Xerox University Microfilms 300 North Zeeb Road Ann Arbor, Michigan 48106 MASTERS THESIS 13-11,312
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Xerox University Microfilms 300 North Zeeb Road Ann Arbor, Michigan 48106 MASTERS THESIS 13-11,312 BAYAR, Yllmaz A ll, 1929- TURKEY'S ECONOMIC POLICIES: FROM STATISM TO A "MIXED ECONOMY" (1923-1973). The American U n iv e rs ity , M .A ., 1978 Economics, general University Microfilms Intemational, Ann Arbor, Michigan 48 ioe TURKEY'S ECONOMIC POLICIES: FROM STATISM TO A "MIXED ECONOMY" (1923-1973) by Yllmaz A ll Bayar Submitted to the Faculty of the College of Arts and Sciences of The American University in Partial Fulfillment of the Requirements fo r the Degree of Master of Economics Signatures of Committee: Chai rman : Dean of the CdTlege /y. /f77 Date The American U niversity Washington, D.C, 1977 the AMEfilCAIf LflM /.r.- TABLE OF CONTENTS INTRODUCTION ............................................................................................................ 1 Chapter I . HISTORICAL BACKGROUND ............................................................................ 3 A. The Ottoman Economic Heritage ................................................... 3 B. The Kemalist Revolution ................................................................ 5 I I . THE FIRST TURKISH REPUBLIC (1923-1960) ........................................... 6 A. The Kemalist Economic Reconstruction ....................................... 6 B. Statism as a New Economic Policy (1933-1938) ...................... 9 C. President Inonu's Economic Policies during the War Years (1939-1945) 10 D. President Inonu Continues Statism with Modifications (1945-1950) ....................................................... 12 E. The Democratic Party Pushes Economic Development and Private Enterprise (1950-1960) ....................................... 13 I I I . THE SECOND TURKISH REPUBLIC AND THE CONCEPT OF A "MIXED ECONOMY" (1961- ) 22 A. The May 27, 1960 Revolution and its Economic Implications .................................................................................... 22 B. Economic Policies of the Inonu Coalition Governments (1961-1965) 25 C. The Justice Party and Prime Minister Demirel's "Progressive-Conservative" Policies (1965-1971) .................................................................................... 26 D. The Political Crisis of 1971-1973 and its Economic Consequences .......................................................... 28 E. The Republican People's Party and Prime M inister Ecevit's "Left-of-Center" Economic Program (1973-1974) .................................................................................... 29 F. Prime Minister Demirel's New Economic Policies (1975- ) ........................................................................................ 31 IV . THE TURKISH ESTABLISHMENT AND THE EMERGING STRUCTURE OF MODERN TURKISH SOCIETY ................................................................... 33 A. The Ottoman H e rita g e............................................................................33 B. The First Turkish Republic ............................................................. 34 n m C. The "Establishment" T o d ay............................................................. 35 1. The E lites .......................................................................................35 2. L a b o r ............................................................................................... 36 3. The Rural Areas and the Pe a s a n tr y...................................... 37 4. General Observations about the New E lite s.........................38 V. MAJOR ECONOMIC AND SOCIAL SECTOR DEVELOPMENT ............................ 39 A. The Development Plan— Economic Sector ................................... 39 1. Agriculture ...................................................................................36 2. Industry, Mining, Power ...................................................... 59 3. Transportation...............................................................................63 4. Communications ...............................................................................67 5. T o u r is m ........................................................................................... 68 6. Urban Development ................................................................... 69 B. Development Plan--Social Sector .............................................. 70 1. Population....................................................................................... 70 2. Employment....................................................................................... 71 3. Education ....................................................................................... 72 4. Health and W elfare......................................................................74 C. F in a n c e .................................................................................................... 75 1. The Financial System, Money and Prices ...............................75 2. Currency ........................................................................................... 77 3. Domestic C r e d i t ...........................................................................77 4. Financial Institutions and Banks ........................................ 78 5. National Budget.......................................................................... 79 6. Foreign A id ................................................................................... 80 7. Balance of Payments..................................................................82 V I. THE FOREIGN TRADE REGIME...........................................................................86 A. General Observations ........................................................................ 86 B. Principal Imports ............................................................................ 87 C. Principal Exports ............................................................................ 89 D. Trade Policy ............................................................................................92 E. Trade P r o s p e c ts ...................................................................................92 F. Economic Outlook ................................................................................ 92 V II. INVESTMENT IN TURKEY.................................................................................. 94 A. Foreign Investment Encouragement Law ..................................... 94 B. Foreign Investment Climate ........................................................... 96 C. The Petroleum L a w ...............................................................................98 D. Extent of U.S. Investment............................................................. 99 IV V III. TURKEY'S BASIC ECONOMIC POLICIES— SUMMARY AND CONCLUSIONS..................................................................................................104 APPENDIX A. KEY ECONOMIC INDICATORS—TURKEY ....................................... 116 APPENDIX B. TURKEY AND THE EUROPEAN ECONOMIC COMMUNITY .... 118 CRITICAL BIBLIOGRAPHY..... .................................................................................. 121 SELECTED BIBLIOGRAPHY.................................... 125 MAP OF TURKEY TABLES 1. Medium- and Long-term Growth Strategy (in % ).............................. 41 2. Macroeconomic Targets and Achievements, First (1963-67), Second (1968-72) Five-Year Plans (in %).... 42 3. Macroeconomic Targets of the Third Five-Year Plan (1973-77) (in % ) ...................................................................................... 44 4. Number of Tractors, Selected