Economic Development, Migration Patterns, and Freedom of Movement: The Case of Turkey

Turkey helps us understand the importance of ideology, belief systems, and values in understanding the role of migration in global political economy. 

Migration is a major topic of both public and academic debate. But a catch-all study of “migration” risks losing sight of the specificity of particular migration trends. This article will focus on the role of Turkish migration to Europe and its relationship with the Turkish state. In particular, it will focus on the importance of ideology, belief systems, and values in understanding the role of migration in global political economy. 

The Productive Economy of Turkey

Turkey has been impacted by the rise of neoliberalism in ways similar to other countries outside the core of the Western world over the course of the twentieth and twenty-first centuries. But its unique position on the world stage meant that it would fare differently from other states. It was able to use its state-centered strategy to lay the basis of an economy that fared better than similar economies during the transition to neoliberalism during the 1980s and 1990s, and experienced growth until the 2018 economic crisis. While this is a product of Turkey’s unique historical circumstances, it is important to avoid painting a rosy picture of how this came to pass. Considerations of race, religion, class and gender played a key role in the development of modern Turkey. 

This also played a role in migration from Turkey. State policies encouraged migration, but also focused on particular types of migration as the Turkish state navigated its own desires (the building of the economy, protecting economic sovereignty, etc.) and the demands of the global market (cheap labor, exports, stable power structures, etc.). Migration was used as a way to meet the needs of both, but the growing strength of the global market meant that while migration was a useful strategy for development, it eventually lost its relevance, particularly as neoliberalism changed the nature of interstate relationships and public ideas regarding migration and the place of the nation-state in public life at the state and interstate levels. 

With the establishment of the Republic in 1923, state policy focused on an ambitious goal: the creation of a Europeanized economy, state, and society from the ashes of an empire that was dismissed as backward and a humiliation to the Turkish people. This aligned with the creation of a bourgeoisie that was uniquely Turkish. But this faced problems from the very beginning: Turkey faced high rates of illiteracy and the export-oriented economy inherited from the Ottomans made creating such a class difficult. This also encountered an ideological stumbling block, as Turkish nationalism guided state policy, but was not necessarily the dominant paradigm within the general public.

To solve this, the state pushed through policies such as the abolition of the Arabic script and its replacement with a Latin one. The former served both productive and cultural considerations. The switch to a Latin script was intended to facilitate the exchange of education between Turkey and the West, and was also promoted to spread literacy. This served the productivity issues of the new Republic, as it allowed for training of the masses to work in industry and commerce. Conscription was also used as a “People’s School” to encourage literacy and the growth of Turkish nationalism.

While the republic emphasized industrialization, agriculture remained the dominant industry, and the rural population did not always feel welcomed by the secularism of government. This is demonstrated by the first multi-party elections in 1950 which were won by the Democratic Party (DP). The DP based itself on agrarian interests and it preceded later Islamically-oriented parties, including the Justice and Development Party (AKP) that governs the country today.

The party won based on agrarian support, in both social and economic terms. This included party appealing to agriculture, while the secularists were seen as supporting industry at the former’s expense. This tied in with the DP’s desire to de-emphasize the role of economic planning and to support more market-friendly policies. The latter also appealed to farmers, as agriculture was dominated by small farmers who believed that the free market was a better path to advancement than state planning. This marks the beginning of a contradiction within the Turkish political system—the Islamic-oriented parties are open to Western business interests and economic ideology, but are suspicious of Western cultural influence, while the secularist left promotes Western culture but keeps its distance regarding economic integration.

As for migration, the DP followed a unique trajectory. While it emphasized agriculture, it also knew that it could not completely discount industry. It was in this context that the first guest worker agreements were signed in the late 1950s. The government encouraged industrial migration to Europe, while maintaining its agrarian base. At the macro-political level, this helped reduce support for the opposition, as those who migrated would have found participating in domestic political activity difficult. But it also meant that more of the population would learn industrial skills and earn higher pay. “Industrialization” applied to workers, but not to the country itself. In this sense, both industrial workers and agrarian workers won out: the former could work in their selected field, while the latter benefited from policies which they liked. The state also received many of the benefits of industrialization without some of its associated costs. Workers who were sent abroad sent remittances and learned the skills they had to learn, and when these workers returned, the Turkish state got the free benefit of a more specialized workforce. This way, the Turkish state pursued both options at once, while the ruling party kept its electoral support and remained popular with other governments who were interested in trading with Turkey 

Following a military coup in 1960, which was welcomed by many leftists, the state returned to industrialization and state planning. It was during this time that migration to Europe accelerated. This could be attributed to political concerns, but economic ones also played a role. The state’s support for import-substitution industrialization (ISI) made guest migration more attractive, as the skills and knowledge acquired overseas would have meant that these workers would have provided a greater benefit to the Turkish economy than they did under the DP government of the 1950s. This partially explains the increase in migration, as industrial guest workers were valued by the government.

