LABOUR-TURKEY: Structural Adjustment Sparks Protest

By IPS Correspondents Reprint | | Print |

Nadire Mater

ISTANBUL, Jul 24 1999 (IPS) - Following weeks of local and regional protests against a package of austerity measures, some 200,000 workers from all over Turkey gathered Saturday in Ankara in what union leaders describe as the largest national demonstration in decades.

The demonstration, organised by ‘Labour Platform’ -a coalition of four major labour confederations – rejected a draft social security Bill introduced by the centre-left government of prime minister Bulent Ecevit, under pressure from the International Monetary Fund (IMF).

One of the Bill’s most rejected clauses is the raising of retirement age from 43 to 60 years for men, and from 38 to 58 for women, which unionists consider equivalent to “retirement in the grave,” given the country’s harsh social conditions and average life expectancy (65).

The government insists, however, that 43 is probably the world’s lowest retirement age, well below European Union (EU) standards, but unionists and experts recall that the average Turkish worker actually retires at 57, after working 55 to 60 hours a-week against 35-40 in EU countries.

In a festival-like atmosphere, the workers and their families flew balloons, waved flags and carried coffins with the inscription ‘No to retirement in the Grave’. “The government should listen to us,” said Bayram Meral, leader of the TURK-Is, the country’s biggest labour confederation.

“Listen to to the workers, pensioners and public employees, not to the international capital,” Meral told the government in a defiant mood. Otherwise, “we will be gathering daily in the (country’s) squares.” later, a delegation visited president Suleyman Demirel to deliver their demands.

“Workers are very correct when they say with the new law they will only ‘retire in their graves’,” says analyst Omer Suvari of Istanbul’s weekly Ozgurluk.

“The retirement age was in the past decreased from 60 to 43 by successive Turkish governments in order to get rid of higher pensions in the forthcoming decades. Yet, only 25 percent of those already retired is under 49 years of age and only 1 percent of these are under 40,” Suvari says.

The government new labour scheme affects Turkey’s 23 million work force, of which four million are officially unemployed while some ten million work in the rural areas mostly in self-subsistence family farms.

Only one out of nine industrial workers is a woman, while most of the female work force is employed without pay as household workers. Employed women’s wages are usually inferior to those of men.

Social security reform schemes coincides with recent negotiations with the IMF for a new stand-by agreement, required to turn on a green-light on foreign loans.

The IMF conditions an agreement to a significant reduction of the present inflation rate of 65 percent. Turkey aims at decreasing the annual inflation rate to 10 percent in 2001, particularly by cutting public expenditures and by speeding up the ongoing privatisation of state- owned industries.

During negotiations with Turkish officials in early July, Carlo Cottarelli, the IMF’s Turkey Desk chair told Turkish journalists that “reforming the social security services is one of Turkey’s major problems. The social security budget deficits have reached significant figures.”

Prime minister Ecevit and Labour minister Yasar Okuyan claim that Turkey’s finances would certainly “sink” in five years unless the social security deficit is not corrected quickly.

But Turkey’s financial bottleneck actually seems to arise from huge foreign debts. According to the State Planning Organisation figures, in the next five years is the country will have to pay 82 billion dollars to international creditors.

As a first step, the government has restrained public employees’ pay-hikes for the second part of the year.

“Under this draft Bill, what indeed is a crack down on labour, not only the retirement age is raised but as a result the labour is practically stripped of its right to organise and to live,” Kamil Kinkir , leader of the United Metal Worker’s Union told IPS.

“In the long term, the government plans to withdraw from social security responsibilities. The workers are offered only private insurance. And if they can not afford this, they will be simply let die,” he says.

“Claims that the social security system (SSK) is a ‘black hole’ in the budget is a big lie,” says labour analyst, Ibrahim Anil of Istanbul University.

“The SSK had indeed not suffered from budget deficits until 1997,” Anil said. “The problem is that the government controls SSK’s incomes and puts them in state banks with zero interest rates. Thus, the system is unable to invest its own resources.”

“Further, the government subsidies to the social security system is unsystematic and much lower than the average EU practices while employers’ generally deny their share to the system,” Anil says.

According to economic analysts, contrary to government claims the greatest part of the state’s financial burden arises from internal debts rather than social expenditures.

“Only 8.7 percent of the total budget is allocated to subsidising the social security system, while 38 percent goes to servicing domestic debt interests. That is, 38 percent of the budget is allotted to 250,000 rich, while million others in the social security system are expected to do with less than 9 percent of the budget,” says economist Hayri Kozanoglu of Istanbul’s Marmara University.

Although not raised by the unions, the imbalances are most graphically expressed by the share of defence and security – 19 percent of the budget- compared to the 9 percent of social welfare costs. On top of this, the state spends seven billion dollars a-year to fight the Kurdish Workers Party (PKK) guerrillas.

A significant segment of the work force does not enjoy any benefits at all. “The actual umber of workers within the social security system should have been 11,7 million if all worked legally. At least 2,5 million work force is working illegally,” says economic analyst Enis Berberoglu of Hurriyet newspaper.

“If these illegal workers had been incorporated into the social security system, the SSK deficit would have been quickly closed,” he says.

“The same government however withdraws a tax law imposing stricter measures to business. Now, legal workers will retire later while illegal workers-slaves will never retire, ” Berberoglu concludes.

“By simply ignoring where particular countries’ financial difficulties are rooted, the IMF proposals are bound to provoke serious social and political turbulences,” believes economist Nesrin Sungur of Istanbul University.

“The demands of international capital are imposed on aid- seeking countries in a most obscene manner. The crisis-riddled Asian countries who applied to IMF assistance are a concrete example,” she warned.