The January measures of 1980 could only really be pushed through if, initially, wage levels were held back. This was difficult. Half of the economy was controlled by the State, with monopolies of this and that, and the trade unions were powerful. There were subsidies for (some) agriculture, and there was elaborate protection for the Koç industrial dynasty, the head of which, old Vehbi, was very astute indeed. (He owed his origins to Ankara. As a small boy he had seen Armenians and Greeks going around on horses, whereas he had his donkey; he wondered how you got a horse. As he grew up, he got the franchise to sell refrigerators in the main square of the town, which had meanwhile become the capital. An oak forest was to grow from this acorn.) The Karabük works on the Black Sea, started with Soviet help and finished with British, produced indifferent steel with coal, from nearby Zonguldak, of atrocious quality, but everything was interlocking, and the system resisted liberalization on 24 January lines. Telling the workers not to have index-linked wages at a time of high inflation was very difficult indeed. Stopping strikes for a time was easy enough, as in Chile, but for how long? Initially all that happened was that the banks were freed from the restrictions hitherto prevailing. Gold was freed altogether; banks now kept four fifths of their hard-currency earnings instead of handing them to the State. It became legal to hold dollars (or Marks), and the Turkish currency was devalued, from 47 to 80 lire against the dollar; there were fourteen further devaluations up to May 1981, as the government did not bother with the exchange rate. This meant, for the banks, very easy money indeed, as you just shifted in and out of Turkish money as and when, making a huge profit if you happened to have warning that a devaluation was forthcoming. Interest rates were unnaturally high, in Turkish money, and inflation or Turkish paper-money creation tended to rise faster than the dollar. Given the world recession that continued until the turn of 1982-3, the liberalization in Turkey was not an easy matter, and the money that it generated, given the odd combination of liberalization and restriction, produced profiteers and Ponzi (pyramid) schemes. There was, in Turgut Özal, too much of the grasping provincial, and his (second) wife loved flashy jewellery; her sons were very badly spoilt. This was a Turkish (and Russian) peculiarity. In western Europe, money took four generations to move
Buddenbrooks
fashion from four-square local dealer via business corner-cuttings and divorces to neurasthenic aesthete. In Turkey, the dynasties mostly did it in two generations.
Özal’s own fingers were burnt, and he dropped out of politics for a while. Then, in time for the election of 1983, he returned (from a weight cure in the USA, where he fell to 13 stone, but no doubt also took time off to talk in Washington). Of all oddities he, standing with a permitted opposition party, ANAP or ‘Motherland’, now gained in popularity precisely because the generals, with their dummy parties, had had to bear the brunt of the blame for the liberalizing policies that Özal himself had introduced. Besides, the Americans regarded him as extremely useful. Their own interest was straightforward, the big base at İncirlik, on the edges of Iran, Iraq and Syria, with a network of listening posts and small garrisons stretching from Sinop on the Black Sea through Diyarbakır on the Tigris. When the Russians went into Afghanistan, the Americans found themselves in alliance with Islam, and, in Turkey, Özal had his links in that quarter (as indeed had Menderes before him, also, for much of the time, the Americans’ man). In 1983 there was an election, and ANAP swept in. Boom ensued. The gamble on exports was a success, as they doubled (to $6bn) between 1980 and 1986; for the first time, Turkey became a part of the world economy, selling manufactures rather than just raw materials. Money poured into Istanbul, especially, and the growth rate also doubled (to 7 per cent in industry).
But there was at the heart of it all a great problem. Özal’s regime was based mainly on relatively upstart Istanbul (or İzmir) money, and provincial Anatolia was also coming into the picture (places such as his own Malatya, and more especially Antep). The men who emerged in such places were generally pious, though in a rather lazy and not consistent way, and under the generals of 1980 Islam made much progress. It was helpful against Marxism, or at any rate might counter the role of so many Alevis, heretical and easily secularized, on the Left. In the seventies, the observation of Ramazan, the fasting month, when nothing - not a cigarette, not a drop even of water - had been supposed to pass the lips, sunrise to sunset, had not been much observed: how, in a hot month, in a proper job in a city, could that fail to turn people into murderous vegetables? Now, its observance grew. In the two decades after the 1980 coup Turkey became in some degree desecularized, and even in the very centre of Istanbul, the
ezan
, the five-times-a-day call to prayer, resounded, microphones turned up. In Galata the techno-music stopped somewhere around 3 a.m. and then, with dawn coming up over the Bosphorus, the first (from his accent, Kurdish)
muezzin
cleared his throat very audibly in the Ağa Cami near the Galata Tower, and charged full-tilt, followed by ten others, for a good hour. Of course, these things were not as intended by the military in 1980, and one of them, driven to distraction by the waking of his small child, finally shot a megaphone, but they had opened the door, to their subsequent regret.
