In the 1990s, the Society of Independent Entrepreneurs (MUSIAD) was established in Istanbul as a counterbalance to the Society of Turkish Industrialists and Businessmen (TUSIAD) established in 1971. The first is characterized by experts as the most authoritative organization in Turkey, representing the interests of big business and focused primarily on the liberal economy of the Western type and cooperation with Western capital. The second can be considered an alternative to the TYUSIAD, which was created by the Islamic business that has grown stronger in ^the country1 . The name itself suggests an answer to the question, from whom are the entrepreneurs who created MUSIAD independent? Obviously, we are talking about independence from Western civilizational and economic principles, which are traditionally guided by the state and members of the UNIVERSIADE. However, since Turkey is a secular state, whose constitution does not allow the use of fundamental rights and freedoms in order to create a threat to the existence of the Turkish state, and the unconditional observance of this principle is strictly controlled by the country's generals, the very definition of the concept of the Society of Independent Entrepreneurs is extremely correct and devoid of blatant opposition.

The section of the MUSIAD website entitled "Our Identity" states that this society was created ."..with a view to transforming Turkey into a country consolidated from within, with regional influence and international prestige, guided by truth and legitimate rights, justice and equality, peace and security, and where the national and global values on which its history is based can be protected and respected." 2 Some questions may arise only in connection with the principles that, according to the founders of this society, should become the basis for the internal consolidation of Turkey. In addition, the final phrase of the mentioned document, which emphasizes the importance of national values, however, along with universal values, causes some concern.

Significant nuances in the presentation of the objectives of the MUSIAD are revealed only when compared with the activities of the MUSIAD. As stated on the website of the latter organization, it is "to develop in Turkey, which is a state based on the principles of democracy and respect for human rights, respects the freedom of entrepreneurship, faith and thought, and in which the power structures are effective due to their focus on the fundamental (basic) tasks of the public structure," ...true to the principles and goals of modern civilization proclaimed by Ataturk." The mission of the TUSIAD is also "... to help establish the concept of a democratic civil society and a secular State governed by the rule of law" ^.3

Thus, although national values are mentioned among the principles on which the activities of the MUSIAD are based, the Ataturk principles, including the principle of secularism, which are particularly emphasized in the program documents of the MUSIAD, are ignored.

It should be noted that while the program statements of the MUSIAD emphasize the importance of" Turkey's international integration", the MUSIAD seeks to turn Turkey into" a stronger and more respected state in the international arena", which indicates a certain difference in views on the problem of openness of the national economy.

STRATEGIC GOALS

The differences in the goals of the two organizations are very significant. ⁴ The TIUCIAD sees them in communicating to the Parliament, the Government, foreign heads of state, international organizations, etc. its point of view on how to solve such common problems as creating the legal and organizational foundations of a market economy, increasing the competitiveness of Turkish industry, and efficiency in using the country's human and natural resources.

The objectives of the MUSIADS are limited to specific enterprises and entrepreneurs, while at the same time determining the ways to achieve them. Thus, in order to develop the human factor, it is proposed to provide assistance in improving the qualification skills of employers and employees. Another goal is to provide the necessary assistance to enterprises, especially small and medium-sized enterprises, to improve their operations, as well as to approach international quality standards through improved management and more efficient use of key factors of production. In order to develop individual industries, it is proposed to provide support in the study of domestic and foreign markets, to establish more efficient channels of commodity exchange between producers, on the one hand, and sellers and consumers, on the other. The final goal is to contribute to the achievement of social, cultural, political and economic objectives of the country, in addition to those achieved at the individual and enterprise level. A similar statement is contained in the section "Our Identity", where MUSIAD is positioned as a platform for cooperation and solidarity, open for dialogue and striving to contribute to the social, cultural, political, economic, scientific and technological development of individuals and organizations, the nation and society, the region and the world as a whole.

