Eastern Kurdish regions continueto diverge in their attitudes towards the deepening inuence o Islamic morality.Tus, there is a wide range o positions and attitudes rather than any uniormtrend. Hence, we can optimistically argue that Islamic politics in urkey is likelyto accommodate these identity contests in democracy. Because so ar, it has been

Te rise o new business groups

did not only change urkeysdomestic political trajectory,

it also prooundly aected thecountrys oreign relations


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driven by pragmatic sel-interested business people, not an ideologically minded

clergy as in the case o Iran.A New Era in Foreign Relations

Te rise o new business groups did not only change urkeys domestic politi-cal trajectory, it also prooundly aected the countrys oreign relations. Islamistgroups initially built their own trade and personal connections, in particular inthe Arab world, the Balkans, and Eurasia. Sometimes they ollowed in the oot-steps o the rst generation amily conglomerates in these markets but they oen

developed their own auxiliary networks using business associations, charities, andthe Glen movements schools. With the AK Partys electoral success, however,these sporadic initiatives turned into more systematic eorts and brought aboutstructural changes in oreign policy.

Tere are three key important aspects o this new orientation. First, the in-crease in trade relations with the neighboring regions o the Balkans and theMiddle East continues to provide a rm oundation to the zero problem poli-cy with neighbors that was initiated by the energetic Foreign Minister, Ahmet

Davutolu. urkish companies have been successul in penetrating relatively un-der-developed neighboring markets or over two decades and have been lobbyingthe government or a stronger engagement in the region. For over a decade, urk-ish politicians as well as diplomats struggled to ormulate new initiatives in or-eign policy. Pressure rom aggressive export oriented SMEs eventually triggeredmore business riendly diplomacy in Ankara. New trade patterns began to play avital role in re-balancing relations with Arab countries. In 2008, the trade volumewith the Arab world reached 30 billion USD. urkey is in the process o abolishing

visas with a number o Arab countries (including Jordan, Lebanon, Libya as wellas Syria) and Russia. Te ree trade zone among urkey, Syria, Lebanon, and Jor-dan is under discussior and will allow urkeys South-Eastern towns to link withtheir historic economic zones. Tis process has already started in Gaziantep withthe establishment o the ree trade zone with Syria in 2007. Similarly, improvingrelations with Iraq and its Kurdistan Regional Government led to the growth omany new business opportunities and investments, making Iraq the h largestexport market (see able 3). 22

Second, urkey has become a network node o international energy trade andbusiness opportunities in energy inrastructure development have grown rapidly.Domestic energy consumption boomed along with its industrial growth and ur-key has now become the second highest consumer o Russian gas in Europe aer


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Germany. In 2008, urkey consumed 30.3 million oil equivalent tons o gas, the

vast bulk o which was sourced rom Russia and Iran and much o it was linkedto inrastructure investments o urkish rms.23 Despite a large trade decit withRussia, economic relations are evolving towards a mutually benecial direction.24Hundreds o urkish SMEs and large businesses operate in the ormer Sovietspace. As o 2007, long-term projects by urkish contractors were underway inRussia, amounting to around 28 billion USD, o which 5 billion USD were newlyinitiated in that year alone. 25

Table 3. Te op 26 Destinations or urkeys Exports in 2009 (million $)

2009 Total value (000 USD) 102 142 613

Country 1 Germany 9 783 225

2 France 6 208 801

3 United Kingdom 5 915 169

4 Italy 5 890 484

5 Iraq 5 123 510

6 Switzerland 3 931 821

7 U.S.A 3 222 821

8 Russia Fed 3 202 398

9 U.A.E. 2 898 839

10 Egypt 2 618 193

11 Spain 2 823 657

12 Romania 2 215 736

13 Netherlands 2 123 961

14 Iran 2 024 863

15 Libya 1 799 236

16 Belgium 1 796 330

17 Algeria 1 780 136

18 Saudi Arabia 1 771 192

19 Greece 1 634 388

20 China 1 599 13921 Israel 1 528 459

22 Syria 1 425 111

23 Azerbaijan 1 399 399

24 Bulgaria 1 389 199

25 Poland 1 321 118

26 Ukraine 1 033 449

Source: urkish Statistical Institute http://www.tuik.gov.tr/VeriBilgi.do?tb_id=12&ust_id=4

Tird, as trade with neighbors and the energy market grow, the image o busi-ness relations shis rom that o the 1980s and 1990s into new patterns. urkeyis no longer dependent on a handul o countries or its exports, as it is activelydeveloping economic ties with countries as diverse as South Korea, India, andRomania. Te growing trade with Arab countries, Eastern Europe, Russia, and


