The Saving Gap Problem: Turkey Example (1980-2014)
Assoc. Prof. Fatih Mehmet ÖCAL
It was the period to get rid of the recession effects of the First and Second World Wars after the years of 1950. After the globalisation started in 1960s and the demand of the developed countries for evaluating their over savings and giving loans with high interest rates to the developing countries, the financial circulation started. The demand of the developed countries for a real income with high interest rates was for the first time, a flotation ring for the developing countries which were in current account deficit. Our country that entered the industrialisation period experienced a similar process at the beginning of 1980s. Experiencing the saving problem, as its national income was very low, Turkey tried to finance its investments via on one side increasing its exportation incomes and on the other side via the financial liberalistaion. The saving inadequacy was the biggest problem for financing the investments. Financing the investments by leveraging from the foreign resources is both expensive and transient. For that reason, the current account deficit, financing the effective investments with the oversavings as a result of the increase in the national income is the first condition for the economies to reach a healthy structure. As Turkey could not solve its savings problems, it had to get into debt and could not protect itself from economic instability process.
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