Change in Turkey's governing system and its effects on welfare policies

Published 01.08.2017 22:53
Updated 04.08.2017 15:02

As the welfare state expands, Turkey needs to create efficient administrative models for the future of its welfare net

With the constitutional amendment passed with the April 16 referendum with 1.7 million more votes in favor, Turkey's political system will transform into a "Turkish-style" presidential regime. Although most of the provisions of the amendment will be in force by 2019, the provision lifting the ban on a president being a member of a political party came into force immediately. Accordingly, President Recep Tayyip Erdoğan returned to the ruling Justice and Development Party (AK Party), which he co-founded from the rough 15 years ago and was elected party chairman at the extraordinary congress following the referendum.

This has marked significant changes for Turkish politics. Now, substantial alterations are being expected among AK Party cadres, both at the local and the executive level. Erdoğan has beckoned change by calling the actual situation of the party as "being in a metal fatigue." This has led to expectations of change within the party. As the governing party for the last one-and-a-half decades interruptedly, the changes in its executives and representatives might be a sign of important policy changes in Turkish politics. Thus, tracking the recent mobility among the AK Party ranks is a prominent a duty for political scientists looking at Turkey.

Additionally, by 2019 Turkey will initiate its presidential system in which a strict separation of powers will be implemented between the legislative and the executive branches. Ministers will not be selected from parliamentarians anymore and executive powers will be concentrated in the hands of the president, vice presidents – whose numbers are not yet clear – and the ministers the president appoints. The president will also be stronger appointing top executives of public institutions. Thus, the recent change of system has a potential to critically alter policies along with the change of the method of selection of ministers and executives who will rule public offices.

What is next for welfare policies?

This column's concern is with the probable effects of change on the country's current welfare system. In other words, the aim is to track the next generation of the country's welfare policies.

For the last two decades, Turkey has significantly improved its social model and built a widespread welfare safety net. Once a laggard, it now is counted among the leaders in its league on several welfare policy areas: Turkey's disastrous healthcare system in the 1990s and early 2000s is a world leader now. Cheap and accessible healthcare giving patients the option to choose service providers, unification and renovation of public hospitals, implementation of the system of family practitioners, expansion of healthcare services covered by social insurance and increasing accessibility for all to get the best treatment from private hospitals are some of the policy changes in this area. Accordingly, citizen satisfaction with healthcare services climbed to 75 percent in 2016 from 20 percent in 2002.

This trend is the same in social assistance, social services and social security allocations as well. According to Organization for Economic Co-operation and Development (OECD) figures, public social spending as a percentage of gross domestic product (GDP) climbed to 12.2 percent in 2012, and 13.5 percent in 2016, compared to 9.7 percent in 2000. More than 7.5 percent of this welfare budget was for the cash benefits of retirement and pension plans in 2016. Since 2012, the country has managed to implement a general healthcare insurance system that covers all citizens and foreign residents in the country, as a colossal reform. Since 2011, the country has a ministry focusing on family and social affairs, which is now getting the sixth largest budget allocation among all ministries. Turkey's social assistance and social services budget climbed to TL 45 billion ($12.78 billion) in 2017 from TL 1.4 billion in 2002.

As a direct result of expanding welfare, extreme poverty in the country fell from 13 percent in 2002 to 4.5 percent in 2012, as 2015 World Bank data indicates. The United Nations Development Program's 2014 Human Development Report placed Turkey in the high human development group since the Human Development Index of the country increased from 0.671 in 2005 to 0.759 in 2013. The Gini coefficient, which calculates income inequality, improved in the country to 0.398 in 2016 from 0.44 in 2002.

Struggling with risk of welfare dependency

But how will this expanding and maturing welfare model be affected by the political change to a presidential regime? There are a few early clues on this matter.

