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Middle Eastern Studies

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Islamic Capital/Anatolian Tigers: Past and Present

Evren Hosgr Version of record first published: 03 Mar 2011.

To cite this article: Evren Hosgr (2011): Islamic Capital/Anatolian Tigers: Past and Present, Middle Eastern Studies, 47:2, 343-360 To link to this article: http://dx.doi.org/10.1080/00263206.2011.534336

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Middle Eastern Studies, Vol. 47, No. 2, 343360, March 2011

Islamic Capital/Anatolian Tigers: Past and Present

EVREN HOSGOR
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The emergence of a specic business group in Turkey, Islamic capital (aka Green capital or Anatolian Tigers), has been an interesting topic for many researchers. Some scholars explain their rise in terms of individual eorts or entrepreneurial spirit.1 Others either rely strongly on the religious/conservative discourse of such businessmen,2 or concentrate on their specic consumption patterns and lifestyles as the main indicator of class formation.3 Besides, since contradictions among dierent business groups (capital fractions) are generally reduced to distributional conicts, the rivalry between Istanbul-based business circles and Anatolian Tigers are equated to size and region related conicts.4 This also leads to a general misconception that Islamic capital was mostly composed of small and medium-sized enterprises (SMEs) and that its economic domain is reducible to an enclave or sub-economy.5 However, there has been a signicant change in its size, scope and regional orientation; hence it is not fair to label all SMEs as Islamic. Despite the growing literature, researchers still have diculties in distinguishing between the two.6 This article discusses the development of Islamic capital from a rather dierent perspective. It argues such research does not provide a criterion on which Islamic capital as such can be identied as a separate capital fraction that can pursue a distinct and collective agenda. Indeed, a group of individual capitalists arising out of some incidental concurrence of interest does not constitute a separate fraction. For fractions are the portions of capital, distinguished from one another by some structural characters referring to distinct positions in the process of capital (re)production and circulation.7 These assertions do not deny the explanatory capacity of the term Islamic capital, but instead assert the necessity of an alternative framework that can explain this peculiar mode of capital accumulation in relation to Islamic motifs (specic formulation of Islam as a regulatory force) but without reducing religion to a mere tool for economic success.8 The article rst identies dierent stages of capital accumulation in the Anatolian region. Second, it interprets their development and success as the product of multiple determinants that only became possible thanks to the neo-liberal transformation from the 1980s onwards, and to the export-orientation strategy and its specic forms of promoting SMEs (including subcontracting activities and the informal economy). Such an endeavour aims to break the myth that these companies established themselves as signicant market players merely as a result of their own individual or
ISSN 0026-3206 Print/1743-7881 Online/11/020343-18 2011 Taylor & Francis DOI: 10.1080/00263206.2011.534336

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joint eorts. Third, it establishes the unique features of Islamic capital by discussing the symbiotic relationship among SMEs, interest-free banks (IFBs or special nancial houses) and communal linkages. This mode of accumulation is mediated particularly through interpersonal relations of kinship/friendship and other forms of networking via religious organizations, business associations and political parties. Fourth, it demonstrates the limits of communal, religious and other non-market networks in pursuing further economic development, and the possible solutions these rms had pursued to solve their dilemmas. Lastly, it reviews their present situation, with particular reference to the process of internationalization of capital accumulation and to the emerging multiple-power relationships among dierent capital fractions in the present environment. By doing so, it attempts to go beyond simplistic analyses that merely dierentiate capital groups in terms of distinctions based on Islamic/Anatolian and Istanbul-based capital or based upon the size of the enterprise (large and SMEs). This method would seem better for empirically recognizing the possible multiplication of fractions and dierentiations in their strategies as one approach closer to complex, concrete analyses of internationalization of accumulation. Dierent industrialization waves can be identied in the Anatolian region of Turkey. In the initial stage, the then governments had rst channelled the savings of the Turkish immigrants in Europe to village cooperatives in the mid-1960s and later initiated a regional industrialization programme based on small and medium scale production in the 1970s. During this initial stage, some 300 worker companies were established under state initiatives, mainly in priority development regions and sectors determined by the State Planning Organization.9 Therefore neither the idea of supporting SMEs for industrial diusion nor using family savings and workers remittances for capital accumulation was unique to the Islamic movement. It was originally a CHP (Cumhuriyet Halk Partisi [Republican Peoples Party]) project that emerged under the slogan of Peoples Sector. However, these rms failed to raise capital through remittances due to the absence of a stock market or experience with nancial transactions; thus only a few survived. Concomitant to CHPs failure to remain in power and the 1970s economic crisis, the objectives of policy makers had diverged from such projects. Disillusioned with previous experiences, savings also either remained dormant or moved away from productive investment towards speculative investments (real estate and gold). However, various developments in the 1980s created opportunities for a second wave of industrialization in Anatolia, albeit with signicant dierences from the initial project, for they were strongly connected to market deregulation and nancial liberalization policies. The initial export boom that followed the neo-liberal prescriptions (and export orientation accumulation strategy) of the early 1980s did not continue as expected and the major winners of this strategy were large conglomerates, which were mainly inward-oriented industrialists despite their export arms. But there was also a group of SMEs that had beneted from such policies. Operating in the rising sectors (textile, construction and related activities, and service sectors), these rms were located in new industrial growth centres in inner Anatolia, but had strong direct (and indirect) transnational connections. They were concentrated strongly in labour-intensive sectors and mainly working as the subcontracted manufacturers of domestic and

