Growing frustration among Turkey’s business elite over the state of the country’s economy and the erosion of the rule of law under the Erdogan administration has been reflected in rare rebukes delivered by the most influential Turkish business association at its annual general assembly.

As part of the authorities’ angry response to the February 13 attack, one of the business representatives who spoke out was the next day placed under investigation by Istanbul’s chief prosecutor’s office.

In the years since the crackdown that followed the failed 2016 coup against President Recep Tayyip Erdogan, the Turkish Industrialists and Businessmen’s Association (Tusiad), once viewed as a big voice in Turkish politics, has generally kept its head down, with business leaders fearing repercussions for speaking out. The stinging criticism of the government delivered at the televised event thus came as a shock to some observers, and encouraged Erdogan’s former economic czar Ali Babacan—nowadays leader of a small opposition party, Democracy and Progress Party (Deva)—to say: “This is a step in the right direction, but not enough. The business community must raise its voice more forcefully for economic justice, legal security and democratic governance.”

Tusiad’s high advisory council president Omer Aras—a top banking executive now under investigation for attempting to influence a fair trial, manipulating the judiciary and disseminating false information—and chairman Orhan Turan pointed to rising economic and political dangers in Turkey, as well as increasing government intervention in the private sector, executive control exercised over the judiciary and growing economic hardship.

The message was clear: there is a worsening crisis of trust among investors, the business community and the general public and a fear that more economic mismanagement could do irreparable damage.

Turan addressing some of the criticisms raised at the AGM as a guest on SOZCU Television (Credit: SOZCU Television, screenshot).

Turan, in an address televised by BloombergHT, took direct aim at the government’s economic policies, saying: “Neither industrialists nor workers are happy. Large businesses struggle, and so do small enterprises. Entrepreneurs in both the east and the west are suffering. Who is benefiting from this system?”

“A modern state is founded on the rule of law. If there is no trust in justice, instability and uncertainty will spread,” Turan added before the broadcast was abruptly interrupted as the network went to commercial breaks.

Many in Turkey have in recent years become even more ill-at-ease with the state of the nation given a series of natural disasters and deadly accidents that have produced high death tolls partly because a lack of regulation left citizens over-exposed to potential dangers.

Aras at the AGM talked of systemic failures behind tragedies in Turkey of this year and recent years, including the Kartalkaya hotel fire that took the lives of 78 people at a ski resort, the Madencilik Copler copper-gold mine landslip accident and February 2023’s catastrophic earthquakes that left tens of thousands dead, many because they lived in structures not in any way built to withstand the quakes, massive tremors that scientists said were entirely predictable given seismic faults in the earth.

“These are not accidents; they are the result of a crumbling system where safety regulations are ignored and accountability is absent,” Turan said.

The Tusiad business leaders also hit out at the mass dismissal of newly graduated military officers from the Turkish Armed Forces—critics say many of the dismissed were essentially singled out for infringing codes that might be seen as a loyalty test to the powers that be—and the growing number of politically motivated arrests of opposition figures, journalists and businesspeople. Judicial instability would mean systemic risks for the economy, putting off investors, they warned.

Said Aras: “We’re facing extraordinary incidents in politics. Elected mayors are being removed from office and replaced with trustees. A political party leader faces an investigation, then is arrested over a different reason.”

The statements made at the Tusiad assembly brought a stern reaction from Erdogan’s ruling Justice and Development Party (AKP). Condemning the remarks, Justice Minister Yilmaz Tunc warned that “no organisation is above the national will”. He vowed to respond “with the strongest legal measures”, the regime-critical publication Turkish Minute reported.

AKP spokesperson Omer Celik said Tusiad was attempting to interfere in politics and was intent on undermining democracy. “Tusiad must confront its own troubled history regarding democracy,” Celik said, with reference to the perceived past alignment of the business group to military-backed governments that held sway in Turkey before the AKP’s rise to power three decades ago.

Looking for the trigger that caused Tusiad to adopt a bold stance at the meeting, some analysts, as noted by Turkish Minute, said it could have been the adoption of a law granting Turkey’s State Inspection Council (DDK) wide-ranging powers to remove public officials, including military officers, without judicial oversight.

The law has also provided a government body with the right to appoint trustees to companies without a judicial order. The newly-empowered DDK can dismiss individuals assessed as an “obstacle” to investigations. Observers say the measure could be used to purge political opponents and allow the Erdogan administration more rule by decree.