Tansu Çiller has been prime minister of Turkey since June 1993. She is a professional economist who received her training at Bogazici University and the University of Connecticut, then did post-doctoral work at Yale University and returned to Turkey, where she taught economics for twelve years. She has nine publications on economics. Professor Çiller's political career began in 1990, when she became an official in the ruling True Path Party. In 1991, she was elected to parliament from Istanbul and became state minister responsible for the economy. Daniel Pipes and Patrick Clawson conducted the following interview with Prime Minister Çiller on April 7, 1995.
THE KURDISH ISSUE
Middle East Quarterly: Is Turkey winning the fight against the Kurdish Marxist group, the PKK?
Tansu Çiller: The Turkish security forces have stepped up their operations completely to eradicate terrorism. The number of PKK militants based in Turkey has dramatically fallen since the beginning of 1994; we estimate the PKK has lost half of its militants and is unable to find new recruits to replace them. Also, many PKK militants are turning themselves in to the Turkish authorities. PKK terrorists are losing ground in all areas of the southeast. This is not just due to the success of the security forces. It also reflects the support the local population gives the authorities in catching militants. I don't mean to say that PKK activities have ceased. But we can reasonably say that the organization has lost its operations capability in the big cities and rural areas.
MEQ: What combination of political reform and military action do you to consider necessary to end the Kurdish insurrection?
Çiller: Well, let's begin by recognizing the clear distinction that needs to be made between the two concepts of "insurrection" and "terrorism." There is no "Kurdish insurrection" in Turkey. The terrorists of the PKK are attacking innocent civilians in the southeastern part of my country without sparing women, children, or the elderly.
As terrorism subsides in the region, its socioeconomic problems will definitely be eased.
MEQ: How does your government intend to solve the Kurdish problem?
Çiller: When people say "the Kurdish problem," they often mean "the PKK terrorist organization." Let me divide the question into two parts.
First, what about terrorism? You simply fight terrorism. There is no other way. Every country has done it in the same way.
Second, what about the problems that our citizens of Kurdish background face? This has several aspects. One is socioeconomic. The embargo on Iraq has made life more difficult for them. As a result, we send twenty times more governmental assistance to their area than to other parts of Turkey.
Another aspect is security. The PKK makes security very difficult to assure for the population. These terrorists claim to represent our Kurdish citizens, yet they kill our citizens of Kurdish background. What kind of representation is that?
Another aspect is democratization. Legally, every citizen is equal and enjoys full rights. There is no distinction and never has been. Some ministers in my cabinet, including the deputy prime minister, are of Kurdish origin. Democratization is necessary for every citizen, for every region, not just the southeastern region.
MEQ: Is the Turkish operation in northern Iraq the endgame in the battle against the PKK?
Çiller: The operation in northern Iraq is only an aspect of combatting PKK terrorism.
MEQ: What more must be done?
Çiller: Since the outset of this terror campaign by the PKK, the Republic of Turkey has been aware that socioeconomic progress must materialize in order to overcome the problems of the region. However, the terrorist activities target not only the civilian population but also public services, such as schools, health facilities, and factories. Thus, terrorism in the region constitutes the main hindrance to the realization of comprehensive investment projects.
THE TURKISH ECONOMY
MEQ: In 1994, Turkey experienced nearly 150 percent inflation and negative growth. What is your government doing to turn the economy around?
Çiller: We announced a year ago, on April 5, 1994, a package of measures known as the "Economic Measures and Applications Plan." It responded to heavy budget and foreign payments deficits in 1993 and fluctuations in the Turkish financial markets in early 1994. It established targets for prices, wages, and foreign exchange and interest rates. Tight monetary and fiscal policies were put in operation and The whole package has been strictly implemented.
The program emphasized the fact that we aim at a sustained reduction in the private sector deficit to a level that will permit the resumption of noninflationary growth. This requires a comprehensive restructuring of the public sector, including reforms of the state economic enterprises, the tax and social security systems, and state agricultural policies.
