Introduction

The aftermath of 1980, the proclamation of neoliberal theory by Ronal Reagan and Margaret Thatcher, capital and service flux were accelerated and thanks to that, new actors in the international arena have appeared. The most significant factor in this recent trend in international politics is China. By its significant efforts in economics, China became a gravity center in Extreme Asia thanks to its economic influence. In addition to this economic influence, it strived to extend its political influence in Africa. What gets our attraction in its bias, rivalry between France, its power based on colonial heritage, and China. In the latter process, this rivalry evolved into an advantageous partnership. To examine this evolution, we have to first look at French-African relations from the colonial period to contemporary interactions. Second, we will delve into Sino African rapprochement from the 1960s. And finally, we will compare French and Chinese cooperation in Africa.

French-African Relations

To treat Africa in a proper way, we have to first analyze France’s positioning in cultural and economic order in African states.

French Presence in Africa as cultural power and Bourdieu’s approach

In this part, we will start by delving into cultural order in African states. But, how can we apply a cultural approach into politics? To do that, we will refer to what Bourdieu suggested about production of inequality. According to Bourdieu, education is a sole source of how the dominant group is relatively superior to dominated groups. During the Industrial Revolution, the bourgeoisie became more visible and powerful and was a part of power in Occident. To preserve its position on power, it has invented a new set of tool, such as education to differentiate itself within other social groups. It means, bourgeoisie invented its “habitus”.  Thus, only the graduates from prominent universities or some groups which completed designated formations had the right to hold power. Bourdieu’s approach find itself in a proper position in Africa case because of the fact that France’s mainstay was formed by cultural dimension. According to UN rapport, the number of the daily newspaper in Africa which are published in French is 114[1]. By the framework of this, Africa foresees the world in the eyes of France. Also, amid the most qualified universities in Africa, 58 of them use French as an academic language[2]. It means, Africa discovers the world through French education model. That’s why most of the African leaders in the decolonization period were influenced by the political thoughts in France. For example, Félix HOUPHOUET-BOIGNY, Ahmed Ben BELLA, Patrice LUMUMBA and Aimé Cesaire shaped continent’s future by French education model and political thoughts. The period which these leaders lived in was a substantial moment for the peak of Existentialism and Constructivism in France. The works published during the decolonization period constructed cornerstones in African political organization. For instance, Jean-Paul Sartre’s and Foucault’s works were influential on African leaders’ opinion. On the one hand, this tendency in the formation of the political environment. On the other hand, elite cadres resembled in African countries. In addition to this formation manner, as Pierre Bourdieu said that, the production of inequality has been prioritized in governance just like the French governance system. France got signed “accords de défense” just before it had left its colonies. At the same time, as Bourdieu insisted, France implemented “governor habitus” to local elites. By doing this, France gained both political power at the macro level and linguistic advantageousness at micro level through which it can remain active in the region.

France as an economic power and Immanuel Wallerstein’s “center-periphery” approach

In this part, we will observe France’s economic power which is one of the elements amid France’s soft power. To evaluate it, we will take into account Immanuel Wallerstein’s theory. According to him, there are two types of country in the international scene: Countries at center and countries at periphery. Second type countries adopted a production model in accordance with the needs of first type countries. At this model, first type countries always gain comparative benefits because of the fact that first one can focus on the production of goods with high added value. These products cannot be understood not only materials but also a human resource. If we examine Africa by this understanding, France had economic control over the countries which were its colonies just before the decolonization process, until the 1960s. In addition, France enhanced its political view with the EU’s support through development aids to African countries. Therefore, France can disguise its national interests by claiming that its policy doesn’t reflect France’s intentions, it reflects the EU’s aims. Meanwhile, France performed a good image thanks to cognitive differentiation in the region. France is no longer a colonialist power in Africa. At this point, the most important factor is education because of the fact that qualified persons could facilitate inter-state trade. For this reason, France had embraced efficient and pro-active policies in higher education. For instance, African students in French universities were 110.936 in 2006. The most interesting part of this data is 28.000 African students who studied in France rest in France to continue their career. When we look at recent data, we can easily see what this policy is so gainful to France’s foreign policy. In 2016, 134.000 African students came to French universities[3]. From this point, we can assume that France formed high-class elites as well as upper-middle-class in order to benefit economic and social profits by subjugating them through French culture. As Wallerstein mentioned, de facto, France is the first type country in Africa, especially in Western Africa. In addition to France’s position, African countries profiled in this trade model according to symbiotic relations and liberalist theory, as well.

Sino-African Relations

In the first section, we have analyzed French-African relations. Here, we will probe into Chinese foreign policy approach in Africa due to the fact that China is always an actor, albeit its influence. To understand China’s position in Africa, we will first dig out Chinese foreign policy from  the decolonization process to 2001. Second, we will examine China’s economic influence in Africa. Finally, we will try to find out why China cares about Africa in a strategic manner.

From Decolonization process to 2001: Chinese Foreign Policy

In this part, we are eager to observe Chinese foreign policy approach between the 1960s and 2001. First, as we know, China was a country which had been torn apart by World War’s effects in domestic life. Nevertheless, China has aided African countries by underscoring the “principle of Pingdeng”[4]. For example, China was the first state who recognized Algeria as a sovereign State, except Arab states. In addition to the principle of Pingdeng, another principle which affects China’s foreign policy is “essence of Ren” that can be explained by Confucius. Confucius once said, “A benevolent person loves people”. This principal indicates Chinese medical cooperation with developing countries during the Cold War. For instance, in January 1963, China was the first to express its willingness to provide medical assistance to Algeria. Also, China played a central role for the African liberation movement during the Bandung Conference in 1955. To do that, China endeavoured to increase its soft power. Another example is quite significant to show China’s policy. In 1972, Benin could stand thanks to Chinese diplomatic support. In this case, we have to highlight China’s other intention, otherwise, it could seem like an angel. Besides China’s efforts to save Benin régime, China established a cigarette factory[5]. So, we can easily say that China has also economic drivers to invest or to support African people during the Cold War.  As Brautigam notes, of the major Chinese agriculture investments in Africa between 1987 and 2003, half of them were former Chinese aid projects. These examples are quite important to interpret Chinese action because of the fact that China’s world view is more different than the Western one. China makes forbearingly its policy as an Eastern country. For example, whereas Washington consensus is based on conditionality, Beijing consensus doesn’t stipulate any condition at the first place. Instead, China gradually releases its aids to convince other State[6]. Based upon this example, we can submit that China’s foreign policy is based on two factors, one of them is quite earlier, the second one is the “new era” notion: Economy and Strategy

China as economic power: Mutual partnership

In this part, we will address China’s effectiveness in Africa as an economic power. As we have already mentioned, China gained economics benefits through diplomatic ways in Africa, such as a cigarette factory in Benin. But, after China’s economic boom, China gave credits to extend its influence over the region. These credits can be explained as follow: 60 billion dollars as humanitarian aid, 5 billion dollars as value-free credits, and 35 billion dollars as low-interest credits[7]. These credits are non-conditional in accordance with “Sense of Shu”. Thanks to that, China gained economics profits through its aid policy. First, China lessened its energy dependence.

