ABSTRACT
The object of the present study is to provide an assessment of Turkey’s post1980 trade and industrial policy and performance in a long-term perspective. In the aftermath of the external shocks of the mid-1970s, Turkey was the first major non-oil middle-income country to encounter a severe economic paralysis in 1978-80 before the outbreak of wider international debt crisis in the early 1980s. In contrast to the prolonged and agonizing adjustment attempts of other major debtors, Turkey’s output recovery has been quite rapid and substantial. Following the foreign exchange stringency and output losses of the 1978-80 crisis episode, Turkish GDP increased at 5.6 per cent per year from 1981 to 1987, accompanied by an annual growth rate of exports of 25 per cent in current US dollars in the same period. The share of manufacturing reached 85 per cent of total exports in the late 1980s from 35-40 per cent levels in the late 1970s. The international creditors perceived Turkey’s export boom as a ‘restructuring success’, and resumed voluntary lending in 1983, quite early in the adjustment process.1
