1. VARIETIES AND CRISES OF NEOLIBERAL GLOBALISATION:ARGENTINA,TURKEY AND THE IMF TURKISH ECONOMY-PROF.FUAT ERDAL1 BURAK ATASOY 070100440

2. Historical Perspective Neoliberal Restructuring Washington Consensus Two Emerging Markets Economies IMF Involvement 2001 Crises Similar Problems (Pre Crises Era,During Crises Era,Post Crises Era Recovery Convergence-Divergence TURKISH ECONOMY-PROF.FUAT ERDAL2

3. POST WAR ERA-PRE NEOLIBERAL ERA 1945-1980 TURKEY Industrial transformation in 1960’s ISI-Heavy Protectionism Political Breakdowns Military Coups Transformation to Neoliberal Economic Model(24 January 1980) ARGENTINA Rich agricultural exporter in 1930’s Low rates of growth after the WW2 ISI High income inequality Hyperinflation Military government btw 1966-1983 Neoliberal Reforms started in 1987 TURKISH ECONOMY-PROF.FUAT ERDAL3

4. Neoliberal Models TURKEY Stage by stage liberalisation Low commitment to the fiscal stabilisation Roots of crises since the late 80’s-Highly Fragile Debt led growth-Led to sensitiveness to exogenous shocks ARGENTINA IMF advices Ensure political stability High rates of growth Reduced inflation to single digits Currency Board –collaboration with IMF Strict discipline over monetary and fiscal policy Privatisations-Large flows of foreign capital TURKISH ECONOMY-PROF.FUAT ERDAL4 Turkey>Argentina in 1980’s Argentina>Turkey in 1990’S Neither of them had a sustainable growth Booms and busts

5. COMPARİSON-GDP GROWTH TURKISH ECONOMY-PROF.FUAT ERDAL5

6. COMPARİSON-GDP PER CAPİTA GROWTH TURKISH ECONOMY-PROF.FUAT ERDAL6

7. END OF AN ERA-2001 CRISES TURKEY Large fiscal deficits Dependency on short term capital Inflation Vicious cycle 1994 Crises IMF Assistance Agreements on Custom Union-1996 IMF Programme-1999 December Debts ARGENTİNA Expansionary monetary policy External Shocks Decreased competitiveness of exports End of privatisation No more capital inflow or foreign investment Budget deficit-debt Less FDI Increasing share of import products Accumulation of external debt TURKISH ECONOMY-PROF.FUAT ERDAL7

8. Similarities Vs Differences Macroeconomic instability Stage by stage vs Shock theraphy Dependency on short term capital Exchange rate regimes Lack of Fiscal discipline PRE 2001 Sectoral imbalances Weak institutions External shocks Immediate bail-outs Massive Protest in Argentina Political instability Macroeconomic environment During the crisis TURKISH ECONOMY-PROF.FUAT ERDAL8

9. DIVERGENCE-CONVERGENCE POST CRISIS ERA -Poverty,Unemployment -Recovery in 2003-High growth rates Regulations on finance-banking sector Government change Turkey is more willing to work with IMF IMF-EU pressure for Turkey Favourable geopolitical context put Turkey in a good position TURKISH ECONOMY-PROF.FUAT ERDAL9