But the days of ISI were limited, and by the late 1970s the loans that Turkey received in the pursuit of ISI had led to a debt crisis. The country faced pressure to return to a focus on exports, despite the fact that this policy ran counter to the ideology of the secularist and modernist elite. The general public suffered under policies imposed by the International Monetary Fund (IMF) and the World Bank, but in different ways. Industrial workers were forced to accept lower wages in a bid to constrict spending, while farmers faced bankruptcy because they could not compete with a global agricultural industry with high level price volatility and imports from the West.

But the Turkish economy responded to the pressures of neoliberalism in interesting ways. As an example, the manufacturing industry responded to elevated interest rates by investing in other fields, instead of updating their technology. This meant that these companies invested outside of industry in fields such as tourism that were seen as accommodating to the neoliberal philosophy that was imposed on Turkey. This money was then re-invested in manufacturing, which led to an increase in manufactured exports during the 1980s, contrary to the intention of the measures that were adapted.

This indicates that Turkey was able to use its industrial knowledge to its benefit and reduced the negative effects of neoliberalism. Migrants played a role, as those who returned would have known how to aid the manufacturing sector, and their overseas work experience would have encouraged them to look beyond the statist viewpoint that the government followed between the early 1960s and late 1970s. And with the role of remittances and higher levels of education that was undertaken outside the country, Turkish migrants helped ease the burdens imposed by neoliberalism. These migrants were encouraged to move overseas with the goal of helping the motherland. Little did they know that their assistance, alongside other factors, would prove to be of great benefit during Turkey’s transition to the neoliberal global order. 

The Virtual Economy of Turkey and Turkish Migration

Remittances played a critical role in Turkish migration policy during the latter half of the twentieth century. The flow of hard currency enabled Ankara to pay its trade deficit on more favorable terms than if it had to pay with its own currency, the lira. 

But beginning in the 1980s, the government changed its position on migration-supported economic development. It began to open Turkey to foreign direct investment (FDI), even if FDI inflows remained small relative to the Turkish GDP. Between 1980 and 2000, FDI inflows amounted to $1 billion per year on average. The historic reluctance of the Turkish state to accept FDI is explained by ideological considerations that began to shift during the 1980s and 1990s, and had completely changed starting in the 2000s, when FDI inflows exploded. Let us now turn to the history of these ideological shifts. 

The Role of Remittances

In order to understand the role of remittances, one must understand the economic history of the early Turkish republic and its ideological context. It is this history that helps to explain the apparent paradox regarding the state’s encouragement of migration: how could a nationalist state encourage its citizens to leave the homeland for economic gain, when service to the homeland is the chief virtue of any nationalist belief system? It is a unique combination of historical circumstances and ideology that explain this apparently contradictory approach. It is the Turkish state’s historic commitment to Westernization and nationalism that led to this policy.

Beginning in 1908, when the Young Turk movement came to control the Ottoman government, nationalism became the bread-and-butter of economic policy. Chief to its existence was opposition to foreign influence within the Ottoman Empire, and to the perceived dominance of the Ottoman economy by non-Muslim (and, by association, non-Turkish) minorities, especially in Anatolia. With the establishment of the Turkish Republic in 1923 Turkish nationalism became the driving force of policy and political participation.

The founder of the republic, Mustafa Kemal Atatürk, made the connection between Turkish political and economic sovereignty. The prior position of the Ottoman Empire, which exported primary goods in exchange for manufactured European goods, would be unacceptable. His statist economy policy was based on building heavy industry and making Turkey self-sufficient.

While this aligned with Turkish nationalist ideology, such an ideology did not make Turkey an economic island. It still had to interact with Europe in the goal of developing the country’s economy. This helps to explain the export of Turkish university students to Europe and the United States. This indicates a contradiction that has played a role in the modern Turkish economy throughout its history. On the one hand, there is the desire to Europeanize. But on the other, the nationalist impulse requires that Turkey keep its distance from Europe. The goal of the Turkish state was to become European without being dominated by Europe. 

This contradiction was apparently solved by the aforementioned labor agreements that were signed after World War II, in which Turkey supplied workers who could rebuild Europe on a rotational basis. In this way, they could send home remittances to cover Turkey’s trade deficit and be exposed to European culture, and upon their return, help spread European culture in Turkey, helping Turkey Europeanize. 

From the beginning, the Turkish state used remittances to further specific policy goals. This was not a case of a country tolerating migration and ignoring remittance flows. Efforts included setting up personal savings accounts tied to the Turkish central bank. These accounts have high interest, but owners can only withdraw money from them within Turkey. This has two benefits for Turkey: it brings in hard currency and expands the central bank’s holdings. The clearest incentive for the migrant is that the high interest brings income regardless of employment, and the geographic restrictions on withdrawal eliminates the possibility of spending those savings excessively. 

