The central trade-off thatpolicymakers faced was betweenfaster growth and lower current
throgh ovato both the crrclm ad objectveo edcato.
Pre-Reform Vulnerabilities Were Lowered,but New Ones Emerged
Macroecoomc tablty, whle addreg may o thelogtadg vlerablte — hgh ato, progatecal polcy ad a ragle acal ytem — opeed thedoor to ew vlerablte. Wth greater codece therkh ecoomy ad a evromet o ample lqdty,captal ow rged. A a relt, the rkh lra apprec-ated, bak ledg rged, prvate avg coted toall, prvate vetmet roe, ad mport creaed. Teeece created trog prere o the crret accotbalace, whch wa aced too heavly by hort-termcaptal ow. T the ew vlerablte cetered o alarge crret accot dect ad expore to dde top, varable rk premm, ad exchage rate varablty.Te cce o tablzato alo chaged the bac polcy trade-o tato o overheatg. I the prevodecade, the mot mportat macroecoomc trade-o wa betwee growth ad ato. Drg the pat decade,however, the trade-o wa traormed. Iato targetgwth a exble exchage rate, a ope captal accot,ad globally tame ato meat that epode o excedometc demad gave re to larger crret accot de-ct. I other word, the cetral trade-o that polcymakeraced wa betwee ater growth ad lower crret accotdect. T, a recpe or taable growth ha yet to beod.
Turkey Faced New Challenges Stemming fromGlobalization during the Decade
rkh exporter aced dfclt codto wth prereor pecalzato, competto rom globalzato, ad theapprecato o the rkh lra. Tey were ccel meetg thee challege de o mall part to rkey’h toward more otward-oreted trade ad pportgdplomacy. T h perpectve, alog wth tablemacroecoomc codto, cotrbted to reewg exportgrowth, creag rkey’ global market hare, dver-yg prodct le ad market, ad movg p thetechology ladder.Whle there had bee chage the compoto o export avor o medm-tech prodct, ch a traormatowa ot acheved the cae o hgh-tech prodct, whchhave hgh growth potetal. Moreover, whle the peetra-to o ew market, epecally the Mddle Eat adNorth Arca, had bee hghly avorable or export, rkhexport have ot bee able to peetrate ad take advatageo market wth the mot growth potetal.
The Goal of EU Accession was a Profound Forcefor Change
Te EU memberhp proce had mportat eect polt-cal, ocal, ad legal phere drg the decade ad hadcotrbted mportatly to ecoomc ccee
However,the vgor ad gle-mdede o the ph to adoptchage reqred by the EU aded aer the mddle o thedecade becae o exteral actor, drpto dometcpoltc, the dfclt atre o remag reorm, ad thedrop pport or EU covergece rkey.It ot clear what th wll mea or the tre. Wll therkh people ad ther poltcal leader recommt to theproce o memberhp? I ot, the abece o a EU phcold elmate teret the coted prt o may tttoal chage. Alteratvely, chage early thedecade repoe to the drve or EU acceo cold et moto a proce that wold evetally reme. T, theEU acceo proce wa the begg o a major traor-mato, wth a yet clear ecoomc mplcato or thetre.
Substantial Challenges Remain for the Next Decade
Chage, eve oe that edre a decade o challege, cabe dermed a they ecoter ew crcmtace