ECONOMIC DEVELOPMENTS IN TURKEY ACCORDING TO BRITISH ANNUAL REPORTS, 1980-1990

This article aims to reveal the economic developments occurring in Turkey between 1960 and 1970, as seen through the eyes of British diplomats. Its intended readership is non-specialists who want to understand more about Turkish economy in 1960s. As in any country, the transition from single-party rule to the practice of multi-party system was not an easy process in Turkey. In spite of their overwhelming victory in the 1950 general election, the leaders of the new Democrat Party still suspected, justifiably, that many of the senior bureaucrats and army officers would retain their historic loyalty to the People’s Republican Party (PRP) in opposition. Hence the increasingly strong measures that they took to try to curb their rival’s power and influence. For example, their proposal to establish a committee to investigate allegations that the PRP was engaging in subversive activities, a plan that was one of the major causes behind the anti-Democrat coup of 1960. Politics before 1950 were limited to a small elite within the bureaucracy, and even smaller number of entrepreneurs and businessmen, almost all mutually known. However, after the first open elections in 1950, Turkey’s politicians were forced to respond to a large national constituency and to find ways short of maximizing the distribution of resources and rewards of office on a much wider scale. An exaggerated importance is often attributed to the Democrats’ rhetorical support for free enterprise. However, the period during which they tried to adopt liberal economic policies was relatively short and, as early as 1954, they were already returning to more overtly statist measures, involving a reinforcement of bureaucratic control over a significant proportion of economic activity. The military coup of 1960 was clearly aimed at overthrowing an increasingly authoritarian Democrat Party government from power. Because this seemed to be the sole purpose of the military plotters, influential groups of intellectuals and officials took advantage of the situation to introduce their own programmes of reform. One of these was the effort to centralize previously erratic economic interventions within a new state planning organization with power to allocate cheap government credit and scarce foreign exchange. Such measures resulted both in a growth in administrative power and in the increase of interest groups with more pressing demands. They also helped to intensify a process of rapid economic and social change marked by an increase in industrialization, urbanization and labour migration abroad. The result was the creation of new classes, new relationships between interest groups and government and, at a national level, a new political and electoral geography. Despite the lack of structural economic reform, the Turkish economy in the 1960s grew at the expected target rate set by the State Planning Organisation (SPO). This constituted almost an industrial revolution and a take-off of a kind which few other Third World states had yet managed. The economic climate in the world economy was favourable. More importantly, Turkish workers in Europe began to send home large sums of foreign exchange which enabled the country to import capital goods and raw materials for its industry and maintain an equilibrium in the balance of payments. Unfortunately, the expansion of the economy was uneven and unhealthy in the long run. Production in agriculture and industry increased only 75% as fast as the planners had hoped, while growth in the construction and service sector. Moreover, the economy became overly dependent on foreign exchange sent by Turks working abroad, a source that was unpredictable and dependent on the boom in Europe. When the downturn came in the early 1970s, the consequences for Turkey were severe. However, by the end of 1960s, the character of Turkey’s economy and society had changed almost beyond recognition. Before the 1960s, Turkey had been predominantly agrarian with a small industrial sector dominated by the state. By the end of the decade, a substantial private industrial sector had emerged so much so that industry’s contribution to the GNP almost equalled that of agriculture.  However, there was still a long distance to be covered before Turkish economy could recover.