Tales of Smugglers and Indirect Taxation - The Şırnak Incident

No doubt you’ve seen recent news coverage of the deaths of 35 villagers in south-eastern Turkey. According to reports, a convoy of young Kurdish smugglers was making its way by night towards the Turkish border leading donkeys laden with contraband petrol and cigarettes from neighbouring Iraq. Their presence was detected by military drones and thermal cameras, and they were taken for Kurdish insurgents belonging to the outlawed PKK, who apparently often use that border crossing to launch strikes against Turkish police and military targets from their bases in the mountains of Iraq. In a tragic case of being in the wrong place at the wrong time, the smugglers were strafed and bombed by Turkish warplanes. Reports say most of the dead were young men around 17 to 20 years old.

Uludere Village, Şırnak Province

The incident is a major embarrassment for the Turkish government, who have been pursuing a dual policy of hitting ‘terrorists’ hard, while trying to defuse the separatist issue by allowing discussion on the use of the Kurdish language and the practising of the Alevi religion. Political opponents, needless to say, have seen a golden opportunity to attack the government, making comparisons to the killing of dissidents by beleaguered President Bashar al-Assad in neighbouring Syria.

I made a journey into that south-eastern part of Turkey back in the summer of 1999. In retrospect, I was fortunate because, at that time, there was a brief window of relative peace following the arrest and imprisonment of PKK leader, Abdullah Öcalan, and before George ‘Dubya’ Bush’s invasion of Iraq stirred up Kurdish activists again. I didn’t get right down to that distant corner of Anatolia, to Hakkari and Şırnak, where the latest incident took place, but I did make my way deep into parts of the country with Kurdish majority populations: Malatya, Diyarbakır, Mardin and Van. Despite the relative calm, we faced regular stoppages at checkpoints, with tanks and other serious-looking military hardware very much in evidence.

There were very few tourists – I met a group of young back-packers from Poland in Doğubeyazit, way out on the border with Iran, but saw no others. I was able to make a small contribution to international goodwill in that remote town, purchasing a New Zealand twenty-dollar note from a taxi driver who would have waited a long time for another such opportunity. Since hostilities resumed after 2003, I imagine the tourist trade has, if anything, declined. Certainly the New Zealand Embassy in Ankara sends out emails to ex-pat citizens and tourists warning us to avoid those parts of the country.

These hostilities are another instance of what we have come to know as asymmetrical warfare – where a professional national military machine combats groups of irregular guerrillas. We have read much about the post-traumatic stress disorder afflicting US servicemen returning from tours of duty in Iraq. One major cause of this stress, no doubt, is that, in such asymmetrical conflicts, the professional soldiers suffer from the disadvantage of having to wear a uniform, making them clearly identifiable targets. On the other hand, local guerrillas are not easily distinguished from harmless civilians, especially when you don’t speak the local language. As a result, the professionals are in a state of constant fear and uncertainty, and not infrequently kill or wound non-combatant citizens going about their lawful business.

Well, I’m not excusing the Turkish military for what they did down there in Uludere, in Şırnak province. However, the situation is, you’d have to say, somewhat complex. For a start, the victims of the air-strike were Turkish citizens intending to re-cross an international border, having, we must assume, previously left the country without notifying the proper authorities, for a purpose which could hardly be called lawful business, and this in the dead of night. Moreover, the path they were on is apparently used by PKK insurgents making guerrilla raids into Turkey from bases across the border in Iraq. Certainly those guys were too young to die, and the price they paid was disproportionate to their crime – but they were surely old enough to know the risk they were taking.

However, that’s not much consolation for those families in Uludere who have lost the flower of their local manhood – and it is certainly creating extra unpleasantness for the Turkish government in relations with their Kurdish citizens, even if they do fulfil their promise to pay substantial reparations. Still, ascribing blame is always a difficult task, and knee-jerk responses rarely address the underlying causes of a conflict, so let’s take a step back . . .

The Turkish Republic has one of the world’s booming economies these days. The middle class is expanding rapidly, the retail sector is on a roll, private sector commercial and residential construction is changing the urban skyline, and the government is proceeding with numerous large-scale public projects. They do, however, have some difficulties in collecting taxation. No one likes paying tax, of course, but not paying it is a way of life in Turkey. Collecting income tax from wage and salary earners is relatively straightforward – but what if the company doesn’t declare its employees? And getting tax out of the wealthy is notoriously problematic, even in countries with more reliable bureaucratic infrastructure.

One widely employed solution is indirect taxation. Everybody does it these days: GST, VAT, KDV . . . a nettle by any other name would sting as sharp. And then there are the special purpose taxes. Who can argue with extra duties on cigarettes and alcohol? If people want to drink and smoke themselves to death, why should I pay for their health care with my taxes? And petrol . . . well, drivers should contribute to the cost of roads and motorways and whatnot, it’s only fair and reasonable.