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foreign capitals. They had wholesale and retail chains both in Turkey and abroad, and their share in exported manufactured goods increased from 31 per cent in 1980 to 48 per cent in 1994.10 Yet the proliferation of these enterprises was not coincidental, but was closely linked to active government encouragement through credit opportunities from public banks, preferential treatment in public contracts and/or construction of organized industrial districts. Besides, the public investments of the 1980s concentrated less on manufacturing and more on infrastructural investments (transportation, energy, communication, and urban renewal projects), whereas liberalization of the trade regime provided opportunities to import necessary inputs without paying commission and to export nal products directly. A signicant number of these rms are concentrated in sectors that took o with the export orientation strategy (textiles) and in other sectors that realized a serious growth potential with the developments in the domestic market (construction and service).11 Indeed, the concept of Small and Medium Enterprises (SME) was rst introduced during this era. More than 500,000 rms were established between 1983 and 2000; and in 1990 the SMEs accounted for almost 90 per cent of all manufacturing rms in Turkey and employed more than one-third of the workers in the manufacturing sector.12 In reference to either their geographic location or their desire to reect the strategies of the export-oriented SMEs in EANICs (East Asian Newly Industrializing Countries), they were usually referred to as Anatolian capital or Anatolian Tigers. Two more factors particularly facilitated the revival of Anatolian industries. The rst was the growth in the Middle Eastern economies and the concomitant injection of Saudi capital into the Turkish economy, taking advantage of opportunities that arose during the liberalization of the 1980s, notably in the nancial sphere. The introduction of IFBs facilitated the revival of Anatolian SMEs in two interrelated ways: On the one hand, they facilitated the initial mobilization and concentration of small sums of capital into larger amounts as a basis for investment; on the other hand, they provided constant ow of capital for these expanded or new companies, thereby encouraging their further expansion. Second, the savings of Turkish guest workers in Europe were channelled towards unocial channels: informal linkages based on trust relations facilitated through interpersonal relations of kinship and friendship and other networking forms. Although savings were initially collected to nance religious and cultural services for migrant communities in Europe, they were later directed in investments back in Turkey, when the market deregulation and export orientation created new opportunities for them. IFBs were introduced as part of the policy to diversify nancial institutions operating in the domestic market. The 1983 special legislation on IFBs was to encourage Middle Eastern capital to invest in Turkey, hence granted them advantages in comparison with conventional banks.13 Turkish IFBs operate like their foreign counterparts: they oer PLS (ProtLoss Sharing) accounts in accordance with Islamic principles.14 First IFBs were TurkishSaudi joint ventures: the Al Baraka Finance House and the Faisal Finance established in 1985, followed by another ArabTurkish investment, the Kuwait Turkish Finance House in 1989. In the 1990s, Arabic capitals share had decreased and Turkish private investors _ established Anadolu Finance, Ihlas Finance House and Asya Finance House in 1991, 1995, and 1996 respectively. They were owned by holdings covering divergent

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_ sectors of industry and media: Anadolu Finance was owned by the Istikbal Group, a leading furniture manufacturer; while Faisal Finance was sold rst to Kombassan Holding in 1998 and then to Ulker Group, a leading food producer, in 2001. IFBs market share rose from 1.59 per cent in 1991 to 2.56 per cent in 1993, and stayed around that level until 2001; the number of branches increased from 25 in 1991 to 120 in 1997.15 Although IFBs outperformed conventional banks in a few cases, their performance was generally below the latter; and they did not become very popular among Turkish depositors, unlike in some other Muslim-dominated countries. Yet IFBs did not aim only to attract domestic savings but also the remittances from migrant workers in Europe and Gulf countries. The latter indeed constituted a signicant source of capital for the second wave of industrialization and the most powerful Anatolian-based holdings were founded primarily with these savings.16 An estimated gure was that over 3 million migrants from Europe had sent $5 billion to Turkey during the late 1990s.17 IFBs had two functions in the process of capital accumulation. First, they targeted those savings that were not channelled to the conventional banking system (the money under the pillow, as expressed by a local idiom). However, their conformity with Islamic norms and values was not the only reason for attracting these savings. The 1982 Bankers Scandal18 seriously eroded investors condence towards the conventional banking system. Indeed, when IFBs were introduced, an estimated $50 billion of savings was kept out of the system.19 Second, they provided funds to those capital groups that lacked sucient capital and/or faced certain barriers in obtaining nancial credits from public and private commercial banks. This form of capital accumulation, however, aected rms sectoral preferences: instead of sectors that necessitate long-term, risky, skilled labour and high-tech investments, the majority of the rms channelled investment towards areas where cashow is fast and secure (consumer durables, Hajj organizations, and construction). Some of the largest and widespread super/hyper-market chains were indeed owned by these groups.20 Religious orders (or sects) have played a signicant role in increasing the speed of capital accumulation, especially in its initial phase. Through personal charisma and revelations, missionary merchants became key agents in conveying the holy message and converting individuals to the idea of Islamic economic rejuvenation. _ The founders of two leading Islamic holdings, Kombassan and YIMPAS, are oft cited examples of such entrepreneurial preachers who were not originally businessmen and had no accumulated capital when they started.21 With the money collected from their members in the form of charities, these sects provided religious and educational services by building mosques, and providing Koranic courses, schools and dormitories. However, the role of sects went beyond the limits of intracommunity support, hence they provided capital and a customer base.22 Thus, religious networks had four functions in establishing business deals, reaching capital and markets in and beyond the national economy. First, sect members undertook joint investments, obtained loans from each other and/or established mutual assistance networks to purchase inputs (raw materials, intermediary goods and machinery) so as to reduce their transportation and transaction costs. Therefore, an important feature of Islamic capital is their ownership structure.23 In contrast with big conglomerates in Turkey, which are generally family-owned rms, ownership in Islamic rms spread around many

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shareholders, including transnational investors. For example, Kombassan had nearly 30,000 shareholders and owned companies in Turkey, Germany and the United States. Another distinct feature is the legal character of rms assets: investors have no legal entitlements to the assets since their shares have no legal basis, yet they receive a share of prot (a xed return) in relation to their investments. These companies were mostly not registered with the state and their shares were not quoted on the Istanbul Stock Exchange (ISE). Second, religious networks helped these rms to distribute their products and to capture a niche market by creating a religiously-sensitive consumer base: Ulker products were distributed by the Nurcu sect in Anatolia and the Central Asian republics.24 Investments in mass media, newspapers, magazines, and television and radio channels played a crucial role in organizing these sects and constructing a distinct religious identity among their members. The purchase of their goods was promoted as a religious duty; commercials explicitly acknowledged their conformity with the Islamic principles; rms adopted Islamic titles for company names/brands. It is notable that prior to this period there was nothing like typical Islamic dress. This shift brought a new dress code (turban) for the pious and led to the growth of an Islamic fashion industry. Consequently, recent decades have witnessed the rise of consumers/believers who dress in Islamic fashions, shop at Islamic supermarket chains, stay in Islamic ve-star hotels, watch Islamic TV channels and read Islamic newspapers and magazines, entertain themselves with Islamic pop/arabesque, standup comedians, and lms. Third, sect-aliated private schools, universities, courses and dormitories not only enabled them to maintain their organizational base, but also provided them with an observant labour force. This created a body of devoted cadres from all segments of the working population, including the professional, urban middle class. Fourth, religious networks played a signicant role in providing legitimacy for their operations. Community leaders, religious teachers and preachers encouraged their members to provide resources for these rms with the help of Islamic ethics in relation to the common good: Muslims should support business activities since more business means more jobs, more bread for all. Put dierently, a synthesis of industrialization, development and Islam has evolved in order to provide the core motivation for investing in these companies and to support their commercial activities. The Islamication process not only divided the market and everyday life along Islamic and non-Islamic norms but also among dierent sects. Although some holdings were sect coalitions (Kombassan), market competition and insucient capital led to a war between these sect-aliated rms. In case of severe competition in a specic sector or bankruptcy, sect leaders called their followers to boycott other products and/or to secure their rms by pooling private resources.25 Fatwas were _ also used to legitimize their activities that fall outside Islamic principles: when Ihlas Holding wanted to enter the ISE, it set up an advisory board (formed by top Islamic scholars) to gain Islamic credibility and to avert criticism.26 The decision to join the ISE was crucial for accumulating the necessary capital for those groups that wanted to enter privatization bids and/or for those planning to expand into sectors that necessitated huge investments. Indeed, some Islamic rms accepted that they are working under an interest-bearing system and openly declared this should not be considered haram. Similar boards were founded and fatwas were produced by other