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Iran attracts businesses interested in growth and new markets. As seen in able

4, Russia, Germany, and China were the three leading sources o urkish importsin 2009.Te three leading import items are: energy, technology, and cheap con-sumer goods. Exports are also diversiying, although stable trade makes Germany,France, the UK, and Italy still the leading destinations. Growth in exports to Iraq,Russia, the UAE, Egypt, Romania, and Iran are impressive. FDI, long dominatedby the Eurozone, has been aected by the economic downturn and is moving to-wards a balance o worldwide sources (see able 5). Chinese Premier Wen Jaibaoannounced an upgrade in China-urkey relations rom a simple bilateral one tothat o a strategic partnership during his visit to urkey. In a similar vein, PrimeMinister ayyip Erdoan proclaimed that we reached an agreement to increaseour trade volume with China to 50 billion USD by 2015 and, in the second phase,to 100 billion USD by 2020.

Table 4. Te op 26 Destinations or urkish Imports in 2009 (million $)

2009 otal value (000 USD) 140 928 421

Country 1 Russia Federation 19 450 086

2 Germany 14 096 963

3 China 12 676 5734 U.S.A 8 575 737

5 Italy 7 673 374

6 France . 7 091 795

7 Spain 3 776 917

8 United Kingdom 3 473 433

9 Iran 3 405 986

10 South Korea 3 118 214

11 Romania and Bulgaria 3 374 865

12 Ukraine 3 156 659

13 Japan 2 781 97114 Netherlands 2 543 073

15 Belgium 2 371 516

16 Algeria 2 028 115

17 Switzerland 1 999 386

18 India 1 902 607

19 Sweden 1 890 994

20 Poland 1 817 093

21 Saudi Arabia 1 686 743

22 Kazakhstan 1 348 903

23 aiwan 1 342 41024 Austria 1 203 634

25 Greece 1 131 065

26 Brazil 1 105 890

Source: urkish Statistical Institute http://www.tuik.gov.tr/VeriBilgi.do?tb_id=12&ust_id=4


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While economic aairs are important or international relations, urkeys po-

litical capital is not always congruent with trade. Te high volume o trade withFrance and Germany does not necessarily drive urkeys relations with the EU ina positive direction. In contrast, urkey sees the relatively small but rapidly in-creasing economic ties with the Arab countries, the Balkans and Eurasia as open-ing new avenues or regional inuence. Te zero problem policy aims to cementlong lasting trusting relations with the neighboring governments, seemingly with-out pushing orward any political agenda. urkeys new business groups are notinterested in promoting Islamist political agendas but rather concentrate just onavorable market conditions. Nevertheless, urkeys engagement with authoritar-ian or semi-authoritarian regimes carries uture risks. Te political elites o theseregimes eel threatened by the prospect o popular upheavals or democratic rep-resentation or popular Islamism. Although it is highly appealing, urkey is notnecessarily a desirable model or these elites. Similarly, urkish business groupsace tougher legal and institutional environments in these countries, especially inthe ormer Soviet Union where property rights are not well saeguarded and theruling groups behave erratically and opportunistically.

Table 5. urkeys Foreign Direct Investment Inow by Country (million $)

Countries 2005 2006 2007 2008 2009

European Union (27) 5,006 14,489 12,601 11,051 4,945

Germany 391 357 954 1.211 496

France 2,107 439 367 679 616

Netherlands 383 5,069 5,442 1,343 738

United Kingdom 166 628 703 1,336 350

Italy 692 189 74 249 314

Other European Countries 1,267 7,807 5,061 6,233 2,431

Other European Countries (Excluding EU) 1,646 85 373 291 305

Arica 3 21 5 82 2

USA 88 848 4,212 863 260

Canada 26 121 11 23 52

Central-South America and Caribbean 8 33 494 60 19

Asian 1,756 1,927 1,405 2,361 670

Near and Middle Eastern Countries 1,678 1,910 608 2,199 358

Gul Arabian Countries 1,675 1,783 311 1,978 206

Other Near and Middle Eastern Countries 2 3 196 96 78

Other Asian Countries 78 17 797 162 312

Other Countries 2 115 36 2 12

otal 8,535 17,639 19,137 14,733 6,265

Source: Central Bank o the Republic o urkeyhttp://www.invest.gov.tr/en-US/investmentguide/investorsguide/pages/FDIinurkey.aspx


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Conclusion

We have argued that Anatolian entre-preneurs changed the politics and econ-omy o urkey. Tey did not displace theamily conglomerates and old businesses

but instead engendered the growth o their own groups along with expandingmarket opportunities. Tese new middle classes are engaged in promoting Islamas a strategic resource in the class politics o urkey and seek protection rom thenegative eects o market capitalism. Although evolving chaotically, this change is

likely to have long lasting eects on the political economy o the country. Tere-ore, the uture direction o class mobility and democratic reorms will depend onthe choices o the new pious middle classes and their newly orming elite in rela-tion to ethnic nationalism, authoritarian tendencies, and status quo politics. Forthe time being, there are several important implications.

