The Economic Impact of Globalization on Turkey

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Introduction Globalization has affected the world in many different ways, including cultural exchange, language development, and information diffusion, along with worldwide economic and financial growth. Here we wish to analyse the costs and benefits of globalisation to the Republic of Turkey. More specifically, we will look at the economic and business impacts globalisation has made on Turkey and its current position with regard to the world economy. Current Economic Situation Today’s economic outlook for Turkey is deteriorating. GDP growth has been revised to 3.6% for 2008 (against 4.3% previously) and to 3.0% for 2009 (previously 4.0%). Turkey’s unemployment rate rose to 9.4%. The slowdown in growth in 2007 (GDP growth of 4.5%)…show more content…
Therefore, there was not comparable increase in their exports. On the contrary, the rise of montage industries which used imported components to assemble the products primarily (i.e. electronic goods, motor vehicles, consumer durables, etc) meant that industrial growth required ever more imports. Paradoxically, the attempts at import substitution to decrease its trade balance deficit tended to aggravate it. This strategy also caused other problems: the capital-intensive nature of many industrial investments, especially those in the intermediate goods sector, caused employment in industry to grow relatively more slowly, which lead to structural unemployment. Moreover, dependence on imported petroleum to develop its industry made the country highly vulnerable to increases in oil prices. These are the threats for the country to achieve sustainable economic growth. Late 1970s and early 1980s: Economic Reform In the late 1970s, the industrial sector of Turkey had reached a turning point. In the short run, it needed to decrease the trade balance deficit. It was facing shortages of energy, imported machinery parts, and processing materials. These had caused a decline in industrial output during the last few years of the decade. In the longer run, to become more efficient and to be able to have more exports, the industrial structure had to be adjusted in accordance with the country's comparative advantages. In effect, industry would have to transfer resources out of
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