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Export-Led Growth: 1980- Onwards. 1980 1983 1989 2011 Outward Orientation Financial Liberalization. Economy at 1970’s:. High inflation 1957-58: 20-25% 1970’s : 75-80 % Unsustainable trade deficits 1950’s: 300-400 million US$ - PowerPoint PPT Presentation
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Export-Led Growth: 1980- Onwards
1980 1983 1989 2011
Outward Orientation Financial Liberalization
Economy at 1970’s:▫ High inflation
1957-58: 20-25% 1970’s : 75-80 %
▫ Unsustainable trade deficits 1950’s: 300-400 million US$ 1970’s: 2500 million US$
▫ High unemployment rates 1972: 13,3% 1983: 16%
Economy at 1970’s:
▫External factors: Increases in oil prices (OPEC) Economic crises in trade partners The collapse of the Bretton-Woods system
▫Cyprus operation
▫New trends in the world: USAReaganomics UK Thatcherism
Economy at 1970’s:
•Government Policies:
▫Industrialization: Consumption goods Etatism period Durable consumption goodsPlanned
economy Intermediate goods Investment goods
▫Stabilization efforts
Structural Adjustment Program:January 24, 1980
▫Prepared by Turgut Özal (Undersecretary of the Prime Minister) under the control of IMF.
▫Prime Ministers: 1980-83: Bülent Ulusu (Military Rule) 1983-87: Turgut Özal (Anavatan Party) 1987-89: Turgut Özal (Anavatan Party)
Structural Adjustment Program:January 24, 1980
• General Principles:
▫Long-term economy policy To end economic crisis in the short-run Structural change in the long-run
▫Free Market Economy Price Mechanism Decresing role of government
▫Export-led Growth
Structural Adjustment Program: Policies
•1. Pricing▫Goods and services market▫Labor market▫Money market▫Foreign exchange market
1968-1972: 1st vicious circle
low savings
low investments
low income
1968-1972: 2nd vicious circle
limited domestic
production
low exports
low imports
Structural Adjustment Program: Policies
•2. Outward Orientation▫Export promotion
Exchange rate policy Export tax rebate system Cash premiums Export credits
▫Import liberalization
Structural Adjustment Program: Policies
•3. Foreign Investment Expectation
•4. Public Sector Reform▫To broaden the tax base▫Rationalization of public investments▫To improve the functioning of the PEEs▫Privatization
Main Economic Indicators (%)
GNP Growth Employment Growth
Savings/GNP Manufac./GDP
Agriculture/GDP
1980 -1.1 1.2 16.0 21.1 22.6
1983 3.3 0.9 16.2 23.9 19.6
1985 5.1 1.6 18.9 25.1 18.8
1989 1.9 2.1 23.6 25.3 16.7
Main Economic Indicators (%)
Exports/GNP Imports/GNP Current acc. /GNP
Foreign debt/GNP
1980 6.4 13.9 -5.5 28.0
1983 15.7 19.6 -3.7 35.7
1985 20.7 23.5 -1.9 47.5
1989 23.5 24.0 0.9 52.0
Main Economic Indicators (%)
Inflation rate Monetary growth (M1)
Nominal Depreciation R.
1980 103.8 57.9 142.0
1983 28.0 48.0 40.2
1985 43.9 39.7 40.9
1989 66.9 72.9 47.4
Yeldan, 2001, s.52.
Growth Rates: 1923-2010Period Average Growth Rate
(%)
1924-1929 8,6
1930-1939 5,8
1940-1945 -6,0
1946-1953 10,2
1954-1961 4,4
1962-1979 6,5
1980-1988 4,9
1989-2002 3,3
2003-2010 4,9