Gov’t pressure on businesses spreading across Turkey, warns union

Several months worth of government hostility and pressure against some of Turkey’s leading private firms is now taking its toll on a large number of companies all across Turkey, a leading business confederation said on Monday.

Turkish Confederation of Businessmen and Industrialists (TUSKON) Chairman Rızanur Meral said in Bursa that the government is now imposing “countrywide pressure” on businesspeople who have adopted a critical stance against the government, especially following its mishandling of a corruption scandal that erupted on Dec. 17. Meral was addressing a business summit that brought businesspeople from the Turkish and the West African markets together in Bursa on Monday.

Prime Minister Recep Tayyip Erdogan responded to the corruption inquiry, which has implicated his family and close friends, by purging thousands of police officers and reassigning hundreds of prosecutors and judges. After the local March 30 elections, Erdogan said his critics — whom he accused of trying to topple his government — will “pay for their treachery.”

“A systematic government campaign to suppress and intimidate private businesses across Turkey is currently underway. …The entire market has been placed under heavy pressure by the government and we hope that this won’t [go on for] too long [or it will] hurt the whole economy,” Meral said.

He said Erdogan’s continuing threats against a wide range of business groups put Turkish markets at a risk of being undermined in terms of their appeal as a safe haven where local and foreign investors can park their cash. Erdogan’s ruling Justice and Development Party (AK Party) won by roughly 44 percent of the votes; however his continuing harsh rhetoric has shaken investor confidence in Turkey’s markets, economic observers warn.

Such top business groups as the Turkish Industrialists and Businessmen’s Association (TUSİAD) have repeatedly warned that Turkey is at risk of losing foreign investments so long as the government continues to show a lack of respect for the rule of law and European Union legal codes. Others have said most foreign investors in Turkey have been discouraged from embarking on new projects, seeing as how the government is pressuring local firms.

The government’s use of its political power to silence political dissent is not new and not confined to certain business groups. During the countrywide Gezi park protests last summer, Erdogan openly criticized such prominent firms as Koç Holding, a TUSİAD member, for allegedly providing support to the anti-government protests. Koç subsidiaries have suffered tax fines following some audits through the end of 2013.

TUSKON is close to Turkey’s largest Islamic group the Hizmet movement. Erdogan alleges that the Hizmet movement is working to undermine his political power, but he has provided no sound evidence to prove his claim. The Hizmet movement has so far dismissed all claims against it by Erdogan and in the pro-government media, saying that they are “baseless.” Erdogan has threatened to make companies critical of the government “pay.”

One of the government methods to punish companies critical of its policies is cancelling key tenders that these firms have earlier won. The pressure on companies from some sectors, especially the construction sector, is so great that they don’t even want to discuss it, market observers earlier said. In separate examples of government pressure, different company and business union representatives previously said that some district governors forced TUSKON members to quit the association and become members of pro-government associations. A nongovernmental and nonprofit umbrella organization for seven business federations, TUSKON has 211 business associations and more than 55,000 entrepreneurs from all over the country amongst its members. Meral said businessmen who wish to obtain loans from a state bank are categorically asked if they are a member of TUSKON.

“We have to put an end to this pressure that is exacerbated by lingering political uncertainty. …An early general elections is an option,” Meral said. Turkey is scheduled to hold general elections in June 2015. Erdogan recently dismissed claims of an early election this summer.

‘Mutual trade with West Africa can hit $5 bln’

Regarding business relations with African markets, Meral said TUSKON has worked hard to boost mutual trade and investments between Turkey and this continent over the past decade.

TUSKON is the most effective business group representing Turkey abroad.

The confederation has ramped up efforts in cementing business ties with African markets, Meral said, adding that 200 business delegates from TUSKON have visited different African countries and 2,000 African companies participate in fairs and trade events in Turkey each year. Turkey exports goods worth $600 million to West African markets and buys goods worth $200 million from these countries per year. Meral says the mutual trade volume can easily be boosted to $5 billion from its current $800 million “with the right strategies in place.”

About 100 businesspeople from different sectors in West Africa participated in Monday’s “Turkey-West Africa Trade Bridge” summit in Bursa. The African company representatives are scheduled to visit counterparts in Bursa and sign some trade and investment contracts this week.

TUSKON has organized 19 World Trade Bridges — summits that bring companies from all around the globe together in Turkey — between 2006 and 2013. Around 70,000 businessmen from Turkey and all around the world have had a chance to come together to establish connections at these events.

With four foreign representation offices — in Brussels, Washington, Moscow and Beijing — and partner organizations in a further 140 different countries, the confederation now boasts the strongest domestic and international business network in Turkey.