Where reform of the State Economic Enterprises is concerned, our main goal is privatization along with measures to increase the productivity and effectiveness of those enterprises we intend to stay in the public sector, and to provide a social security safety net for their employees. Therefore, high priority has been given to the new Privatization Law to enable the government to proceed with its economic program.
We plan to restructure the Social Security Organization and also to introduce measures to increase productivity in the social security system. The measures will include both changes in the existing institutional structures and also in the functioning of these institutions. In order to decrease the burden of social security institutions on the treasury, we are also encouraging private insurance companies.
As far as tax reform goes, some legal changes have been introduced to expand the tax bases to cover unregistered activity in the economy, and to improve tax collection. Unregistered economic activities are now very considerable within the Turkish economy and to keep track of them, legal arrangements have been introduced to assign a tax number to every citizen and to monitor and check tax collection via a recently established computer system. IN order to achieve a more equitable tax system, fines for tax evaders have been increased and tax controls widened.
Existing personnel and expenditure management policies in the public sector have turned out to be inefficient and ineffective. So a new study has been launched by the Turkish authorities in order to design an efficient personnel and payroll management system with expenditure control mechanisms, such as auditing and accounting.
The April 5 measures have produced several striking successes, including a sharp reduction in the public-sector borrowing requirement and a major improvement in our balance of payments position. The financial and foreign exchange markets have long since made a full return to normal. All our debt-service obligations have been met, despite a sharp reduction in new external borrowing.
MEQ: What comes next?
Çiller: The biggest economic policy challenge in 1995 is to consolidate what we achieved in 1994, by obtaining a lasting reduction in inflation plus a strengthened external payments position and a recovery in industrial output and investment. The original strategy of the April 5 program remains valid for these purposes, but we now need to give greater emphasis to ensuring the stability of the initial fiscal adjustment through structural reforms and also to providing a clear and credible course for lowering inflation.
Sharp fiscal tightening under the April 5 resulted in a reduction in the PSBR from 12.1 percent of GDP in 1993 to 7.5 percent in 1994. The macroeconomic program for 1995 envisages a further reduction in the PSBR-GNP ratio to 5.1 percent. The way to achieve this is through continued tight budgetary policies and further improvements in the financial performance of the Extra-budgetary Funds and the State Economic Enterprises.
The consolidated budget deficit was sharply reduced in 1994, falling to TL 145 trillion (3.8 percent of GNP--down from 6.9 percent in 1993). Budgetary performance will be strengthened still further in 1995. It is intended to increase the primary surplus of the budget by 6 percent GNP.
Apart from taxation, the financing of the budget will rely heavily on domestic sales of government securities at market-determined interest rates. Securitized borrowing will consist mostly of 6-month and 9-month bills, but as inflation expectations and interest rates decline under the stabilization program, the maturity of Treasury bond rates will increase.
We expect a recovery in the real economy and a real growth rate of approximately 4 percent in 1995. This recovery is not expected to place strains on the current account balance. We expect a small current account surplus of $430 million at the end of the year. The general macroeconomic environment should be a great deal more stable this year than it was a year ago, which should further help matters. It should lead to a substantial rise in foreign capital inflows.
Money and credit policies will continue to be restrained in 1995, reflecting the continuing need to bring down inflation. As inflation, and inflationary expectations, are reduced, interest rates will eventually come down to much lower levels. Monetary policy and interest rate policy, in particular, will help to prevent the nominal exchange rate from depreciating significantly in 1995. Sound structural adjustment policies should help us avoid a repetition of the sort of bottlenecks that we faced early in 1994, but they are not enough by themselves. Our efforts have to be accompanied by a more favorable external economic environment and, equally important, adequate financial inflows.
Therefore, we can be confident of seeing during 1995 a fall in inflation to a more acceptable level and a return to moderate growth. In short, we will have a much more healthily functioning Turkish economy.