This graph explains that China’s petroleum need has sharply increased. As a known fact, China is growing %10 per year. In this situation, China requires new resources areas around the world. In fact, even if this graph shows China’s need, why China especially focused on Africa? Energy policy of the United States responds to the question. As we know, ExxonMobil has Iraq and Syria petroleum since 2003. Another petroleum giant, British Petroleum had occupied and settled in oil-rich countries in the Middle East. According to BP’s annual booklet in 2016, the company operates North Africa, Oman, Yemen and Egypt[8]. In addition to that, as we know, the United States got pressure on Georgia, especially in petroleum. Due to these reasons, China has to focus on East and West Africa to meet its energy needs. For instance, China National Petroleum Company made %7,7 of Chad’s petroleum extraction in the first quarter of 2009[9]. Also, according to Yu Zheng, The China Petroleum and Chemical Corporation (Sinopec) acquired majority ownership of several oil blocks and formed a joint venture with Sonangol, Angola’s national oil company. These active decisions in Africa show us the fact that China is keen to reinforce its presence in the energy sector in Africa. Another example is China’s infrastructure investments in Africa. At this case, China Road and Bridge Company (CRBC) is a pioneer of China’s activeness. For instance, CRBC started to build railways between Nairobi and Naivasha. This investment was about 1,5 billion dollars. So, China has special ambitions to affect African countries.

III. China’s New “Heartland”: Africa

In this part, we will finally analyze China’s strategic gains in Africa. To understand China’s strategic trajectory, we have to overlook “GO” game. In a go game, the most important aim is to contain the enemy’s predictable movements. In comparison to the chest, you don’t destroy your enemy, or not aim one chess piece. When we comprehend this logic, we can find out why Africa is so important for China. To make sense of this game’s approach in politics, we will use Halford John Mackinder and Zbigniew Brzezinski’s approaches. According to Mackinder, we have to hold terrestrial influence in a region, we can have total control. In addition to this perspective, Brzezinski suggests that if a country wants to be a superpower, it has to take control of middle area in accordance with its strategic previsions. He adds that the United States won the Cold War because of the fact that Europe was its middle area in its strategic projections. As for China, Africa is the middle area through which it can apply its policy over the world due to the fact that Africa’s geopolitical position in contemporary politics is central stand, such as its demographic power, geographic location, and natural resources. On the one hand, the Middle East has been occupied by the United States and two ancient colonial powers, the United Kingdom and France. On the other hand, Africa is an intersection point of maritime roads. For example, if you take control in Africa, you can easily take control of Red Sea and road which goes along to the South China Sea. Likewise, China tries to be sea power, as Alfred Mahan suggested. Yet, the United States is far away powerful than China. According to the Ministry of Defense of Pakistan, China has only 2 aircraft careers whereas the United States has 12 aircraft careers. By this framework, coastal African countries have vital importance for China. For instance, while the civil war was keeping up in Sierra Leone, China bought the Bintumani Hotel in the center of Sierra Leone. This action approves the fact that Africa is the main pillar in China’s strategy. In addition to that, Xi Jinping said emphasized that they are fate companion with Africa during his speech on 4 December 2015. To sum up, Africa is a strategic postpone for China and that’s why China’s investments in Africa is increasing both economically and diplomatically.

 Rivalry to Partnership: Sino-French Relations in Africa

Till now, we have separately analyzed France and China’s foreign policy approaches in Africa. In this part, we will overlook their bilateral relations in the region. To comprehend this, we treat the subject under 3 parts: First, we will look at the period between 2001-2008. Second, we will delve into the 2008 Great Crisis and its effects in their policies. Finally, we examine after the 2012 period which can be identified as China’s lead in free trade.

 The Rivalry emerged after 2001: China and France in Africa

In this part, we will take into account their firs interactions in Africa. France is an important actor since XIX. century, firs colonization period. But, we have witnessed China’s aggressive involvement after 2001, its membership to WTO. From this date, we saw an active competition between ancient colonizers, France and the United Kingdom, and China. Of course, there were some signs of competition like the case of Algeria in 1958 and Benin in 1960 in which China was the first country that recognized them as a sovereign State. These two examples prove that China was an active actor in the region, but not an aggressive actor. As for France, it was ancient colonizer, yet it was influential at the political organization in the new States after the decolonization process, as we have already underscored in the first section. For instance, the founder father of Cote d’Ivoire, Félix Houphouët-Boigny have completed its education at Ecole normale William Ponty. In fact, we can’t see a real confrontation in Africa between China and France in a political manner. We can say that France and the United Kingdom was dominant in Africa until 2001. In the case of France, the “accords de défense” were strong proofs of what we claimed. By these treaties, even if France had retreated from these countries, such as the French army, France could preserve its military presence. For instance, France has active military bases in Djibouti, Cote d’Ivoire, United Arab Emirates, Gabon, and Senegal. By this framework, we can easily say that what we witnessed in the region, is parallel to what Mao suggested as “Three World Theory”. By this framework, China could overthrow France and the United Kingdom by the help of autochthone people in Africa. To sum up, until 2001, France and the United Kingdom were hegemon in Africa whereas China tried to be active by the same occasions.

2008 Great Crisis: China’s emergence as an economic giant and France in recession

In the second part, we will observe the effects of the 2008 Great Crisis on China and France’s foreign policy in Africa. In 2008, the economic crisis happened in the United States and it hit Europe because of the leverage effect in the banking system. That’s why most the European States went into the downswing. And, France was intensively affected by this crisis. In this period, France suspended its active African policy because of the economic recession. In addition to that, France had used its military power to adjust its balance of payment. For instance, the French army intervened the conflicts in Eritrea and the Gulf of Aden[10]. What is important here, is the improve in France’s balance of payment. France’s balance of payment after the interventions are shown below:

When we look at this graph, we will see an important increase after France’s intervention in Djibouti (10 October 2008). At this point, we can assert that France gained economic profits from this intervention. Normally, its balance of payment had to be affected negatively.