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sects in the mid-1990s when they joined the race.27 Eventually, this widened the gap between holdings and SMEs. This then created a division not only between capital haves and have-nots, but also between fatwa haves and have-nots. _ _ The foundation of MUSIAD (Mustakil Sanayici ve Is adamlar Dernei [The g Independent Industrialists and Businessmens Association]) was the real breakthrough for Islamic capital. However, the important point here is not its members individual commitment to Islamic ethics/principles,28 but rather the organizations _ specic formulation of Islam as a regulatory force. For MUSIAD helped them to go beyond their mere economic-corporate interests. _ MUSIAD was founded by ve businessmen in 1990; but its membership grew suddenly, reaching 2,700 in 1997 which amounted to 10,000 aliated rms. Unlike _ TUSIAD (Turkiye Sanayici ve Isadamlari Dernegi [The Turkish Industrialists and Businessmens Association]29) aliated companies, the majority of these rms were _ founded after the 1980s; only a few date back to before the 1960s. While TUSIAD members come from large rms geographically concentrated in Istanbul and adjacent _ industrial districts of the Marmara region, MUSIAD is mainly comprised of Anatolian _ SMEs employing fewer than 50 workers.30 Nevertheless, MUSIAD rms operate in various sectors that are well integrated into the capitalist core and are both national and transnational. They are mainly concentrated in the booming sectors of the post-1980s noted above, and others such as chemical and mining, food, furniture, forestry, machinery and spare parts, automotive auxiliary/accessory products, electronic and consumer products.31 In close connection with their ownership structure, they are involved in partnerships with each other; hence their investments are diversied in dierent activities and sectors, which protect them from risks that occur due to market contraction or other uncertainties. _ MUSIAD functions at both the national and international level.32 First, it aims to strengthen solidarity and cooperation among its members through input supply, outsourcing, subcontracting and retailing relationships. Given the limited capital available to SMEs, this intermediation is signicant since it reduces uncertainty, prevents the breaching of contracts and minimizes the cost of information gathering and _ monitoring.33 As expressed by its then-president, MUSIAD was established [to allow] the rather closed (or introvert) small business to step out [of] his shell and get into relationships with the general sector of industry and [to enable] him to overcome the diculties he encounters in such relations, and [to obtain] adequately rich knowledge and information concerning technology and markets.34 Second, it encourages nationals living abroad to invest in their projects, and hence promotes a global Muslim business network that enables mutual assistance and joint-venture investments: it organizes international business fairs, conferences and trips abroad and establishes contacts with businessmen, government ocials and managers from other public/private organizations. Although Muslim countries and countries with Muslim-dominated communities came rst (Middle Eastern, Central Asian and other Asia-Pacic countries), it _ encourages operations in Europe, Latin America, and the USA. Therefore, MUSIAD notes that its international orientation dierentiates it from other local solidarity associations, since those cannot full the function of opening out.35 _ MUSIAD publishes bulletins, journals and reports, and holds meetings with politicians, academics, journalists and religious scholars where investment

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opportunities, in and abroad, and public policies were discussed. Therefore, as in _ _ the case of TUSIAD, MUSIAD also goes beyond simple interest-group representation that merely organizes individual capitalists into a collective group or builds networks among its members. This is not merely because it develops close contacts with the local and central governments to inuence economic policies, or because it sets goals and mobilizes resources to ensure their consolidation and survival as a class; but, particularly, because it formulates an alternative societal project that has the capacity to both reect and address the diversied needs, demands and interests of the social formation, and is a project that draws legitimacy primarily from religion. The project of building homo Islamicus should be read in this context. _ In 1994, MUSIAD published a report called The Muslim Person in Working Life: Way of Organizational Behaviour in the Firms governed in the Direction of Islamic Principles.36 The notion of homo Islamicus not only attunes Muslim identity with the present day understanding of modern capitalist economy, but also oers an alternative model to homo economicus. While the latter was criticized for being self-centred/individualistic, Islamic businessmen should base their acts on social morality. The Westernist modernization project of early republican generations is rejected since it failed to reach the Western levels of economic and technological development, and because it created socio-economic inequalities, dependency and identity crisis. Yet it criticizes not only the Western capitalists and/or Turkish secular/big business (considered as a pale copy of homo economicus), but also traditional businessmen (esnaf). This man of small needs and means owns a workshop, relies on household labour or few labourers, is strongly pious and devoid of the entrepreneurial -spirit to motivate him to accumulate capital. In contrast, homo Islamicus could and should acquire wealth and earn prot freely as long as it comes from productive activities (not from speculation, gambling, hoarding, or destructive competition) and if such wealth is not used solely for individual consumption or hedonistic purposes.37 Therefore nouveaux-riches, whose lifestyle was strongly based on conspicuous consumption, are criticized. Interestingly, despite their anti-Western discourse, these businessmen aspire to the Protestant ethic, and call themselves Islamic Calvinists. The rise of Anatolian capitalists was linked to their Protestant work ethic.38: it is argued that unlike the traditional (pre-capitalist) businessman, homo Islamicus is a self-maximizing, rational, calculating, competitive, innovative and utilitarian person; but someone who also considers the well-being of society at large. To sum up, the notion promotes moral capitalism. Homo Islamicus goes beyond the simple terms of Islamic management, and hence also denes the relationship between capital and labour, which particularly helped political representatives to gain the consent of the working masses. It argues that loyalty to Islamic ideals of justice and brotherhood would assure peace and productive industrial relations: While workers have religious obligations to work hard, avoid idleness, respect their employers and must show utmost care not to harm the means of production, the employers, in turn, must be just and fair toward their employees and should give their due rights before their sweat is dried.39

