Developments in Turkey`s foreign trade and immiserizing growth (1993-2003)

SUMMARYDEVELOPMENTS IN TURKEY?S FOREIGN TRADE ANDIMMISERIZING GROWTH (1993-2003)smet ATEŞAs known, the Turkish economy has entered a liberalization trend with the?Decision of 24th January? in 1980. This trend created a freedom to ease import manykinds of goods and services into the country. Although it is taken some measures toincrease export of Turkey, the rise of the export did not meet its import. This situationincreased the current foreign trade deficit. The policies that applied to make well theforeign deficit did not give the desired results. This situation mostly affected theregularity of economic life in a negative way. The high rate interest foreign debt thathave to be taken to finance the foreign trade deficit made worse of functioning ofeconomic life properly in Turkey.One of the policies reducing foreign debt is the keeping the value of nationalcurrency at the low level against the foreign currencies (it is usually called concealeddevaluation). The value of the national currency was kept to at low level by applyingthese policies. So, this policy encourages the export and discourages the import. As aresult of the policy, it was expected that the revenue of the export increases and the lossof foreign currencies decreases. But, in reality the situation does not always approve thetheory. This situation is explained in the thesis. The applied policy in Turkey did notimprove the foreign trade deficit as much as it is desired. The gains of foreign tradecould not get at the expected level, because of the continuous diminishing terms oftrade.The study show that the growth of GNP (Gross National Product) per capita iseffected by the terms of trade. While the terms of trade increasing the GNP per capitaincreases and while the terms of trade decreasing the GNP per capita decreases. Thissituation shows us how much important the proper policy determination.In addition, there are some measures have to taken to increase thecompetitiveness of Turkish commercial goods.In recent years, because of the high capacity and potential in Turkish economy,it must be focused on the automotive industry not only manufacturing but also researchand development.Turkey must regulate its imbalanced foreign trade with its trade partners.In this thesis, the effects of continuously applied high value foreign currencypolicies on the country?s foreign trade balance in the term of 1989-2004 are examinedthe frame of Bhagwati?s ?immiserizing growth? theory. How much the sources usedproductive to get more foreign currency. The result is that desired economic growth anddevelopment could not be obtained.After the some concealed devaluations, although the gross national productincreased; the reality is that it was a kind of a source transferring process from poor torich peoples/ countries. A total gain for years is negative.After the 2001 crises in Turkey, the economy and terms of trade has been getting wellbecause of appropriate policies. Especially in the year 2004 the terms of trade was103.3.