This coincided with the import-substitution industrialization policy that was enacted after World War II. The remittances would have helped to pay for the goods and services that would have been necessary for getting such an approach off the ground, and the resulting value of such transactions would have kept the fruits of such a policy within Turkey, accomplishing both economic principles of the Turkish republic. It also encouraged the development of a Muslim bourgeoisie in Turkey, which was a goal of the Republic.  

But it also brings the immaterial investment of contributing to the development of Turkey. This relates to the nationalist ideology that plays a role in both Turkey and within the Turkish diaspora. The savings accounts also provide benefit to the account holders, meaning that both the Turkish nation and the Turkish migrant benefit vis-à-vis the accounts. This means that Turkish migrants can help the homeland on their own terms, as opposed to having such contributions being directly regulated by Ankara or other intermediaries. 

As mentioned previously, there has been a decline in remittances in relation to the trade deficit. In 1980, remittances covered 93.65 percent of Turkey’s exports, which would have provided a mechanism for it to pay for exports without relying on a weak currency. By 2000, this figure had dropped to 16.59%. Within the same period, foreign direct investment increased from US $65.4 million between 1980 and 1984 to $716.4 million between 1990 and 1994. This relationship should not be ignored, and neither should the neoliberal context in which it occurred. 

When this is put into the context of ideology, Turkish migration was a way of helping the motherland not only prosper, but also to Europeanize. The remittances that were sent home not only helped out the families of migrants, they also helped Turkey modernize on its own terms. This put Turkey in a considerably more powerful position as it allowed for it to Europeanize while tempering its reliance on foreign banks for loans.  

The Transition to Foreign Direct Investment (FDI)

The reliance on remittances declined starting in the 1980s, and by the beginning of the 21st century, Turkey’s openness to FDI had made a complete reversal compared to the attitudes of Atatürk almost a century earlier. Turkey was not completely able to avoid foreign borrowing, even with the help of remittances. The need to pay off these creditors during the age of financialization encouraged Turkey to switch to an export-oriented economy and eventually led to Turkey joining the European Customs Union in 1995. 

But even these changes apparently did not force Turkey to adapt to neoliberalism as strictly as similar economies. Privatizations were delayed due to electoral chaos and a lack of interest from foreign buyers. The Turkish bourgeoisie knew enough about the state bureaucracy to maintain their position without conceding to foreign interests, unless doing so helped their bottom line. Half of all FDI between 1980 and 2000 occurred through joint ventures between domestic and foreign interests. Turkey also avoided the full adoption of neoliberalism due to its relationship with the United States, as investors saw the latter’s dominance of the International Monetary Fund as guaranteeing the availability of a bailout in the event that Turkey needed one. 

This was not a one-way relationship and it helped both the Turkish elites and their foreign partners. As demonstrated by later crises (such as Greece), foreign banks are often reluctant to invest in a country if their governments are not seen as creditworthy. But significant geopolitical clout can make up for lack of credit. This is because major players cannot afford to let it fall into chaos by financial meltdown and imposed restructuring. In Turkey’s case, its position as a bridge between Europe and the Middle East and as a key member of NATO means that the West cannot risk pushing the country towards instability. 

This gives Turkey more autonomy as it navigates the neoliberal economic system. In exchange, Western investors know they can invest in Turkey, as they know that political structures alleviate the chance of Turkey defaulting on its debt or going through a massive restructuring program a la Greece. Foreign investors have little reason to consider politics in making their decisions, as they know that Turkey’s geopolitical position means that it can receive help from the West and the IMF at more favorable terms compared to similar economies. 

The real expansion of FDI in Turkey came with the election of the Justice and Development Party (AKP), led by Recep Tayyip Erdogan in the early 2000s. It is often described as an Islamist party, but while it is certainly the representative of religious conservatives it entered government with a twist. It opened the country to FDI and was in favor of accession to the European Union (EU), in contrast to the nationalists’ traditional reluctance to join the EU. Key to appeasing the nationalist state was its insistence on relying upon multiple sources of FDI and its associated implications. Welcoming FDI from the Arab world was popular with the religiously inclined, who wanted Turkey to develop closer ties with the Muslim world, while FDI from Europe appealed to secularists. 

But this came with an invisible string attached. In order for FDI to make sense to investors, it needed a source of cheap labor. This meant that emigration had to be discouraged, for investment would not make sense from the investors’ viewpoint if workers kept leaving the country. When combined with rising anti-immigrant sentiment in Europe, Turks had less reason to leave, as they could find more jobs in Turkey. The decline in emigration occurred alongside the rise of neoliberalism and xenophobia in Europe, further encouraging Turks to stay in the country and work, guaranteeing a source of labor for foreign investors. This encouraged more FDI, which discouraged emigration further, resulting in the aforementioned inverse relationship between the two. 

