Turkey's Economic Development

This research paper discusses the course of Turkey's economic development since the mid-1980s and the factors which have influenced it. Since the end of World War II, the Turkish economy has grown at an average annual rate of approximately five percent per annum, about double the rate of population growth; however, that growth has been highly irregular, reflecting periods of substantial prosperity coupled with episodic and recurring bouts of financial and political crisis. That growth, which has been mirrored by a lesser but still substantial improvement in per capita income, was largely stimulated by state-led intervention in the economy. Beginning in the early 1980s, Turkey began de-emphasizing the role of the state in the economy and adopted measures of structural adjustment and free market reforms which were designed to make the Turkish economy more competitive in global markets. Progress in integrating that economy with the world economy has, however, been implemented slowly and has been impeded by a number of factors, including populist pressures which delayed the implementation of measures such as the privatization of state economic enterprises (SEEs) and other institutional reforms, continuing high inflation and persistent government budgetary deficits, foreign trade and debt repayment problems, and various domestic and foreign policy problems. These factors caused a major drain of resources needed for capital investment in infr

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undered over political and bureaucratic opposition. Inflation shot back up to 70-80 percent levels by the end of the decade. The Economist criticized in 1991 "the failure to deal with the worst part of a backbreaking budget deficit that keeps inflation intolerably high and therefore prevents the emergence of an efficient Turkish economy" (A Survey S7). It said "the spectacular real economic growth of the mid-1980s has started to hiccup; down to 1.6% in 1989" (C5). The budget deficit grew from one trillion Turkish lira in 1985 to 33 trillion in 1991 (S6). Turkey's Economic Difficulties and Progress in the 1990s 1990-1997. This period was selected for analysis because 1990 marked the beginning of the intensification of various international and domestic military, political and economic developments which retarded further Turkish economic development and ended with the reimposition of military rule and the removal from power of a coalition government led by the Islamic fundamentalist oriented Welfare (Refah) Party. During the years 1989-1994, annual economic growth rates (changes in GDP) were even more volatile than typical of the postwar period: 1989 .1 percent 1990 9 " 1991 1.5 " 1992
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Approximate Word count = 3989
Approximate Pages = 16 (250 words per page)

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