THE MIDDLE EAST
MEQ: Do you wish to see U.N. sanctions on Iraq lifted?
Çiller: Turkey has shouldered its responsibilities as a member of the international community by joining the multinational coalition formed to restore the international law and order after it was blatantly violated by Iraq's invasion of Kuwait. In the same spirit, Turkey has also fully supported all the relevant U.N. Security Council Resolutions.
The four-and-a-half-year embargo has brought grave suffering on the innocent people of Iraq and also inflicted hardship on neighboring countries. Turkey is one of them. The heavy economic losses the embargo has inflicted on Turkey are estimated around $20 billion so far, and have led to a rise in social disturbances and terrorist activities, especially in the Southeast Anatolia region. This, in turn, has created a strong and growing frustration among the Turkish public. Therefore, Turkey wishes to see the U.N. sanctions lifted as soon as Iraq complies with the legal requirements set by the United Nations.
MEQ: Financial Times and Petroleum Intelligence Weekly have both reported that Turkey is importing large amounts of oil from Iraq.1 Turkish sources say the amount is small. Could you comment on this discrepancy? Could you tell us about your government's efforts to crack down on this and other contraband trade from Iraq?
Çiller: In response to a report published on the same topic in the U.S. media, the U.S. State Department stated on February 16, 1995, that "of all the nations bordering Iraq, Turkey has probably enforced the sanctions the most effectively, responded to concerns that we've raised. . . . They've also suffered the most from some of the lack of commerce that's involved in the sanctions regime itself."
The traffic going through the Habur Border Crossing to northern Iraq does somewhat ease the economic sufferings of our people in the southeast. My government cannot remain indifferent to pressure from public opinion on this matter. I should also note that the amount of fuel which truck drivers are allowed to carry back to Turkey, in return for the non-prohibited goods they take to Iraq, is very small compared to the quantities which Jordan imports from that country. The people in northern Iraq benefit from this traffic too for, as you know, nothing gets through to them people from the south, from the Saddam regime.
MEQ: Some observers believe that the Iranian regime cannot feel confident of its own future until Turkey has been purged of secularism. Do you worry that this may be the way the mullahs see things?
Çiller: Turkey's foreign policy stresses the policy of non-interference in the internal affairs of other countries. Iran's perspective on its future is entirely its own affair.
MEQ: Do you have evidence to suggest that Tehran has in the past supported terrorist activities in Turkey? That it is currently doing so? Or that Tehran has become involved in Turkish politics, supporting the Refah Partisi, Turkey's fundamentalist party?
Çiller: Turkey has always hoped to develop friendly relations with other countries and expects other states to respect the same principles as it does.
MEQ: You stopped in Libya last fall in a surprise visit to Mu'ammar al-Qadhdhafi. Could you tell us if that led to positive results?
Çiller: On my way back to Turkey from the Economic Summit in Casablanca, I paid a short visit to Libya. I am convinced that the visit contributed to the development of our bilateral relations.
MEQ: The Republic of Turkey signed Security Protocols with the Syrian authorities in 1987 and 1992, yet Damascus continues to support the PKK. What is your government's attitude toward this pattern of violating agreements? Has it explicitly warned President Hafiz al-Asad about continuing to support the PKK?
Çiller: Unfortunately, Syria has not expelled the terrorist elements from her domain despite her international and bilateral commitments. Turkey is very much disturbed by the fact that the PKK leadership is resident on Syrian territory and based in the Bekaa Valley, which is under Syrian control. We are in the process of trying to find a solution through bilateral talks, as befits a country that seeks solutions through peaceful means.
MEQ: Do you foresee greater coordination with Israel as a means to put pressure on Damascus to change its ways?
Çiller: Turkey is prepared to take part in any international cooperation in order to eliminate terrorism, and nowhere more so than in the Middle East.
