Late last week in Turkey, the
stock market declined by 18 percent and the lira lost a third
of its value. Interest rates have soared to several thousand
percent, and inflation is around 30 percent. What reportedly
scared away investors was a publicized argument between President
Ahmet Necdet Sezer and Prime Minister Bulent Ecevit, whom the
president had accused of being too lenient toward corrupt politicians.
But that was merely the beginning of the crisis, not its underlying
The cause was the very fragility of Turkey's recent economic
reforms and the boomlet they had created, sending market indexes
up from 5,000 to nearly 20,000 points in 1999 and early 2000.
Turkey is building modern democratic and financial institutions
that provide stability, but building such institutions can be
destabilizing in its own right. Turkey's problems are those
of success, but that does not make its problems any less dangerous
to American interests.
Turkey, along with Brazil, perhaps, is now the world's foremost
example of a state whose institutions are struggling to keep
up with modernization. The government bureaucracy remains mired
in Ottoman lethargy. Some banks, burdened by foreign-currency
debts and murky dealings, are close to collapse. Tax revenues
are insufficiently distributed to the provinces where they are
Meanwhile, the dramatic liberalization of the Turkish economy
begun in 1983 by Turgut Ozal, the late prime minister, has created
a vast new population of urban middle-class Turks, who are pressing
for better public services.
Stability has so far been maintained by the National Security
Council, a mixed regime of military officers and civilian ministers.
For decades, this council has prevented Turkey from slipping
into the anarchy of new democracies like Indonesia or the stifling
autocracy of many nearby Arab states. Nevertheless, that stability
has come at an increasing cost, especially as Turkey's society
and class structure have become more complex.
The problem is this, simply put: No one in the system is accountable.
Turkey's needs for responsive, transparent banking and taxation
systems have grown. But who would establish them?
The military has no logical role, and anyway, avoids political
responsibility for many problems.
But the politicians also avoid responsibility. They know that
in a crisis the military will bail them out through subtle interventions
that Turks have come to call "soft, post-modern coups." Such
ultimate reliance on the military is what keeps Turkish politics
immature, as evinced by the kind of temper tantrums thrown by
the president and prime minister last week.
Another reason that both violence and political breakdown have
been avoided in Turkey is the very corruption that is partly
responsible for the current crisis in the first place. As Samuel
P. Huntington explains in his 1968 classic, "Political Order
in Changing Societies," high levels of corruption are endemic
to societies undergoing the stress of rapid modernization. Corruption
greases the wheels of creaky, unresponsive bureaucracies, creates
informal networks of power so that things get done when they
otherwise wouldn't, and allows people to purchase power in third
world systems that they would otherwise violently revolt against.
Turkey, however, is at the point where such corruption has
outlived its usefulness and threatens an Asian-style financial
meltdown. Any meltdown in Turkey, however, would be far more
serious than an economic meltdown in, say, Indonesia. That's
because a Turkish economic disaster would have geopolitical
consequences for the United States far more severe than the
various economic crises that have affected East Asia in recent
Turkey is the political organizing principle of the greater
Middle East. It controls the headwaters of the Tigris and Euphrates
Rivers that supply Syria and Iraq, and it is the economic lifeline
for new democracies in the Caucasus. Any weakening of Turkey's
borders would open up the entire nest of questions -- dormant
since the end of World War I -- regarding the real frontiers
of Syria, Iraq and other countries, all of which were artificially
created in postwar peace agreements.
Indeed, the Turkish military has been a fundamental element
in the Middle East balance of power. For instance, a new Turkish-Israeli
military alliance helped pressure Syria into peace negotiations
with Israel in the late 1990's.
A strong, stable Turkish government would be even more needed
if Saddam Hussein were to fall. Without Mr. Hussein, Iraq would
have few ways to damp down divisive tribal and sectarian conflict,
and the country could fall into civil strife. In that event,
a stable Turkey would be necessary to safeguard Iraq's northern
border with the Kurds.
Turkey, in other words, is not a country like Thailand, where
an economic crisis has only financial repercussions for the
United States. Turkey is more in the category of an Israel or
Mexico: a place whose strategic importance is too great to allow
the White House to trust the International Monetary Fund and
other international bodies with the cleanup operation.
The Reagan administration did not leave Israel, when it was
ridden with inflation, to its own devices; the United States
intervened to restructure the Israeli economy. The Clinton administration
took aggressive action, at significant political cost, to bail
Both policies were successes. The Bush administration has stated
its reluctance to prop up countries in economic turmoil. But
in the case of Turkey, it may find it has no choice but to directly
chaperone the Turkish political system toward further modernization,
so that the current financial crisis does not expand into a
geopolitical one. In short, the Bush administration should see
the Turkish financial crisis less as a financial crisis than
as a political and strategic one.
Copyright 2001, The New York Times