Yeldan2005 - Neoliberal Global Remedies From...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
193 Neoliberal Global Remedies: From Speculative-Led Growth to IMF-Led Crisis in Turkey Review of Radical Political Economics , Volume 38, No. 2, Spring 2006, 193-213 DOI: 10.1177/0486613405285423 © 2006 Union for Radical Political Economics Abstract Turkey experienced a severe economic and political crisis in November 2000, and again in February 2001. The IMF has been involved with the macro management of the Turkish economy both prior to and after the crisis, and provided financial assistance of $20.4 billion, net, between 1999 and 2003. The offi- cial stance is that the crisis was the result of the failure of the public sector to maintain the austerity tar- gets and the failure to fully implement the free market rationale of globalization. I argue in this article, however, that contrary to the official wisdom, the current economic and political crisis is not the end result of a set of technical errors or administrative mismanagement unique to Turkey, but is the result of a series of pressures emanating from the process of integration with the global capital markets. I document the fragility indicators of the Turkish financial and fiscal system, and show that the IMF program led to an increase in vulnerability of the financial system throughout 2000-2001. I further argue that the recent wave of structural reforms destined for stability and credibility serve, in fact, mainly the interests of foreign finance capital, and primarily aim at securing the debt obligations of the Turkish arbiters. JEL classification: E6; F3; O1; O52 Keywords: economic and political crisis; Turkey; speculation-led growth; globalization; stabilization; IMF conditionality 1. Introduction At the turn of the millennium, the neoliberal orthodoxy juxtaposed a new set of condi- tionality as part of its hegemonic agenda on the developing world: privatization, flexible labor markets, financial deregulation, central bank independence, flexible exchange rate regimes, and fiscal austerity. To this end, integration of the developing nation-economies into the evolving world financial system has already been achieved through a series of policies aimed at liberalizing their financial sectors and privatizing major industries. Furthermore, the state apparatus had to be transformed to facilitate the hegemony of international finance capital. E RINC Y ELDAN Department of Economics, Bilkent University, Ankara, 06800, Turkey; e-mail: [email protected] Received December 23, 2003; accepted May 5, 2005
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
The neoliberal ideology attempted to explain the motives behind financial liberalization, arguing that such measures would restore growth and stability by raising savings and improv- ing economic efficiency. Accordingly, as the “strangulation” of the so-called financial repres- sion was dismantled, loanable funds would expand, real cost of credit would fall, and the consequent increases in the pace of capital accumulation would generate sustained growth.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern