The courts do not function effectively. This is why Turkey fails to achieve innovation-driven growth.

It created a great uproar during the 2001 crisis: The possibility of selling to a mediator the right to collect uncollectible debts, as is done abroad. A banker friend of mine said, “This system cannot work in Turkey. Here, only the creditor can collect the credit.” It was then that I realized that the securitization that has been pushing American banks to bankruptcy is difficult in Turkey. In other words, it is Turkey’s justice deficit that has saved us. Are you aware that Turkey’s current account deficit is accompanied by a justice deficit? We know how to set rules, but we fail to implement them. Why? Are we lacking sanctions? No, there is a sanction for infringing on almost any rule. The problem is that those sanctions are not operational. The courts do not function effectively. Here is an example from the Central Bank database. In the last year, 6.2 million bounced checks were issued. Appeals were filed in court for only 6 percent, or 383,000, of them, most probably just in order to account for the bad debts. As citizens of the Republic of Turkey, we know that we cannot collect our receivables via court. We do not expect trials to bring justice. Today let me take a look at this justice deficit issue.

I believe that Turkey cannot achieve innovation-driven growth unless the justice deficit is overhauled. I am one hundred percent sure that, with the current judicial system, the rule of law cannot be established in Turkey. At first, the penalty for issuing a bounced check was imprisonment. Then, a regulation that allowed parties to settle the issue without imprisonment was introduced. Nothing changed. Now, a new regulation that will enable solving the problem without going to court, via a disqualification order to be imposed by the public prosecutor, is being prepared. We pretend like we have solved the issue without going to court.

Let me tell you in advance: nothing is going to change. The capacity of hospitals indicates the capacity of post offices. Passing the buck from the court to the public prosecutor is like building an underpass at a congestion point that will just move the congestion a block further away. It would be useful if the Ministry of Justice worked on more structural measures.

Now, let me state five observations about the justice deficit of Turkey: first, according to the Worldwide Governance Indicators published by the World Bank, Turkey moved up only two ranks between 2002 and 2010 and currently ranks eighty-ninth among 212 countries. Second, applications submitted against Turkey to the European Court of Human Rights (ECHR) have been growing at a two-digit rate each year. Turkey was the defendant in 15,000 of 140,000 petitions filed with the ECHR during 2010. Our beautiful country holds second place on the list, following Russia.

Third, out of the rights violations Turkey was charged for between 1959 and 1998, 6 percent relate to the right to a fair trial and 8 percent to lengthy trials. During the 1998-2010 period, the ratios increased to 21 percent and 13 percent, respectively. The hike in violations stemming from the operational weaknesses of the judiciary is striking. The issue is related to the Ministry of Justice as much as it relates to police stations. Fourth, in the Global Competitiveness Index that covers 142 countries, Turkey’s ranking in terms of judicial independence decreased from sixty-four in 2005 to eighty-eight. This is a significant deterioration despite the rise from ninety-third to sixtieth place in the index for legal rights. Fifth, 56 percent of the inmates in prisons are not convicts, but detainees waiting for verdicts. According to a report by the Turkey Bar Union, Turkey ranks second after Italy with respect to the share of detainees in total number of inmates in prison. That is, Turkey is just like Italy in this respect.

I have a reason to argue that at this rate, Turkey will become like Italy. If you do nothing but wait, you will become like Italy. When your competitiveness melts down, you think, “What did I do wrong?” The current account deficit is not the only challenge for Turkey. There also is a justice deficit problem. Here me out. No justice, no innovation.

This commentary was published in Radikal daily on 23.12.2011