nd the creation of a Turkish bourgeoisie were viewed as key ingredients of national economic development" (10). The 1920s were relatively prosperous, but the Great Depression resulted in the collapse of world commodity prices for Turkey's agricultural exports. During the remainder of the 1930s, Turkey turned to statism, which Hale said meant that "the state had a major responsibility for undertaking new industrial development" (55). It was responsible under successive Five Year Plans for financing, constructing and managing infrastructure projects such as railroads and industrial plants which were "designed to reduce Turkey's needs for imported consumer and intermediate goods using domestic raw materials" (Hale 56). Although Turkey remained neutral, World War II's defense mobilization costs retarded further development. From 1935 to 1950, Turkey achieved only modest average per annum rate of growth in GNP of 1.7 percent and remained an underdeveloped country with little industry (Hale 64).
During the 1950s, 1960s and 1970s, Turkey achieved much higher average annual rates of economic growth, about 6.3 percent in GNP and 3.4 percent in per capita income in the 1950s, and between 1960 and 1972, comparable overall and per capita growth rates of 6.4 percent and 3.9 percent (Hale 108; and Issawi 103).
Many factors helped spur growth, Marshall Plan aid, the mechanization of agriculture, the Korean War boom, and the general expansion of the European and world economies. Turkey pursued policies during these periods which involved "protection of the domestic market" through autarchic trade policies, heavy government investment in infrastructure projects such as roads, dams and irrigation as well as public education, and in SEEs which were heavily subsidized, and "industrialization through import substitution" (111). The SEEs dominated such areas as transport, telecommunications, banking and finance, and heavy industry. Private industry wa...