Turkey’s Economic Odyssey Since 2000

Kadir Tanju Yürükoglu is an economist with fifty years of experience in development economics and macroeconomic policy. He vvorked at the World Bank for thirty years and consulted for the Asian Development Bank, governments, and foundations. He taught at Boğaziçi University and the University of Maryland College Park. He holds a doctorate in economics from the University of İstanbul. This book reviews economic policies and performance in Turkey since 2000. Corning out of a severe crisis at the turn of the century and years of coalition governments, the economy stabilized, supported by an IMF program, and recovered rapidly, buoyed by international Capital flows. While high interest rates and currency appreciation attracted hot money, the construction sector and consumption grovvth led the economy in the 2010s. External debt piled up rapidly. The tide turned after 2015 as the ruling Justice and Development Party became overconfident after several election victories, started undoing structural reforms, and shifted from the parliamentary system to a one-person rule in 2018. Turkey has been sufferingfrom an insidious decay of institutions and a lack of respect for the rule of law. Unraveling inflation was made vvorse by the president's interventions in monetary policy by cutting policy interest rates, leaving the economy with even higher inflation and depleted foreign exchange reserves. While some see the recent appointments of the Minister of Finance and the Central Bank governor as credible attempts to return to economic orthodoxy, recovery will likely be arduous if not impossible, underthe current political structure.