As for China, China won after the 2008 Great Crisis. When we look at the graph right-hand side, we will see a constant increase in China’s foreign exchange reserves. In 2007, China’s reserves were 2,5 trillion dollars. In 2008, it reached 2 trillion dollars. In 2009, when the world suffers from an economic downswing, China added 200 million dollars in its vault. That explains us the importance increase in China’s economic power which influences policies in Africa.

When we look at data from the World Bank, we can see an immense increase in favour of Chinese evolvement in Africa.

As we observe here, 2008 Great Crisis was positively affected in China. China gained economic influence in the region. As a result, China’s investments have augmented, even in 2008. In contrast, France strived to operate in Africa by consulting on its ancient hegemony.

III. After 2012, Liberal China and Reconciliatory France: Premise of Partnership

In this part, we will finally examine the transformation of rivalry between France and Chine to the mutual partnership. In this period, both China and France have needed a partnership. As for China, there were no economic and financial constraints, but there was some protest against China’s policy because of the fact that trade shares were in favour of China. As we look at the graph, we can easily see this proof. According to the IMF’s Africa Department, trade balance between China and Africa is shown as below.

After 2013, we see important fluctuations in the trade balance in favour of China.  Because of that, autochthone countries commenced seeing China as a new colonizer. This attitude explains to us why China is contested in Kenya, Mali and Sudan. For example, according to CNN, people prefer France rather than China in Tunisia, Benin, Mauritius, and Burkina Faso. Another example occurred during the Libyan Civil War in 2011. China couldn’t rescue its citizens and asked France to help him. In addition, China has no banking system in Africa. Of course, China Development Bank does some intermediary transactions, but it has no money transfer system in Africa. At this point, French banks have a comparative advantage. According to Global Finance, Société Générale is a powerful actor in the African banking system. Also, cooperation with France may be beneficial for both France and China according to He Wenping[11]. These examples show that France’s soft power is still influential in Africa. That’s why China seeks a partnership with France. In this case, France also seeks a partnership with China[12]. For instance, French company Peugeot and Chinese company Don Feng agreed on a new partnership in 2014. In addition, the Sino-French Partnership Conference held in Paris, in 2017 in order to ameliorate economic and political collaboration in Africa. Besides all these positive efforts, France is also suspicious about China’s new military base in Djibouti and China’s new fortification in Sierra Leone. Still, as a result, we can say that both China and France are in way of partnership in Africa.

Conclusion

As we mentioned at the beginning, France is still one of the most important actors in the region. France’s influence is based on cultural heritage from XIX. century. To enhance its cultural influence, France has adopted an active policy on education in Africa. In Western Africa, French is officially the most common language. And thanks to that, autochthone societies have sympathy to the French model. At the same time, African ruling elites have completed their educations through French model thanks to French government scholars. These elites organized the political system of their counties through French political thought. Therefore, both trade and bureaucracy were organized in accordance with the French system. Thanks to these facts, France gains comparative advantages in the region. As for China, it extended its political power by applying aggressive politics through its economic power after 2001. This policy was important for China because of the fact that China had to meet its energy need in order to sustain its economic growth. After China’s involvement in Africa, the rivalry between France and China has emerged in 2001. Aftermath of the 2008 Great Crisis, China became dominant in the African economy and tried to diminished France’s political power through aid policies. But, in the end, China’s advantage in trade balance provoked contestations in Africa. Thus, China has stepped back and sought to find a new partner in order to facilitate its involvement in Africa. After 2012, China endeavors to establish a new partnership with France which was gradually improving its economic situation after the 2008 Great Crisis. Thanks to this policy, both China and France gained and are benefitting mutual profits. As a result, the rivalry between them evolved into a mutual partnership.

Bibliography

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[1] [1] Nations Unies, Toute la Presse Francophone, Available on 15 October 2017, http://www.un.org/depts/OHRM/sds/lcp/French/pressefranco.html

[2] Martin Dreyfus, Enseignement/apprentissage du français en Afrique : bilan et évolutions en 40 années de recherches, Revue française de linguistique appliquée Vol. 11, No.1 (2006), s.73-84, Available on 19 October 2017, http://www.cairn.info/revue-francaise-de-linguistique-appliquee-2006-1-page-73.htm.

[3] [3] Myriam Dubertrand, “Pour les étudiants africains, la France n’est plus une destination évidente”,Available on 19 October 2017, http://www.lemonde.fr/afrique/article/2016/11/11/pour-les-etudiants-africains-la-france-n-est-plus-une-destination-evidente_5029763_3212.html

[4]Anshan,L. “Cultural Heritage and China’s Africa Policy” China and the European Union in Africa: Partners Or Competitors? ,London: Routledge, 2011

[5] Valérie Niquet, La stratégie africaine de la Chine, Politique étrangère Vol. Summer, Number 2, p. 361-374, Avaible on 24 October 2017, URL : http://www.cairn.info/revue-politique-etrangere-2006-2-page-361.htm

[6] François Godement and John Fox, A power audit of EU-China relations, (London: European Council on Foreign Relations, 2009

[7] [7] Les relations commerciales Chine-Afrique en 4 chiffres, Available on 30 October 2017, http://www.lemonde.fr/economie/article/2015/12/04/les-relations-commerciales-chine-afrique-en-quatre-chiffres_4824548_3234.html

[8] BP Annual Booklet 2016

[9] [9] Deborah Brautigam, The dragon’s gift: the real story of China in Africa (Oxford: University of Oxford Press, 2009)

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[11] Bassan, M. Coopérations tripartites: France – Chine – Afrique, Avaliable on 7 Novembre 2017, https://www.pairault.fr/sinaf/index.php/component/content/article?id=782

[12] Frans-Paul van der Putten, John Seaman, Mikko Huotari, Alice Ekman ve Miguel Otero-Iglesias, Europe and China’s New Silk Roads, s. 21-23, Available on 13 Novembre 2017, http://www.iai.it/sites/default/files/2016_etnc_report.pdf

]]> https://www.academicnetwork.net/role-of-imf-in-2001-financial-crises.html Tue, 20 Oct 2020 10:06:48 +0000 https://www.academicnetwork.net/?p=1887 Introduction  Argentina’s most severe economic crisis, the 2001 economic crisis, was one of the punchlines in the course of neoliberalism that we observed during the structural reconfiguration process in the 1990s through which national economies were forced to open up their economies and to integrate themselves into the global economy. In a similar way, Turkish […]]]>

Introduction 

Argentina’s most severe economic crisis, the 2001 economic crisis, was one of the punchlines in the course of neoliberalism that we observed during the structural reconfiguration process in the 1990s through which national economies were forced to open up their economies and to integrate themselves into the global economy. In a similar way, Turkish experience, precisely a series of economic crises from 1994 to 2001, coincided with Argentinean crisis and underscored the vulnerability or inappropriateness of what is called ‘Washington Census’ that favours four principles to reach a level of economic readiness to grow efficiently in a way that every economy will gain more or less in accordance with its material capacity.