First is the new social assistance system that the Family and Social Policy Ministry is preparing to implement. With the new system, which will start to be implemented in 2018, beneficiaries of social assistance will be asked to accept job offers from the Turkish Labor and Employment Agency. The job offered will be suitable to the situation, talents and career plans of the person. If the beneficiary refuses a job offer three times without justification, their direct social assistance will be cut for a full year.

This new system will try to fight the problem of welfare dependency. As the Turkish welfare system matures it starts to face the problems old welfare states are already struggling with.

Aligning welfare with further flexibilization

Another clue about the future of Turkey's welfare system is hidden in the intention to reform labor legislation, the severance payment system and public recruitment. Several government officials, including the labor and social security minister, have released press statement exposing intentions to reform the severance payment system and to implement further flexible labor legislation. Severance payments are one of the major controversial issues between employers and employees in labor courts. According to unofficial figures, almost nine out of 10 employees do not receive their severance pay on time. The government is aiming to reform the system by building a fund that will be governed as a private fund.

The public recruitment system, which is the most rigid among OECD countries, is also being prepared for reform. The intention with the reform is to transform public service positions from secured life-long positions with very weak internal audits into annual contract positions checked with performance targets. The aim here is to bring efficiency and effectiveness to public services.

In addition to this, since early this year, all employees in the public and private sectors in the country are compulsorily being rolled on to a private pension plan with a 3 percent mandatory deduction from their wages or salaries. Despite there being an option to opt out, this new model is seen by many as a further step toward the privatization of social insurance system in the future and an early exercise for familiarizing employees with private pension plans, as it is being actually practiced in the English-speaking world.

Integrating Syrian refugees

When assessing the future route of Turkey's welfare system, there are several serious challenges ahead to be noted. One of them is the test with refugees. There are more than 3 million Syrian refugees in the country. Despite its limited welfare state, Turkey is doing way better than the EU in terms of finding solutions to refugee's immediate daily problems. While refugees are regarded as welfare exploiters across Europe, Turkey has opened its welfare system to refugees.

But still, long-term policy solutions are needed. It seems many refugees will stay in the country even after peace comes to Syria one day. Thus, rather than showing generous welfare provisions to meet their immediate daily needs, the country has to have long-term policies to absorb and integrate them into the wider population. In other words, after giving $25 billion for refugees through public, private and volunteer sectors, Turkey needs to teach Syrians in the country to fish, rather than just giving them fish. This is a challenge for the social security system, the labor market and social services, together.

Regulating the labor market to the 21st century

Yet Turkey's immigration problem is much bigger than Syrians. As the country becomes an economic center and hub of the region thanks to consecutive years of economic development, it attracts immigrants from elsewhere. This is the same story Europe has been facing for a long time. Unofficial estimates show there are 150,000 of Armenians, 100,000 Georgians, tens of thousands of Africans and many more Iranians, Kazakhs, Turkmens and Arabs working and living in Turkey illegally. As it is on one of the main human trafficking routes, quite a large portion of trafficking networks preferring or are obliged to stay in the country.

Thus, reforming the foreign work permit and residence permit system is an imminent challenge. As a step toward this, the country has started to issue a Turquoise Card, similar to the U.S. green card system, to attract a high-quality labor force. However, the Turquoise Card system is still a baby and several colossal steps are needed before it becomes a successful foreign recruitment tool for the country to infuse fresh power to its economy and social policy.

A ministry that will only deal with immigration is a must in this sense because there is a huge need to coordinate the current flow of people with a strategic approach.

Reforming the divided welfare administration is another necessity. In practice, the Family and Social Policies Ministry, Labor and Social Security Ministry, Social Security Institution, Labor and Employment Agency, municipalities and district governorships serve several welfare allocations separately without upper integration or coordination. As the welfare state expands, Turkey needs to create efficient administrative models for the future of its welfare net. European welfare states know well that the best welfare cannot be served to citizens without the best organizational arrangements. Not only reforming public administration, but building strong relations between the public, private and volunteer sectors is a crucial task.

* MSc in social policy at London School of Economics, Ph.D. student in political science at Boğaziçi University

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