Turkey is in need of a wide platform of political consensus not only to change the Constitution but also to found the public budget on solid grounds. Democratic political history of Turkey is like a parade of fiscal indiscipline. There is no single day that one does not offer a dime more than another did. We always suffer from this, but always do this anyway. Our current situation in need of a dime from the IMF is solely the fruit of fiscal indiscipline. So, have you taken a look at the public finance reforms? For instance, since the beginning of democratic regime Turkey failed to implement a comprehensive tax reform. Income Tax Law was enacted in 1947 and amended upon the 1960 coup and 1971 memorandum. 1980 coup d'état initiated a number of reformation efforts including VAT reform. So, today's question is; cannot we make a reform without the sledgehammer in this country? Why does all experience maintain so?  What is Turkey's problem?

Tax reform implies reallocation of resources through public intervention. This practice has both winners and losers. Resources will be taken from one and transferred to another. Such a comprehensive intervention requires to convince the losers and when necessary, to make the winners compensate for the losers for a certain period over the transition process. This is how change takes place in democratic countries; it is carried on upon reconciliation and negotiation. There, change is not grounded directly on the self-evident will of the "omniscient saviors." It does not happen overnight.  Change requires effort not to attack here and there or fight even with one's own shadow; but to convince people in order to reach a wide-scope consensus platform and a mass coalition. And this is exactly what Turkey lack nowadays. This is also exactly what is missing and what leaves every step taken unfinished in Turkey. The issue is basically an issue of discourse. Democracy lies in discourse. Rage and impatience on the other hand is an indicator of implying "I already know the right way to do this. Why should I waste time trying to convince you?" It implies consolidation. Then, the phrase 'rage is also an art of oratory' is wrong.

We are talking big about democracy nowadays; so let us assess the issue in this regard: Why did Turkey achieve all major tax reforms in periods of military coup d'état, in antidemocratic eras? Why were the January 24^th 1980 decisions, which changed Turkey's path in the road to modernization and integration, were implemented in a period of military coup? Do not these directly crowd the list of cracks of Turkey's democracy? Why does the democracy fail to found a vast consensus platform and offer common solutions to common problems? Why is this specifically important nowadays?

It is now an indispensible need for Turkey to solve its problems through vast consensus platforms to be built upon persuasion. This is necessary for the sake of the economy as well as for those struggling for survival. We demand democracy right now. We need democracy not to breed our short term personal ambition for prosperity but to build tomorrow. First, due to low savings rate, Turkey needs a solid public finance system that will secure sustainable development.

Greece was on the agenda for a while due to the public finance disaster it went through. Recently, Wall Street Journal called attention to the state of affairs in Portugal. The common feature of Greece and Portugal is that savings rate is low in both; just as in Turkey. Low savings rate makes growth performance dependent on foreign savings. Since it is not possible to change the savings rate from one generation to another, it is technically impossible to prevent interruptions in growth process. The main precaution to secure the sustainability of growth is to implement a solid public finance reform. This is the first point.

Second, the fiscal rule, which is recently being discussed for Turkey, should secure that politics respects the budget constraint. In countries with low savings rates, budget deficit should be considered not as a political but as a technical indicator and the budget right of the parliament should be limited. Budget results and budget balance should be a technical constraint and the budget right of the must be limited with a sum set in advance to change the public expenditure pattern. Tax revenues should no longer be a control variable for each budget period. In that case, fiscal rule should seek to limit budget deficit through budget expenditures.

Third, there is a need for a period of new tax reforms which will tidy up the riddled budget and strengthen the structure of tax revenues today for the sake of tomorrow. This is exactly what we should get from fighting informality. Both the tax system and tax auditing system must be revised. But for now, we have not accomplished this democratically.

Without establishing such milieu of political consensus, Turkey cannot even change its budget policy; not to mention amending the constitution.

Is there any reason to be hopeful about the near future?

There is no example in history, not only in Turkey's history but also in world history, where politicians on the edge of a nervous breakdown established a consensus platform. We will come to this later.

Note for interested: We extracted the tax reforms - coup d'états relationship from Selami Şengül (1997) "Bir hurafe: Kayıt dışı ekonomi" (A superstition: Informal economy)(İmaj Yayınları). I believe this book must be reprinted.

This commentary was published in Referans daily on 28.01.2010