Wednesday, June 1, Ozal to 2001 Crisis

Transcription

1 Ozal to 2001 Crisis

2 Coalitions and Crisis-Again

3 Coalitions and Crisis-Again, again, again Earthquake Growth Rate Turkey GDP per capita (constant 2000 US$) Democracy Scores Ozal Death Susurluk

4 Crisis, reform, crisis Escalating Conflict in S.E. P.K.K. rebellion accelerates starting in 1984, brief respite in By 1999 over 30,000 have been killed and 1,000,000-3,000,000 displaced. Ozal s death in 1993 left an opening in the Presidency and sparked renewed conflict with PKK And a political struggle in ANAP DYP is a splinter of former Adalet Party of Demiral Demiral s Party wins 1991 elections, forms government with Social Democratic Party. Demiral shifts to Presidency, as appointed by TGNA. Tanşu Çiller is appointed DYP s new leader, and thus new Prime Minister. Over objections of old ranks in the party.

5 Crisis, reform, crisis Tanşu Çiller is appointed DYP s new leader, and thus new Prime Minister. Turkey s first female Prime Minister (although not the first of a muslim nation.) Sought continuation of liberal economic agenda of Ozal. Efforts at Privatization and economic, and financial deepening. Çiller s twin crisis 1994 Russian financial crisis hit Turkey balance of payments disaster, requires IMF intervention. weak banking sector high public borrowing requirement driven by recession and Demiral s expansive policy. Kurdish crisis accelerates with renewed attacks on Police, soldiers, politicians, and teachers. After Ozal s outreach, Çiller retreats to old mode Massive deployment of military to S.E. Creation of Home Guards Possible recruitment of Hizbollah or other anti-pkk terrorist groups

6 SEE transfers of Budget

7 Lira to Dollar Exchange Rat Fixed exchange rates, only possible with investment controls and import restrictions, or market driven interest rates. Inflation with currency Devaluation Devaluation 10 Devaluation New Turkish Lira (1=1 million old TL)left scale Old TL (right logarithmic scale) 0 Jan 1, 1950 Apr 1, 1954 Jul 1, 1958 Oct 1, 1962 Jan 1, 1967 Apr 1, 1971 Jul 1, 1975 Oct 1, 1979 Jan 1, 1984 Apr 1, 1988 Jul 1, 1992 Oct 1, 1996 Jan 1, 2001 Apr 1, 2005 Jul 1,

8 15000 Chart CUrrent Account (trade)- deficits mean imports Financial Account (Incl FDI and Portfolio) Foreign Direct Investment Portfolio (Debt and Equities) IN Dec 1, 1984 Nov 1, 1986 Oct 1, 1988 Sep 1, 1990 Aug 1, 1992 Jul 1, 1994 Jun 1, 1996 May 1, 1998 Apr 1, 2000 Mar 1, 2002 Feb 1, 2004 Jan 1, 2006 Dec 1, 2007 Nov 1, 2009

9 Crisis, reform, crisis 1994 Economic Crisis (bank collapse) results in reformed BSIF 1995 Yilmaz s ANAP-Motherland Party leaves Coalition Yilmaz investigated for nepotism in banking licenses Forces new coalition with Erbakan Brings in Security services personnel into Parliament 1995 Coalition with Erbakan s Party Welfare 1996 Customs Union with E.U. Return to practice of splitting cabinet w/o coordination (continued) 1997, after visit of Iranian Ambassador, and a series of militant(ish) speeches by Erdogan among others, military (national security council, and prosecutors) moved against Erbakan Coalition collapsed with Erbakan s ouster.

10 Crisis, reform, crisis 1999, Ocalan seized in Kenya after consistent pressure ejected him from Greece and Syria 1999 coalition government with Ecevit in (Democratic Left), ANAP and nationalist MHP enteered power lasted briefly, 1999 earthquake rocked country, triggered economic crisis and crisis of confidence Rapprochement between Greece and Turkey 1999 IMF plan. Inflation stabilization with exchange rate anchor IMF plan creates independent Banking Supervision Agency 2000 Independent Banking agency discovers persistent weakness, seizes banks. triggers missing of IMF targets. Balance of Payments current account deficit high capital account flows stop, in November 2000, then for real in February 2001 February 2001 crisis.

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