is a founding member of the OECD and the G-20 major economies.
most of its republican history, Turkey has adhered to a quasi-statist
approach, with strict government controls over private sector participation,
foreign trade, and foreign direct investment. However, during the 1980s,
Turkey began a series of reforms, started by Prime Minister Turgut Özal
and designed to shift the economy from a statist, insulated system to
a more private-sector, market-based model. The reforms spurred rapid
growth, but this growth was punctuated by sharp recessions and financial
crises in 1994, 1999 (following the earthquake of the same year), and
2001, resulting in an average of 4% GDP growth per annum between 1981
and 2003. Lack of additional reforms, combined with large and growing
public sector deficits and widespread corruption, resulted in high inflation,
a weak banking sector and increased macroeconomic volatility.
has taken advantage of a customs union with the European Union, signed
in 1995, to increase its industrial production destined for exports,
while at the same time benefiting from EU-origin foreign investment
into the country.
years of low levels of foreign direct investment (FDI), Turkey succeeded
in attracting 21.9 billion USD in FDI in 2007 and is expected to attract
a higher figure in following years. A series of large privatizations,
the stability fostered by the start of Turkey's EU accession negotiations,
strong and stable growth, and structural changes in the banking, retail,
and telecommunications sectors have all contributed to a rise in foreign