Industry

Abstract

This chapter provides a brief yet thorough account of the history of the Turkish manufacturing industry, with special focus on the developments since 1980. As a developing country, Turkey has lived through almost all of the debacles that developing economies experience. Chronic fiscal deficits have produced high and chronic inflation and macroeconomic uncertainty. The country has experienced three important economic crises, in 1980, 1994, and 2001, which threatened not only its economic but also its political stability. After the 2001 economic crisis, Turkey was finally able to implement macroeconomic structural reforms that have made it possible to bring inflation under control, attain high growth rates, and render the economy less prone to economic crises. Despite these achievements, however, there still remains much to be done. The most important challenge is to undertake microeconomic structural reforms that will enable the Turkish economy, in particular the manufacturing industry, to sustain its competitiveness with a diversified mix of products.