Patterns of Adjustment under the Age of Finance: The Case of Turkey as a Peripheral Agent of Neoliberal Globalization
Turkey experienced a severe economic and political crisis in November 2000 and again in February 2001. The IMF has been involved with the macro management of the Turkish economy prior to and after the crisis, and provided financial assistance of $20.4 billion between 1999 and 2003. Following the crisis, Turkey implemented an orthodox strategy of raising interest rates and maintaining an overvalued exchange rate. The government was forced to follow a contractionary fiscal policy to attain a primary surplus of 6.5% of the GNP, and promised to satisfy the customary IMF demands: reduce subsidies to agriculture, privatize, and reduce the role of the public sector in economic activity. Contrary to the traditional stabilization packages that aim to increase interest rates to constrain domestic demand, the new orthodoxy aimed at maintaining high interest rates to attract speculative foreign capital. The end result in Turkey was shrinkage of the public sector; deteriorating education and health infrastructure; and failure to provide basic social services to the middle class and the poor. Furthermore, as the domestic industry intensified its import dependence, it was forced to adopt increasingly capital-intensive, foreign technologies with adverse consequences on domestic employment. In the meantime the transnational companies and the international finance institutions have become the real governors of the country, with implicit veto power over any economic and or political decision that is likely to act against the interests of global capital.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: 418 N Pleasant St, Amherst MA 01002|
Phone: (413) 545-6355
Fax: (413) 545-2921
Web page: http://www.peri.umass.edu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Grabel, Ilene, 1996. "Marketing the third world: The contradictions of portfolio investment in the global economy," World Development, Elsevier, vol. 24(11), pages 1761-1776, November.
- C. Emre Alper, 2001. "The Turkish Liquidity Crisis of 2000: What Went Wrong..," Working Papers 2001/11, Bogazici University, Department of Economics.
- Reinhart, Carmen & Kaminsky, Graciela, 2000.
"Las crisis gemelas: las causas de los problemas bancarios y de balanza de pagos
[The twin crises: Te causes of banking and balance of payments problems]," MPRA Paper 13842, University Library of Munich, Germany.
- Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
- Reinhart, Carmen & Kaminsky, Graciela, 1999. "The twin crises: The causes of banking and balance of payments problems," MPRA Paper 14081, University Library of Munich, Germany.
- Graciela L. Kaminsky & Carmen M. Reinhart, 1996. "The twin crises: the causes of banking and balance-of-payments problems," International Finance Discussion Papers 544, Board of Governors of the Federal Reserve System (U.S.).
- Diaz-Alejandro, Carlos, 1985. "Good-bye financial repression, hello financial crash," Journal of Development Economics, Elsevier, vol. 19(1-2), pages 1-24.
- Dani Rodrik & Andres Velasco, 1999. "Short-Term Capital Flows," NBER Working Papers 7364, National Bureau of Economic Research, Inc.
- C. Emre Alper & Ziya Onis, 2002. "Emerging Market Crises and the IMF: Rethinking the Role of the IMF in the Light of Turkey's 2000-2001 Financial Crises," Working Papers 2002/03, Bogazici University, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:uma:periwp:wp126. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Judy Fogg)
If references are entirely missing, you can add them using this form.