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Analysts in Europe, the US and Turkey have focused on how the latest victory of Recep Tayyip Erdoğan in the presidential elections and the victory of the Adalet ve Kalkınma Partisi (AKP) in the parliamentary elections (alongside its ultranationalist and racist political allies, the Milliyetçi Hareket Partisi – MHP) is driving the Turkish state institutions towards a more authoritarian and opaque system, through the increase of political repression, political control of media, and the opacity of the electoral system.

The 24th of June electoral results complete the political project Erdoğan had started designing in 2007, when a referendum was passed to elect the Turkish president by popular vote instead of being elected by the parliament. This system brought him first to the Turkish presidency in 2014, and finally, after winning a referendum for the implementation of a presidential system in 2017, Erdoğan has now been elected president of the new presidential system.

This new system based on the persona of Erdoğan is legitimising the legal manipulation of government institutions for public projects, mainly focused on the infrastructure and construction sectors, through the manipulation of public procurement laws. These institutions and laws have been a key factor to sustain Erdoğan in power and the implementation of the new presidential system only increases the direct control of the president over these informal tools for resource distribution among his loyal businessmen and individuals.

Ultimately, the instauration of this new system institutionalises a hermetic capitalist system where only Erdoğan-linked businessmen can win, reducing competitiveness, and where corruption is likely to be the main informal tool for securing prosperous investments in Turkey.

 Montesquieu’s Nightmare

The massive empowerment of Erdoğan as President of Turkey is legitimised (by his supporters) by the idea that, under this new system, decision-making is going to be faster, reducing barriers between the people’s needs and the President’s actions. Behind this populist justification, the newly elected President Erdoğan has and will legally accumulate powers that make of him the main decision-maker in the executive, legislative and judiciary powers.

Within the new legal framework, the Turkish President absorbs the powers of the figure of the Prime Minister, which is automatically abolished, making of the President the head of the state and of the executive. Moreover, the new President is now the only figure entitled to appoint members of the cabinet of ministers, besides being the only figure to appoint civil servants, governors, and officials of the AKP (James in Turkey, 12.12.2016).[1]

According to Esra Çeviker, the parliamentary institution in charge of preparing the national budget, the General Directorate of Budget and Fiscal Control, will be directly linked to the presidency. According to these sources Erdoğan will become the “president of all expenditures of the state”.

Progressively, the Grand National Assembly (Turkish Parliament) is stripped of most of its oversight tools, as even if the state of emergency in Turkey is lifted, the President could still rule by decree, bypassing the Parliament. Furthermore, this representative house has few effective mechanisms to investigate or topple the president (American Progress, 22.03.2017).[2]

Moreover, in the case of the judiciary power, the Turkish President is again the most influential actor, as with the new system under way, Erdoğan will appoint two-thirds of the most senior judges in Turkey. The rest will be appointed by the Parliament, where the government coalition (MHP+AKP) controls 344 of the 600 seats (James in Turkey, 12.12.2016).[3]

Government Investment in Hands of the President

This new political context leaves a scenario where the president has little oversight from other institutions, as this figure can now control most of the legislative and judiciary powers. With almost non-existent checks and balances in the Turkish political system, the President can legally use institutions that in the past have already been informally manipulated for political interests of the Turkish ruling elite, allegedly incurring in corruption and criminal practices.

There are three main government tools that have been used for redistributing public contracts among Erdoğan-linked businessmen. These mechanisms have allegedly been: the Housing Development Administration Fund (TOKİ – Toplu Konut İdaresi Başkanlığı), the Public Procurement Authority (PPA), and the Saving Deposit Insurance Fund (TMSF) (Shadow Governance Intel, 22.06.2017).[4]

The legal condition of these institutions under the new presidential system is still not clear as the correspondent laws have not yet been published (Cumhuriyet, 02.07.2018).[5]

Despite this current legal uncertainty, is likely that most of the institutions that depended on the PM’s office will now be under direct control of the President. In the case of TOKİ, it is likely to fall either under a new ministry (controlled by an Erdoğan-loyalist) or it will be linked to one of the vice-presidents, which will be again directly appointed by Erdoğan.

In relation to the PPA and the TMSF, these institutions have been independent of the government by law, and have never been under the control of a government office. Now, and according to consulted specialized sources, the new system empowers the President to directly appoint the boards and directors of several regulatory agencies, among them the TMSF.

In the case of the PPA, its authority for autonomous intervention on public procurement projects was already minimized before these latest elections, and therefore, its role is unlikely to be altered under the new system.

All these institutions have previously been legally and politically manipulated to allow direct influence of the ruling elite in its decision-making process.

For example, since the summer of 2016 and under the state of emergency, the TMSF has sized almost 900 companies in Turkey, most of these companies were related to opposition political groups. It is believed that these companies have been afterwards publicly auctioned only for AKP-linked businessmen (Hürriyet, 24.05.2017).[6]

Also under the state of emergency, the PPA and the Public Procurement Law have had few influences in the public tendering processes, as under this situation (in force since July 2016), the Council of Ministers determined the tenderers, which by law could not be affiliated to a terrorist organisation (T.C. Gıda Tarım ve Hayvancılık, 25.11.2016).[7] Under the state of emergency the government has been legitimised to contract loyal businessmen by law, and exclude those accused of terrorist affiliation, mainly related to the Gülen Movement.

In the case of TOKİ, it is alleged that the AKP has systematically used this institution to favour loyal businessmen with public housing construction contracts. TOKİ is one of the least transparent government bodies, is exempted from land tax and is not audited by the Court of Accounts. In this legal context, TOKİ has been manipulated by the ruling elite to favour AKP-linked construction businessmen (Esra Çeviker, 27.06.2016).[8]

The Party Goes On

With this new political system under way, President Erdoğan is now the most powerful politician in Turkey in determining resource allocation, either in the national budget either in public procurement projects, while at the same time, having very little oversight from the executive, legislative or judiciary powers.

As long as the Turkish economy does not collapse, the Turkish President will be able to maintain a strong network of businessmen that have become essential for the political agenda of Erdoğan and the AKP. Therefore, institutions such as TOKİ, the TMSF and the PPA will keep distributing public resources from the Turkish state to businessmen that have had demonstrated their loyalty to Erdoğan and that have followed his instructions, such as the businessmen involved in the “Pool Media” case, which allowed Erdoğan to informally control most of media outlets operating in Turkey.

Therefore, by controlling these government institutions, Erdoğan is able to exert direct influence in loyal businessmen, who in exchange obey political orders from the President and invest accordingly.

In sum, Erdoğan is holding his dream position, being President of Turkey with very little (if existent) oversight, and with the maximum influence a President of Turkey has ever exercised over government investment institutions. With an obedient PPA, and with the (highly likely) direct control of TOKİ and the TMSF, Erdoğan can keep a docile class of loyal businessmen and institutionalize a system of crony capitalism.


[1] 2016 1212 James in Turkey

[2] 2017 0322 American Progress

[3] 2016 1212 James in Turkey

[4] 2017 0622 Shadow Governance Intel

[5] 2018 0702 Cumhuriyet

[6] 2017 0524 Hürriyet

[7] 2016 1125 T.C. Gıda Tarım ve Hayvancılık

[8] 2016 0627 Esra Çeviker