In both cases, those economies were announced as a successful remark of to what extent the IMF could guide an economy and of how the IMF acted in line with its initial aim which was and is to assure a robust and stable international economy in which every state is part of the global economy. Starting from the outbreak of economic crises in both Argentina and Turkey, the development model which was favoured and suggested by the IMF, World Bank and the U.S. Treasury, was at the centre of huge critics regarding its limits and its implication in developing economies. Besides, as a part of Washington Consensus, these crises put in question the role of the IMF and its effectiveness during those crises which were simply considered as a prolongation of emerging market crashes, namely the 1995 Tequila Crisis as well as the 1997 Asian financial crisis and the 1998 Russian ruble crisis. (Demiroglu and Karagoz 2016) One should claim that emerging markets are located in the semi-periphery of global economy and that’s why, what was observed at the end of 20^th century and in the early 2000s is a sort of reshuffling of international economy by which the U.S. victory against Soviet Russia could be translated into diffusion of market-oriented economy in a horizontal manner. At that point, this paper’s main priority is to underpin the limits of neoliberal model and to investigate why these two different economies ended up with a financial crisis even if the external factors that they encountered were diametrically different. By doing that, the IMF and its recommendations will be held under a microscope.

Argentinean and Turkish Development Paths in the 20^th century 

Argentina and Turkey were enlisted among rural economies in the wake of Second World War, and both countries were eager to quickly industrialise as other rural economies, such as Brazil and South Africa.(Önis 2006) Yet, neither of them could not properly catch up developed economies in the following three decades.

In fact, Argentina was, at the beginning of 1930s, one of the fifth richest economies in the world thanks to rapid increase in food prices. However, it couldn’t benefit from its capital to invest in the manufacturing industry and kept relying on its agriculture.(Blustein 2006) In contrast, Turkey was, to be franc, devastated in the aftermath of the First World War, and channelled its energy towards building its infrastructure rather than ramping up its competitiveness. So much so that, every government that came to power put an emphasis on highways. For instance, the total length of highways was increased from 44.000 km to 62.000 km in 1945 and 1957, respectively. (Oral and Aydin 2018) Given that, one should claim that Turkey put all its energy to complete its highways network. However, things have changed. From the mid-1950s, both Argentina and Turkey adopted the import-substitution system and dedicated themselves to build up a self-sufficient economy. At that time, their initial aim was to protect their infant industries and to accumulate enough know-how to so that core countries, such as the United States and the EEC, exploited their raw materials. For instance, it is noteworthy that Turkey was the biggest exporter of chrome and ore minerals to the EEC until the end of 1970. (Doğan 2015)

By all accounts, one could say that it was, at that time, a common way to enhance domestic productivity and thus, it is logical that Argentina and Turkey employed protectionist regulations. However, this policy changed income distribution in both countries, and it entailed a series of coup d’état between 1960 and 1980. First, Turkish military forces (TSK) made a coup d’état to dismiss the Menderes government and to reconfigure the Turkish economy under the excuse of ‘clientelism’. Following this putsch, Turkey experienced two other coup d’états, precisely in 1971 and 1980, by which the structure of Turkish economy was redesigned. Same happened in Argentina. Juan Péron, socialist and authoritarian politicians, got withdrawn from the government under the guise of keeping ‘Argentina on track’, which was defined by the United States.(Sheinin 2006) Indeed, democracy matters for every country but what was happening behind the scenes is the tension between outward-oriented entrepreneurs along with huge landowners and inward-oriented industrialists in both countries. At the end, former group won out over latter one until the beginning of 1980s.

It is interesting that both Argentina and Turkey passed democracy in the similar period. Argentina experienced a transition phase from military junta to democracy in 1983 under a presidential system. After turbulent years, Carlos Menem, the shining boy in neoliberal milieu with support of the Peronist group, has won the first democratic election in 1987. Similarly, democratic elections were held in Turkey after three years of military committee’s rule. Turgut Ozal, young and dynamic politician educated in the U.S. and fervent believer of neoliberalism, was elected in November 1983. It is perplexing to notice that both Menem and Ozal promised to implement what the IMF would suggest for the development of their national economies. At that point, their challenges and solutions were mainly common. First, they had to curb government deficit and attract foreign capital inflow so that both Argentina and Turkey were in difficulty to finance their balance of payment.(Bambaci, Saront and Tommasi 2002; Yalman, Marois and Güngen 2019) Second, Menem and Ozal preferred to privatise state-owned companies because international creditors had lost their confidence to lend money for Argentina and Turkey. For instance, the Carlos Menem government privatised 90% of public companies operating in infrastructure, mining, telecommunication and transportation.(Önis 2006) By opening these companies up to the stock market, Argentina and Turkey found enough capital to kick-start the economic transformation phase, which was stipulated by the IMF for further aid packages. Third, both the Argentinean and Turkish economies were financially closed economies for foreign investors in a way that current accounts were strictly regulated, and capital inflow/outflow was restricted to a certain degree. After Menem and Ozal, current accounts were partially liberalised and rules regarding capital inflow were loosened in line with the IMF’s advice on deregulation and financial liberalisation. For example, Turkey established the General Directorate of Money Market and Fund Management and promulgated a new law concerning full convertibility and government’s assurance on foreign capital in 1989 thanks to which the volume of foreign current accounts rose by 30% in 1989.(Evrensel 2004) As you can see on the left-hand side, Argentinean and Turkish bonds incrementally increased after financial deregulation. (IMF 2000) Last, Argentina and Turkey had chronic hyperinflation problems for over 20 years. For instance, the consumer price index in Turkey rose from 19.5% to 101.4% in 1970 and 1980, respectively.(FRED 2020a) Same as Turkey, even if there is no available data for consumer price index in Argentina, one-to-one surveys demonstrate how Argentinean people suffered from high prices during the military junta regime. That’s why, Menem and Ozal applied specific exchange rate regimes. Argentina adopted a dollar-pegged exchange rate in 1990 after Domingo Cavallo was appointed as the Prime Minister and state minister responsible for Economic Affairs. Meanwhile Turkey applied a crawling peg exchange rate regime which permits the Central Bank of Republic of Turkey to intervene from time to time and to keep the value of Turkish lira under control.

