Turkey Opens the Door

Turkey has set a notable example for countries in search of U.S. capital. Instead of putting up barriers to private investment, such as have been erected in many countries, Turkey has torn them down.

On the day he departed for his month-long tour of the U.S., Turkey's President Celal Bayar pushed through the Grand National Assembly a law designed to attract private U.S. money. The law guarantees foreign investors the right to take 100% of their profits out of the country, and 100% of their principal, too. Another evidence of Turkey's hospitality toward foreign capital is a bill, expected to pass soon, which opens the nation's oil resources to exploration and development by non-Turkish companies. At present Turkey produces practically no oil, thus is forced to spend about 70% of her foreign exchange for oil imports. But geologists are convinced that big reserves lie waiting to be tapped.

Imported Experts. Both the investment law and the oil bill were drafted by U.S. experts. Chief author of the investment law is Washington Lawyer Henry B. Mitchell III, who went to Turkey last summer with the economic fact-finding mission headed by Steelman Clarence Randall.

To draft the oil bill, the Turkish government hired another Washington lawyer, Max Ball, an oil specialist who helped write Israel's oil legislation. The bill permits foreign private oil companies to drill in Turkey under 50-year leases, pay the Turkish government only a modest royalty on the oil and gas produced, until they recoup their investment. After that, the company and the government split the net profits. An important feature: instead of granting a nationwide concession to a single company or syndicate, the bill guarantees competition by keeping the door open to newcomers, and by limiting the area of each company's leases in any one district.

The Big Change. Turkey's willingness to try free enterprise marks a big change since the days of Dictator Kemal Ataturk, who tried to industrialize his nation through a cumbersome form of state socialism. The Turkish constitution, written in the 1920s, declared the nation to be "etatist" (i.e., state socialist). But as the Turks saw the disappointing returns of state socialism, the etatist ideology withered. In 1950 the voters elected Celal Bayar, an outspoken advocate of free enterprise, as President.

Last week politicians of the Republican People's Party, which opposes Bayar's Democratic Party, denounced Lawyer Ball as "a tool of the oil interests," and criticized his draft as too freehanded with Turkey's oil. The investment law has also been a target for such political potshots as: "Why don't the Democrats introduce those two laws in the original English? It would save translation costs."

Although newspaper stories filed from Turkey reported these flurries as "anti-Americanism," they were actually just politicking prior to the general elections in May. Anti-American feeling hardly exists in Turkey. Though they snap at each other, Turkey's two major parties agree, as President Bayar recently told a U.S. audience, that "private enterprise is the best system [for] rehabilitating a country that is economically backward."

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