Edited by Léo-Paul Dana, Mary Han, Vanessa Ratten and Isabell M. Welpe
Chapter 40: Turkey
Serkan Yalcin Introduction to Turkey Turkey, or Republic of Turkey, is an Eastern Mediterranean or Eurasian country located at the crossroads of Europe and Asia. Turkey covers 814 578 sq km and borders Georgia, Armenia, Azerbaijan, Iran, Iraq, Syria, the Mediterranean Sea, the Aegean Sea, Greece, Bulgaria, and Black Sea. Turkish culture is mixed with Western and Eastern themes. Being culturally strong and economically influential in the region stretching from Europe to Russia, Middle East, and Central Asia, Turkey has always had a strategic geopolitical power (Shaw and Shaw, 1977). Turkey was established in 1923 upon the collapse of the Great Ottoman Empire, established in 1299. Turkey is now a democratic, secular, and social state governed by the rule of law and has accepted the principle of the separation of powers: legislative power, executive power, and judicial power (Ministry of Culture and Tourism, 2007). From 1923 to 1980 the Turkish economy was based on a state-controlled economy. In the early years, the economic policies were implemented by State Economic Enterprises (SEE) to pursue economic growth and import substitution. These SEEs were successful in realizing various large-scale investments until 1960s. After the 1960s, industries became highly capital-intensive and required scale economies, therefore foreign exchange requirements increased substantially. Afterwards, SEEs became inefficient because of a sudden increase in oil prices and the inflation rate (Sogut, 1997). Towards the end of the 1970s, the gap between imports and exports substantially enlarged and thus the budget deficit increased and the inflation rate rose significantly....
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