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Hence, workers religiosity becomes an important criterion for their employment. Islamic companies promote this by weekly religious training courses (instead of vocational training) and/or by organizing working hours according to daily prayer times.40 Moreover, since mutual trust and social responsibility would ensure harmony between capital and labour, there is no need for any formal labour codes and/or trade unions to mediate this relationship according to this logic. Labour strikes were also harshly criticized for disrupting this harmony and productivity, for it renders labourers lazy and idle. Yet this adherence to a paternalistic model where workers rights and responsibilities are determined by informal relations, as opposed to redistributive principles of modern capitalist industries, is a shared feature of many SMEs and of the growing informal sector in the region characterized by unskilled and unorganized elements of the labour force (children and women), low payment, no job security or social security, long and irregular work hours. Export orientation then strategically ts Anatolian SMEs into a exible production system and relocates them as crucial nodes within a new international division of labour.41 Since this general characteristic of small-scale production can also be seen in other developing countries, it is argued that the rise of Anatolian Tigers can be seen as part of a larger process of restructuring production into a global coreperiphery model.42 Moreover, trade unions are seen as by-products of the Western model, which divides society into classes. In a system where personal wealth is not used to oppress other people, classes would not emerge: people who make their fortune along the true path of Islam would not constitute a class.43 Yarar, the then _ president of MUSIAD, asserts that although they own capital, they are not capitalist: for no one can accuse someone who spends his wealth for the well-being of the humanity.44 This vision of a classless society was not only preached by Islamic businessmen and intellectuals, but also shared by the Kemalist cadre of the Etatist period. Nevertheless, in the present context it can be seen as a part of the larger process of fragmentation and depoliticization of the labour force since the 1980s, and thus demonstrates continuity in the bourgeois parlance, rather than a rupture. Despite this self-armation of non-class identity, some adherents of the Islamic model support the idea of voluntarily appointed worker representation or dierent models of social movement unionism, particularly to displace radical unionism.45 Under the model of productivist trade unions, workers would share the risk and responsibility with the employers in quantity and quality of the products produced, rather than an understanding of conict and contradiction between them.46 _ Moreover, in the course of 1980s, the Islamist trade union, HAK-IS (Turkiye Hak Is ci Sendikalar [The Confederation of Turkish Real Trade Unions]), has established itself as a national force and captured members from all segments of the labour _ _ movement, including formerly DISK (Devrimci Is ci Sendikalar Konfederasyonu [The Revolutionary Trade-Union Confederation]) aliated workers. Although the _ _ representatives of capital and labour, MUSIAD and HAK-IS, share important characteristics (the critique of the statist model of the previous era or the social project designed around religious themes), class conict reveals itself in various sectors and over dierent periods. As put by one commentator Islam of capital and Islam of labour are not one and same.47

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What we can infer from the above arguments is the existence of a strategic similarity between Islam and neo-liberal ideology. Indeed, the Just Order48 saw no contradiction between Islamic principles and free-market logic. As repeated by many Islamic intellectuals, the rst Islamic society established during the Prophets era, rested on a free-market economy. This system (Medina model) was celebrated not only for its non-interventionist, non-monopolistic and tax-free environment, but also because of its redistribution system (zakat), which is promoted as an unmatched instrument for reduction of inequality.49 Zakat refers to spending a xed portion of ones wealth for the poor and needy when ones annual wealth exceeds a minimum level (nisab). Although there were attempts to institutionalize these payments through state-run zakat systems in Pakistan, Saudi Arabia, Malaysia, and Sudan, or to extend the obligation to rms, it is levied on individuals and subject to their will in most cases. So the Islamic alternative attempts to ll the vacuum created by the decline in social spending, specically health and education, via community work: charities, schools, clinics, cooperatives. Indeed municipal governments run by Islamic political parties have played a crucial role in channelling eorts into housing and basic necessities for low-income families; including the sale of bread, meat, fruit and vegetables at bargain prices, the distribution of free food during Ramadan and fuel in winter, as well as providing support during family celebrations and crises, such as arranging weddings, funerals, circumcision for children of the needy and hospital beds for the sick. Moreover, communal eorts are also channelled into founding employment opportunities for those seeking jobs; many sect followers and Islamic party members are employed in municipal governments and the state bureaucracy as well as companies, schools, hospitals and law rms established by Islamic capital and networks. Therefore, this grass-roots approach not only targets the marginalized and excluded, but also includes professional urban middle classes, which has in turn created a body of devoted cadres for the Islamic alternative from all walks of life. The Just Order model was not only limited to domestic policies but also provided important elements to augment international competitiveness. This was reected in its foreign policy formulations. It aimed to forge a closer union with the Islamic world, including Middle Eastern countries, the emerging states of post-Soviet Central Asia and second-generation EANICs with predominantly Islamic popula _ tions (Malaysia and Indonesia). Both MUSIAD and Islamic politicians particularly referred to the East Asian model as the most viable strategy to achieve technological and economic development for SMEs with a lean and mean welfare mechanism, as opposed to the large-scale capital-intensive industries of the Western model with a highly interventionist state.50 The success of ASEAN SMEs is attributed, rst, to a state that provides guidelines for macro- and micro-economic plans/projects and engages only in establishing and coordinating the rules of the market, and, second, to their ability to incorporate/harmonize cultural identity, traditional values, and _ institutions. MUSIADs self-description as the voice of Anatolian Tigers, who have adopted the principle of High MoralityAdvanced Technology, reects this admiration of the Confucian ethic. But the ASEAN success was not only emphasized by Turkish Islamic entrepreneurs, intellectuals, and politicians, but also embraced by Western policy-makers and academics since it assumed a model that minimizes scal dependency on the welfare state and compensates it with communal/family bonds and solidarity networks. Yet these success stories do not consider the role of

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interventionist strategies and active industrial policies. Indeed, along with a strong anti-statist discourse that advocates deregulation, liberalization and privatization, _ MUSIAD also promoted incentives to the SMEs and privileges for domestic rms in the face of international competition. The model was also extremely critical of any future union with Europe: instead of the Customs Union, it supported the establishment of an Islamic Common Market. This had been on the agenda of many other Muslim countries, since various regional organizations (NAFTA [North American Free Trade Agreement], EU, ASEAN [Association of Southeast Asia Nations]) stimulated the idea of economic integration and cooperation in Muslim countries too. The Cotton Union, which later developed into a more sophisticated project, the D8 (Developing 8), aimed to build intra-ummah cooperation among Turkey, Pakistan, Bangladesh, Egypt, Indonesia, Iran, Malaysia and Nigeria. The project also included the establishment of a United Nations of Muslims to resolve potential problems among Islamic countries and a Muslim Defence Alliance to protect them against the non-Muslim world; the introduction of the Dinar as the common Muslim currency to ease commercial transactions; and the foundation of other cultural institutions to form a unied entity. Yet, not only did this project receive loose support from other Islamic countries, but there were also opposing views within Islamic circles in Turkey: while _ some Islamic rms (Ihlas Holding), opted for a less ambitious project, some sects ` adopted a less controversial strategy vis-a-vis the West.51 The February 28 process52 seriously limited the organizational and nancial resources of Islamic capital. A wide range of methods and strategies were adopted, including criminalization of capital accumulation processes through legal actions, police and nancial investigations, systematic public display of unlawful acts by Islamic companies, boycotts and campaigns supported via the media. The Capital Markets Board (CMB) put them under close scrutiny and issued warnings asking for more information on the nature of their bonds and disclosure of company activities, and later froze the assets of some Islamic holdings due to their illegal money collection and capital generation activities in Turkey and abroad. Legal action was _ taken against some companies, including Kombassan, YIMPAS, Kaldera, Kubra, _ Endustri, Sule Besicilik, Jet-Pa, Trakya and Kimpas . MUSIAD was charged with anti-secular views and its then-president was put on trial; and some members were _ arrested on money-laundering charges. Although the charges against MUSIAD were later dropped, its membership has fallen from 2,900 to 2,300. Nevertheless, the spokesman of the association attributes this decline to the impact of the economic crisis and stricter requirements applied by the organization itself in admitting new members and maintaining existing ones.53 Besides, not only were these businesses excluded from military contracts, but ocial discrimination was also coupled with citizen calls for a boycott of the products of Islamic rms. Their names and products were listed in the mainstream media, which also uncovered bribery scandals about Islamic companies which cast a shadow over their businesses. A ban was introduced to prevent the donations of animal skins to religious networks and NGOs. Hence, a secularly-sensitive consumer base was created. To compensate their losses in the domestic market, some Islamic companies have directed their eorts to transnational markets in the Far East,