One particular set of measures did considerable damage to the country’s public image. The generals had become enraged with the leadership of the universities. Decree 1402 after the coup allowed dismissals and there were some forty, who made a noise; beyond that, some 15,000 fled abroad, there to spread news of the Pinochets’ taking over of the country (ten or more years later, they were looking foolish, and many returned). The fact was that the universities had often become ungovernable, or at any rate were not controlled. Now, a Higher Education Council was set up, with strict control of appointments, and İhsan Doğramacı ran it. He set up the first of the private universities in what might be called the European space, Bilkent (it means ‘science park’). Doğramacı was an organizer of genius. He had studied the American system, because the old European (and Turkish) system had been failing. That failure was obvious, everywhere. The State took on too much, expanded the number of students, jerry-built horrible buildings; educational reforms meant that the students were less and less well-prepared (in England, spelling became a problem) and inflation then impoverished everyone and everything. The American system was better prepared to resist these developments, and Bilkent was stamped out of the ground as a private university. Doğramacı (originally a paediatrician, from a grand Ottoman-Iraqi family) took a long view. A university enriched its surroundings, such that people would want to live within the area, driving up property prices. He therefore took over some barren land south-west of Ankara (there were still wolves on the campus, ten years on), and developed a partnership with two banks and a construction company, Tepe Holding. The State gave the water and electricity (and grants for research, mainly scientific), and the companies’ profits went into the endowment. The other third of the income came from fees. As Istanbul and İzmir flourished in the middle and later eighties, parents were prepared to pay $10,000 in tuition fees provided their children got a decent education. That meant good English, and there was already a critical mass of Turks to adapt to that. The weight was on the natural sciences, and good connections opened up with the United States, but there were also schools for business and tourism, for which, again, parents were prepared to pay. As income was generated, the university could expand: the academics had very decent accommodation, and the professional classes of Ankara started moving to the housing that went up around Bilkent, complete with the services that their American equivalents would expect - a shopping mall (Real, complete with its Praktiker, a German do-it-yourself shop, and the British Marks and Spencer). Profits from it all went back into the university, which spiralled upwards. It spent more on its library than did ten British universities put together, and the internet connections were of international class. Since Bilkent was not bound by state regulations as regards salaries, it could afford to pay the academics decently, and a good half of the staff consisted either of Turks returning from the USA or of foreigners. Here was another upwards twist in the spiral: they needed a good English-language school, and the Bilkent School, again, became
the
prestige school in Ankara, taking over from the old Ankara College, where Denis Hills (and many other legendary men and women) had taught. Keeping all of this together involved a feat of organization and leadership, and İhsan Doğramacı’s son, Ali, who had taught engineering at first-class places in the USA for twenty years, could keep all the balls in the air. He took over the rectorship, had charisma and intuitional judgement, and, within twenty years, put Bilkent on the world’s map. It was an extraordinary performance. İhsan Doğramacı, who had been offered senior political roles and turned them down, instead worked at the very infrastructure of the country, a sort of counter-Gramsci. He braved extreme unpopularity, deserved well of the Republic, and received the best sort of flattery, in that there are now two dozen imitations of Bilkent in Turkey, and private universities all over the European area.
