Emerging Finance Capitalism in Mexico and Turkey
Chapter 5: Crisis and the Neoliberal Idealism of State and Bank Restructuring in Turkey, 1980–2000
For years Turkish society had been suffering from economic uncertainty, social unrest, and political polarization. The 1979–82 US-based Volcker shock worsened matters as the resulting debt crisis reverberated throughout the global periphery. In Turkey instability culminated in the 1980 military coup and the unrolling of an authoritarian marketoriented restructuring program. The international financial institutions (IFIs) facilitated and pushed these changes, but the IFIs did not simply impose them. In the two decades following the 1980 crisis, I argue that domestic advocates actively brought about the neoliberal restructuring of the Turkish state and society in ways that increasingly favored financial capital. The Turkish banking and finance sector was at the heart of this restructuring, although not always in ways consistent with neoliberalism. Consecutive governments promoted financial liberalization and exposed domestic banking to world market competitive imperatives while state authorities manipulated the state banks’ developmental missions and crafted a stronger state financial apparatus to support neoliberal restructuring. Two decades of economic sluggishness and recurrent crisis followed as a more finance-led form of neoliberalism took root. I develop this argument in three sections. Section 5.1 looks at the 15 years following the 1980 military coup and how advocates sought as far as possible to approximate the ideals of neoliberalism within national constraints. Section 5.2 then analyzes the structural changes in Turkish banking over the first two decades of neoliberal transformation. Special attention is given to the importance of mounting state debts and the role of the state banks in ensuring neoliberal continuity....
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