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Europe and US. Then, to cut their transnational nancial links, the CMB published several advertisements in Turkish newspapers (to be distributed in Europe) warning immigrants not to lend their savings to these companies. This blocked their main sources of capital and credit; and following the economic crises in the 2000s an increasing number of bankruptcies and corporate collapses were experienced among _ Islamic holdings: Jet-Pa, Ihlas, Kombassan and others sold some of their investments, whereas survivors preferred to maintain a low prole. IFBs were also banned from opening new branches and their privileges were abolished. Following the investigations, IFBs did not manage to increase their assets.54 Despite a recovery in 1999, their loans, deposits, the funds in their current accounts and their prots had declined and several companies realized negative growth rates. Faisal Finance was sold a year after the intervention. A new banking law (No. 4389) became eective in 1999 to annul the 1983 special legislation on IFBs. Although the new law integrated them to the ocial banking system, they still did not have state guarantee on deposits and were not included in the deposit insurance fund. Yet Banking Act No. 4491 enacted in May 2001 provided them with more secure positions and guaranteed the legal arrangements they demanded. Note that both laws were implemented under IMF supervision to reform the Turkish nancial _ system. The nancial crisis of 2001 was mainly ascribed to the collapse of Ihlas Finance House, which possessed about 40 per cent of IFBs total assets, in February of the same year. The nancial activities of all other IFBs were stopped for a short period after the collapse, which resulted in losses of hundreds of million dollars. February 28 forced Islamic capital to modify its strategies and policies on a _ number of important issues. MUSIAD put more emphasis on region and size related dierences in expressing economic concerns and asked its members to avoid using religious/sacred symbols in their commercials and promotional activities.55 Some fraud-stricken companies (Jet-Pa and GAP Holdings) were expelled and others (Endustri Holding) were forced to resign. Moreover, some businessmen claimed that they had been put on the blacklist by accident. To clear their names, they ran advertisements and interviews in newspapers declaring their loyalty to the secular regime and stressing that they are not as dierent as they are usually portrayed. Some even denied that there is such thing as Islamic capital.56 Moreover, the Islamic Party of the post-1997 period (Fazilet Partisi, FP) distanced itself from its predecessors by adopting a moderate posture in terms of its programmatic commitments via de-Islamizing its discourse. It omitted all references to leaving NATO, modication of the nancial system along Islamic principles and multiple legal order. This represented a search for a new consensus rather than a mere pragmatic political turn. Indeed, the famous Abant workshops brought together several intellectuals and politicians from dierent intellectual backgrounds across the Islamic movement. Also in 1998, the leaders of the Fethullah sect declared that they do not favour an Islamic state.57 Perhaps the most striking dierence was the change in the strong anti-European ethos. FP not only stopped dening the EU as a Christian Club, but also supported Turkeys future accession to the EU. Nevertheless, these modications should be analyzed in a broader context to include the impact of Customs Union (CU) and 1997/98 Asian crisis on domestic actors. While the former allowed Islamic SMEs to reach a larger market, to enjoy partnership opportunities with Western companies,

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thereby, to bypass those selectivities that favour large conglomerates in the domestic market,58 the Asian crisis seriously undermined the viability of the East Asian development model, and hence reoriented these economic actors towards the EU market.59 Therefore, it is better to approach the subject as a competition between alternative modes of development and societal projects: the East Asian model and homo Islamicus, respectively. The AKP (Adalet ve Kalknma Partisi [Justice and Development Party]), which came to power in 2002, not only articulated the economic demands of the petty-bourgeoisie to the interests of the newly arisen medium-sized business groups from Anatolia, but also forced big business circles from Istanbul to adopt a selective strategy that included strategic compromises to the newly growing medium-sized rms whose content nonetheless went beyond purely mechanical compromises, tactical alliances on a limited number of issues and/or settling of accounts among economic corporate interests. On the contrary, these compromises sought to establish a long-term organic relation that would extend across the economic, political, and ideological elds. A broad range of issues were addressed, including strategies for labour relations, competition, socioeconomic policies, economic prosperity, ideological matters, social inclusiveness, democratic consolidation and international relations. So, despite persistent rivalries and conicts, the prospects of stability and economic growth resulted in a temporary truce within business circles in Turkey, whereas the promise of social justice, income equality and democratization helped the AKP bloc to disrupt the subordinate classes and obstructed the formation of a united front against neo-liberal reforms. However, the AKPs preferential treatment of certain bourgeois sections signicantly altered the distribution of total surplus value, whereas its attempts to change the states institutional materiality so as to switch the relays and circuits of power to suit its own constituencys interests led to a whole series of hegemonic dislocations in the power bloc, and enhanced the contradictions among dierent capital groups. Indeed, it has been widely noted that Islamic capitals wealth has been growing in proportion to the AKPs career.60 ` Despite their persisting disadvantages vis-a-vis large conglomerates, the religiously conservative Anatolian businesses found great opportunities under the shelter of AKP governments. Thanks to the public administration reform that limited the authority of central government in favour of local governments, there has been a rise in the number of public contracts awarded to conservative businessmen through AKP-run municipalities.61 The governments decision to provide scholarships and grants for students of the lower middle classes and the poor mainly proted private schools established by religious sects/networks. Islamic capital also extended its share in the media sector. Those media companies put under the control of the Savings Deposit and Insurance Fund (Sabah newspaper and ATV television) were not only transferred to AKP-aliated companies but the PM himself also stepped in to force the withdrawal of all competing bidders, and also removed state bank governors whod objected to nancing the sale because of the proposed loans breach of their bylaws.62 IFBs were allowed to set up a parallel Islamic deposit insurance scheme, which invests the deposit insurance pool according to Islamic investment principles; and they doubled their market share in 2003.63 _ MUSIADs support for AKP rule is also undeniable. The AKPs Urgent Action Plan prepared before the 2002 elections noted that [a]rrangements shall be made to