Turkey, however, is a special case. I read that Americans got upset when the price of gasoline reached $4 a gallon. Imagine the screams of outrage if they had to pay $8.50, as Turkish motorists do! They’d never get the protesters out of the parks! And if the US Federal Government tried to take 70% of the price in tax, the Tea Party would likely be organising airstrikes on the White House.

Then there’s the cigarette tax. There was a time when ‘to smoke like a Turk’ was axiomatic. Now I’m starting to feel sorry for Turkish smokers, who currently pay nine Turkish liras or more for a packet of smokes, of which 7.50 TL goes to the government. Unlike smoking, however, drinking is not such a big thing in Turkey. In tea consumption, Turks are right up there with the English – but Islam has traditionally frowned on alcohol. The land that probably invented wine production, allowed the art to die out until the last decade or so saw some kind of revival.

The exception to this abstemiousness has been rakı, the grape-based, aniseed flavoured spirit resembling Greek ouzo, which is a popular accompaniment to a Turkish night on the town. Perhaps I should have said ‘was’, since a litre bottle of the cheapest Yeni Rakı now retails for 61 TL, of which 62% disappears into government coffers.

So what’s the connection, you’re saying. The Turkish military kills 35 poor young villagers out east, and I’m blethering on about the price of grog and cigarettes. But don’t be hasty. It’s pretty clear that those kids were smuggling cigarettes and petrol. Of course it’s illegal, but when people take such risks to do it, you can safely bet that they are addressing a need, and that there is money to be made. Economic niches will be filled, by fair means or foul - Americans learned that lesson back in the 1920s when the Federal Government attempted to ban the consumption of alcohol. During the thirteen years the Volstead Act was in force, an unlooked for side-effect was the emergence of ‘rampant underground, organised and widespread criminal activity’.

People will drink, people will smoke tobacco, and people will drive around in vehicles powered by internal combustion engines, until satisfactory substitutes are found. That is the principle on which indirect taxation is founded, whatever alternative rationalisations are put forward. A 17^th century English poet, Henry Aldrich, wrote:

If on my theme I rightly think,

There are five reasons why men drink,—

Good wine, a friend, because I ’m dry,

Or lest I should be by and by,

Or any other reason why.

Substitute ‘smoke’ or ‘drive cars’ for the underlined word, make one or two other necessary amendments, and the resulting epigram will be equally true. Governments know this, and see a bottomless source of revenue. Unfortunately, as with other forms of taxation, the burden tends to fall disproportionately on those at the middle and lower ends of the income spectrum. The wealthy find ways to circumvent the annoyance: company expense accounts, legal forms of tax avoidance, duty-free purchases while traveling abroad – or if the worst comes to the worst, most have plenty of slack in their disposable incomes.

In countries like Turkey, the problems are exacerbated by poverty. Turks, as has been noted, pay more than double the price for petrol that US drivers do, yet their per capita GDP is less than one quarter of that in the USA (IMF 2010 figures). And, of course, such figures represent a national average, and disguise the fact that 50% of the population have incomes substantially below the national average.

The bottom line, to use a phrase much beloved of businessmen and economists, is that indirect taxes hit hardest the poorest sections of the population. So what are they to do? For the most part, they won’t stop drinking and smoking (even paupers need some small pleasures in life), though they may be obliged to do without private cars. Human nature being what it is, then, we can expect the following results:

- Some enterprising souls will find ways to manufacture alcoholic beverages. In Turkey, there have recently been reports of deaths related to the consumption of illegally distilled spirits. In fact last summer there was a minor scandal caused by the deaths of some Russian tourists.

- Smuggling. ‘Kaçak’ is an important word in Turkish, with a multitude of meanings, but, in the case of cigarettes, for example, it has the connotation of ‘unofficially duty-free’.

- The involvement of organized crime syndicates. Some reports on the deaths in Şırnak province suggest that, at the very least, PKK insurgents are taking a commission from smugglers to allow safe passage.

So, coming back to where we began, and the question of blame for the deaths of the young men from Uludere, I would suggest that inequality of income and opportunity lie at the root of the tragedy. The New Year edition of Time magazine has chosen ‘The Protester’ as Person of the Year for 2011 – the protester to be found in Zucotti Park, New York and Tahrir Square, Cairo; in Syntagma Square, Athens, and the streets of London. Common factors in all these protests are lack of central leadership, frustration with the inability of governments to deal with manifest injustice, and a willingness to endure pain, suffering, even death, to make their message heard. One further factor is the participation of a more educated, middle class species of protester. The less educated, lower classes are likely to turn to more direct action, such as mugging and smuggling. In the end, if the privileged classes fail to address the valid grievances of their fellow citizens, they will find increasing need for draconian security measures, and not only in China and Syria.