Contrary to their similarities, Argentina and Turkey had three distinct features. First, the Argentinian insurance system is well established and covers labour rights compared to Turkish one. The Argentinian social security system was a pay-as-you-go (PAYG) type of social security which protects labourers in case you’re still employed.(Blustein 2006) As for Turkey, social security is protected by the Constitution of Turkey in Article 60 according to which even if you’re unemployed, you are able to enjoy basic health services.(Elveren 2008) It’s important to highlight this difference because labours in Turkey did not manifest as much as Argentinean labours during the crisis period. That’s why, social unrest was limited in Turkey thanks to which public confidence could be quickly restored as opposed to Argentina.

Second, as we mentioned earlier, Turkey and Argentina adopted different FX regimes. Argentina’s one-to-one dollar-pegged FX regime was not sustainable unless Argentine economy was dollarized. (Takagi and International Monetary Fund 2004) As the Central Bank is no longer capable to independently print paper money and enlarge money supply in case of either an immediate payment crisis or an exogenous shock resulting from a fluctuation in the international market just as seen in the Tequila Crisis, Argentina has lost control of its economic policy. As for Turkey, Central Bank was fully operational. For instance, Central Bank deflated money supply as a response to 5 April 1994 from 16.06 billion lira to 10.09 billion liras in February 1994 and April 1994, respectively.(CEIC 2020)

Last, Turkey significantly differed from Argentina thanks to its institutional capacity. Ziya Onis argues that Turkey geared up its legal and regulatory framework for fully functional market economy after it signed 1963 Ankara Agreement where the EEC underlined its support to Turkey for harmonisation of its institutions.(Önis 2006) When it comes to Argentina, Onis further claims that Menem’s arrival to the rule immediately changed the economic and political scene and because of that, Argentina was exposed to a shock therapy. Based on that, Argentina have not found a chance to digest what is proposed by the IMF. Onis’s argument is rock solid given the pre-crisis conditions in both Argentina and Turkey because the 2001 economic crisis damaged the Argentine economy so much harder than Turkish economy given the recovery duration. Argentina’s GDP reached the pre-crisis level after seven years ($284.2 and $287.5 billion in 2000 and 2007, respectively). (FRED 2020c) Compared to Argentina, Turkish economy recovered very quickly and attained same GDP level after one and half years ($272.9 and $311.8 billion in 2000 and 2003, respectively).(FRED 2020d)

Given these differences, we can claim that Turkey and Argentina got into a financial crisis in the same period, yet Turkey caught up very quickly in comparison to Argentina thanks to its resilience and its financial elasticity.

Post-crisis Dynamics in Argentina and Turkey 

Economic crisis is, as always, a double-sided coin. Either a crisis lays the basis for new opportunities or it can lead to a vicious cycle where the wheels of the economy are stuck in a mud and cannot escape from it. In fact, what is seen during the Turkish and Argentinean experiences was exactly the same. The former was able to boost its economy by swallowing the bitter pill and the latter resisted what has been suggested after the crisis hit. Hereby, it presents us with a unique display to compare these two economies.

To start with, it is important to underscore types and origins of both crises. First, the Argentine crisis resulted from government inability to service its debt. It means that the Argentinean government borrowed a huge sum of money from foreign creditors to the degree that tax revenues and public spending cuts could not meet the amount of loans. In this case, the Argentinean government decided to leave Convertibility Plan adopted in 1991, and it expanded money supply. However, it was not enough to get away from insolvency. At that point, government increased budget cuts and froze bank accounts. Argentina’s debt rose from $49.5 billion to $152.2 billion in 2001 and 2002, respectively. (CEIC 2020) Public debt skyrocket signifies that the government’s actions not only didn’t solve the problem, but also triggered a bank run and capital flight. Besides, unemployment rose tremendously as a result of financial collapse. According to Gustava Bacarrezza and Luis Soria, Argentinian unemployment rate rose from 15% to 25% in 2001. Yet, they argue that if informal sector is added to unemployment, it is striking that unemployment rose from 13% to 52% in 2001. (Canavire-Bacarreza and Lima 2009) This drastic increase in unemployment entailed a social turmoil in Argentina and halted all activities until 2003 when the government announced new social aid package covering both rural and urban workers. Besides, labour unions in Argentina was part of collective bargaining. It means that if a labour association quits negotiations, that workplace is immediately stopped. During the December 2001 crisis, Kristina Hill displays to what extent work activities were halted and triggered an impasse between workers and entrepreneurs.(Hille 2015) In comparison to Argentina, Turkish crisis was basically an internal debt service problem stemming from government issued bonds which were used as the main mechanism to curb the public deficit. Due to its nature, Turkey’s public debt slightly rose from $51.6 billion to $76.07 billion in 2000 and 2001, respectively. Along with a smooth increase in public debt, Turkey encountered a mild unemployment problem. Unemployment rate rose from 6,5% to 8,4% in 2001. Another important factor that alleviated the damage of unemployment was strong social solidarity. According to Hasan Comert and Erinc Yeldan, informal social networks, such as neighbourliness, worked a lot to compensate the losses of unemployed workers. For this reason, there has not been any turmoil between 2000 and 2002 in Turkey. (Comert and Yeldan 2018)

It’s noteworthy to take a look at the domestic political environment both in Argentina and in Turkey. As a result of a profound economic crisis, Argentine politics run off the rails. From December 2001 to January 2002, Argentina had 5 presidents. At the end, political parties unanimously appointed Eduardo Duhalde as the acting president. Five presidents in a month displays to what extent Argentine politics was destabilised. When it comes to Turkey, the coalition government was dismissed after the February 2001 economic crisis. Until the election of November 2002, a group of technocrats consisting of former IMF and World Bank staffs ruled the country and prepared an action plan according to which Turkish economy started to give positive signals about the future. IMF Article IV reports indicated that Turkey is in a recovery path and economic governance is deemed sound in the hand of Kemal Dervis. (International Monetary Fund 2002) Along with technocrats, the rise of new political party consisted of both liberal and Islam-oriented political figures, AKP, won the majority in November 2002 and formed a government that gave confidence to foreign investors and the IMF. Last, the EU played an important role as a reliable anchor through which AKP found enough opportunity space to manoeuvre political reforms in the following years. For example, new legislation expanding Banking Regulation and Supervision Agency’s competence was adopted just after the 2001 crisis. In addition, Turkey became a part of BASEIL-II Agreement by which Turkish banking system gained resilience to external shocks.(Yalman, Marois and Güngen 2019) Along with improvements in the banking system, Turkey as a member of the Customs Union, could attract the European investors coupled with the U.S. support due to the Iraq War during which Turkey’s geopolitical importance outweighed its structural risks stemmed from the lack of effective monitoring in the Turkish financial market as well as  chronic corruption issue and questionable rule of law. Both the government’s willingness and harsh application of the IMF’s suggestions in Turkey coupled with the EU’s role as a last resort paved the way for Turkey to launch a series of reform programs and apply them in a secure and committed manner.(International Monetary Fund 2002) In comparison to Turkey’s performance, Argentina refused to pay its debt and announced sovereign default. Following that period, the IMF offered a debt relief programme providing a long payment scheme. However, Argentina refuted to pay 24% of total debt and contested the IMF’s offer and unilaterally proposed a new debt relief programme. (Hornbeck 2011) That’s why, economic crisis in Argentina was prolonged until the end of 2006.