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protect the rights and interests of the shareholders of those companies with many small shareholders.64 The AKPs anti-monopoly references were indeed instrumental in securing the organizations support. It is an established fact that the government has been channelling resources to them through public banks, privatization bids, and local governments.65 It is also noted that excessive borrowing has accompanied the green money inux. Saudi businessmen have shifted an important part of their nance from tightly regulated US bank accounts into Turkey since 9/11. Between 2002 and 2005 approximately 200 companies were established in Turkey, and their share in the economy increased by 50 per cent in the rst six months of 2004 alone.66 It is even argued that if it were not for the Green Money inux Turkey might soon face another devaluation of the scale of the 2001 currency crisis.67 In order to distinguish the analyses in this article on the present condition of Islamic capital from other readings, it is necessary to highlight a couple of points argued above. First, this article does not read the current rivalry merely as a typical distributional conict between Istanbul-based companies and Anatolian-based Islamic rms, or between holdings and SMEs. Hence, it is at odds with those studies that equate this rivalry to size and region related conicts or recognize the fundamental dierence between two fractions as a matter of identity issue. Although this research does not underestimate size, region and identity-related dierences, it argues that such readings are misguided since they reduce the economic domain of Islamic capital to an enclave or sub-economy. In contrast, there has been a signicant change in the size, scope and regional orientation of these companies.68 Not only did they secure an important position in the domestic market that goes beyond a niche (Ulker), but some became large transnational players with _ investments in Europe, Central Asia and the US: YIMPAS owns over 24 companies, employs 10,000 workers and has investments in Germany, Bulgaria and Turkmenistan, while Kombassan had 40 companies, employs 8,000 workers, and is active in Khazakstan and Germany.69 _ Moreover, studies revealed that in terms of IFBs regional concentration Istanbul is the most concentrated region possessing 59 branches out of 159 as the total branch numbers of all the Islamic banks in spring of 2002,70 which makes it harder to dierentiate them as Istanbul and Anatolian capital. Indeed, in 1995 under the _ supervision of Ihlas Holding and some prominent Islamic intellectuals, an exclusive organization, the Istanbul Club, was founded to provide certain privileges to the Islamic elite.71 Therefore, it is better not to be misguided by heavily SME-based discourse of these rms and (dis)regard them as backward-looking small businesses who were threatened by rapid industrialization and opening of the economy. For it underestimates the concentration and centralization tendencies among Islamic capital. Moreover, the dependency on religious legitimacy tends to decline as their capital and power increase. Second, this article does not conne the contradictions merely to a struggle between outward-oriented commercial capital and inward-oriented productive capital, but it rather explains it in relation to the internationalization of productive capital by organizing itself at dierent levels and through assuming dierent functions in the circuit of capital.72 First, Islamic SMEs engaged in import/export and sub-contracting activities with other Turkish rms and MNCs, hence they

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assumed the role of commercial capital in directing those products to dierent markets: while Aydnl, an Islamic textile rm, was working as a sub-contractor to Pierre Cardin and supplying material to some 300 rms from all over the world, some other companies were authorized to import products from Far Eastern _ electronic and automotive industries. Therefore, as outlined in a MUSIAD report, they had opted for a mixed implementation of import substitution and export orientation.73 Second, neither the holding structure nor the aliation between banks and industry is limited to the Istanbul holdings. Not only did many Anatolian _ _ companies (Ihlas Holding, Kombassan, Sanko, Kar Sirketler Grubu, YIMPAS, Cetinkaya, Jet-Pa, Ulker, Kalebodur) establish their own IFBs, but their nancial activities were well integrated with the interest-bearing banks.74 These variations in activities are linked to the broader process of internationalization of capital which led dierent accumulation strategies to be implemented simultaneously and at the same geographical location, yet not without leading to a contradiction between the balance of forces, albeit a contradiction dierent from previous periods. In this regard, instead of yielding to a simple conclusion and arguing that Islamic capital is currently yielding large prots thanks to the distribution of key positions in the state bureaucracy to such personnel with close links with AKP governments,75 it is necessary to search for a more complex answer that explains the multiple power relationships (in terms of both strategies and struggles) among dierent capital fractions in Turkey. One rst has to illustrate and explain how internationalization of capital accumulation creates a whole series of contradictions between capital fractions which has a strategy of international expansion and those with a strategy of limited expansion within the national economic eld; and second how fractions may pursue multiple strategies to benet from dierent state policies in relation to their strengths and weaknesses in the international markets. In this context, when the articulation between the national and international contexts is considered, three main capital fractions can be identied with conicting demands on the state:76 big internationalized capital groups having a partial control over the global market; newly growing medium-sized capital groups trying to internationalize and integrate with the global market; and capital groups, mostly composed of SMEs but not exclusively, still operating in the national market.77 Such an analysis can therefore tell us more about how fractions can establish dierent alliances depending on their specic concerns: under what circumstances internationalized big domestic capitals tend to ally with global capital (against domestic SMEs) in order to benet from the advantages of internationalization, while at the same time they can also ally with other domestic capitals, such as newly growing and internationalizing medium-sized domestic capitals, against foreign capitals to preserve their privileged positions in the domestic economy. This contradictory process not only explains the fractional alliance(s) behind AKP government(s) especially in its early period in government, but also helps us to understand why certain regulatory reforms/laws could be implemented without a major conict whereas some others created serious confrontations among the government(s), business circles, upper echelons of the bureaucracy and external actors. Therefore, the neo-liberal restructuring process in Turkey not only referred to the concentration and centralization of domestic capital in few hands in the national context, but also to the constant tendency among domestic players to expand their

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accumulation base and further integrate with the world market.78 While nancialization enhanced their power to attract over-accumulated global capitals (mainly in the form of money capital), structural changes allowed them to cooperate with global productive and money capitals to use local opportunities in large-scale privatization bids and other investments. Internationalization then also results in multiple power relationships: First, it leads to a series of contradictory and unequal power relationships; second, it also allows for cooperation among capitals of dierent size and sectoral orientation against a common enemy. In sum, in the present situation such divisions within the capital into blocs clustering around rival political and economic agendas may not be captured through crude distinctions based on Islamic/Anatolian and Istanbul-based rms; or necessarily through the distinction based upon the size of the enterprise (big and SMEs).

