THE POLITICAL ECONOMY OF TURKEY’S ECONOMIC MIRACLE
Please cite the paper as:
“Turan Subaşat, (2013), THE POLITICAL ECONOMY OF TURKEY’S ECONOMIC MIRACLE, World Economics Association (WEA) Conferences, No. 4 2013, Neoliberalism in Turkey: A Balance Sheet of Three Decades, 28th October to 16th December 2013”
This article focuses on the second part of the liberalisation epoch in Turkey which started in 2001 and heightened in 2002 with the establishment of the AKP government and deals with the above counterarguments. In order to assess Turkey’s performance under the AKP government, we first investigate Turkey’s GDP and export growth performance by comparing Turkey with four income groups which are high, upper-middle, lower-middle and low income countries. We show that, while Turkey grew faster than the high income countries under the AKP period, it grew slower than the low and middle income countries. In terms of exports, however, Turkey fell behind of all the income groups. We then deal with the current account deficit and external debt. Our analysis shows that Turkey is one of the leading countries in the world in terms of the increase in current account deficit. Although external debt to GDP ratio indeed declined between 2003 and 2012, external debt signifies only a small portion of the total resources that Turkey externally borrowed. The International Investment Position (or “net external debt stock” which covers the entire resources borrowed externally) to GDP ratio has, in fact, increased very rapidly since 2003.