EXTERNAL TRADE

2001 economic crisis affected the economy significantly. When Justice and Development Part
came to power, Turkeys export performance manifested itself in the continuous surge in total
export volume which reached at 36 billion dollar in 2002; around 43.7 billion dollar in 2003;
63.2 billion dollar in 2004; 73.5 billion dollar in 2006.During the period of 2004-2006,
government undertook the Exports Strategic Plan which was a roadmap for Turkeys new
export orientation as well as by the end of 2006 while it was exceeded by more than 10
billion. Export witnessed robust growth rates by 25.3 percent in 2007 and 23.1 percent in
2008. Total volume therefore reached at 107.2 billion dollar and 132 billion dollar in 2007
and 2008, consecutively. Due to the financial crisis erupted in 2008 however, Turkeys main
affected so total export volume decreased by a significant 22.6 percent, down to 102.1 billion
dollar in 2009 . (http://arsiv.setav.org/Ups/dosya/53018.pdf )
In the world, the balances have changed with the affects of global economic crisis. Less
developed emerging markets was demanded. Turkey foreign policy decisions, accordance
with economy, started to be implemented. Because of the government expansion to the
Middle East and Africa, the trade relations have developed with these countries.Turkeys
vibrant economy and democratic reforms have increased its soft power in the region and made
it particularly attractive for reformers. The argument around the so-called axis shift might
seem to be well fitting into Turkeys changing foreign trade scheme as the number of new
export destinations and the significant rises in Turkeys bilateral trade volume with Latin
American, African and Mid-Eastern countries as well as China could display such a case.
(http://file.setav.org/Files/Pdf/20130304144535_ak_parti_donemi_turkiye_ekonomisi_web.pd
f)
Turkey succeed the eliminate the effects of the economic crisis and tend toward the way of
searching of an alternative export markets. So, the disadvantage status which caused by crisis
turned to in favor of Turkey. Whereby, the effects of economic crisis reduced to minimum.
Especially, the Middle East and North Africa countries(MENA) become an alternative export
market for Turkey. Since 2010, Turkey made trade with MENA countries in various sectors.
In recent years, Turkey has increased the social, cultural, economic relations with African
countries. In 2011-2012 of Turkey, despite the debt crisis in the European Union, has a
positive momentum in export due to expand the market share. In 2011, the period which
economic growth tend to slowing down, due to a contraction of domestic demand producers
tend to external demand and has been an increase in the amount of export. The depreciation in
TL affects the gain competitiveness in world markets and the increase in the export.All during
the year of 2012, export become the source of growth in Turkish economy.After 2002, the
export quantity has contiuous increased except the global economic crisis term. While in 2002
the export quantity was 36 billion dollar, it reached 152.6 billion dollar in 2012.
(http://www.deu.edu.tr/userweb/iibf_kongre/dosyalar/akdemir.pdf )
Turkeys imports continuous increase year by year, biggest portion in imports have
mineral fuels and oils in 2007 and rest of imports as follows respectively;
machineries, mechanical appliances and boilers, iron and steel, electrical machinery
and equipment and vehicles were main imports for Turkey. Import rate was 54.5 billion dollar
in 2000. But after the 2001 economic crisis, import reduced to 43.13 billion dollar. After
2002, import has began increased. The most important uptick in the import become 69.3
billion dollar and 97.3 billion dollar in 2003 and 2004. In 2005, import rate reached 110
billion dollar. In 2009, Turkeys imports decreased by 30% due to global crises. In 2010,
Turkeys imports have raised to 185.5 billion dollar. (http://i-
rep.emu.edu.tr:8080/jspui/bitstream/11129/140/1/Savrun.pdf )
FOREIGN DIRECT INVESTMENT

There was an extreme rise of freign direct investment in Turkey after 2002. The reason for
this increment was the reform made in economy and stable preferences continue according to
economy. In Turkey, the performance of increase in economy and successive budgets have
shown the increase of competitive industry. These increasements have shown the importance
of Turkey and brought it up to the level if records. The reforms made in economic financial
sectors have opened ways as revolution in the process of European Union membership. The
reforms have saved the government from sum of their works and increase the financial sector.
The most important performance in economic and financial sector is to keep contiunity of the
success. Fort his reason, it is important to make stanbul the center of finance in order to
stable and express the economic success.stanbul plays a big role to become international
financial center.
