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Mustafa Koc, Turkey’s beloved businessman

by

Bloomberg

The large turnout in Istanbul for the funeral of Mustafa Koc, along with the thousands of tributes on social media, says a lot about what has been happening in Turkey during the past decade. These days, prominent businessmen usually don’t draw such affection.

Koc, who died of a heart attack Jan. 21, ran a company that claims to account for 8 percent of Turkey’s economy and 14 percent of its exports. The Koc group, which produces everything from cars to petroleum products, grew during the country’s military and secularist-dominated era — from its beginnings in 1926, soon after Mustafa Kemal Ataturk formed the Turkish Republic, until the election of President Recep Tayyip Erdogan’s religious conservative Justice and Development Party in 2002. The business has continued to prosper since.

In a country where secular and religious conservative companies have formed separate associations (Tusiad and Musiad, respectively), and where consumers choose even chocolates according to whether they are manufactured by “secular” Eti or conservative Ulker companies, Koc’s continued success was never a given. And the government controls many of the contracts and privatizations on which conglomerates such as Koc rely for growth.

Since coming to power in 2003, Erdogan has sought to shift the disproportionate amount of wealth accumulated by secularist business families toward his religious conservative allies. This was to be expected, given the way secularist parties had previously disfavored conservative companies.

But he has also taken punitive action against some secularist businesses. He charged the Dogan group — a conglomerate with large media and energy assets — with tax fines and interest of $3.2 billion (most of the charges were eventually thrown out in court).

Erdogan felt strongly that Istanbul’s secular aristocracy — so-called White Turks — had treated him, a “Black Turk” from the streets, disrespectfully when he was the city’s mayor in the 1990s. As recently as 2013, he suggested that business leaders of that era should face trial for the role he suspects they played in the “soft” coup of 1997, which toppled an Islamist-led government and led to Erdogan being jailed. So it was a smart move for Koc’s father, Rahmi, to hand control of the company to his son in 2003, the year Erdogan became prime minister. Mustafa Koc could deal with the new leaders with less personal baggage than his father or Aydin Dogan, who kept control of the Dogan group until 2010. And for the most part, he managed to maintain good relations with the new regime. In 2005, for example, Koc was able to buy a 51 percent share of the oil refiner Tupras, the country’s largest single enterprise, paying the government $4.1 billion.

For Turkish secularists, Koc’s success was important. So long as Koc and other secular-era conglomerates run a big share of the economy, there is a large safe space in which secularists can work and advance at good jobs even if they — and their spouses — don’t wear head scarves. Among the tributes to Koc that poured in after his death came one from U.N. Women, the United Nations entity devoted to promoting women’s empowerment, to which Koc was a deeply committed. In Turkey, gender equality is a defining political issue. Erdogan is just as committed to his belief that God, and physical attributes, have created men and women for separate, unequal roles.

News of Mustafa Koc’s death caused the company’s share price to fall over 5 percent, though it has recovered.

While Koc may have been one of Erdogan’s most powerful natural opponents, he was always respectful toward him in public and avoided diving into Turkey’s culture wars, even in private discussions I had with him. At the same time, he wasn’t a pushover. When, during the 2013 Gezi Park demonstrations against Erdogan, protesters sought refuge from police tear gas and batons in Koc’s swanky Divan Hotel, the doors opened, and first aid was provided. Erdogan was furious, promising punishment for the “crime” of abetting “terrorists.” As many as 200 tax inspectors descended on Koc’s energy companies and the government canceled a €1.5 billion ($1.64 billion) naval contract it had previously awarded to the company.

Koc didn’t overreact, but neither did he roll over. When evidence emerged of widespread government corruption, he called for Erdogan to clear up the charges for the sake of investor confidence, rather than bury them (as the government did).

Slowly, Erdogan came around, seeming to recognize that destroying the Koc group would damage Turkey itself. The day before Koc suffered his heart attack, the two men were again talking about defense contracts.

Erdogan attended Koc’s funeral along with leaders of the secularist opposition. The death of a man who was able to walk such a fine line with a government that too often sees its opponents as terrorists is an enormous loss. Turks who came to pay their respects for Koc understood this.

Marc Champion writes editorials on international affairs for Bloomberg View.