Güven Sak, PhD - [Archive]

If you cannot protect the İnci Patisserie, you cannot maintain your industry 11/12/2012 - Viewed 2120 times

Those who are not trying to protect İnci Patisserie cannot be considered conservatives. A conservative without tradition is like meat-free sausage or milk-free yoghurt.

I was born in Bursa in the second half of the 1960s. Every now and then, my family would go to Istanbul. During these short visits, we definitely would stop by the famous İnci Patisserie. I ate my first profiterole there in the first half of the 1970s. Now the news has come that İnci has been closed down, as part of the urban transformation project the government is carrying out in Beyoğlu. I believe that a country unable to protect İnci Patisserie is unable to protect its industry. If not taxed heavily, urban rent will wash away a country’s industry. The reason why Turkey moved off the list of the world’s industrial giants from 2000 to 2010 is also the reason why İnci Patisserie has been closed down..

The McKinsey Global Institute recently released a report that calculates the share of gross value added in manufacturing industry in GDP. The fifteen countries with the highest figure constitute the list of world’s industrial giants for the most part. Turkey was not on the list in the 1980s, but made it to the thirteenth place in 1990 thanks to Özal. With a small decline, Turkey ranked fifteenth in 2000. However it moved off the list in 2010. Just like Turkey, South Korea was not on the list in the 1980s. The country made it to eleventh place in 1990, jumped to eighth place in 2000 and to seventh place in 2010. Korea has improved the gross value added in manufacturing industry to GDP ratio while Turkey has done the opposite. South Korea’s industrial giants have become global industrial giants whereas their peers in Turkey have switched to construction. Korea has provided the correct incentives; Turkey has done it all wrong. And here we are today.

Let me ask you then: what is the difference between South Korea and Turkey? And here is the answer: South Korea imposes heavy taxes on urban rent. Seoul is declared to be an overheated speculative zone, bringing not just high but extremely high taxes on capital earnings. There is no such concept in Turkey. If the municipalities of a country provide zoning privileges that earn immediate and high returns, that country cannot have an advanced industrial sector focused on innovation and high technology. All it is able to maintain as rising sectors will be iron, steel and cement,, which cannot bring affluence to us all.

So, what does this have to with the İnci Patisserie? It was located in the Cercle d’Orient, the pearl of Beyoğlu’s history, which together with the historic Emek theatre hall will be torn down to build a shopping mall. A restoration, in a way. Municipal zoning regulations allow this in the name of urban transformation. İnci Patisserie has been closed down because the rent of the property jumped due to a municipal regulation. The reason industrialists switched to the construction sector is the same as why İnci Patisserie has been closed down.

There are two conclusions: urban transformation projects must not be carried out without heavily taxing unearned profits first. Second, those who do not consider protecting İnci Patisserie cannot be considered conservatives. A conservative without a tradition is like a meat-free sausage or milk-free yoghurt.

Yet this is the very case in Turkey.

This commentary was published in Radikal daily on 11.12.2012