MEQ: Please tell us about Turkey's relations with Israel.
Çiller: The Turkish and Israeli governments both have the necessary political will to build on their already existing cooperation in various fields. I am confident that our excellent bilateral relations benefit not just the mutual interests of Turkey and Israel but also those of the entire region.
MEQ: What role do you see for Turkey in the Middle East peace process?
Çiller: Turkey's active support for the continuing peace process between Israel and the Arab countries is extremely important. It is not only one of the few democratic, secular, and stable countries in its region but it has enjoyed good relations with both the Arab world and Israel since the 1950s.
The peace process cannot proceed in a vacuum. In particular, it must be backed up through economic cooperation. The people of the region, and Palestinians in particular, must see that the peace process pays dividends. Economic development and the prosperity that peace brings are the best antidote to terrorism. To this end, we encourage Turkish companies to take a more active role as traders and investors in the Middle East. We urge them to consider joint projects; and ventures to build new infrastructure, especially in the areas of transportation, communications, and water projects.
MEQ: How realistic are the prospects for a Middle East Free Trade Area?
Çiller: We envision a Middle East with open borders and with free movement of persons, products, and services across borders, leading to economic cooperation and growth. It may sound ambitious. Ultimately, all this is attainable only if the peace process is brought to fulfillment.
MEQ: Would the existence of such a body make a difference to Turkey?
Çiller: Yes. A Middle East Free Trade Agreement would enhance Turkey's economic and trade relationships. We would hope to act as a bridge between the European Union and this group of countries.
MEQ: Your country has a unique secularist body of thinking in the legacy of Kemal Atatürk. What value might this have today in combatting the fundamentalist surge?
Çiller: Turkey is a secular and democratic country, so we are naturally concerned about any trends which may work against the smooth and steady functioning of democracy. Turkey approaches this sort of issue with a global perspective. In other words, we are concerned about all types of fundamentalist and related ideologies throughout the world, regardless of whether they originate from Islam or Christianity. In this context, the Turkish state stands equidistant from all religions and their subdenominations. Secularism is an indispensable principle for Turkey.
MEQ: Do you have any plans to make the Kemalist legacy available to Muslim peoples who do not speak Turkish?
Çiller: I believe Turkey is a fine example of a country in which a Muslim population enjoys the benefits of a modern secular and democratic state system.
THE FORMER SOVIET UNION
MEQ: The years 1990-92 marked a time of great hope in Turkey to build ties to the Turkic world. As President Süleyman Demirel said: "We were all alone; now there are five others." From the outside it appears that Turkish hopes have been disappointed: commerce has not worked out very well, political differences remain, and cultural influence has not been extensive. Are you, in fact, disappointed by the way things have developed in the Turkic world?
Çiller: That interpretation does not reflect what is actually going on in Turkey's relations with the Central Asian republics and Azerbaijan. Turkey's very strong historical, cultural, and linguistic ties with those states have enabled us to make rapid progress in our relations and cooperation with them in the three years since their independence. I believe that Turkey's relations and cooperation with the Central Asian Republics and Azerbaijan also contribute to strengthen prospects for peace and stability in the region.
On the political level, we have establish good, close working relations with these countries, as shown by the steady flow of top-level bilateral visits between Turkey and the new republics, as well as summit meetings of the leaders in Ankara in 1992, and in Istanbul two years later.
As far as economic relations go, Turkish businessmen are very active in the Central Asia republics and Azerbaijan. Turkish corporations have invested almost $4 billion, and that is only the beginning. Trade is increasing, with a volume of $650 million in 1994 -- quite an impressive figure when you recall that our trading relationship with these countries began only in 1992.
We have allotted $936 million in loans to the Central Asia republics and Azerbaijan. If you take foodstuff credits and humanitarian and technical assistance into account, the loan figure climbs to $1.4 billion. This assistance aims to help them establish fully national states, overcome their severe economic difficulties, and move forward to a democratic political system and a market economy.