Notes
_ _ _ _ 1. See S. Ozdemir, MUSIAD ve HAK-IS i Birlikte Anlamak [To Understand MUSIAD and HAK-IS _ Together], in Modern Turkiyede Siyasi Dusu nce: Islamclk [Political Thought in Modern Turkey: _ Islamism], Vol.6 (Istanbul: Iletis im, 2004), pp.83744. Ozdemir also argues Islamic capital can be regarded as the real domestic/national capital that has been sought since the 1900s in Turkey (p.838). _ 2. See B. Koyuncu, Kureselles me ve MUSIAD: Eklemlenme mi, Cats ma m? [Globalization and _ MUSIAD: Articulation or Conict], in F. Keyman (ed.), Liberalism, Devlet, Hegemonya [Liberalism, State and Hegemony] (Istanbul: Everest, 2002). See also S. Ozdemir, Religious and Socio-Economic Transformation of Turkey: the Case of the MUSIAD (PhD thesis, Ankara: METU, 2001). 3. O. Demir, M. Acar and M. Toprak, Anatolian Tigers or Islamic Capital: Prospects and Challenges, Middle Eastern Studies, Vol.40, No.6 (2004), pp.16688; O. Sandkc and G., Ger, Fundamental Fashions: The Cultural Politics of the Turban and the Lev, Advances in Consumer Research, Vol.28 (2001), pp.14650. 4. See Z. Onis and U. Turem, Business, Globalization and Democracy: A Comparative Analysis of Turkish Business Associations, Turkish Studies, Vol. 2, No. 2 (2001), pp.94120. 5. Ibid. 6. For such an attempt see K. Can, Yes il Sermaye Laik Sisteme Ne Yapt? [What did Green Capital do to the Secular System?], Birikim, Vol.99 (1997), pp.5965. 7. H.W. Overbeek, Global Capitalism and Britains Decline (PhD thesis, Amsterdam, 1988), p.22. 8. See A. Bura, Class, Culture and State: An Analysis of Interest Representation by Two Turkish g Business Association, Interest Journal of Middle East Studies, Vol.30, No.4 (1998), pp.52139; see also A. Bura, Islam in Economic Organizations (Istanbul: TESEV, 1999), and G.B. Ozcan and M. g Cokgezen, Trusted Markets: The Exchanges of Islamic Companies, Comparative Economic Studies, Vol.48 (2006), pp.13255. 9. Ozcan and Cokgezen, Limits to Alternative Forms of Capitalization: The Case of Anatolian Holding Companies, World Development, Vol. 31, No. 12 (2003), pp.206184. 10. E.B. Adas , Prot and the Prophet: Culture and Politics of Islamic Entrepreneurs in Turkey (PhD thesis, Urbana-Champaign: University of Illinois, 2003), p.42. 11. For detailed examples, see ESI (European Stability Initiative), Islamic Calvinists: Change and Conservatism in Central Anatolia (Berlin: ESI, 2005). 12. Adas , Prot and the Prophet, pp.712. 13. Ibid.; see also T. Kuran, Islamic Economics and the Islamic Subeconomy, The Journal of Economic Perspectives, Vol.9, No.4 (1995), pp.15573. 14. It is worth noting that there is an ongoing debate as to whether the interest-free returns made through the IFBs essentially correspond to the interest-based returns of the Western banks. It has often been repeated that the IFBs are now avoiding providing capital for risky and long-term investments, instead directing their funds towards secure, short-term projects and mainly in non-productive sectors such as commerce, distribution and services; even in the case of productive activities these were generally limited to consumer goods.

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15. F. Bulut, Tarikat Sermayesi II: Islamci Sirketler Nereye? [Islamic Capital II: Where do Islamic Firms Go?] (Istanbul: Su, 1999), pp.4, 7. 16. Adas , Prot and the Prophet; Demir et al., Anatolian Tigers or Islamic Capital. 17. B.A. Yes ilada, The Virtue Party, Turkish Studies, Vol. 3 No.1 (2002), p.78. 18. The interest-rate competition among and within the banks and bankers skyrocketed the interest rates and later some 250 listed bankers and another 1,000 institutions were bankrupted when thousands of depositors lost condence in the system and rushed to brokers to collect their savings. Note that high interest rates were intended to encourage savings and to (re-)direct them into productive investments. 19. Adas , Prot and the Prophet, p.80. 20. Ozcan and Cokgezen, Limits to Alternative Forms of Capitalization. 21. Ibid. See also Demir et al., Anatolian Tigers or Islamic Capital. 22. F. Bulut, Tarikat Sermayesi I: Islam Ekonomisinin Elestirisi [Islamic Capital: the Critique of Islam Economy] (Istanbul: Su, 1999). See also Bulut, Tarikat Sermayesi II. 23. Adas , Prot and the Prophet. 24. H.M. Yavuz, Political Islam and the Welfare (Refah) Party in Turkey, Comparative Politics, Vol.30, No.1 (1997), pp.6382. 25. Bulut, Tarikat Sermayesi II, p.45. 26. Bulut, Tarikat Sermayesi I, p.256. 27. Ibid, pp.2569, 267. _ 28. See Koyuncu, Kureselles me ve MUSIAD, for such accounts. See also Ozdemir, Religious and Socio Economic Transformation of Turkey. _ 29. TUSIAD is a business association founded by the large conglomerates of Turkey. 30. See Onis and Turem, Business, Globalization and Democracy, for further comparison of two associations. 31. Adas , Prot and the Prophet, pp.423. 32. Ibid, p.50. 33. A. Bura, Labour, Capital, and Religion: Harmony and Conict among the Constituency of Political g Islam in Turkey, Middle Eastern Studies, Vol.38, No.2 (2002), pp.187204. 34. Ozdemir, Religious and Socio-Economic Transformation of Turkey. _ 35. MUSIAD is not the only representatives of such business interests. Apart from various Chambers of Industry and Commerce, other business organizations were established in the 1990s: the CUSIAD _ (founded by Alevite businessmen), the ISHAD (founded by the Gulen sect) etc. _ _ _ _ _ 36. MUSIAD, Is Hayatnda Islam Insan (Homo Islamicus) (Istanbul: MUSIAD, 1994). 37. Kuran, Islamic Economics and the Islamic Subeconomy, pp.15573. 38. ESI, Islamic Calvinists, p.24. 39. Adas , Prot and the Prophet, p.162. 40. Bulut, Tarikat Sermayesi II. 41. A. Eraydn, Ds Pazarlara Eklemlenmeye Cals an Konfeksiyon Sanayiinde Uretimin Orgutlenmesi ve Emek Surecleri [The Organization of Production and Labour Process in Export Oriented Textile Industry], ODTU Gelisme Dergisi, Vol.27, No.1/2 (2000), pp.91117; A. Kose and A. Oncu, Dunya ve Turkiye ekonomisinde Anadolu imalat sanayii: Zenginles menin mi yoksa yoksullas mann m es iindeyiz? [Anatolian Manufacturing Industry in the World and Turkish Economy: Are we at g Threshold of Prosperity or Poverty?], Toplum ve Bilim, Vol.77 (Summer 1998), pp.13558. 42. U. Cizre-Sakallolu and E. Yeldan, Politics, Society and Financial Liberalization: Turkey in the g 1990s, Development and Change, Vol.31 (2000), pp.481508. 43. The chairman of Konya Chamber of Commerce in Ozdemir, Religious and Socio-Economic Transformation of Turkey. _ 44. Koyuncu, Kureselles me ve MUSIAD, p.366 (my translation). 45. Bura, Labour, Capital, and Religion. g 46. Adas , Prot and the Prophet, p.162. 47. Ibid, p.164. 48. Necmettin Erbakan, the leader of the Islamic movement, explained his partys (Refah Partisi) economic programme in two booklets. See N. Erbakan, Adil Ekonomik Duzen (Ankara: Refah Partisi, 1991) and Adil Duzen (Ankara: Refah Partisi, 1993). _ 49. M. Cnar, Siyasal Bir Sorun Olarak Islamclk [Islamism as a Political Problem] (Ankara: Dipnot, 2005).