III- The role of the IMF in the Argentinean and Turkish experiences

IMF policies during both Argentinean and Turkish economic crises were broadly criticised by Argentinean and Turkish economists as well as scholars and former policymakers. In fact, most of the critics regarding the role of the IMF consists of three big flaws.

First, The IMF’s Article IV, Sec.3(b) indicates that every country has a right to determine its exchange rate regime. In fact, what is seen in both crises was that the IMF actively engaged in the choice of exchange rate regime. In Argentina, Paul Blustein clearly displays how the IMF crystallised and fragilized the Argentine economy by insisting on dollar-peg. The IMF pushed forward the duration of Credibility Plan which was deteriorated balance of payment although it seemed reluctant to imply at first place. (Blustein 2006) Below, the table presents economic dislocation in Argentina considering real GDP growth, real effective exchange rate and the amount of imported goods and services along with division between general and central government’s overall balance. (Takagi and International Monetary Fund 2004)

At that point, what is appropriate to urge the Argentine government to discipline its fiscal system in a short time period. In Turkish case, the IMF has done the exact opposite of what was implied in Argentina. Although Turkey was going to on the edge of a bankruptcy, the IMF ignored huge imbalances in macroeconomic indicators due to Turkey’s accession negotiation to the EU. Onis makes criticism on the IMF’s attitude in the Turkish experience and explains that the IMF tried to buy time to strengthen the Turkish banking system by ignoring Banking regulation which allows opening a bank branch with almost zero capital. He further claims that the IMF’s exit strategy was inadequate and pious in a sense that 15% margin in crawling peg regime is futile considering Turkey’s economic magnitude with almost $280 billion at that time. (Önis 2006)

Second, IMF’s strict constraints on primary fiscal accounts weighted the burden on taxpayers that triggered economic slowdown and political turmoil in both countries. Below, the table conveys to what extent tax revenue became an important component of GDP in Argentina and Turkey.

Table I.II Total GDP and Tax-to-GDP ratio in Argentina and Turkey

Source: OECD Stats & Federal Reserve Banks of St. Luis & Instituto Nacional de Estadistica y Cencos Republica Argentina (OECD 2020; FRED 2020b; INDEC 2020)

Last, the IMF’s biggest mistake was that it didn’t provide an ownership for both programs. It means that the IMF turned its back to Turkey and Argentina in case of a failure by claiming that all fault belongs to national governments, not to IMF policies. For instance, Paul Blustein argues that the IMF blindly gave additional funds to Argentina ignoring moral hazards of foreign investors.(Blustein 2006) It is applicable to Turkish case where governments investments blown up because beneficiaries were not strictly monitored. Finally, the IMF did not care about countries preparedness to such extent liberalisation and which is why, both Argentina and Turkey ended up with a severe economic crisis.

Conclusion

            Argentina and Turkey have followed similar development paths in the 20^th century. Both countries invested, first, in an agriculture-intense economic model during which they focused on exports of raw materials. Later, they strived to leapfrog by adopting import-substitution model which gave the way for incessant public deficit problem. In that regard, Argentina and Turkey called for the IMF’s support to finance their debt. In return, the IMF imposed several conditions to transform their economies and converting its import-substituted economy into export-oriented one. In the 1980s, Turkey started to differ from Argentina by implementing neoliberal policies. When it comes to the 1990s, Argentina eagerly and rapidly adopted financial liberalisation, privatisation and deregulation. To that point, Turkey has already applied these three pillars of Washington Consensus with a robust institutional background. Yet, political instability in the Turkish political life slow downed the pace of economic reforms, necessary regulations for opening the Turkish economy up to the global economy remained incomplete, even obsolete given the Turkish banks’ malpractices during the 1990s.

            As a consequence of both malpractices in both Argentinian and Turkish domestic policies fuelled with the IMF’s blindness in terms of monitoring and controlling mechanisms, an economic crisis hit both Argentina and Turkey in the beginning of 21^th century. What differs two cases is basically countries’ readiness to resilient against external shocks. On the one hand, Argentina succumbed in high level of corruption as well as improper exchange rate regime and complexity in allocation of administrative competencies. On the other hand, Turkey encountered a relatively low level of corruption being relevant at the highest ranks of Turkish politics as well as fragile banking system and consumption-oriented growth model. Due to their structural differences, the Turkish economy rapidly recovered in comparison to the Argentinean one. However, even if Turkey reacted well in a way that unemployment and inflation issues were delicately handled, the model itself is highly criticised by both scholars and the IMF, itself. These crises put an end to IMF policies dictating limitless and unrestrained neoliberal policies over developing economies. In this respect, these crises revealed to the degree institutional capacity and good governance are important in the path of development in a sense that the amount of foreign capital doesn’t solely constitute a ‘big push’ in terms of economic growth.

Bibliography

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]]> https://www.academicnetwork.net/globalisation-and-arms-trade.html Tue, 30 Jun 2020 12:32:29 +0000 https://www.academicnetwork.net/?p=1524 Increasing General Military Expenditure in a Global World is Questioned Introduction  Globalization is a major phenomenon that has completely changed the economic, political, and military relations between states. After the end of the Cold War, interactions among Nation-States have drastically increased and intensified in a way that every state became dependent on each other. Removal […]]]>

Increasing General Military Expenditure in a Global World is Questioned

Introduction 

Globalization is a major phenomenon that has completely changed the economic, political, and military relations between states. After the end of the Cold War, interactions among Nation-States have drastically increased and intensified in a way that every state became dependent on each other. Removal of obstacles to trade and liberalization of capital flow entailed a huge shift in the global production scheme and gave birth to global supply chains that linked national economies into each other. In the same sense, the World Trade Organisation (WTO) has found in 1995 as the mark of market-oriented world’s victory over centrally planned economies to demonstrate the beginning of a long-lasting peace period. (Ünal-Kesenci 2015) In this context, one should claim that the integration process of the world economy has accomplished, and States came to a point where there is no turning back to geographically constrained economies. At this point, some liberal scholars put forth that humanity reached its climax and attained a level of civilization in which there is no possibility to wage wars for profit-seeking reasons. For instance, Francis Fukuyama announced the end of history and said that this is the last stage of humankind in terms of political thoughts. (Fukuyama 2006) Yet, it is interesting to see that the defense industry has blossomed in this period as well. State’s military expenditures rose by 49% from 2000 to 2009. Besides, what intrigues us is that considering the magnitude of the 2008 Quasi-Great Depression, states kept increasing their military expenditures in the following period until today. Given this discrepancy, the paper will argue why States are still increasing their military capacity in a world where every state is not only economically dependent on each other but also politically and socially interconnected.  To address this question, the paper will first investigate how national economies became integrated into the wake of the Cold War. Second, the paper will shed light on the rapid increase in military expenditures from 2000. Last, the paper will try to depict why globalization is in question and what are common points with regard to criticism towards globalization.

