THE EFFECTS OF 2008 CRISIS TO TURKEY AND TURKEY`S EXPORT CONFIGURATION

THE EFFECTS OF 2008 CRISIS TO TURKEY AND TURKEY`S EXPORT CONFIGURATION

Hazırlayan: Dr. Levent ÖZKARDEŞ

Yüksek Lisans Bitirme Projesi

Boston University (Metropolitan College)

Master of Science (Administrative Studies)

Subconcentration: Multinational Commerce

Global financial crisis started in the summer of 2007 as a mortgage crisis primarily concentrated in the United States but quickly spread far beyond U.S. borders. The world economy in 2008-09 experienced its most severe financial shock since the “Great Depression” of the 1930s and the deepest economic downturn since the Second World War. Countries around the globe witnessed major declines in output, employment, and trade beginning in the third quarter of 2008 through the second quarter of 2009. GDP in industrial countries fell by 4.5%, world trade volume declined by more than 40%, and the unemployment rate rose to 9%. As a result, the bankruptcies increased 43% for individuals and 54% for businesses in the U.S.; besides, more than 150,000 firms from 17 countries in Europe filed for bankruptcy in 2008.

This global financial crisis wasn`t the first crisis that Turkey faced for years, furthermore, it can be said that Turkey used to live with crisis for a long time. It has made negative impacts on the economic and financial indicators of Turkey. There was a massive GDP contraction of close to 14% from peak to trough. This was because of the dramatic fall in exports and industrial production, largely because demand in its export market, the European Union (EU), collapsed. Exports contracted by nearly 27% annually after the crisis hit, and imports dropped even faster (by nearly 35%), owing to declines in both prices and volumes. In the process, Turkish firms have managed to reroute their activities towards a variety of new sectors where they have a comparative advantage, and to shift their exports to more dynamic markets in Asia, Russia, North Africa and Middle East. In this paper, the background of Turkish economy and export configuration are analyzed starting from almost zero point of economy, and the 2008 Crisis is examined considering the causations to understand and present the effects of Crisis to Turkey and Turkey`s export configuration.