Different goals determine a very significant difference in the strategy of the two companies ' activities.

page 50

organizations: if the MUSIAD philosophy presupposes a movement through the satisfaction of the needs of the individual and the enterprise, but without the direct participation of the state, to achieve national interests, then the MUSIAD considers the state as the starting point of the movement, more precisely, its activities aimed at satisfying the interests of entrepreneurs.

In other words, TYUSIAD sees itself as a tool that ensures the use of the state in the interests of big business. The opposition of MUSIADS is manifested in a certain degree of autonomy in relation to the state, as well as in the fact that its activity is addressed to entrepreneurs and production, which, obviously, should replace the state support that is absent or unsatisfactory in its quantitative or qualitative parameters in the part that is addressed to small and medium-sized businesses. At the same time, the activities of MUSIADS serve the interests of the state, but they are understood in a broad sense of the word, that is, they are not identified with those who exercise public administration. In other words, the pro-Islamic attitude of the MUSIAD as an organization of small and medium-sized businesses is a form of opposition to the officially secular state, which lobbies the interests of mainly large entrepreneurs.

MUSIAD, which unites about three thousand members, has established 30 branches over the ten-year period of its activity. For comparison, we note that TYUSIAD has only four hundred members, but the member firms of this organization control about 40 percent of Turkey's exports, and their enterprises employ 350 thousand people. In other words, TYUSIAD brings together representatives of the largest Turkish businesses. The Supreme Council of this organization was headed at various times by such legendary figures for Turkish business as Wehbi Koc, Nejat Ejzajibashi, Sakip Sabanji, Rahmi Koc.

One of the most important activities of the MUSIAD is the implementation and publication of research results on the most pressing problems of the regions and sectors of the Turkish economy, as well as on general economic and social problems of the country. Along with the research topics that are quite typical for modern Turkey, there are separate ones that stand out for their specifics.

So, in 1994, the study "Muslim in business life" was published, and in 1998-the study "Our place in the state administration". MUSIAD publishes a series of so - called "pocket brochures" containing brief operational information on various aspects of business activities. For example, over the past three years, the pamphlets "Eximbank Credit Support Programs", "Russian Economy and Opportunities for Turkish entrepreneurs in the Russian market", "State Investment Support System", "Privileges and Incentives for Small and Medium-sized Enterprises"have been published.

In addition, MUSIAD publishes periodicals: MUSIAD Bulletin, Chercheve magazine ("Fundamentals of Legislation") and some others. The Company organizes business trips abroad for its members with the aim of developing exports and establishing trade relations with foreign firms.

The MUSIAD Commission on Foreign Relations studies the markets of other countries in order to identify their potential for developing foreign trade relations with Turkey and publishes the results of research. The advantage of these publications is that they not only contain general information about the industrial potential of a particular country, its trade legislation and transport system; they also indicate the coordinates of contact persons and organizations in this country that can be contacted by members of the MUSIAD. When conducting such studies, this commission seems to be guided by certain geographical preferences, although they are not explicit. Thus, the relevant studies were conducted for the markets of Uzbekistan, Kazakhstan, Azerbaijan, Egypt, Sudan, Pakistan, Iran, Saudi Arabia, Jordan, Bosnia and Herzegovina, the United Arab Emirates, Albania, Libya, Morocco and Tunisia. The markets of non-Muslim countries were also studied, although they are noticeably smaller: Argentina, Brazil, the countries of the Far East, the USA, Austria, and Hungary.

MUSIAD helps its members take part in general or specialized trade exhibitions both at home and abroad. Representatives of the company participate in international business forums held annually in the country since 1995. The second, third and fourth forums were held in Istanbul, and MUSIAD was one of the organizers. MUSIAD also organizes its own international exhibitions, seeking to establish closer contacts between the organization's members, develop business cooperation and expand their international relations. Such exhibitions are held in Turkey (three were held in Izmir and five in Istanbul), and firms from abroad also take part in them. In total, about 200 foreign companies demonstrated their achievements at eight exhibitions.

