Mohsin Khan, Morris Goldstein, and Vittorio Corbo
Published Date:
September 1987
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Hélène Ploix

There are two issues that I think are worth discussing. I might take as the theme of my remarks “Les peuples heureux n’ont pas d’histoire,” which could be loosely translated as “Happy matters do not need to be discussed.”

The first is the sustainability of the economic stabilization and structural adjustment in Turkey. This is a challenge facing Turkey. Here I would like to raise the question of what is going to happen tomorrow, in particular when we note that Turkey is still experiencing a high rate of inflation, a decline in employment, and some decline in workers’ real income (at least minimum salary). Furthermore, the dramatic growth of exports of goods and services was made possible first by the measures taken but also by the prior existence of an industrial sector and by the development of the Middle Eastern markets.

Concerned by the prospects for the Turkish case and considering that exports dropped by 8 percent last year, I wonder whether, had there been more open policies, the development process would have gone further and whether the allocation of resources to more productive activities has taken place as it should.

The second issue that I would like to raise is the existence in Turkey of specific and exceptionally favorable conditions at the outset of the stabilization and adjustment program. I wonder which role they played and how much this makes a difference in other cases. These favorable conditions are, among others, the very large amount of workers’ remittances that responded fairly well to the government investment incentives scheme, the market potential offered by Iran and Iraq, and perhaps also the domestic political stability that contrasted to the political situation and the lack of confidence in the 1970s.

What about the countries that do not experience such favorable circumstances? Does Turkey represent an appropriate model?

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