Economic Policy Preferences of Turkish Cypriot Business Groups in the Post-2004 Process in North Cyprus
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ECONOMIC POLICY PREFERENCES OF TURKISH CYPRIOT BUSINESS GROUPS IN THE POST-2004 PROCESS IN NORTH CYPRUS A THESIS SUBMITTED TO THE GRADUATE SCHOOL OF SOCIAL SCIENCES OF MIDDLE EAST TECHNICAL UNIVERSITY BY CELAL ÖZKIZAN IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN THE DEPARTMENT OF POLITICAL SCIENCE AND PUBLIC ADMINISTRATION JANUARY 2017 Approval of the Graduate School of Social Sciences ————————————- Prof. Dr. Tülin Gençöz Director I certify that this thesis satisfies all the requirements as a thesis for the degree of Master of Science. ——-—————————— Prof. Dr. Ayşe Ayata Head of Department This is to certify that we have read this thesis and that in our opinion it is fully adequate, in scope and quality, as a thesis for the degree of Master of Science. ————————————- Assoc. Prof. Dr. Galip Yalman Supervisor Examining Committee Members Assoc. Prof. Dr. Pınar Bedirhanoğlu (METU, IR) ——————————- Assoc. Prof. Dr. Galip Yalman (METU, ADM) ——————————- Assist. Prof. Dr. Umut Bozkurt (EMU, PSIR) ——————————- I hereby declare that all information in this document has been obtained and presented in accordance with academic rules and ethical conduct. I also declare that, as required by these rules and conduct, I have fully cited and referenced all material and results that are not original to this work. Name, Last name: Celal Özkızan Signature : iii ABSTRACT ECONOMIC POLICY PREFERENCES OF TURKISH CYPRIOT BUSINESS GROUPS IN THE POST-2004 PROCESS IN NORTH CYPRUS Celal, Özkızan MSc., Program of Political Science and Public Administration Supervisor: Assoc. Prof. Dr. Galip Yalman January 2017, 118 pages The aim in this thesis is to investigate the policy preferences and policy evaluations of two main Turkish Cypriot business groups, Turkish Cypriot Chamber of Commerce and Turkish Cypriot Chamber of Industry, with regards to the labour market in North Cyprus and relations with Turkish state and capital in the post- Annan Plan period in North Cyprus. Thus, I have resorted to the method of in- depth interview in order to penetrate into the mindset of Turkish Cypriot business groups’ officials in detail. My findings reflect that, while the transformation in the economic relations between Turkey and North Cyprus in the post-2004 process have been considered to be favorable by Turkish Cypriot business groups, their impact upon articulating the required revisions are relatively low. Moreover, Turkish Cypriot business groups, both because of their general approval towards the transformation in the post-2004 process and their weakness vis-a-vis the leverage of Turkish state upon the economic policy-making in North Cyprus, have preferred to be more reconciliatory and cautious in this sphere. On the other hand, regarding the labour market aspect of the discussion, Turkish Cypriot business groups act with the understanding of creating a “business-friendly” environment in terms of reducing the labour costs and obtaining the required type of labour force. Unlike the former sphere, their discourse in terms of policy preferences and impact upon the different aspects of labour market are more confident and clear-cut. Keywords : Turkish Cypriot business groups, labour market, privatization, Turkish Cypriot state, policy-making. iv ÖZ KUZEY KIBRIS’TA 2004 SONRASI SÜREÇTE KIBRISLI TÜRK SERMAYE GRUPLARININ EKONOMİ POLİTİKASI TERCİHLERİ Celal, Özkızan Yüksek Lisans, Siyaset Bilimi ve Kamu Yönetimi Programı Tez Yöneticisi: Assoc. Prof. Dr. Galip Yalman Ocak 2017, 118 sayfa Bu tezin amacı Kuzey Kıbrıs’ta Annan Planı sonrası dönemde; emek piyasası ve Türkiye devleti ve sermayesi ile ilişkiler bakımından, iki ana Kıbrıslı Türk sermaye grubu olan Kıbrıs Türk Ticaret Odası’nın ve Kıbrıs Türk Sanayi Odası’nın siyasa tercihlerini ve siyasa değerlendirmelerini incelemektir. Bu nedenle, Kıbrıslı Türk sermaye gruplarının yetkililerinin zihniyetlerine ayrıntısıyla nüfuz edebilmek açısından, derinlemesine mülakat yöntemine başvurdum. Bulgularım, Türkiye ve Kuzey Kıbrıs arasında, ekonomik ilişkiler bakımından 2004 sonrası dönemdeki dönüşümün Kıbrıslı Türk sermaye grupları tarafından olumlu olarak değerlendirilmesine karşın, bu grupların ihtiyaç duydukları revizyonları dile getirmedeki etkilerinin görece düşük olduğu yönündedir. Dahası, Kıbrıslı Türk sermaye grupları, hem 2004 sonrası dönüşüme yönelik genel onayları hem de Türkiye devletinin Kuzey Kıbrıs’taki ekonomik siyasa yapımındaki güçlü etkisi karşısındaki zayıflıklarından dolayı, bu alanda daha uzlaşmacı ve temkinli bir tavrı tercih etmişlerdir. Öte yandan, tartışmanın emek piyasası boyutu açısından bakıldığında, Kıbrıslı Türk sermaye grupları, emek maliyetlerini düşürmek ve istenilen türde emekgücünü elde