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50. Bura, Labour, Capital, and Religion, p.116. g 51. C. Dinc, The Welfare Party, Turkish Nationalism and Its Vision of a New World Order, Alternatives: Turkish Journal of International Relations, Vol.5, No.3 (2006), http://www. alternativesjournal.net/volume5/number3/dinc.pdf 52. At the National Security Council meeting held on 28 February 1997, the military members expressed their concern about the growing religious reactionarism and handed over a list of policy recommendations to the Erbakan-led coalition government to halt the tide of radical Islam in Turkey. Thus, a string of pro-secular measures were introduced to weaken the organizational strength of the Islamic movement. February 28 is often referred as a soft coup, post-modern coup, covert coup or civil coup. These terms point to two peculiar characteristics of the military intervention: (a) the cooperation among the armed and unarmed/civil forces; (b) the atypical/unusual character of the intervention, i.e. the absence of a governmental takeover. 53. Z. Onis , Political Islam at the Crossroads: From Hegemony to Co-existence, Contemporary Politics, Vol.7, No.4 (2001), pp. 28198. 54. J.H. Jang, The Politics of Islamic Banks in Turkey: Taming Political Islamists by Islamic Capital, paper prepared for the 2003 Annual Meeting of the Midwest Political Science Association (Chicago, IL, 2003), pp.56. 55. Adas , Prot and the Prophet, p.172. 56. Bulut, Tarikat Sermayesi I, p.167. 57. Bulut, Tarikat Sermayesi II, p.81. 58. C. Keyder, The Turkish Bell Jar, New Left Review, Vol.28 (2004), pp.6584. 59. Onis and Turem, Business, Globalization and Democracy, p.101. 60. U. Tekin, AK Partinin Muhafazakar Demokrat Kimlii [The Conservative-Democrat Identity of AK g Party] (Istanbul: Orient, 2004). _ 61. F. Gulen, AKPnin Iktidarda Olduu Donemde Kabul Edilen Yasalar Hakknda Deerlendirme [An g g Analysis of the Laws Passed during AKP Governments], Mu lkiye Dergisi, Vol.30, No.252 (2006), pp.1545. 62. B. Rubin, The Case against Turkeys Ruling Party, The American (20 June 2008). 63. M. Parker, Islamic Banking Sector in Turkey Emerges Much Stronger, Arab News (29 March 2004). 64. AKP, Urgent Action Plan, AKP (2002). 65. Tekin, AK Partinin Muhafazakar Demokrat Kimlii, p.224. g 66. B. Rubin, Green Money, Islamist Politics in Turkey, Middle East Quarterly (22 Feb. 2005). 67. B. Rubin, Will Turkey Have an Islamist President, AEI Online (Feb. 2007), p.3. 68. A.E. Doan, Siyasal Yansimalari ile Islamci Sermayenin Gelis me Dinamikleri ve 28 Subat Sureci g [The Growth Dynamics of Islamic Capital, their Reections on the Political Plane and February 28 Process], Mu lkiye Dergisi, Vol.30, No.252 (2006), pp.4769. 69. Ozcan and Cokgezen, Trusted Markets. 70. Jang, The Politics of Islamic Banks in Turkey, p.12. 71. Bulut, Tarikat Sermayesi II, p.54. 72. F. Ercan, The Contradictory Continuity of the Turkish Capital Accumulation, in N. Balkan and S. Savran (eds.), The Ravages of Neo-Liberalism: Economy, Society and State in Turkey (New York: Nova, 2004). _ 73. Koyuncu, Kureselles me ve MUSIAD. 74. M. Pekoz, Islami Sermayenin Ekonomik Gelis me Duzeyi [The Development of Islamic Capital], Sendika (20 Jan. 2006). 75. Although municipalities and certain bureaucracies were staed by Islamists throughout the 1990s, the AKP not only perfected this process, but also focused on those areas which had previously been ignored and/or could not be penetrated: long-term Islamic activists were appointed to signicant posts in important ministries and state corporations. Key positions in state-owned banks and nancial institutions were occupied by Islamist bankers. The AKP also tried, though failed, to replace the head of the Central Bank with an (loosely) aliated gure. Those secular-oriented mid-level bureaucrats were either pushed out of their posts and transferred to rural areas or were forced to undertake meaningless tasks to encourage early retirement. Examples can be multiplied. 76. See F. Ercan and S. Ouz, Rescaling as a Class Relationship and Process: The Case of Public g Procurement Law in Turkey, Political Geography, Vol.25 (2006), pp.64156. This article not only exemplies these multiple-power relationships well, but also provides the main theoretical framework for the arguments presented above.

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77. Ercan and Oguz (ibid.) also note that since contradictions among these fractions are already internationalized, state intervention in favour of a certain fraction against others amounts to an indirect intervention in favour of a certain fraction/section of global capital. The power bloc can hardly be located on a purely national level since it appears as a part of the class conguration of the country (and thus can be considered as the fourth fraction). 78. F. Ercan, Alternatif Baks lar Sorgulamak: Turkiyede Sermaye Gruplarnn Kuresel Kapitalizmle Butunles melerindeki Rolleri [The Role of Capital Groups in Articulating with Global Capitalism in Turkey], International Conference: Acts of Resistance from the South against Globalisation, 57 Sept. 2005, Ankara.

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