Genesis of Neoliberal Globalism

Neoliberalism was and is a catchy word for at least four decades starting from the signing of Smithsonian Agreements in 1971. It was a punchline for developed economies who could from that point onwards print paper money without the gold to back it up. In that regard, developed countries expanded their money supply to tackle the destructive effects of the 1973 and 1978 petrol crises. This change in monetary policy bestowed a stimulus in the domestic financial market. As a matter of fact, monetary expansion has not only created opportunities in the domestic market but also enlarged global money supply in a way that financial intermediary organizations sought to harness more wealth by lending money to countries who are facing difficulties to curb their deficits. According to the World Bank, the broad money-to-GDP ratio rose from 50.37% to 63.87% between 1960 and 1980. (World Bank 2019a) Even if the amount of broad money drastically increased, it was still certain restrictions on capital flows which inhibit investing in developing countries offering more interest rate and more financial revenue. At that point, Reaganomics in the U.S. coupled with Thatcherism in the U.K. came to stage in a sense that neoliberal pamphlet was dictated to other countries in an era where money in circulation all over the world tremendously increased compared to the precedent era.(Kotz 2002) More specifically, the broad money-to-GDP ratio grew from 63.87% to 93.15% in 1980 and 1989, respectively(World Bank 2019a). From onwards, neoliberalism’s postulates had to be reshaped to extend the scope of the global integration process, which started with the financial integration in the mid-1980s. To do this, neoliberalism’s main tenets, namely financial deregulation, privatization, removal of barriers to trade and freeing capital movements, are strongly emphasized, wrapped up in a single package called ‘Washington Consensus’ which promotes structural reconfiguration to the degree that every country has to prioritize several issues such as ensuring rule of law, transparency and democratic governance(Gore 2000). Only after that, a country could embrace the benefits of neoliberal understanding which is basically overall improvement in living standards for every citizen.

Along with financial and economic concerns, neoliberalism has to be redefined in an environment where there is neither balancing power nor a common threat for Western countries after the Soviet Union collapsed. According to Brian Burgoon, the United States and the European Union combined postulates of neoliberalism and globalisation and melt them into a single pot.(Burgoon, Oliver and Trubowitz 2017) Further, they pushed their constituents to believe in a new dream so that absence of a common threat could lead them into a disunification in an economic and political manner. As for justification, Western leaders gave examples of European experience to demonstrate how trade and openness enhanced their economies such that Western bloc arrived to gain victory against the Soviet Union. In essence, the idea which promotes free trade and openness was a bullet-proof argument for those who are willing to expand the scope of neoliberal understanding and to transit from Western-constrained globalization to more inclusive and comprehensive globalisation.

Given that, Tim Oliver argues that Western justification for neoliberal global agenda is not limited to their domestic politics, but also interlinked to converting their influence into the areas where there is a power vacuum after the retreat of the Soviet Union and where it is necessitated to formulate economic and political agenda (Burgoon, Oliver and Trubowitz 2017). At this stage, multilateral institutions turned into a tool to spread neoliberal globalism. To be frank, since multilateral institutions are found by reference to European experience and Western practices, they are inherently a reflection of Western values and thus, they are a manifestation of Western dominance over the rest of the world. As Michel Foucault mentioned in his earlier writing, this is a sort of fabricating régime de savoir upon which Western countries maintained their supremacy over other countries by guiding them through a set of values and norms. Brain Burgoon puts forth that new international setting is, by all accounts, finds its root in Western experience in terms of its governance logic in a sense that Western practices were used as a blueprint (Burgoon, Oliver and Trubowitz 2017). For instance, the Single European Act signed in 1986 predicted full-fledged free movement of capital until 1 June 1990 and following that rapid economic growth is observed in Europe according to Christophe Strassel (Strassel 2012). In this regard, financial liberalization is suggested by the IMF in line with past European experience in the 1990s.

In line with, financial and political effects of neoliberal globalism, it also portraits a new phenomenon which is the birth of transnational firms along with the development of supply chains. From onwards, economics entered into an unchartered territory where no one ever experiences an economic entity whose operations are not restricted by national boundaries and whose employees are not just its national, but also international. B. Sutcliffe and A. Glynn found out that the one hundred largest TNCs in the world (ranked by assets) had 40.4 percent of their assets abroad, 50.0 percent of output abroad, and 47.9 per- cent of employment abroad in 1996.(Kotz 2002; Sutcliffe and Glyn 1999) It clearly demonstrates how economic relations have changed starting from the 1990s. In line with a change in the structure of economic entities, namely transnational firms, the production network had to align with the economic realm. That’s why, one should claim that production is delocalized in a way that every part of a goods manufactures in different places and assembles in the central country which is where the to headquarter of this economy is installed. That shift from territorial production to fragmented production could be explained by two factors.

First, an abundance of money supply in developed economies created an excess and paved the way for foreign direct investment of a company that foresees much more profit in developing economies due to relatively cheap labour force and easy access to raw materials. (Croissant et al. 2019)

On the left-hand side, the table represents a rapid increase in the global net inflow of foreign direct investment between 1989 and 2001. (World Bank 2019b) Starting from the end of the Cold War a smooth uptake was observed until the end of 1996. It is interesting to see that the amount of foreign direct investments was rapidly increased after the United States and the European Union agreed on the neoliberal global agenda in 1996.