The MUSIAD consists of 10 industry committees and 10 commissions. Their mission is " ... to promote solidarity and trade between entrepreneurs in various industries and members of the MUSIAD." In addition to the already mentioned commission on external relations, these are the commissions on trade, education, research and others. A special place is occupied by the Commission on education: its tasks include improving the professional skills of members of the MUSIAD in such areas as modern management methods and their application in various industries. For this purpose, regular seminars on professional management, administration methods, and organization of domestic and foreign trade are held in all departments of the MUSIAD.

TUSIAD defines its main areas of activity as follows: to increase Turkey's competitiveness by developing effective interaction with professional and business associations; to support export promotion policies in order to deepen integration with the world market and ensure balanced growth at a high rate; to communicate the opinions and proposals of representatives of the business world to the relevant institutions, taking into account the prospects for Turkey's accession to the European Union. in Turkey and abroad; to bring the opinions and suggestions of the country's businessmen to decision-making authorities; to promote the expansion of contacts between Turkish entrepreneurs and government agencies at various levels.

TYUSIAD is also engaged in publishing activities: it prepares annual reviews of the development of the Turkish economy, conducts various seminars and symposia, although this area of its work is considered less important.

page 51

MORE FREQUENT CRISES AND RECESSIONS

In turn, MUSIAD also makes attempts to promote its vision of ways to develop the country's economy. The oppositional nature of the MUSIADS is evident in the fact that annual reviews of economic development are maintained in the spirit of correct criticism and necessarily contain proposals for adjusting the economic course. It is characteristic that they are addressed, unlike the TYUSIADS, not to the government, but rather to a broad opposition-minded public, dissatisfied with the policy of the authorities and ready to support alternative models of economic development.

Thus, a number of critical comments and suggestions are contained in the economic review "Turkish Economy 2002: estimates of 2001, expectations for 2002. ⁵ This review notes the following. First, the dynamics of economic growth signals a noticeable reduction in the duration of the economic cycle, which indicates the structural weakness of the national economy, as well as that this "degenerative" structure is close to exhausting its viability. Second, politicians tried to attribute responsibility for the crisis that broke out in the country's economy in early 2001 to the Central Bank and Treasury, although in reality the responsibility for the inefficiency of economic policies lies not so much with technocrat bureaucrats as with the government. Third, the failure of the previous stabilization measures made it almost inevitable that the "Program for Building a Strong Turkish Economy", which was adopted in April 2001, would fail. Fourth, the concept of a primary budget surplus adopted in the country means that the state budget is almost completely subordinated to the goal of servicing the state debt, since spending on social needs, wages and state investments has inevitably been reduced. Fifth, the economy was managed under a mechanism imposed by the IMF, while the national Government demonstrated economic and political failure. Sixth, the continued pressure of the state on the financial sector, macroeconomic instability, the introduction of additional taxes, high prices for raw materials, consumables and electricity compared to world prices, as well as numerous bureaucratic obstacles imposed on investors, led to the flight of national capital abroad.

Having rather critically assessed the situation in the Turkish economy at the beginning of 2002, MUSIAD also proposed a number of measures to correct the current situation, which were divided into short-term and long-term ones. As a short-term model, it was proposed to try out the following: immediately reduce additional taxes on the producer; implement the necessary amounts of money issuance in order to eliminate the liquidity deficit and reduce the volume of domestic loans. The MUSIAD experts believed that the additional money supply entering the banking system would increase consumption and investment in a short time. As a result, the interest rate will decrease, and bank funds will rush to the market in the form of investment and consumer loans ^.7

However, the model proposed by the MUSIAD experts also has weaknesses. First, the bet was made both on the fact that the dollar exchange rate will not rise, and on the fact that if it rises, it will prevent the growth of imports. Moreover, in terms of time, both trends are practically not divorced. Secondly, it was quite wrong to assume that the trend characteristic of the current situation, i.e. low import volumes with negative economic growth rates, would also continue in the context of economic recovery. Hopes for curbing the demand for foreign currency in the context of a reviving economy and expanding the money supply in Turkish liras are likely to be disappointed.

