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The referendum held in Turkey on April 16, 2017, to approve amendments to the constitution – in essence, transition from a parliamentary mode of government to a presidential system, with a limited set of checks and balances between the governing authorities – was staunchly promoted by Turkey’s President Recep Tayyip Erdoğan. As such, many saw the referendum as a vote of confidence in the President, although even some of Erdoğan’s supporters believe that the change in system is a mistake, because it grants the president too much power. Perhaps this situation is comfortable for Erdoğan today, but what will happen when someone else comes into power?
Of the extensive commentary published since the announcement of the referendum results, two main perspectives may be identified. One approach postulates that the fact that the amendments to the constitution were approved by a slim majority – about 51 percent – constitutes a source of hope for the opposition factions, since it indicates that the support for Erdogan and his Justice and Development Party (AKP) is not as steadfast as it used to be. This contention carries greater weight in the light of statements made by the International Limited Referendum Observation Mission sent on behalf of the OSCE Office for Democratic Institutions and Human Rights that cast the possibility of waging a campaign before the referendum as unfairly biased in favour of the “evet” (yes) supporters. In addition, the amendments to the constitution were not supported by the majority in Istanbul, which is significant given the city’s economic importance, and particularly since Erdogan has always enjoyed the support of Istanbul in elections since he was its mayor. Other pundits, however, believe that it matters little by what percentage the referendum was passed; the very fact that it was passed gives an official seal of approval to President Erdogan’s regime.
Following Erdogan’s considerable successful investment in the efforts to pass the referendum, what will Erdogan’s next objectives be and what specific issues will he choose to promote? While serving as Prime Minister, in unprecedented fashion, he chose to promote the peace process with the Kurds. However, he abandoned the peace process when he perceived the regional strengthening of the Kurds following the Arab Awakening as threatening Turkey’s domestic arena. However, since 2016 the cooperation between the AKP and the Nationalist Movement Party (MHP) has not been as fruitful as expected, in the sense that it did not achieve broader support in the “yes” camp for the referendum (although this cooperation did help the AKP pass the resolutions in the parliament that enabled the very holding of the referendum). With the referendum over, it appears that the importance of this alliance has diminished and, therefore, its unraveling could play a part in a possible resumption of the peace process.
In late March 2017, Turkish Prime Minister Binali Yildirim, announced the successful conclusion of Operation Euphrates Shield in Syria, but failed to mention what are the plans for the existing Turkish presence in northern Syria, and said only that if further operations were launched, they will be given a different name. For his part, Erdogan added that the next stage of Operation Euphrates Shield will be launched not only in Syria, but also in Iraq. As such, Erdogan has signalled the possibility of a Turkish military operation against the presence of the Kurdish underground organization, the Kurdistan Workers Party (PKK), in the Sinjar Mountains – in addition to the sporadic bombings already launched against targets in the Qandil Mountains. These declarations attest not only to the difficulties that Turkey is facing following its military intervention in Syria – given that Turkey’s advances are positioned against the American support of the PKK-affiliated organization in Syria, the Democratic Union Party (PYD), and opposite Assad regime forces, which are supported by Russia and Iran – but also attest to the battle over the political future of the territories currently under the control of Islamic State, in light of the hopes of the territorial routing of the organization in the near future.
President Trump was the first Western leader to contact Erdogan to congratulate him on the results of the referendum. Despite this, grave disputes between the two countries exist, led by the continued American support of the Kurds in Syria and the Turkish government’s demand to extradite the cleric Fethullah Gülen, accused by the Turkish government of being behind the failed coup attempt in Turkey on July 15, 2016. Despite the efforts to resolve these two points of conflict during the Obama administration and since Trump has taken office, no formula has been reached that will satisfy the American requirements and at the same time placate Turkey.
Another central issue is the future of the relations between Turkey and members of the European Union, and in particular, whether the process of Turkey joining the EU will remain officially open. Since 2005, despite the many doubts over the years with regard to the final outcome of the process, many in Turkey and the EU believed that the process itself is worthwhile, since it encourages trends toward liberalization in Turkey, and thus plodded ahead with it. However, the campaign prior to the referendum and the attempt by the Turkish government to persuade Turkish voters living abroad to vote “yes” resulted in exchanges of rhetoric between Erdogan and Western leaders that reached new lows. In March 2017, Erdogan even announced that he might hold a referendum about whether to continue the contacts with the EU with regard to Turkey joining the European Union, and made similar remarks once the results of the current referendum were announced. Another challenge is that in his first speech after the referendum, Erdogan announced the possibility that he might reinstate the death penalty. Prior to the referendum, European Union leaders warned unequivocally that the reinstatement of the death penalty would trigger the termination of contacts with Turkey regarding its joining the EU. If so, why is Erdogan taking such a belligerent stance towards the European Union? Is he despairing of the process and the gains to be reaped from its completion, or is this a negotiating tactic with the EU that relates to the issue of Turkey allowing refugees passage through Turkey en route to Europe and the fact that Turkey is currently accommodating more than three million Syrian refugees?