The new republics have a host of links with Turkey. National carriers since 1992 connect Istanbul to Baku, Tashkent, Bishkek, Almaty, and Ashkabad with regular flights. These republics are expanding their radio links and satellite connections to the outside world via Turkey. Turkish television programs are transmitted via satellite to the Caucasus and Central Asia.
So too in the educational and cultural fields: we are providing scholarships, technical assistance, and vocational training. Around 8,000 students from these countries have arrived in Turkey since 1992 under a scholarship program. The Turkish government and private institutions have established over one hundred schools in the republics.
MEQ: Wars between Armenians and Azerbaijanis, Muslims and Serbs in Bosnia, and Russians and Chechens have together had a seemingly deep impact on Turkish public opinion.
Çiller: Events in the Caucasus and in the former Yugoslavia are viewed with deep concern in Turkey. Turkey is not only geographically close to both places but we have close historical, traditional, and cultural ties to them and their people. Furthermore, millions of people living in Turkey today trace their family roots to the Caucasus and the Balkans. They are, understandably, deeply and earnestly concerned, even outraged, by what is going on in those regions.
MEQ: Do you worry that strong emotions from these tragedies will unsettle Turkish politics? Do you worry that Turkish citizens will go off to fight in any of those wars?
Çiller: By and large, the mainstream of Turkish society is very moderate and very forward-looking. Our people would like to see toleration and progress towards peace in both regions.
MEQ: What are the Russians doing in the Caucasus?
Çiller: Certainly, one of the driving forces in Russian foreign policy seems to be the need to maintain the belief that Russia is still a great power. Being a great power means that a state must act in certain ways and accept certain responsibilities. When it comes to dealing with the large number of conflicts along Russia's borders and beyond, this is accomplished by the implementation of a sort of Russian 'Monroe Doctrine,' which seeks to define a sphere of influence in regions formerly part of the Soviet Union. Turkey's concern arises from the proximity of Russian forces to its borders.
THE EUROPEAN UNION
MEQ: How do matters stand between Turkey and the European Union?
Çiller: We have taken up our rightful place in all Western organizations. We regard full membership of the European Union as an extension of the long-standing policies of modernization, which we have been vigorously pursuing since the last century.
Turkey showed her commitment to closer links with Europe when we signed the Treaty of Ankara with what was then the European Economic Community in 1963. Since the Treaty of Ankara, the EU has accentuated its approval of Turkey's accession to the Union in its response in 1989 to Turkey's application for full membership. More recently still, it has done so again at the Copenhagen summit. Turkey is now economically strong enough to integrate her economy into the community. As cooperation in the areas of trade, investment, and finance gradually increases, Turkey's de facto existence in Europe will be steadily consolidated. The Customs Union that will come into being at the end of this year is the crucial step forward in this direction. We regard the Customs Union as an exceptionally important step on the way to Turkey's full membership to the union.
As we all know, the decision of the Customs Union could not be adopted during the EU-Turkey Association Council meeting last December because of a Greek veto. However, despite all the difficulties we met along the way, the decision was eventually approved during the EU-Turkey Association Council meeting on March 6, 1995.
MEQ: Looking beyond the economic dimension, how do recent relations with Europe leave Turks seeing themselves vis-à-vis Europe? Do they make Turks feel less European? More Muslim? More Middle Eastern?
Çiller: The Anatolian peninsula's unique geographical location makes Turkey a bridge between Asia and Europe, Middle East and the Balkans, and, above all, between East and West. As a Muslim country, Turkey's commitment to a secular democratic political system and also to the general ideals of the West introduces a further dimension to her role.
In the early years of the Turkish Republic, Atatürk sought to demonstrate that Islam and modernity are compatible. His vision has now been realized; and it has irrevocably transformed our nation. As a secular democratic country with a successfully functioning free-market economy, Turkey relays key Western concepts and values, such as democracy, human rights, and free enterprise, to the Middle East, the trans-Caucasus, and Central Asia. Turkey offers living proof that Muslim and Western values can be combined inside a secular and democratic system.
