Turkel Minibas Presentation

Macro Economic Constraints in Developing NationsThe case of Turkey : Macro Economic Constraints in Developing Nations The case of Turkey Türkel Minibaş, Prof.Dr. Istanbul University Faculy of Economics


Slide2 : every crisis period became a restoration period for capitalism, in that when economic, social and political balances are upset new balances were created.


Slide3 : the crisis usually spreads to developing countries through import channels and foreign debts by the countries at the heart of capitalism. This is the reason why capitalism is trying to solve the last crisis by globalizing capital. Public utilities like water and energy, public provisioning of social services such as education, health and social security become domains of private sector.


to solve the crisis of the capitalist system : to solve the crisis of the capitalist system is not to solve macro economic defects in developing nations, but to solve the crisis of the capitalist system by integrating less developed ones to the system, irrespective of whether they are called stability or structural adjustment programs. They are the dependency programs that are established by neo-liberal policies. The main task of these policies is to the design of a new world order.


neo-liberal thinker : neo-liberal thinker “the liberalization of trade and investment laws around the world has contributed to an enormous increase in the volume of world trade and foreign direct and portfolio investment, whose impact on the welfare of participants has been considerable and for the better.”


If we consider Turkey as an example.  : If we consider Turkey as an example. GNP is now 5 %, but was - 8 in 2001. the growth in the manufacturing sector was 12 % in 2004 compared to 4 % in 2005. Consumption price index was 69 % in 2001, now it is around 7.6 %.


Slide7 : An increase in growth rates and foreign money reserves depends on continuing short term funds. 21.5 billion dollar external funds entered 50 % of which was government debt instruments and stock market shares. .


can the house of card break down? : can the house of card break down? as far as the decrease of real interest rates less than the degree of nominal rate decreases, we have time!!! Three years ago, the nominal interest rate of Treasure stocks were 63.9 %, and they decrease to 17.4 %. This was the reason why real interest rates decreased from 30.8 % to 8 % at the same time.


Can the happiness chain break? : Can the happiness chain break? i f the increase in foreign money stocks will continue and how long an over valued Turkish lira will continue


by over valued Turkish lira : : by over valued Turkish lira : Import costs become lower in intermediate goods and raw materials. - import of intermediate goods increased to 22 %, - import of raw materials increased 24 %. domesticly produced final goods such as otomotive sector and consumer durables will begin to be imported. ımport of oil and related goods increased to 14.4 billion to 17 billion dollars.


the growth of inequality : the growth of inequality the poorest 20 % in the world population with the richest population of 20 %. 1960 30 times 1980 45 1989 59 1997 70


The main indicator of growth : The main indicator of growth is the wage level both in public and private sectors.


Structural adjustment programs : Structural adjustment programs Their share of the pie will not grow Smaller portion will be divided even less equally among individuals The share of trade among the poorest countries will not increase Transnational companies will maintain their dominante status in the world market. And, continue transfer resources to the developed world. İncome inequality will continue to increase


1- Free market model increases the GNP as far as state has no restrictions and control over the market. : 1- Free market model increases the GNP as far as state has no restrictions and control over the market. How will she success this ?


Slide18 : 2- State control is regarded as one of the causes of an economic crises and interruption of social reforms.


public workers wage : public workers wage


public workers wage : public workers wage Reel wage percentage of ındeks of a dissolution average wage year before 2001 324.738.063 81,87 18,13 2002 497.849.499 86,56 13,44 2003 619.873.260 85,79 14,21 2004 702.778.601 88,0 11,99 2005 773.877.650 90,48 9,52


Personel Expenditures in Total (%) : Personel Expenditures in Total (%)


Personel Expenditures to GNP (%) : Personel Expenditures to GNP (%)


The percentage of public workers in employment and population in selected countries : The percentage of public workers in employment and population in selected countries