The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

A Japanese-style recession but without the wealth

Although Bulent Ecevit’s ruling coalition has signed up to an impressive programme of reforms, it will be years before they will be implemented or show their full effect. Meanwhile, with the banking bubble burst, Turkish companies find themselves bereft of capital. Rescue money from the IMF will mainly go towards paying off foreign debt.

       
Bulent Ecevit

Turkey's political and economic environment has been calm since February 2001 when a massive, unexpected devaluation caused the Turkish lira to lose 69% of its value over the rest of the year. But the lull results from incidental rather than fundamental changes.


The IMF, for which Turkey is now the biggest loan customer, has signed a new $16 billion cheque for 2002-04. This has averted an almost certain debt default. But what happens next year and the year after that?


Turkey seems to be stuck in a Japan-style no-growth recession. But Japan is swimming in wealth and its recession is a result of its political establishment's inability to make reforms. Turkey is swimming in poverty but has been on an unprecedented reform binge since 1999.


Bulent Ecevit, the 77-year-old prime minister, who has been a prominent figure since the late 1950s, is no reformer.




You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree