Turkish Army's Economic Might Under Growing Scrutiny

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In Turkey, whether you buy a chocolate bar, insurance, a house or a car, it is likely to be linked in some way to OYAK, the Turkish Armed Forces Assistance and Pension Fund.

Military expert and Taraf newspaper Ankara Bureau Chief Lale Kemal said OYAK is a relic² of the country's military dominated past.

"It remains³ a bizarre, unaccountable institution. It is like the old days of Latin American countries or in China or in Egypt, which has nothing to do with the rule of law or democracy," said Kemal.

Probing OYAK

But OYAK’s dealings are now coming under growing political scrutiny. Last month, Justice and Development Party spokesperson Huseyin Celik announced that parliament will investigate the pension fund’s “existence and function.” 

Under Justice and Development Party rule, a fifth of the country's generals are languishing⁴ in jail, on trial, or awaiting trial for various alleged⁵ coup⁶ plots. The country's unprecedented⁷ investigations⁸ have driven the army out of the political arena⁹. 

Political scientist Cengiz Aktar of Istanbul's Bahcesehir University, however, said moving against the army's economic power is crucial.

"Demilitarization is a very, very long process. Without abolishing the financial and legal privileges of the army, we will not have a perfect demilitarization process," said Aktar.

Expanding assets

Army officers founded OYAK in 1961, months after the country's first military coup, to provide a pension to all serving soldiers.

Over the years, the pension fund has enjoyed tremendous growth. According to its 2009 annual report, it employs nearly 30,000 people and has assets worth more than $15 billion, spanning 60 companies. This year, the four-millionth car rolled off the OYAK-Renault production line in a collaboration¹⁰ that dates back to 1971.

Although the company board of representatives and general assembly are dominated by retired¹¹ senior military members, OYAK says it is not a part of the armed forces. 

Turkish military analyst¹² Gareth Jenkins pointed¹³ out that discontent over OYAK has spread to non-commissioned officers. The European Court of Human Rights is considering a case against OYAK brought by non-commissioned officers seeking representation on the company's board.

"I think the problem for OYAK is it was being used as an almost employment agency for retired generals. The people who needed OYAK to work hardest were the non-commissioned officers and junior officers. It is instead being used mainly for the benefit of higher ranks," said Jenkins.

Shifting emphasis, coming reforms

Legal woes¹⁴ also face jailed OYAK Chairman Yildirim Turker. The retired Lieutenant¹⁵ General is charged in connection with the so called "soft coup" of 1997 that forced an Islamist-led government out of office. 

Jenkins said with the army under increasing political and judicial¹⁶ oversight¹⁷, change at OYAK is likely.

"If the companies are somehow taken away from the army pension fund, the assets will be transferred to people [who] happen to be close to the ruling party. One of the problems generally we have seen in Turkey in the last few years is the system remaining the same, but the ruling elite¹⁸ changing,” he said.

Critics of the army's power in Turkey say reform of OYAK is crucial to the ongoing¹⁹ demilitarization of the country and is vital for the future of democracy.

"The fact that OYAK is unaccountable, untouchable, tells us Turkey has a long way to go to end the military tutelage system and to ensure the full civilian²⁰ control of its armed forces," said defense²¹ journalist Kemal.

Full civilian control of the military is a key demand of the European Union, which Ankara is seeking to join. But a statement on the pension fund's Web page denies such criticism, saying it is a victim of a campaign of disinformation. Observers say with the military's political power on the wane²², pressure for OYAK reform is likely to grow.

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