DOMESTIC DEBT ISSUES

In the analyzed work - "Turkish economy 2002: estimates of 2001; expectations for 2002" - it was emphasized that interest payments on public debt are the main problem of the country. The mechanism of domestic loans operated in the 1990s in such a way that it ensured the transfer of funds from the real sectors of the economy to the banking sector. The vicious circle of ever-increasing loans has squeezed not only the public sector, but also the Turkish economy as a whole.

It was proposed to solve the problem of domestic debt by monetarizing about a fourth of it. The remaining part - three quarters of the national debt-was proposed to be converted into foreign currency bonds with an indexed income and a maturity of three to seven years. Again, many people believed that the additional mass of money launched into the circulation channels, reviving the economy, at the same time would not lead to currency speculation in the face of a decrease in demand for foreign currency.

Thus, MUSIAD, refuting objective economic laws, suggests making a monetary issue, but believes that the subsequent, inevitable depreciation of the Turkish lira will not follow.

On the other hand, in the framework of the model proposed by MUSIAD, the consolidation of domestic debt at the expense of the resources of the national economy calls into question the possibility of economic growth. The model promises to earn money only if monetarization volumes are much higher than the MUSIAD experts suggested, but then it is not possible to talk about maintaining the lira's exchange rate.

MUSIAD's approach to solving the problem of the chronic state budget deficit was based on the assumption that by eliminating the need to bear the cost of servicing the national debt in the next few years, it would be possible to make the budget more balanced. The Government, however, refrained from taking the decisive steps proposed by the MUSIAD to solve the problem of public debt, and in 2001 was forced to find sources of deficit financing. Under the agreement signed with the IMF, 12 trillion liras were supposed to be received from external sources, and three trillion liras were supposed to be borrowed from the domestic market, which made it possible to cover the budget deficit and at the same time pay off the domestic debt in the amount of 5.3 trillion liras ahead of schedule ^.9 Thus, according to MUSIAD experts, the Treasury repaid internal debt, replacing it with external debt. Therefore, financial stability has become dependent on financial support from the IMF. This meant that the "stability" achieved in this way significantly restricted the Government's freedom to make decisions in the national interest, especially in the foreign policy sphere. But also the scheme

page 52

MUSIAD on solving the national debt problem is extremely vulnerable: abandoning the use of external sources of financing and consolidating public debt at the expense of domestic resources means delaying the resumption of economic growth for at least several years.

The declarations of MUSIADS in the tax sphere are openly propagandistic and populist in nature. "The responsibility for the incapacity of the government should not fall on the people and entrepreneurs," the MUSIAD10 experts said . But no national economy, regardless of its declared social orientation, has yet managed to find other resources to compensate for mistakes and losses incurred than tax increases. However, MUSIAD, in anticipation of the consumer boom, required a significant reduction in value-added tax and its collection at two rates (5 and 15 percent, depending on the product category). Easing the tax burden is possible in principle, although this measure would definitely be more populist than objectively economic in nature.

The problems in the country's financial sector are characterized by the following statistics:between 1995 and 1999, the country's GNP grew by 36.7 percent, while domestic debt increased by 169.5 percent over ^the same time period11. Under these circumstances, the banking sector has generally lost interest in the quality of management of its funds. According to the authors of the study, banks should not be an integrated part of corporate holdings, for which it would be necessary to introduce limits on the permissible equity participation in their capital of influential persons, mass media, etc. The MUSIAD experts recommended encouraging bank consolidation, which would ensure a qualitative improvement in the structure of bank assets. This item of the program, reflecting the problems of the financial sector, practically does not differ in content from the government's plans to restructure the banking sector; MUSIAD experts opposed the transfer of banks in a difficult financial situation to the state Deposit Insurance Fund. In their opinion, to strengthen these banks, it was necessary to use funds not from the state, but from the interbank insurance fund, which the banks themselves should establish. This paragraph reflects the fundamental disagreement of MUSIAD with the state economic policy as a policy of lobbying the interests of large industrial and financial capital, which, in turn, is considered by MUSIAD as a fundamental principle of state activity.

