MACROECONOMIC DEVELOPMENTS

The Turkish Economy and Economic Policies Open to Foreign Competition
Foreign Economic Relations and the Balance of Payments
Foreign Capital and the Free Trade Zones
Turkish Contracting Services Abroad
The Housing Sector in Turkey
Protection of the Consumer
Protection of the Environment

The Turkish Economy and Economic
Policies Open to Foreign Competition

Before 1980, Turkey followed an economic policy based on the substitution of imports, and instead of importing it was aimed to manufacture those goods in the country to meet domestic demand. Newly established industrial branches were protected for long periods of time by customs tariffs and other taxes equally effective. A comprehensive Stability Program with the objective of providing substantial economic reforms was prepared and applied as of 24 January 1980. Thus, Turkey has abandoned the industrialization model based on the substitution of imports and adopted an industrialization model concentrating on, and giving priority to, exports.

The reform policies implemented also adopted a change in philosophy by gradually concentrating more on the market mechanisms instead of the central administration. The Capital Markets Law went into effect in 1981 at the conclusion of the restructuring and developments in the capital markets. The objective of the law is to provide the effective and widespread participation of the people in the economic development by investing their savings in securities. The following year, the Capital Markets Board was established for providing regulatory and supervisory functions in the Turkish capital markets. The Istanbul Stock Exchange (ISE), which played a very important role in the development of the Turkish economy, started its activities on 3 January 1986. Among the factors influencing the rapid expansion of the ISE were the accelerated growth of the funds due to the effect of tax concessions and the liberalization of the entrance of the foreign investors into the capital markets. Currently, there are three markets operating on the ISE which are mainly the ISE Equity Market, Bonds and Bills Market and the International Market.