The Turkish Economy in Crisis : Critical Perspectives on the 2000-1 Crises

This book provides a set of critical perspectives on the economic crises of 2000 and 2001 focusing on both the origins and consequences of the crises. Attention is drawn to the role of domestic actors as well as key external actors such as the International Monetary Fund in precipitating the twin crises. Book Cover......Page 1 Half-Title......Page 2 Title......Page 4 Copyright......Page 5 Contents......Page 6 Preface......Page 8 1 Domestic Politics versus Global Dynamics:Towards a Political Economy of the 2000 and 2001 Financial Crises in Turkey......Page 9 PREMATURE CAPITAL ACCOUNT LIBERALIZATION AND THE DEBT TRAP: THE ECONOMIC AND POLITICAL BACKGROUND TO THE TWIN CRISES......Page 14 THE CRISES OF NOVEMBER 2000 AND FEBRUARY 2001: INTERNAL DYNAMICS AND SYSTEMIC INFLUENCES......Page 16 LOOKING BEYOND FEBRUARY 2001: THE ECONOMIC AND POLITICAL CONSEQUENCES OF THE CRISES......Page 22 OVERCOMING THE LOW GROWTH-HIGH INEQUALITY SYNDROME: THE CHALLENGES AHEAD AND THE NEED FOR A LONG-TERM STRATEGY......Page 26 THE NEED FOR A PERMANENT EXTERNAL ANCHOR: POLITICAL ECONOMY AND THE SIGNIFICANCE OF EU MEMBERSHIP......Page 31 CONCLUDING OBSERVATIONS......Page 32 NOTES......Page 33 2 The Lost Gamble:The 2000 and 2001 Turkish Financial Crises in Comparative Perspective......Page 39 BANKING FRAGILITY, FINANCIAL PANIC, AND CURRENCY COLLAPSE: ANALYTICAL CONSIDERATIONS......Page 40 FROM FINANCIAL LIBERALIZATION TO EXTERNAL ILLIQUIDITY......Page 43 Turkey’s Stabilization Program and Rising Financial Vulnerability......Page 44 Unanticipated Nature of the Crisis......Page 48 Triggering Events......Page 50 The November Crisis......Page 52 The February Crisis......Page 54 CONCLUDING REMARKS......Page 55 NOTES......Page 56 3 On the Structural Weaknesses of the post-1999 Turkish Disinflation Program......Page 62 THE LIQUIDITY GENERATION MECHANISM UNDER THE DISINFLATION PROGRAM......Page 64 DEEPENING THE VULNERABILITY OF THE BANKING SYSTEM......Page 68 THE STRUCTURE OF FISCAL FRAGILITY AND THE BEHAVIOR OF INTEREST RATES......Page 70 CONCLUSIONS......Page 72 NOTES......Page 73 4 Domestic Needs for Foreign Finance and Exchange Rate Regime Choice in Developing Countries, with Special Reference to the Turkish Experience......Page 76 EXCHANGE RATE REGIME AND EXTERNAL DEBT DYNAMICS......Page 77 THE TURKISH EXPERIENCE......Page 85 THE ECONOMETRIC ANALYSIS......Page 87 MONETARY POLICY UNDER A FLOATING EXCHANGE RATE REGIME......Page 94 CONCLUSIONS......Page 96 NOTES......Page 98 5 Economic Crisis as an Instigator of Distributional Conflict:The Turkish Case in 2001......Page 100 CONCEPTUAL AND STATISTICAL DIFFICULTIES......Page 101 Production......Page 104 The Labor Market......Page 106 Poverty and Income Distribution......Page 109 Inflation......Page 111 Social Sectors......Page 112 Other Effects......Page 114 THE RESPONSE TO THE CRISIS......Page 115 The Turkish Government......Page 116 International Institutions......Page 117 Other Reactions: Organized Groups and Households......Page 118 PROSPECTS AND CONCLUSION......Page 120 NOTES......Page 123 6 Social Capital and Corruption during Times of Crisis: A Look at Turkish Firms during the Economic Crisis of 2001......Page 129 THEORETICAL BACKGROUND......Page 135 THE SURVEY......Page 139 Measures Used in the Analyses......Page 140 RAMIFICATIONS OF THE QUANTITATIVE RESEARCH......Page 145 NOTES......Page 151 7 Towards a Sustainable Debt Burden:Challenges Facing Turkey at the Turn of the New Millennium......Page 154 THE POLITICAL ECONOMY OF THE GOVERNMENT BUDGET CONSTRAINT......Page 158 THE DYNAMICS OF SUSTAINABLE DEBT FINANCING......Page 161 THE CASE OF TURKEY......Page 163 CONCLUSIONS......Page 172 NOTES......Page 173 THE REGULATORY FRAMEWORK AND A BRIEF DESCRIPTION OF THE SECTOR......Page 176 The Operating Environment......Page 180 The Road to Destruction......Page 183 Post-Crisis Outlook......Page 189 PROSPECTS......Page 190 NOTES......Page 192 9 Conclusion:The Broader Ramifications of Turkey’s Financial Crises......Page 194 NOTE......Page 200 Abstracts......Page 201 Notes on Contributors......Page 204 Index......Page 206

During 2001 and 2002, economic crises in Turkey came to be seen as the worst the country had faced in at least fifty years. Önis (international political economy, Koc U., Turkey) and Rubin (Global Research in International Affairs Center of the Interdisciplinary Center) present nine papers dedicated to analyzing the domestic and international causes of the crises. The authors approach the topic from different perspectives, at various points blaming the crises on shifts in expectations of foreign investors, structural weakness of the Turkish disinflation program, corruption, a major increase in the public debt, or other causes. First published as Turkish Studies, vol. 4, no. 2 (Summer 2003). Distributed in the US by ISBS. Annotation ©2004 Book News, Inc., Portland, OR