America in a Turkish mirror made for a contrast with Chile. In Chile there was a general in charge, and there were no elections for ten years while Chicago economists sorted things out. Then she experienced the end of history. Turkey did not, although there was a brave try. There, the army did not want formal power: no Pinochet. It was happier with professors of Political Science, and wanted figureheads. Turhan Feyzioğlu had thought that he would be indispensable to the generals, as an old, reliable republican alternative to the wayward Ecevit. There, he was wrong: this was a military coup with a big difference. This time round, the generals had thought things through; Turkey was the front line of front-line countries; it would not do for it to be run on non-democratic lines; there would have to be a democracy, the only one for a considerable number of miles to the east, north and south. Democracy generally meant Demirel, whom the military did not want at any price. They got Özal instead. In his way, he was a sort of South Korean politician, and this was an era when South Koreas shot into worldwide prominence, more interesting and productive than assorted European Legolands where a large part of the gross domestic product consisted of divorced men’s taxes, paying for other men’s divorced wives to have jobs as divorce counsellors, all paying VAT. He did not believe in the State, or at any rate not the Republican, Atatürk state. Özal was the IMF’s trusted man: he had served at the World Bank for two years, and worked closely with the Sabanci dynasty, where he understood directly the virtues of private enterprise (as distinct from state-dependent enterprise, the Sabancis being, on the whole, less dependent than other great enterprises) and the German government helped. As director of the employers’ union, he had been quite tough. Demirel had been his original patron, though as Özal rose the relationship became tense (in 1990 Özal put up a memorial to Menderes, and Demirel, who regarded himself as rather more successful, was put out; he brought back the bones of Enver Pasha from Kirghizia as a come-back, the Democrats being children of the Young Turks).
Özal won in 1983 because he had outmanoeuvred the generals. They took the blame for the 24 January measures, and the Özal party, ANAP, counted as opposition. His reign was very Second Empire, even to the point where, at its end,
horizontales
arrived from the Soviet Union in battalions (and caused such havoc among traditional religious marriages on the Black Sea coast that a law was passed against adultery: like the Atatürk hat law, it was a declaration of intent, much criticized by humourless people). Money showered, old quarters of Istanbul were bulldozed for motorways to take fancy motor cars, and there were always the
tarikat
connections to make hand wash hand in Anatolia (in Özal’s case, the Nakshibendi, who were quite open: his main Kurdish ally, Kâmran İnan, was one of their leaders, a Sheikh, with a Lausanne degree in law and a Swiss wife). Islam in Turkey was not at all dissimilar from Catholicism in Italy, and this had long, long origins. Even in mid-Byzantine times, Anna Comnena had divided the Anatolians into Greeks, barbarians and semi-barbarians, meaning the Turks. Özal was a very clever man, sitting on his exercise bike (it failed: he was huge) and zapping CNN, driving a BMW at absurd speeds, taking parades in a baseball cap and telling the generals to turn up to lunch. He was a far more interesting man than the wooden Pinochet, and moved his country forward in an extremely interesting direction. But he failed. The problem goes back to 1986, the return of inflation. Özal gave up, and was diverted, like Margaret Thatcher, into foreign policy, an entertainment not vouchsafed to Pinochet, who could get on with the job.
Özal’s government did remarkably well in the first period, with a cabinet largely made up of American doctorates and engineers (the chief Treasury minister, Kaya Erdem, clearly knew his business). Currency liberalization had to be pushed through the hostile bureaucracy; its style had been to present 13,000 pages, now reduced to fifteen; it retained valuable property - large offices, summer houses, shares, gold,
etc.
Inflation fell back - roughly to 30 per cent - as protection came down (only 200 items being banned for import; by 1988 thirty-three needed approval, and after 1984 only three were entirely prohibited). Tariffs, wharf charges, VAT had meant that the real rate of protection stood at around 60 per cent (c.i.f.) and it had often changed. Motor cars had incurred duty of 112 per cent in 1980, 145 per cent in 1986, 74 per cent 1989. Exporters’ tax rebates were accelerated, and after 1980 they were allowed to retain $40,000 and then more (earlier there had been compulsory clearing at the central bank, to pay for imports). The exchange rate itself was unified, as against the variable earlier rates, and income tax, hitherto the largest item on the revenue side, was cut from 40 to 25 per cent, and on companies to under 50 per cent, while VAT was raised at 10 per cent. Up to $3,000 could be bought per person, without restriction. Later, this was altogether freed. By 1987 income tax contributed only a quarter of income, indirect taxes one third. Parts of the country began to flourish, particularly the ultra-Western areas - Istanbul and the north-west, İzmir, some places on the south coast; there was a shift in trade towards Europe, and a growth of part-manufacture, particularly for Germany. By any index, Turkish prosperity was growing. One sign was the freedom to travel - people could now move more than once every three years, though a hundred-dollar tax remained until 1996.