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Capital Flows and the External Financing of Turkey's Imports (Special Series on Mixed Credits, in Collaboration with ICEPS)

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Author Info
Ziya Önis
Süleyman Özmucur ()

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Abstract

Subsidized capital flows have made a major contribution to the recovery of the Turkish economy from the acute balance of payments crisis of the late 1970s. The inflow of foreign capital on a substantial scale has facilitated rapid growth in imports of essential raw materials and investment goods which, in turn, has been instrumental in sustaining a comparatively high rate of economic growth.

A balanced account, however, needs to take into consideration the negative side effects associated with subsidized credits. Subsidized capital inflows have resulted in overborrowing and consequently in overexpansion of the public sector, particularly during the post-1984 phase. A structural disequilibrium has developed, in the sense that the majority of medium- and long-term capital inflows has been directed to the public sector, and within the public sector, primarily to infrastructure projects. The private sector has been able to borrow mainly on a short-term basis, to satisfy working ...


Les flux de capitaux subventionnés ont puissamment contribué à la restauration de l'économie turque confrontée à une crise aiguë de la balance des paiements à la fin des années 70. L'afflux, à grande échelle, de capitaux étrangers a concouru à la croissance accélérée des importations de matières premières essentielles et de biens d'investissements qui, à leur tour, ont été à la base d'un taux de croissance économique relativement élevé.

Un bilan équilibré implique cependant la prise en considération des effets négatifs de ces crédits bonifiés. Les flux de capitaux subventionnés ont donné lieu à un surendettement et à une expansion excessive du secteur public, en particulier après 1984. Un déséquilibre structurel s'est alors développé, la majorité des importations de capitaux à long et à moyen termes bénéficiant au secteur public et, au sein de ce secteur, prioritairement aux projets d'infrastructures. Quant au secteur privé, il a emprunté surtout à court terme pour s'assurer ...

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Paper provided by OECD Development Centre in its series OECD Development Centre Working Papers with number 36.

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Date of creation: Jul 1991
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Handle: RePEc:oec:devaaa:36-en

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