First o all, this trend brought about urther social mobility chances to newsegments o the society. By breaking into the control exercised by the old state elite

and their business and local allies, new middle classes and SMEs managed to cre-ate new opportunities or their rank and le. In doing so, they energized Islamicpolitical movements, incorporated multiple techniques or building solidaritynetworks, and aligned their interests with the lower stratum o the society. Tus,they used Islam as a strategic resource. Tey eectively and most critically utilizedmunicipal resources to deepen local business networks. With the AK Party gov-ernments since 2002, they also benetted rom central government unds and pro-motional activities to generate business opportunities and nance capital or theirassociates. Tese groups successully diused into lower segments o the society

through charitable institutions and social help. While promoting Islamic politicalagendas among the economically and culturally marginalized urban population,they were successul in providing educational and proessional opportunities tothe children o the poor. Tis class mobility and dynamism is a positive actor ineconomic growth, as it gives SMEs across Anatolia a modern and outward look-ing perspective. However, this economic change has not yet been ully reected inthe quality o public services, access to resources, and equitable growth among theregions. Over the past ew years urkey has only marginally improved on its low

standing in the UN human development index.

Secondly, the rise o the new middle classes created a split in traditional middleclass positions in the country due to generational, ideological, and religious ac-tors. Yet, the inclusion o Islamist politics and the engagement with democratic re-

Newly emerging middle classes

are engaged in promoting Islamas an ideology and moral gluein the class politics o urkey


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orms to meet the EU accession criteria

widened democratic participation andsocial inclusion, especially most recentlyor the Kurds. However, while suggest-ing optimism we remain cautious aboutthe ability o the new middle classes tobuild a democratic and pluralistic soci-ety. Te reason we counsel caution hasmore to do with middle class opportunism than the stereotypical prejudice about

the incompatibility between Islam and democracy. Evidence rom numerous non-Islamic countries such as Argentina, Malaysia, Mexico, and Tailand point outthat the regimes the middle classes choose depends among other things on theirprospects o social mobility. Aside rom the consolidated democracies, the posi-tion o middle classes around the world in supporting democracy against non-de-mocracy or authoritarianism has been historically inconsistent.26 Although thereare authoritarian tendencies in the AK Party, it is too early to reach a verdict onwhat kinds o ties will orm between a western style plural democracy and the newovertly Muslim middle classes. urkey has the advantage o a highly diversiedand competitive businesses environment in contrast to authoritarian states domi-nated by resource dependent economies (such as Russia and Iran), or others withcohesive business groups protected by military or dictatorial regimes (as such asEgypt today and Spain beore 1980). We optimistically believe that these diversi-ed interests require and can best be served by democracy.

Tirdly, newly emerging middle classes are engaged in promoting Islam as anideology and moral glue in the class politics o urkey. Tey concentrated their

eorts on the protection and re-allocation o wealth and property or their groupsand aliated businesses. Liberal economic order and globalization served their in-terests in securing and expanding business opportunities abroad, especially in thedeveloping markets, such as the ormer communist block, Arica, and the MiddleEast. Te political mobilization o Anatolian businessmen under the AK Party,while benetting rom the end o the Cold War divisions, destabilized the longestablished positions between right and le wing politics in urkey. Tis politicaldislocation brought about a new dynamism and pragmatism in international a-

airs. A growing assertion o business ties and strategic interests nowadays is rede-ning urkeys external relations with Russia, Iran, and other states in the region.Tese developments require a layered and more complex role or the country inits region and beyond. Tis will not only benet Islamic leaning business groupsbut also urkeys old amily conglomerates and others. Capitalists rom dierent

Although new Islamic leaning

business groups have becomethe winners o the new regime,

they have increasingly losttheir cutting edge idealism and

originality


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dispositions are acting abroad together and lling dierent gaps. Despite its blun-

ders and opportunistic instincts, this new orientation is likely to improve urkeyseconomic inuence and diplomatic stance in East-West alliances, aecting its re-lations with NAO and the EU.

