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

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 fo...

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Bibliographic Details
Published in:Review of international political economy : RIPE 2005-08, Vol.12 (3), p.387-408
Main Authors: Cizre, Ümit, Yeldan, Erinç
Format: Article
Language:English
Subjects:
Austerity policy
Capital market
Economic and political crisis
Economic crises
Economic crisis
Economic impact
Economic liberalism
Economic policy
Economic reform
Financial crisis
Financial economics
Globalization
Government spending
IMF
IMF conditionality
Inflation
International economics
International finance
International political economy
International politics
Market economies
Neoliberalism
Political crises
Political reform
Public sector
Regression analysis
Section: Crises and Financial Reform
stabilization
Studies
Turkey
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Summary: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.
ISSN:0969-2290
1466-4526
DOI:10.1080/09692290500170692