The strategy of foreign direct investment must pull foreign investments.Turkish economy has
markets and wide telecommunication network due to being internal market and possession
advantageous geographical position. . Creating new
employment areas and increasing capital stock based on advanced technology, FDI can
also make significant contributions to economic growth. As FDI requires technology and
technological know-how, it can have a two-dimensional effect on the economy; both
directly, and indirectly. As it also includes direct ownership control, it may affect growth
through R&D activities, direct technology transfer, enhancement of opportunities for
human resources, and productivity. These are remarkable for the sustaining development and
high-tech manufacturing because of lack of domestic saving in Turkey. (
http://www.econstor.eu/bitstream/10419/45435/1/599164409.pdf )
Before 2001, Turkey cannot be adequate for attract foreign capital.After 2002, reconstruction
started in the economy especially banking sector. There was high growth in foreign direct
investment. In 2007, Turkey has highest foreign investment as 22 billion dollar. Turkey has
been less affected in global economic crisis but there has beendecline in foeign direct rate. In
2009, foreign direct investment increased with financial infrastructure and resistant structure
of economy. Turkey has 110 billion dollar foreign investment in the last 10 years and Turkey
achieved the most attractive 13th country of world. (http://www.eurascapoint.com/wp-
content/uploads/2012/02/Kut-120123dt-T%C3%BCrkiyeden-Do%C4%9Frudan-Yabanc
%C4%B1-Yat%C4%B1r%C4%B1mlar-SETAV-2011.pdf)
The share of energy and automotive sectors investments in the international direct investment
increased. The cheap labor, access to markets become effective fort he determination of
investment. The incentive systems, the arrangements in the tax and custim areas, and
structural factors has been remarkable for foreign investments. New incentive law began to
implemented in 2012. Within this law, due to increasing peace and security, foreign direct
investment also will increased.
(http://file.setav.org/Files/Pdf/20130304144535_ak_parti_donemi_turkiye_ekonomisi_web.pd
f)
EXTERNAL DEBT
In Turkeys economy the problem of external debt has continued for many years. The increas
in the amount of debt prevented the foreign investors to invest because of the higher tax. It
caused the reduction of investment, and decrease the capacity of the debt repayment of
country and reduction of foreign capital inflow. On the other hand, real interest rates and
exchange rates increased significantly. Due to this increases, the payment of the debt burden
of country has increased for many years. During these years; bribery, corruption, and misuse
of privatization policies and misuse of economic measures become widespread with political
instability and management crisis. This situation caused the reduction of capital inflow. The
debt burden increased with the existing crises.
(http://file.setav.org/Files/Pdf/20130304144535_ak_parti_donemi_turkiye_ekonomisi_web.pd
f)
Justice and Development Party succeed the reduction of the external debt rate in the GDP, and
provided the repayment of debt. This policies implemented since 2002. While external debt
was 130 billion dollar in 2002, it reached 340 billion dollar this year. In the Justice and
Development Party term, 210 billion dollar of new foreign loans have been taken; foreign
debt has increased by 162 percent. One-third of the foreign debt, that is 10 billion dollar,
belongs to the state and the Central Bank. Thanks to the system of indirect taxes and
unlimited privatizations, the public debts remained at 103 billion dollar. Public debt stock,
including domestic debt, is 40 percent of the national imcome. The some rates in the EU, in
the eurozone, reach 70 to 80 percent. External debt of private sector increased from 43.1
billion dollar to 226 billion dollar in Justice and Development Party term.
(http://file.setav.org/Files/Pdf/20130304144535_ak_parti_donemi_turkiye_ekonomisi_web.pd
f)
In 2002, Turkish gross domestic product (GDP) stood at $230 billion with the local and external
debt/GDP ratio at 75 percent. This figure declined to 36 percent in 2012 when GDP was $786.3
billion.Turkey ended its Internal Monetary Fund debt last year by paying its last installment.
Turkey is one of the countries which contribute financially to the IMF with a 5 billion dollar
contribution. (http://www.hurriyetdailynews.com/turkeys-imf-debt-to-be-paid-off-foreign-
debt-stock-still-on-increase.aspx?pageID=238&nID=46647&NewsCatID=344)