The Turkish encounter with neo-liberalism: economics and politics in the 2000/2001 crises

Abstract

Turkey initiated an extensive dis-inflation program in December 1999 backed and supervised by The International Monetary Fund (IMF). The program aimed at decreasing the inflation rate to a single digit by the end of 2002. It exclusively relied on a nominally pegged (anchored) exchange rate system for dis-inflation and on fiscal prudence. In February 2001, however, Turkey experienced a very severe financial crisis, which deepened and continued to-date. The official stance is that the crisis was the result of the failure of the public sector to maintain the austerity targets and the failure to implement fully the free market rationale of globalization. We argue in this article that, contrary to the official wisdom, the current economic and political crisis is not the result of a set of technical errors or administrative mismanagement unique to Turkey, but is the result of a series of pressures emanating from the process of integration with the global capital markets. We further provide a discussion on the fundamental parameters of the Turkish politics connected with the crisis.

Market Reaction to Risky Banks: Did Generous Deposit Guarantee Change It?

“…This new agency took over these functions from the Treasury in September 2000. Cizre and Yeldan (2005) pointed out that in Turkey, the first-generation reform phase did not go far enough, because of the involvement of economic bureaucrats and politicians and of their supporters in economic interest groups on banking sector activities. Similarly, Alper and Onis (2002) argued that ''.…”

“…In addition to the weak implementation of the regulations, for various reasons (including political interventions until 1999), the IMF's new structural reform program ignored the fragility of the financial markets and institutions and caused further loss of confidence in the banking sector. In particular, due to the IMF's design failure, the Central Bank's ability to implement implicit mechanisms such as ''lender of last resort'' in addition to the fiscal authorities' use of their traditional tools of austerity made the economy powerless against speculative attacks (see Akyuz & Boratav, 2003;Alper & Onis, 2002;Cizre & Yeldan, 2005). Considering all, in this paper, we argue that in quite a lax regulatory environment, the marketdepositors and borrowers-might have an incentive to protect their stakes from various risks in the banking system.…”

When Does Globalization Lead to Local Adaptation? The Emergence of Hybrid Islamic Schools in Turkey, 1985–2007

“…The data were obtained from the website of the Swiss Economic Institute (http://www.kof.ethz.ch/). Figure 1 illustrates that globalization started to accelerate in Turkey around 1985 (see also Cizre and Yeldan 2005). All KOF indices rapidly increased until 1994 and subsequently continued to grow incrementally until the end of the period, by and large, revealing the influential impact of the globalization wave.…”

“…The solution introduced by the liberal government was the integration of the Turkish economy into the world capitalist system (Ardiç 2009). This integration process was not only initiated by government policies but also stimulated through structural adjustment programs organized by the International Monetary Fund and the World Bank (Cizre and Yeldan 2005). As a result of the liberalization policies, Turkey developed economic relationships with several countries and gained access to a range of export markets.…”

“…In the slipstream of Turkey's accelerating integration in the global market economy in the 1980s (Cizre and Yeldan 2005), global norms, values, and American Journal of Sociology practices began to spread to all spheres of life, including the education system (Meyer et al 1997). As a result of these developments, the traditional education provided by Imam Hatip high schools began to fall short.…”