“Debt Economies as Urban Survival Strategies in The Collapsed Economies: Examples from Post-Soviet Economies and Turkey Compared”

Rano Turaeva, Ludwig Maximillian University Nurdan Atalay Bandirma Onyedi Eylul University, Turkey

Debt relations and economic exchange based on debts are not only the matter of economic exchange and value but rather social embedded into the social web of the relevant location, shared norms, identities, networks and relations of trust and power relations.

Debt relations and economic exchange based on debt is understudied within anthropology. The classical anthropological studies of economic exchange and gift exchange are the oldest themes in the classical anthropology as well as economics. In this blog we would like to approach debt relations and economic exchange based on debt from holistic and processual approach and perspective engaging our analysis with related aspects and the process of debt making, debt paying, debt dependencies and social reality of the constitution of debt in two contexts such as post-Soviet countries and Turkey.

In our contribution we will provide first social, economic and political background of the contexts where debt is made, kinship and traditional set up of the social relations where debts are made and paid, as well as dependencies and reproduction of gender and patriarchal systems which result from debts in the three case studies in Central Asia, Russia and Turkey.

Debt in the post-Soviet context of economic collapse

After the collapse of the Soviet Union it overcentralized and unified economy stopped existing which meant that most of the Soviet Republics which economies was designed to be dependent on Republics were not prepared to become suddenly independent. Independence meant not only collapse of the centrally organized Soviet economy but also political power struggle for the new power arrangement to replace Moscow. Political, economic and social insecurities doubled with struggles for power grabbing, resources grabbing created what was then called as beshabashnoe vremya or bespredel. Some countries had to go through civil wars as a result of political and economic chaos and power struggles (Tajikistan in Central Asia). After the power holders
cemented their positions authoritarian regimes following the Soviet models have become the realities of today post-Soviet states (Central Asia, Russia).

In both uncertain periods during the chaotic period of early post-Soviet years and later authoritarian regimes could not provide social and economic security for its citizens which was then filled in by other systems such as kinship, friendship and religious belonging. This was also then described as re-traditionalisation, revival of Islam and the like although these processes are much more complex than those terms. Purer economic explanation for these
processes does also not work.

In the situation of absence of social welfare system, economic collapse, flourishing of informal economies and further strengthening of kinship and other systems of belonging there were variety of survival strategies, and survival modes developed.

In the context of post-Soviet regions unemployment, ridiculously low state salaries, absence of cash and not developed banking systems forced people who had to take up any work for cash (teachers and doctors earning some cash as taxi drivers) in order to be able to pay for their basic needs (food, cloth, other items).

Ridiculously small salaries gradually led to a decrease in incentives to seek employment within the state agencies, while salaries of the employees of security structures and the police were raised to levels incomparable with those of other professions. For example, a doctor or University teacher’s salary would average from 20$ to 50$, and a regular policeman would receive approximately 100$, not including the additional benefits for those employed in the security structures. At the time of my fieldwork (2005-2006) a middle ranking policeman had a net salary of 150,000 which was equivalent to 120$, whereas a school teacher was paid about 60 or 70 thousand which equates to 40-50$ excluding taxes. Employment in the security forces does not require special training or schooling, though possession of a diploma of any kind does automatically bring the recipient the title of lieutenant. Those who have graduated from
philological faculties, particularly with a major in foreign languages, have the potential of being hired directly by the secret police. There, the salaries are high and the employees enjoy all kinds of benefits related to health care, accommodation and food subsidies.

Debt based systems was the only system which could bridge those days where people could not earn or could not pay for their food. Small shops and small stands with small things (cigarettes, food items (repacked into smaller portions)) became more popular than state owned bigger stores due to the flexibility of traders or entrepreneurs who could introduce the debt based
system of trade without interests.

The employment market has dramatically transformed since the collapse of the Soviet Union. Industrial production has mostly declined due to lack of supply which was previously provided by the vast economic web of the Soviet Union, and based on the principle of economic interdependence. As industrial production stopped, employees lost their jobs. Scarcity of products was another consequence of the same process. Informal trade prospered visibly, and since the borders opened up, the supply of products became more flexible than during the Soviet Union where the supply chain had been more or less strictly predetermined and planned by central government. The most popular and lucrative profession became that of a businessman.
Often when people are asked about their occupation they would give a short answer ‘
biznes’ (business), and this term can be interpreted as wide or as narrow as one wishes, since it has no fixed meaning or definition. Doing business in the way Uzbeks understand it is an activity ranging from petty trade to operating one`s own business. In between there can be all kinds of  professions such as a seller, buyer or supplier, middle man, information manager, suitcase trader, or just anyone who is directly or indirectly involved in any kind of transaction which brings some income. This occupation cannot be defined as formal or informal since payment of taxes are generally avoided, or paid only partly in different ways – in the forms of bribes or other services. It is difficult to judge whether any part of these various kinds of payments reach state tax structures or not. The term tirikchilik (remaining alive and not starving) is used by almost all who are out of state employment when answering a question about their living. This means that a person does various things to generate some cash in contrast to davlat ishinda (on state employment) which is only profitable if an employee can gain additional bribes from his post.

Debt in Urban Turkey

It would be highlighted that debt relations should be understood within the neoliberal context in Turkey. Until 1980, there was an import substituting protection in which state played the main role in the economy. State was a main employer not only in the civil service but also in the industrial jobs as well. Those who had jobs in these institutions had accessed better social
protection in addition to better salaries. Except these groups employed in all kind of state sponsored jobs, welfare provisions were limited and they were mainly dependent on job status. Those employed in informal jobs were dependent on their family networks for both economic well-being and social support.

After the military coup in 1980, the new economic policy that had been accepted 24 January 1980 Decisions was adopted to more open liberal market economy. Transformation of the economy was gradual. Privatization took more than two decades but number of these secure jobs have declined gradually. Even some public jobs like teachers and doctors have lost their privilege and security and they have become contract or performance based. The inflation rate was high and salaries were not protected in this high inflation rate economy. On the other hand, new goods were available to those who had money. Consumption patterns started to change. Several economic crisis during 1990s and the first years of 2000s have

The financial mediums like credit and credit cards etc. were not easily accessible for the majority of the population until the end of 1990s. Financial mediums have played two crucial role in 2000s. First one, they changed the consumption pattern because they were not regulated by state and people started to buy whatever goods available in market through installments. For example, people paid their daily supermarket consumption through 12 installments with their credit cards. Later state regulated these installments. Secondly, these financial mediums compensated the low level of wages. At the context of economic crisis, people pay their debt through taking another loan. At the end, they could not take new loans and then they try to mobilize their family network to either get new loans or debts from this network. These dynamics have changed the debt relations within the society.