The Economy of Turkey since Liberalization

215 Pages·1996·17.745 MB·English

by  S. Togan, V. N. Balasubramanyam (eds.)

THE ECONOMY OF TURKEY SINCE
LIBERALIZATION
Also by S. Togan
FOREIGN TRADE REGIME AND TRADE LIBERALIZATION IN
TURKEY DURING THE 1980s
Also by V. N. Balasubramanyam
ECONOMY OF INDIA
INTERNATIONAL INVESTMENT (edited with David Sapsford)
The Economy of Thrkey
since Liberalization
Edited by
s.
Togan
Professor of Economics
Hilkent University, Ankara
and
V. N. Balasubramanyam
Professor of Development Economics
Lancaster University
First published in Great Britain 1996 by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS
and London
Companies and representatives
throughout the world
A catalogue record for this book is available
from the British Library.
ISBN 978-1-349-24466-9 ISBN 978-1-349-24464-5 (eBook)
DOI 10.1007/978-1-349-24464-5
First published in the United States of America 1996 by
ST. MARTIN'S PRESS, INC.,
Scholarly and Reference Division,
175 Fifth A venue,
New York, N.Y. 10010
ISBN 978-0-312-12694-0
Library of Congress Cataloging-in-Publication Data
The economy of Turkey since liberalization I edited by S. Togan and
V. N. Balasubramanyam.
p. em.
Includes bibliographical references and index.
ISBN 978-0-312-12694-0
I. Turkey-Commercial policy--Congresses. 2. Turkey-Foreign
economic relations--Congresses. 3. Turkey-Economic policy
-Congresses. 4. Turkey-Economic conditions-1960-- -Congresses.
I. Togan, Siibidey. II. Balasubramanyam, V. N.
HFI583.4.E28 1996
330.9561---dc20 95-5640
CIP
© S. Togan and V. N. Balasubramanyam 1996
Softcover reprint of the hardcover I st edition 1996
All rights reserved. No reproduction, copy or transmission of
this publication may be made without written permission.
No paragraph of this publication may be reproduced, copied or
transmitted save with written permission or in accordance with
the provisions of the Copyright, Designs and Patents Act 1988,
or under the terms of any licence permitting limited copying
issued by the Copyright Licensing Agency, 90 Tottenham Court
Road, London WIP9HE.
Any person who does any unauthorised act in relation to this
publication may be liable to criminal prosecution and civil
claims for damages.
10 9 8 7 6 5 4 3 2 I
05 04 03 02 01 ()() 99 98 97 96
Contents
~~~~ ~
List of Tables viii
P~u ri
Acknowledgements xii
Participants in the Conference and Contributors to the Volume xiii
1 Introduction
S. Togan and V. N. Balasubramanyam 1
2 Trade Liberalization and Competitive Structure in Turkey
during the 1980s
Subidey Togan 5
3 Trade Reform and Changes in the Terms of Trade in
Turkey
David Greenaway and David Sapsford 52
4 Financial Reform in Turkey since 1980: Liberalization
without Stabilization
P. N. Snowden 67
5 Foreign Aid and Adjustment in Turkey
Oliver Morrissey 88
6 Foreign Direct Investment in Turkey
V. N. Balasubramanyam 112
7 Turkey and the European Community: Regional
Integration and Economic Convergence
Robert C. Hine 131
8 Export Expansion, Capital Accumulation and Distribution
in Turkish Manufacturing, 1980-9
Fatma Taskin and A. Erinc Yeldan 155
v
vi Contents
9 Liberalization. Export Incentives and Exchange Rate
Policy: Turkey's Experience in the 1980s
Oktan H. Aktan 177
Index 198
List of Figures
3.1 Turkey's trade orientation, 1968-85 59
4.1 Disequilibrium in the market for bank credit 68
4.2 Interest liberalization with endogenous budget deficits 73
4.3 Intermediation costs and loan supply 77
6.1 Effective exchange rates and inflows of foreign direct
investment in Turkey 126
8.1 Composition of Turkey's manufacturing exports 165
8.2a Capital accumulation and the profit-wage frontier in
consumer manufacturing 171
8.2b Exports per worker and depreciation versus wage costs
in producer manufacturing 171
8.3a Exports per worker and depreciation versus wage costs
in consumer manufacturing 173
8.3b Capital accumulation and the profit-wage frontier in
producer manufacturing 173
vii
List of Tables
2.1 Share of 'restricted list' imports in total imports 12
2.2 Share of imports 'subject to permission' on sectoral
imports (%) 13
2.3 Sectoral protection rates (%) 16
2.4 Protection rates by major commodity groups and
trade categories (%) 20
2.5 Sectoral subsidy rates (%) 24
2.6 Subsidy rates by major commodity groups and trade
categories (%) 26
2.7 Real exchange rate 32
2.8 Anti-export bias (%) 34
2.9 Sectoral real effective exchange rates 37
2.10 Comparative advantage according to domestic
resource cost (DRC) 40
2.11 Comparative advantage according to the values
of revealed comparative advantage 41
2.12a Correlation coefficients of Turkish RCA values for
the period 1986-8 with the RCA values of
different countries for the periods 1986-8, 1983-5
and 1980-2 43
2.12b Correlation coefficients of Turkish RCA values
for the period 1989-90 with the RCA values of
different countries for the periods 1989-90,
1986-8, 1983-5 and 1980-2 43
2.13 Revealed comparative advantage (RCA) of Greece
and Korea, 1989-90 44
2.14a Nominal and effective protection rates in selected
developed countries (1962) 47
2.14b Nominal protection rates in manufacturing sectors
of selected developed countries 48
2.14c Nominal and effective protection rates in Germany
(1970) 48
2.14d Nominal and effective protection rates in selected
developing countries 49
3.1 Turkey's trade orientation and terms of trade, 1968-91:
causality analysis 61
viii
List of Tables ix
3.2 Turkey's trade orientation, 1968-91: a distributed
lag model 63
4.1 Central government budget: ratios to total expenditure
(percentages) 71
4.2 The structure of financial claims in Turkey (1981-7)
(percen tages) 75
5.1 Patterns of Turkish aid receipts 91
5.2 Conditionality content of SALs 96
5.3 Compliance with conditionality, 1980-7 99
5.4 Comparison of results on effectiveness of SALs 102
5.5 Sequencing in Turkish adjustment programme 107
6.1 Stock of foreign direct investment in Turkey,
1970-91 113
6.2 Flows of foreign direct investment: selected developing
countries, 1970-88 114
6.3 Sectoral distribution of foreign direct investment
in Turkey (January - end of May 1992) 115
6.4 Geographical distribution of foreign direct investment
in Turkey (January - end of May 1992) 116
6.5 Estimated regression equations (dependent variable -
annual average inflows of foreign direct investment
per capita for the years 1970-80) 121
6.6 Effective exchange rates for Turkey's exports and
imports 121
7.1 Variations in per-capita incomes in the EC(I2)
and Turkey 137
7.2 The development of intra-industry trade in Europe 138
7.A Inflation rates in relation to per-capita incomes 152
8.1 Prices and costs in Turkish manufacturing 157
8.2 Exports by commodities (million US$) 160
8.3 Commodity composition of exports (% of total
exports) 162
8.4 Commodity composition of manufacturing
industry exports (% of industrial exports) 166
9.1 Total charges on imports 179
9.2 Total protection: import duties and other charges,
1980-91 180
9.3 Liberalization of trade regime: numbers of
commodities on various import lists, 1979-90 184
9.4 Total protection: impact of import duties and