MEQ: Ultimately, does Turkey's future lie with Europe or the Middle East when it comes to economics? And politics?
Çiller: Full participation in the process of European integration has long been, and continues to be, one of Turkey's main foreign policy objectives. We regard eventual full membership of the EU as the logical culmination of our longstanding drive to become a fully modern and industrial country.
With the cold war over, I see a Euro-Atlantic community emerging that stretches from Vladivostok in the East to Vancouver in the West. Moreover, Western political, legal, and economic patterns--democracy, human rights, and free enterprise--have become universally valid blueprints on which societies are based today. If a divided Germany and Central Europe were then the main earlier epicenters of tension, the Balkans and the Caucasus are the epicenters today. Turkey today stands in a crucial subregion of Europe, between the Adriatic to the Caspian Sea, where stability has yet to be established. Adverse developments in these regions make Turkey's strategic role and responsibilities all the more crucial as a strategic bridgehead between the Euro-Atlantic community and Central Asian republics. Beyond that, of course, there are many advantages Turkey's position offers the union in the Near and Middle East and Mediterranean region.
In addition, Turkey itself has become a large market. When the Customs Union is set up, Turkey will be the tenth biggest trading partner inside it. This country offers some very exciting investment opportunities to our European partners. We believe that our young, dynamic economy will make an increasing contribution to the prosperity of the continent as years go by.
Our European vocation is no obstacle to relations with the neighboring countries with which we share historical, cultural, and religious links. Quite the contrary, we see these links as very helpful to building relations with the region.
THE UNITED STATES
MEQ: Do difficulties with the European Union lead you more to emphasize your ties with the United States?
Çiller: We have enjoyed steadily deepening relations with the United States and with the countries of Western Europe since the foundation of our republic in 1923. This relationship gained new momentum during the Cold-War era, when Turkey actively participated for the first time in the political and military organizations of the West. Turkey's links with the United States and its ties with Western Europe are inseparable parts of its overall relationship with the Western world. So I don't think it would ever be possible to do without both of them.
MEQ: What is the outlook for Turkish relations with the United States?
Çiller: We see our bilateral relations with the United States as a tested and enduring relationship, for the Turkish-American alliance has not only stood the test of time but has successfully responded to change. Turkish-American relations have developed steadily and grown stronger in recent years, becoming a multifaceted partnership. It is my firm belief that what was mainly a defense-oriented cooperation can be transformed into a multifaceted partnership. We call this "enhanced partnership." While defense cooperation continues to be important, circumstances are now ripe to shift the emphasis to economic, scientific-technical, and cultural fields. The U.S. administration, I am pleased to note, shares this outlook.
MEQ: Please tell us about the strengths and potential problem areas of the relationship.
Çiller: Our countries have convergent interests on many issues but, of course, not on every issue. Still, our common interests and bonds clearly outweigh the differences. Moreover, Turkey and the United States have sufficient mechanisms for mutual consultation and cooperation to enable them to harmonize their views and actions.
MEQ: Do you expect that a decline in U.S. financial aid to Turkey will significantly affect the two states' ties?
Çiller: The amount of U.S. security assistance to Turkey has fallen every year since 1992. The assistance given by the United States benefits both countries, and so a reduction in it is not in either country's interest.
NOT ANSWERED: Why has the Refah Partisi been growing in strength? What steps are you taking to blunt its appeal?
ARRIVED TOO LATE FOR AN ANSWER: The Turkish strike against the PKK in northern Iraq has been much criticized in the West as seeking to solve a political problem with military means. How do you reply to this accusation? After Turkish troops leave northern Iraq, what political authority do you hope to see in charge of the area?
1 On Dec. 8, 1994, and Dec. 18, 1994, respectively.