Finally, we argue that the paradox between modernity and authenticity remainsunresolved or urkeys old middle classes and the new pious elite alike. A similarproposition can be argued or the old business establishment and the secular elitevis--vis the western universal ideals o modernity. Tus, urkeys changing do-mestic and international standing is moving towards multiple identity ormations.

Although new Islamic leaning business groups have become the winners o thenew regime, they have increasingly lost their cutting edge idealism and originality.Tey are being normalized as the new establishment.27 Political sleaze, corrup-tion in public procurement, and populist trends increasingly dene the nature otheir business operations. Similarly, despite a just and moral business discoursepromoted by the Islamic groups, unaccountable distribution o business oppor-tunities continue to prevail under the AK Party governments as they had been orurkeys previous governments and ruling elites. New re-allocation mechanisms

generate avored clients and human development priorities are still lagging.

Endnotes

1) See Ruen akr,Ayet ve Slogan (Istanbul: Metis Yaynlar, 1995); Niler Gle, Islamin YeniKamusal Yzleri (Istanbul: Metis, 1999); Hakan Yavuz, Secularism and Muslim Democracy in urkey(Cambridge: Cambridge University Press, 2009).

2) See ebnem Gms, Class, Status, and Party: Te Changing Face o Political Islam in ur-key and Egypt, Comparative Political Studies, Vol. 43, No. 7, (2010), pp. 835-861; Ziya ni, TePolitical Economy o Islamic Resurgence in urkey: Te Rise o the Welare Party in Perspective,Tird World Quarterly, Vol. 18, No. 4, (1997), pp. 743-766; Cihan ual, Passive Revolution: Absorb-ing the Islamic Challenge to Capitalism (Stanord University Press, Stanord, 2006).

3) Tis was not unique to urkey; manydevelopmentaliststates, most notably South Korea andJapan, pursued policies o state-supported industrial growth, which led to the domination o amilyrun conglomerates.

4) For an analysis o globalization and distribution channels in urkey see Nebahat okatl andYonca Boyac Eldener, Globalization and the Changing Political Economy o Distribution Chan-nels in urkey, Environment and Planning A, Vol. 34, No. 2, (2002), pp. 217-238.

5) Gl Berna zcan, Small Firms and Local Economic Development: Entrepreneurship in South-ern Europe and urkey (Aldershot: Avebury Press, 1995).

6) Te outlook o urkish cities, as in the developing world, did not resemble their counterpartsin advanced capitalist countries. A heated debate on the nature o Tird World cities stressed thenature o backwardness and the Tird Worlds dependency on the global industrial capital. urkishscholars argued that underdeveloped countries had a distorted and dependent urbanization, repletewith inormality and casual jobs. See, or example, lhan ekeli, Yiit Glksz and ark Okyay,Gecekondulu, Dolmulu, portal ehir(stanbul: Cem Yaynevi, 1976).


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7) In 1980, 60 per cent o the working population was employed in agriculture; this rate ellto 48 per cent in 2000 and urther declined to 26.8 per cent in 2006. With over 18 million peopleemployed in agriculture, urkey still has a large rural population compared to other European coun-tries. See rkiye Istatistik Enstits, retrieved 28 September 2010 rom http://www.tuik.gov.tr/Ver-iBilgi.do?tb_id=25&ust_id=8.

8) In the 1973 general elections, the Republican Peoples Party (CHP) won over 40 per cent ovotes in all major cities: Ankara (41%), Istanbul (49%), Izmir (44%). Overall, with a 33 per centshare o the total votes, the party was ahead o the centre right parties; the Justice Party- AP (29.8%)and the Democratic Party-DP (11.8%) while the Islamist National Salvation Party (MSP) obtained11.8 per cent, retrieved October 1, 2009, rom http://www.belgenet.net/ayrinti.php?yil_id=7.

9) Te APs share was 36.9 per cent and the MSP became the third with a signicant loss o votes,8.5 per cent. Te Republican Peoples Party increased its urban votes more than ten percent in allmajor cities: Ankara (51%), Istanbul (58.2%), Izmir (52.7%), retrieved October 1, 2009, rom http://www.belgenet.net/ayrinti.php?yil_id=7.

10) Te CHP proposed the village-town development projects (ky-kent projesi) and multiownership companies (ok ortakl irketler) aiming to utilize small savings and remittances oimmigrant workers. For an analysis o these projects, see Gl Berna zcan and Murat okgezen,rusted Markets: the Exchanges o Islamic Companies, Comparative Economic Studies, Vol. 48,No.1, (2006), pp.132-155; Gl Berna zcan and Murat okgezen, Limits to Alternative Formso Capitalisation: the Case o Anatolian Holding Companies, World Development, Vol. 31, No. 12,(2003), pp. 2061-2084.

