Fragility of Turkish economy and structural reforms

Globalization has gained a different dimension recently and economic fluctuations have become a situation that can affect all economies regardless of the geographical borders with the increase of financial liberalization. This situation causes economies to become fragile to external shocks and to be dragged into crises. The fact that economies are dragged into crisis due to internal and external shocks and unable to return to their previous states in a short time has led to the concept of fragility. This study, focusing on the economies using Turkey as base, examines the relationship between crisis and fragility. Furthermore, the fragile structure that drives economies into crises is analyzed and the structural reforms required to increase economic resilience are evaluated. In the study, the economic performances of the countries included in the "Fragile Five" category, which was introduced in 2013 based on the concept of fragility, were analyzed and it was concluded that these countries failed especially in terms of inflation, unemployment, and growth items. Since Turkey also takes place among "Fragile Five" countries, basic economic performance indicators of Turkey were revised as well as those countries. It has been concluded that instability in economic growth and the particular country factors such as high inflation and interest rate risk brought a fragile situation. In this context, some structural reforms have been put forward both for the development and improvement of the country and for the recovery of the economy after the crises that occurred as a result of the fragile structure. In the context of these reforms, the 1923 Izmir Economic Congress, Five-Year Industrial Plans, Five-Year Development Plans, January 24 Decisions (1980), April 5 Decisions (1994), Inflation Reduction Program, and Transition Programs to a Strong Economy were examined and structural reform proposals agreed by international organizations were evaluated. When the literature is examined, it has been observed that the main and clear reasons for fragility have not been revealed completely. Because each country is unique economic dynamics, factors that also cause fragility in the economy varies Turkey compared to other countries. It has been concluded that the factors such as instability in economic growth, fluctuations in the exchange rate and capital movements, restriction of the Turkish Central Bank's independence have led the Turkish economy to fragility, and evaluations have been made within the framework of these concepts. Keywords: Economic Fragility, Crisis, Structural Reforms, Fragile Five