The analysis of the foreign debt of Turkey(1980-2006) and assesment of this for the point of view of the emerging market economies

The stability ruining effect of foreign debt on an economy is an important subject in the international arena. Turkey is an important country in terms of a continuously increasing foreign debt amount. This can be easily seen by rapidly increasing foreign debt ratio of Turkey. Turkey has been reported as one of the high foreign debt countries. In this study, we analyzed the foreign debt structure of Turkey from 1980 to 2006. The first part of the study explains the conditions of the debt position and the second part discusses the problems of the foreign debt. The last part of the study analyzes the debt structures of the middle income countries such as Argentina, Mexico, and Brazil. In this study, we used econometric methods in order to analyze the debt structures of the aforementioned countries and extensively surveyed the current literature. In order to solve the economic problems generated by the high foreign debt of Turkey, we suggest the followings: First, economic agents' negative expectations about the future should be broken down and the political stability should be realized. Second, the public sector should decrease its foreign debt stock. Third, the private sector's debt stock should be decreased. The novel feature of this study is to show that the foreign debt structures of developing countries such as Mexico, Argentina, and Brazil significantly differ from that of Turkey.