MUSIAD experts expressed their position on privatization in a categorical form: "Turkey should get rid of state-owned enterprises as soon as possible." In other words, MUSIAD stands in solidarity with the government. However, the Company believes that when privatizing large companies, it is necessary to act cautiously, not to allow their sale below the real value. Moreover, it is impossible to receive foreign loans in exchange for ownership of privatized enterprises.

FIGHTING INFLATION

Turkey has developed a strong inflation lobby over the past 25 years. As an element of the fight against inflation, it was proposed to carry out the denomination of the Turkish lira, depriving it of six zeros. As a result, it was supposed to start anew the financial history of the country, and use the new money printed, including to finance part of the national debt.

Thus, the economic measures proposed by MUSIAD, in the part where they clearly contradict the policy pursued by the government of B. Ecevit, were not so much a real alternative, but rather testified to the economic shortsightedness of the authors and insufficient consideration of causal relationships.

In one of the points of their program, the MUSIAD experts raised the question of forming a new government of the country that would enjoy the confidence of society. That is why they supported the holding of early parliamentary elections in November 2002. In addition, they argued that it was necessary to limit the powers of the IMF and the bureaucracy in managing the economy.

Such an approach found a broad positive response in Turkish society, as it gave hope that the economic situation would improve rapidly with the change of power. Nevertheless, the so-called "alternative" economic program of the MUSIAD shows the objective nature of Turkey's economic problems: the years when public spending was clearly excessive must inevitably be paid for by the subsequent increase in financial problems, financial crises and a slowdown in economic growth. Only external assistance can alleviate the difficulties of financial stabilization. Attempts to solve these problems at the expense of the national economy's resources are fraught with a prolonged recession. This is a poor choice of scenarios for the country's economic development, and it cannot be multiplied by the efforts of the opposition - we can only talk about the implementation of specific details of economic policy.

As you know, in the wake of widespread dissatisfaction with the difficult economic situation, the pro-Islamic Justice and Development Party came to power in the country, whose program has many "points of coincidence" with the proposals of the MUSIADS in the economic sphere. However, the steps taken by the new government indicate that it intends to pursue a policy of continuity of economic policy in close connection with the Program of building a strong Turkish economy and therefore recognizes many of the programs expressed earlier.

Thus, the role of MUSIAD as an organization of Islamic business can be recognized with great caution as positive only in terms of supporting small and medium-sized businesses. At the same time, its claims to offer alternative Western concepts for the development of the national economy can hardly be considered sound.

^{Kireev N. G.} 1 Turkish business elite on Turkish-Russian relations. - Middle East and modernity. Collection of articles. Issue 9. Moscow, 2000, p. 70.

² www.musiad.gov.tr.

³ www.tusiad.org.tr.

⁴ Further analysis was carried out on the basis of comparisons of the relevant sections of Internet sites that inform about the activities of MUSIADS and TYUSIADS.

⁵ МЬSЭАD Araetarma raporlara: 39.Turkiye Ekonomisi 2002. 2001 yyly deger-lendirmesi. 2002 yyly beklentileri. 3st., 2002.

⁶ Ibid., pp. 17, 85.

⁷ Ibid., p. 77.

⁸ DPT. Temel ekonomik gostergeler. Ocak 2002. Ankara, 2002, C.I 1, 54.

⁹ MUSYAD Araptirma raporlary: 39. Turkiye Ekonomisi 2002..., c. 81.

¹⁰ Ibid., p. 83.

¹¹ Ibid., p. 85.

Permanent link to this publication: