IBRAHIM – ‘Extractive’ government

‘Extractive’ governmentThe most recent clash between the high-flying resident of the new presidential palace and an elite businessmenand#39s club is yet another sign of the Justice and Development Party (AK Party) governmentand#39s disengagement from the economy.I am aware of the apparent fallacy, but talking about a battle of words in which the president was first a part and then reaching a conclusion involving the government is not my fault.

They have deliberately erased the line, which, in every healthy democracy, must clearly separate the presidency from the executive and responsible prime ministry.Turkish Industrialists and Businessmenand#39s Association (TuSIAD)hairman Haluk Diner told a reporter with the Hurriyet daily last week that the business organization has sweetened formerly sour relations with President Recep Tayyip ErdoIan, but that since he ascended to the presidency, they no longer need to communicate with himThe head of the government, Prime Minister Ahmet DavutoIlu, is naturally who TuSIAD will speak with to convey their proposals and suggestions, said DinerErdoIan, who assumes he is the unquestionable controller of all the human-made elements of the political system, lashed out at Dinerand#39s remarks and is vexed with them again.

He said he will no longer accept their invitations. I donand#39t think TuSIAD members are depressed about this.

It didnand#39t take DavutoIlu long to position himself against TuSIAD. Like his boss, he also decided not to attend the organizationand#39s meetings.

It was hard for mere mortals like us to understand the meaning of this reaction. He was upset about being called the man responsible for the governmentand#39s handling of the businessmenand#39s demands.

The government media and loyalists of ErdoIan were swift to side against TuSIAD. Columnists who for some reason believe that ErdoIan is infallible said it was a matter of time for TuSIAD to be labeled andldquoparallel,andrdquo a government term to stigmatize the faith-based Hizmet movement.

The Civilian Solidarity Platform, which includes a number of nongovernmental organizations that deem the government their supreme benefactor, said TuSIAD was andldquoextremely rudeandrdquo for failing to show unwavering respect for the first popularly elected president.The Turkish Confederation of Businessmen and Industrialists (TUSKON) has already been blacklisted, literally.

Its members face red-tape hurdles — even to engage in export trade — and they are often denied licenses and caught up in incessant investigations.ErdoIan spoke at a Turkish Union of Chambers and Commodity Exchanges (TOBB) meeting on Dec.

12 at his palace to an audience that was nearly one-third guards and other civilian and uniformed security staff. The main theme of his speech there featured wrongdoers in business and politics, and the andldquoneutralandrdquo president did not hold back from lashing out even at the opposition parties for their stances.

With such a divisive approach, will this government, which is under ErdoIanand#39s direct influence, be able to stir and guide the private sector properly out of the systemic and conjectural problems the economy suffers from now? This is a rhetorical question. Its answer is obvious.

The government has recently announced ambitious plans to transform the economy. With only six months to go until the next elections, this government never even stood a chance of achieving its goals, and the loss of confidence will only exacerbate the situation for it.

For the next year, the government plans to reach a 4 percent annual growth rate of gross domestic product (GDP). The engine of this growth will be private-sector investments and domestic demand, they think.

Letand#39s assume for a moment that everything will be fine abroad. The Fed will not raise its interest rates.

Russia will thwart the sanctions and will continue to thrive. The Chinese economy will regain its impetus.

Syria will turn into a garden of thorn-free roses and the Islamic State in Iraq and the Levant (ISIL) will terminate itself and surrender to the Iraqi authorities to confront the consequences of their cruelty.Even under these conditions, this governmentand#39s promises will not do the trick, as the private sector will approach it with suspicion.

Economists Daron AcemoIlu and James Robinson argued in their 2012 book andldquoWhy Nations Failandrdquo that the identity of a political institution that determines economic institutions plays a key role in the success of a nation. andldquoExtractiveandrdquo institutions, in which a small group of individuals exploit others, are harbingers of the doom of a nation, whereas andldquoinclusiveandrdquo institutions, in which as many people as possible are included in the governing processes, help a nation to prosper, they claimThe state mechanism in Turkey is undoubtedly becoming more extractive under ErdoIan and the AK Party, and the possible consequences of such a character shift are axiomatic.

SOURCE: Today’s Zaman