TURKEY'S DEBT CRISES IN HISTORICAL PERSPECTIVES : A CRITICAL ANALYSIS

Date

1992

Author

CEYHUN, Fikret

Metadata

Show full item record

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Item Usage Stats

52
views

192
downloads

Cite This

The paper critically examines Turkey's debt crises in three episodes: the liberalized foreign trade regime in the 1950s, import-substitution industrialization (ISI) from the early 1960s to 1980, and export-led industrialization (ELI) since 1980. The failure of the liberal economic policy opened the way to a new policy consideration in the 1960s. The ISI policy was adopted to avoid a foreign exchange crunch. This policy, too, ran into trouble quickly because there was insufficient industrial infrastructure to produce new capital goods, lack of technical and skilled personnel as well as competent managerial and entrepreneurial elite, and inadequate technical know- how. Lacking these, Turkey's industrialization depended on supplies from abroad, leading to a debt crisis again, Turkey's third in less than 30 years. Hence, Turkey saw debt crises at three junctures: in 1957-58,1969-70, and 1978-80. As an alternative to ISI, ELI was launched in January, 1980. This time the government of Turkey sought to overcome the foreign exchange barrier by producing for export under ELI policy. The foreign exchange, thus earned, would both mitigate the crushing debt service burden and finance needed imports. However, the debt burden has increased further rather than diminished during the last ten years. This paper examines why ELI failed.

URI

https://hdl.handle.net/11511/110493

Collections

Department of Economics, Article