Conclusion: FDI and Migration in the Neoliberal Context

There is an inverse relationship between FDI inflows and migration and its associated remittances. In order to understand this in the context of neoliberalism, it is helpful to understand its emphasis on financialization as opposed to the traditional productive economy. This emphasis means that the earlier approach of sending migrants abroad to send back remittances became frowned upon as these remittances were based on traditional productive labor—they were treated as less able to encourage economic growth. In contrast, FDI inflows were treated as ways in which investors could make money overseas, and thus glorified in the new system in which wealth creation is promoted, even if it does not have any relationship with material economic production.

But something else must be said about this relationship. It is important to remember that despite its transnational commonality, nationalism is often a symptom of neoliberalism and the relationship between the EU and Turkey regarding migrants is no exception. It is no accident newspaper headlines which stated “Vienna prefers Turks” in 1963 gave way Austrian political parties declaring that “Vienna must not become Istanbul”. This is not only because neoliberalism creates inequality, which is associated with insecurity and therefore correlates with racism, xenophobia, sexism, etc. It is also because neoliberalism needs workers to stay put. This is because neoliberalism reinforces inequalities between wealthy and impoverished nations. This encourages workers in the latter to move to the former to earn a better living. But this would endanger the whole neoliberal project, as its associated power distribution relies on cheap labor from the peripheral countries. 

Neoliberalism, despite its professed love of freedom, requires the revocation of the freedom to move. This contradiction is justified with the nationalism and xenophobia that neoliberalism tolerates, and even encourages—economic decline is never attributed to the internal contradictions of capitalism. Instead, it is blamed on the Other. Wage slavery, in the classical Marxist sense, has always been influenced by race, gender, nationality, etc. But it is codified on a global scale under neoliberalism both politically (i.e., immigration controls, deportation, etc.) and culturally (xenophobia, racism, etc.). This leads to the paradox that neoliberalism, while sacrificing everything at the altar of Freedom (for the bourgeoisie), takes away the right for people to move, as respecting it would risk undermining the whole system. This is one of the key contradictions upon which neoliberalism rests, and uses nationalism and xenophobia to perpetuate it. 

The shift away from migration to FDI in the Turkish context illuminates the nature of neoliberalism in both the Turkish and global contexts. For Turkey, the shift away from migration indicates a desire (or, more likely, a push) to participate in the global economy on its terms, rather than holding it out in the statist pattern that dominated much of the republic’s history. This points toward a loss of democratic control over economic policy, as Turkey has been forced to open its doors to FDI, it has needed more workers to stay in the country to make the investments worthwhile. Since the AKP has favored FDI and the associated economic boom, it keeps winning elections, which further encourages FDI and changes in the Turkish landscape that favor the AKP. This results in a country that is more open to neoliberalism, but is also dominated by one party. 

These changes point towards a more global shift towards authoritarianism and a decline in freedom of movement. This is most obvious outside the first world, where workers are forced to stay in countries in which they must accept low wages. The same pattern can be seen in wealthier countries, but in reverse—politicians and parties who promise to protect domestic jobs are rewarded, whether they be “protecting” those jobs from other countries (i.e., American factories moving to Mexico) or immigrants (i.e., Eastern Europeans working in manual occupations in the United Kingdom). The same logic applies in the developing world: voters will support whomever they think will guarantee them work and wealth, regardless of what else that party or politician might bring. 

But in both the core and the periphery, neoliberalism means freeing up the movement of capital, but not of people, which has ominous implications for political and economic democracy, as this forces workers to accept low-paying jobs in the developing world (and the parties that can keep economic growth going), and encourages those in the developed world to support those who are perceived as preventing their jobs from going overseas, regardless of their other policies.

Analyzing the historical patterns of Turkish migration helps illuminate some central points. First, migration doesn’t necessarily entail “brain drain” because migrants can be integrated into state economic policies through remittances and the significant education and training they bring back from overseas. Second, it should help show the fundamental value of freedom of movement. Migration is one of the few ways in which the periphery can gain extra income on its own terms. Remittances and the acquisition of skills and education help level global inequality, as it transfers wealth from rich states to developing ones. It is no accident that restrictions on migration increased during the transition to neoliberalism, as this particular capitalist regime needs cheap labor in order to survive. Anti-migrant sentiment and its associated immigration controls keep those in the developing world stuck in dire economic conditions. While it is true that free migration allows for people to “vote with their feet” against dire political and economic circumstances, it does not align with free markets. Capitalism is predicated on a controlled and flexible workforce. Free migration makes this much more difficult, and in the neoliberal context, impossible. In a globalizing world, protecting freedom of movement is not only protecting a key human right. It is also protecting the whole idea of human rights itself.