Sustainability of external depts Turkey application

Sustainability concept came into consideration for both developing countries and developed countries along with budget deficits in 1980?s and since then it has been a popular subject of economic researches on external sustainability. The general framework of external debt was drawn by IMF, World Bank, BIS and other international institutions with their common workshop and some data compiling and filtering guides were published by them in order to help countries to prepare an external debt file with common base for all countries. Some researchers have found out the liquidity problems as as source of sustainability problem whereas other researchers pointed out domestic saving gaps for a country. In the first part of this study, the definition of external debt and its theoretical framework along with debt sustainability approaches were examined. In the second part of this study, all external debt of Turkey starting from Ottoman Empire period, in terms of their term structure, debt stock ratios, borrowing institutions countries was examined in detail in comparison with the debt statistics of some indebted developing countries which has similar external debt structures. In the last part of the thesis, sustainability condition was tested based on studies of Sawada (1994) and Hakkio and Rush (1991) and as result of finding out co-integration among the series, it was concluded that Turkey has an external debt re-payment capacity between the years 1975-2004.