The supporters of the constitutional amendments and the “yes” voters during the referendum tried to emphasize that the amendments are needed to stabilize the political system, in order to help Ankara contend with the many challenges that Turkey is facing – economic deterioration, the decline in tourism, the threat of terrorist attacks by the Islamic State and the Kurdish underground organizations, the continuing civil war in Syria and the Russian military presence also in the southern arena, the deteriorating relations with the European Union, and the pitfalls in relations with the United States. Nevertheless, it is doubtful that Turkey’s difficulties contending with these problems actually derive from any lack of government stability. Notwithstanding the impact of the failed coup attempt, Turkey faced these problems even before the incident. Therefore, despite the fact that the referendum was passed more or less to the satisfaction of the “yes” supporters, it does not signal any substantive change in the negative trends prevailing in Turkey. Despite the efforts exerted by Erdogan and his supporters to pass the referendum, it is highly likely that frustrations will rise again, due to the inability to implement the desired changes. This frustration is liable to be directed against those whom the government perceives as “enemies from within” and to collect a price, at least in part, in terms of Turkey’s foreign relations.
Potential Long-term Economic Impact of Turkey’s Constitutional Changes
The presidential system will establish a unified executive branch and extinguish the problems of divided executive authority between the offices of the President and the Prime Minister. This is an extremely vital aspect of institutional restructuring in Turkish public administration as it will improve coordination among the conventional ministries, bureaucratic agencies, autonomous bodies and sectoral advisory councils that are responsible for the formulation and implementation of macro and micro level economic policies. As such, the new system will centralize and speed up decision-making under the umbrella of the Presidency, and, therefore, will allow more dynamic interference capacity against potential market failures, to improve the efficiency of economic processes.
Turkey already has a sound regulation and supervision infrastructure designed for areas of macro-management such as finance and transport/communication services, etc. But in areas in which there is a need for better intra-sectoral policy coordination such as science and technology policy, FDI policy, university-industry linkages, or modernization of manufacturing industries the new system will substantially increase the administrative capacity of the Turkish state.
Forming effective state-business linkages for long-term development objectives will be easier under a presidential system with a leaner and more agile bureaucratic structure. Under this system there will be greater protection of Small and Medium Enterprises (SMEs) against bigger conglomerates, and targeted social policy reforms to reduce regional and social inequalities.
The constitutional reform might open a window of opportunity through which the key governance problems that hindered the execution of crucial structural reforms over the course of the last decade, could finally be resolved.
As far as Turkey’s development trajectory is concerned, the foremost policy objectives include monetary, fiscal and procurement policies to permanently reduce the current account deficit; micro-sectoral policies to increase the high-tech manufacturing and export capacities; fiscal reforms to reduce the burden on productive and export-oriented sectors; improvement of the investment climate to spur growth and increase the inflow of productive foreign direct investment (FDI); reducing energy costs to support local production and processing of raw materials; creation of new financial instruments to increase national savings and improve local financing of new investments; galvanizing the legal infrastructure of the business environment; raising human capacity through improved university-industry linkages; alleviating private monopolies and triggering sectoral productivity increases through stricter competition policy; alleviating regional disparities through better coordination of regional development agencies.
Turkey desperately needs the constitutional reform towards the presidential system for the successful realization of these goals under the coordination of a unified and strong executive which could oversee the formulation of a new development narrative based on real economy, industry-technology linkages, modern agriculture and information technologies. Maintenance of fiscal discipline and price stability while implementing an employment-friendly, inclusive, sustainable and equitable growth model requires effective coordination of policy realms such as education, industry, agriculture, technology, human resources, money and fiscal policy – at a time when exchange rate wars and neo-protectionism continue to rage in the world economy.
In the historical development of Turkey’s public administration tradition, there is no precedent for institutional bodies such as the “Super-Ministries” seen in various developmental states in East Asia such as Japan’ s MITI or South Korea’s EPB. Therefore, achieving centralization at the top of the executive around the Office of the Presidency seems the only viable option for better policy coordination and swift decision-making. The proposed constitutional amendment is also vital to permanently eliminate the structural sources of the economic tutelage exerted by family-owned conglomerates in conjunction with their international partners by ensuring stable and robust executive authority that leaves no room for politico-economic manipulation.