Second, the production scheme was fragmented as a means to supervise developing nations in a sense that companies whose headquarters are located in Western countries are exemplary for portraying the Western ways of doing business in these countries. It means that they acted as a mirror to reflect on how and why Western values lead to generating more wealth. At that point, developing economies discerned to what extent the rule of law and democracy are handy in terms of securing an investment environment. Only after that, state apparatus bears the responsibility of protecting property laws as well as ensuring contracts and servicing judicial effectiveness. According to the Index of Economic Freedom prepared by the Heritage Foundation, BRICS countries except China displayed a major improvement in economic freedom. If one would like to give an example, it is certain that Brazil performed very well. More specifically, Brazil’s overall economic freedom score jumped from 48.1 points to 63.4 points between 1995 and 2003.(Heritage Foundation 2020) In the same period, foreign direct investment in Brazil skyrocketed. In detail, while FDIs in Brazil was 4.85 billion dollars in 1995, it reached a peak in 2000 with 32.95 billion dollars. Due to the financial crisis that happened in 2001, it gradually regressed to 10.12 billion dollars in 2003. However, foreign direct investment in Brazil doubled between 1995 and 2003. It moved from 4.85 billion dollars to 10.12 billion dollars. (World Bank 2019c) It clearly displays a parallel between the Westernisation of business practices and norms and the amount of foreign direct investments. (Butcher 2014)

In general trend, almost every economy experienced the same evolution in the course of globalization, and following that, an impressive overall improvement in every economy is observed after the neoliberal global agenda has announced by the Atlantic alliance. At that point, it is logical to look at to what extent fragmented production, or simply global value chains take a central place in global commerce and how it changed the export and import rates in developing countries. William Milberg and Deborah Winkler carried out a study to scrutinize the evolution and impact of global value chains in the global economy. It reveals that developed economies’ imports remained restricted compared to those of developing economies. (Milberg and Winkler 2010) According to the U.S. Bureau of Economic Analysis, the U.S. imports moved from around 11% of its GDP to 15% of its GDP between 1995 and 2007. As for Europe, EU 27’s imports constituted 16.5% of its GDP and 21% of its GDP in 1999 and 2007, respectively. When it comes to low-and middle-income countries, their imports-to-GDP ratio moved from 19.8% to 33.2% in 1990 and 2007, respectively. It seems that developing economies integrated into the world economy and thus, they became interconnected to developed economies. From onwards, these economies attracted capital from centre economies and invested this capital into the manufacturing and services sectors. This radical shift entailed the rise of emerging economies and it eventually has an impact on world politics. New actors in commitment to WTO rules gained huge benefits from global value chains and enhanced their economies. For instance, China was a comparatively less influential economy at the beginning of the 20^th century. After it became a member of WTO in 2000, its economic performance drastically improved. China’s GDP almost tripled from 2000 to 2007 (1.21 trillion dollars to 3.55 trillion dollars, respectively) In parallel, Chinese foreign direct investment outflow increased almost four times in the same period. Given that, one should say that China has massively engaged in the global economy. However, China contested core Western values in the course of its economic development and critiqued its validity all over the world. Thus, China formulated another model, called ‘visible hand’ as opposed to the Western model ‘invisible hand’.(Womack 2017) In line with China, other BRICS countries raised a question regarding Western dominance.

In fact, it is interesting to perceive how a dominance project or a pacificator aim initiated by Western countries turned into a hurdle for themselves. In the beginning, Western economies strived to extract more profit from developing economies and to keep their influence on those countries who lack the necessary capital as well as institutional capacity and technological know-how. However, developing economies took advantage of being exposed to Western direct intrusion and started to accumulate capital and to ameliorate their technological and institutional capacity. In the end, these dissident voices against the Atlantic alliance questioned the functioning of multilateral organisations and criticised Western norms and values. The rift between developed and developing economies caused a bottleneck in world politics, which is gradually becoming more and more unstable.

The Citizens of the Republic of Turkey have decided their options in parliamentary and the presidential elections on 24 June 2018. Erdogan won the election again and became the first president of the new management system in the country. According to leaders’ election night conversations and election conclusion, could we say it is a victory of Erdogan? or reality of AK Party’s dependence on MHP is waiting at the door?

After Turkish citizens’ preference, according to the informal conclusions, this has appeared in TBMM (Turkish Grand National Assembly) and the presidential system which is something new in Turkish political life:

In the Presidential Election:

Erdogan: %52,38
Ince: %30,8
Demirtas: %8.32
Aksener: %7.42
Karamollaoglu: %0,9

In the Parliamentary election:

AK Party: %42,56 (295)
CHP: %22,64 (146)
MHP: %11,1 (49)
IYI: %10 (43)
HDP: %11,7 (67)

According to this conclusion and the rules of the new constitutional amendment, the partner of the AK Party, MHP (Nationalist Movement Party) has become a lock party in the new government system. While Erdogan’s party is losing 22 deputies according to elections which are made in 2015, other parties in parliament like CHP (14), MHP (9), HDP (8), Saadet Party (3), and the new-built party IYI Party (43) have been enhanced their powers by winning in this count deputies. This situation is too vital for the ruling party. Because AK Party could not seize the fifty percent plus one deputy of parliament and also it could not seize 3/5 (360) deputies in parliament, this was necessary for changing or arranging the constitution, even though MHP and AK Party made an alliance in this election. As a result, Ak Party that wants to manage an effective parliament process has been addicted to MHP. The explanation made by leader of MHP in election night has shown us this conclusion obviously. Even if Bahceli (The leader of MHP) says they are really determined to go on this alliance, he has not any idea or expectation about next year’s elections which is going to make in local governments whether or not will affect their alliance. Because the AK Party is forcing MHP in local elections in some cities like Adana, Mersin, Manisa which are being accepted MHP’s strongholds. Even if it has not been talked, for now, plans will be made in the close future. Erdogan will have a plan for the next elections like he has always one. Because Erdogan gives too much importance to local elections.

Erdogan protected his chair in the first presidential elections. Actually, we have to say that it is a truth that everybody’s expected. Because Turkish people have accepted the new constitutional amendment to go on their way only with Erdogan. So it was open at the beginning that they will want to see Erdogan first in the new government system’s head. Only, old CHP deputy Muharrem İnce who shows an extraordinary performance to the Turkish public was not been expected by people. This became an unexpected situation for people. İnce’s spectacular performances like making 107 meetings in 50 days, getting high ratings of his participated TV programs, his quick answers to give columnists, and others affected people. Not only affected his party’s partisans but also affected the ruling party’s participants and famous people. No one was expecting like a performance from him. In conclusion, İnce has gathered fruits of this success by rising up CHP’s votes above %30 after 41 years in CHP history. However, this success seems like it will shake the chair of Kemal Kilicdaroglu (leader of CHP) in the party. At the moment, it is being talked by people who are being Ince’s natural leader of the party. At the end of this process, it seems highly probable that Ince will race for the chair of Kemal Kilicdaroglu. Of course, unless the current chairman of CHP suggests to İnce a nomination for Istanbul municipality in the local election.

All those happenings in the last 3 days may be the beginning of born a new leader in Turkish political life or the beginning of an end which is waiting for Erdogan. I am sure Erdogan is understanding this and being ready for it, making a plan to prevent it.