etmek anlamında bir “işveren dostu” ortamın oluşturulması anlayışıyla hareket etmektedirler. Bir önceki alana kıyasla, emek piyasasının farklı boyutları üzerindeki siyasa tercihleri ve etkileri bakımından sahip oldukları söylem, daha kendinden emin ve kesindir. Keywords : Kıbrıslı Türk sermaye grupları, emek piyasası, özelleştirme, Kıbrıslı Türk devleti, siyasa-yapımı. v To my father… vi ACKNOWLEDGMENTS I would like to thank my supervisor Assoc. Prof. Dr. Galip Yalman for his profound contributions both on the theoretical and methodological aspect of this thesis. I am also grateful for the contributions and goodwill of the committee members, Assoc. Prof. Dr. Pınar Bedirhanoğlu and Assist. Prof. Dr. Umut Bozkurt. I owe specific thanks to my father for his valuable contributions and comments regarding my investigation of official documents; to my sister Nehir for being a cheerful housemate, to Ayşe Deniz İmir for being a joyful accompany, to Mustafa Çağlar Atmaca for his valuable “library friendship” and to the friends in Baraka for contributing deeply to the shaping of my political consciousness. Lastly, I would like to thank Elif Ebru Sakar for her indispensable fellowship. vii TABLE OF CONTENTS PLAGIARISM.........................................................................................................iii ABSTRACT………………………………………………………………………iv ÖZ………………………………………………………………………………....v DEDICATION……………………………………………………………………vi ACKNOWLEDGMENTS………………………………………………………..vii TABLE OF CONTENTS………………………………………………………...viii LIST OF ABBREVIATIONS…………………………………………………….x LIST OF TABLES………………………………………………………………..xi CHAPTER 1. INTRODUCTION…………………………………………………………1 2. HISTORICAL, METHODOLOGICAL AND THEORETICAL FRAMEWORK…………………………………………………………..7 3. TURKISH CYPRIOT BUSINESS GROUPS’ RELATIONS WITH TURKEY AND TURKISH BUSINESS GROUPS…………………………………………………………………14 3.1 Introduction…………………………………………………………14 3.2 Economic Relations between Turkey and North Cyprus in 1974- 2004………………………………………………………………...16 3.3 Economic Relations between Turkey and North Cyprus in Post-2004 Process……………………………………………………………...33 3.4 Turkish Cypriot Business Groups Within the Context of Economic Relations Between Turkey and North Cyprus……………………..38 3.4.1 The Distinction between Pre-2004 and Post-2004 Periods in Terms of Economic Relations Between Turkey and North Cyprus From the Perspective of Turkish Cypriot Business Community….38 3.4.2 Influence of Turkish Cypriot Business Community in the Preparation and Making of the Economic Protocols.……….…….41 3.4.3 The Way Turkish Cypriot Business Community Perceives and Evaluates the Implementation of Privatization Policies……….….42 viii 3.5 Conclusion…………………………………………………...48 4. LABOUR MARKET IN NORTH CYPRUS…………………......50 4.1 Introduction…………………………………………………50 4.2 Labour Force Mobility……………………………………...51 4.2.1 Migration From North Cyprus to Republic of Cyprus……...51 4.2.2 Migration From Turkey to North Cyprus…………………...53 4.2.3 Changing Dynamics in the Demographics of the Foreign Labour Force……………………………………………………………....56 4.2.4 Turkish Cypriot Business Community on Foreign Labour Force……………………………………………………………....62 4.3 Different Patterns of Employment…………………..……...64 4.4 Mismatch in the Labour Market……………………………70 4.5 Working Conditions in Private Sector……………………..80 4.6 Conclusion………………………………………………….90 5. CONCLUSION…………………………………………………...91 REFERENCES…………………………………………………………………96 APPENDICES A : TURKISH SUMMARY………………………………….………………..107 B : TEZ FOTOKOPİSİ İZİN FORMU…………………………………….….118 ix LIST OF ABBREVIATIONS AKP Justice and Development Party (Adalet ve Kalkınma Partisi) CTP Republican Turkish Party (Cumhuriyetçi Türk Partisi) DEİK Foreign Economic Relations Board (Dış Ekonomik İlişkiler Kurulu) DPÖ State Planning Organization (Devlet Planlama Örgütü) GDP Gross Domestic Product (Gayri Safi Yurtiçi Hasıla) EU European Union (Avrupa Birliği) KTSO Cyprus Turkish Chamber of Industry (Kıbrıs Türk Sanayi Odası) KTTO Cyprus Turkish Chamber of Commerce (Kıbrıs Türk Ticaret Odası CTBA Cyprus Turkish Businessmen Association (Kıbrıs Türk İşadamları Derneği) TEB Turkish Economy Bank (Türk Ekonomi Bankası) TOBB The Union of Chambers and Commodity (Türkiye Odalar ve Borsalar Birliği) TRNC Turkish Republic of Northern Cyprus (Kuzey Kıbrıs Türk Cumhuriyeti) TÜSİAD Turkish Industry and Business Association (Türk Sanayicileri ve İşadamları Derneği) UBP National Unity Party (Ulusal Birlik Partisi) x LIST OF TABLES TABLES Table 1 Distribution of Employees by Nationality…………………….…….…57 Table 2 Nationality of Registered Students in North Cyprus Universities…….72 xi CHAPTER 1 INTRODUCTION It is important to begin with the fact that, there are several problems for studying political economy of North Cyprus in general. First problem is that it is not even easy to come to terms with a minimum socio-economic structure and political