Globalization and Turkey
Globalization is the liberalization process wherein there is a movement of goods and services between countries thereby creating an open economy. Globalization has also encouraged exchange of technologies, information, ideas and cultures across nations Several developing countries have attracted foreign direct investments and have adopted liberalization of trade. One of these countries is Turkey. In 1980 Turkey adopted a liberalization policy and invited foreign direct investments to the country. According to a study (Gazi, E.
2006) Turkish has been successful in implementing trade liberalization as exports of goods and services have continuously increased from 1980 up to present. The study cited the ratio of total exports of goods and services has increased from 16 percent in 1990 to 33 percent in 1988 and has reached the 30 percent level at present. However, although Turkey is quite successful in exports, the country had experienced economic set backs and difficulties due to economic and political factors that eventually slowed down its growth process.
In order to attain economic stability, according to report of the Turkish Embassy in London, the Turkish government in 2001 adopted significant structural reforms. Independent regulatory and supervisory authorities were set up for banking, telecommunications, and energy sectors; and functions of the Central bank were enhanced; policies were set to check inflation Stand-by agreements with IMF and World Bank were implemented; and after plugging all the loopholes of the laws, negotiations for Turkey membership in EU started on October 5, 2005.
The economic performance of Turkey has significantly improved after the implementation of economic reforms and in 2006 according to Turkish Embassy Statistics has achieved the following: Annual exports and foreign trade volume reached 21% of GDP and 55% pf GDP respectively, Tourism revenues went to USD 19 billion Cash inflow of USD 3. 0 billion from net real estate purchases of non residents in Turkey FDI in Turkey increased from USD 10. 031 million in 2006 to USD 22.
0 billion in 2007 EU membership completed In 2007, Turkish Embassy Statistics reported a boost in exports and imports trade, such as imports increased to $170 billion and exports (FOB) increased to $107 billion registering a foreign trade deficit of $62. 8 billion. Top imports are mineral fuels and oil, machineries, boiler, parts and appliances. Exports to EU countries consist of motor vehicles, fruits and vegetables. This represents a 25. 3% move up in exports and a raise of 21.
8% in imports as compared to 2006. As for foreign trade services, the country realized a surplus of $14. 1 billion in 2007 which increased from $13. 8 billion in 2006. Tourism contributed highly to the increase in revenue in service sector. The confidence of foreign investors is reflected by the increase of the number of firms and capital infused to Turkey, such as it grew to $688M in 2007 against $ 628M in 2006 and 173% increase in FDI companies.
All these represent the impact of globalization to Turkey which has helped in one way or another stabilize the economy. Works Cited Gazi, Ercel. “Globalization and the Turkish Economy” Vanderbuilt University. Nov. 2006. June 15, 2009 www. vanderbilt. edu/econ/conference/gped-conference-06/papers/ercel. pdf – Turkish Embassy London. “Economic Outlook of Turkey”. Office of the First Economic Counselor. 15 June 2009 http://www. turkisheconomy. org. uk/economy/UK_direct_inv. htmSample Essay of RushEssay.com