11) zcans analysis o 216 SMEs in Denizli, Gaziantep and Kayseri at the beginning o the1990s illustrated a moderate spread o Islamic ideology but more powerul presence o anti-state andanti-establishment sentiments among the SME owners. See zcan, Small Firms and Local EconomicDevelopment: Entrepreneurship in Southern Europe and urkey.

12) See Seluk Uygur, Te Islamic Work Ethic and the Emergence o urkish SME Owner-managers,Journal of Business Ethics, Vol. 88, No. 1, (2009), pp. 211-225.

13) Gl Berna zcan, Local Economic Development, Decentralization and Consensus Build-ing in urkey, Progress in Planning, Vol. 54, No. 1, (2000), pp. 199-278.

14) Gl Berna zcan, A Critical Analysis o Decentralization and Local Economic Develop-ment: the urkish Case, Environment and Planning C: Government and Policy, Vol.24, No.1, (2006),

pp. 117 -138.15) Some scholars argue that Islam has long been part o the state ideology in urkey. For exam-

ple, Akel analyses the socio-psychological dimensions o political and ideological changes in thehistory o the Republic with what he calls the urkish-Islamic synthesis, see: Fethi Akel, KutsalMazlumluun Psikopatolojisi, oplum ve Bilim, No.70, (1996), pp.153-198.

16) Almost all o these holding companies were located in inner Anatolian towns such as Konya,Kayseri, Karaman and Krehir.

17) For example, see Rachel Sharon-Krespin, Fethullah Glens Grand Ambition, Middle EastQuarterly, (Winter, 2009), Vol. 16, No. 1, pp. 55-66; oktam Ate, Eser Karaka and lber Ortayl,Bar Kprleri: Dnyaya Alan rk Okullar (stanbul: Uuk Kitap, 2005).

18) MSAD is the urkish acronym or Independent Industrialists and Businessmens Associa-tion.

19) Tere has been numerous media reporting on these issues. A recent article by Oktay Eki inHrriyet, Bu Gemi Nereye Gidiyor summarizes the extent o corruption in government procure-ment. See Oktay Eki, Bu Gemi Nereye Gidiyor, Hrriyet, October 24, 2010. Te AK Party Hatay


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Deputy, Mr. Fuat Geen, who accused the Hatay branch o the AK Party corrupting local tenders,was swily dismissed rom the party. See reporting byrkish Daily News, June 7, 2006.

20) Rubi Abe, ransormation o Womens Consciousness & Te Role o the Media in Modernurkey, unpublished PhD dissertation, London School Economics, 2005.

21) Niler Gle, slamn Yeni Kamusal Yzleri (Istanbul: Metis, 1999).

22) Daily shoppers and businessmen travel to Gaziantep in two hours rom Aleppo. A majorshopping centre, Sanko Park, was established in Gaziantep to cater this trade. Interview with Fahret-tin Yac, the World Bank (January 10, 2010).

23) Large as well as small, all orms o urkish investors and traders are active in the region. TeEast and Southeast Industrialists and Businessmens Federation (DOGNSFED) anticipates thescope o trade volume with Iraq will reach 10 billion USD rom its 2010 rate o 6 billion USD in ew

years. See: Akn akn Kuzey Iraka gidiyorlar, Hrriyet, December 23, 2010.24) Te European Union o the Natural Gas Industry, Natural gas consumption in EU27,

urkey and Switzerland in 2008, retrieved January 21, 2010, rom http://www.eurogas.org/uploaded/09P142%20-%20Press%20release%20on%20Evolution%20o%20Gas%20Consump-tion%202008.pd.

25) urkish direct investments in Russia reached 6 billion USD by the end o 2007. uncayBabal, urkey at the Energy Crossroads urkey, Present and Past,Middle East Quarterly, Vol. 16,No. 2, (Spring, 2009), pp. 25-33.

26) Leventolu illustrates that ruling classes with similar economic conditions but dierent rateso mobility can make dierent choices with respect to regime type, see: Bahar Leventolu, Social

Mobility and Political ransitions, Journal of Teoretical Politics, Vol. 17, No. 4, (2005), pp. 465-496.

27) Yavuz argues that the Muslim bourgeoisie became democratized and opened up to the worldeconomy. However, he points out that, there are also the authoritarian temptations o Prime Min-ister Erdoan as he moves to replace Kemalism. See Yavuz, Secularism and Muslim Democracy inurkey (Cambridge: Cambridge University Press, 2009).

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