SYNOPSIS

A study was conducted to asses economic changes with the globalization process. We
gathered export & import, population growth rate, GDP growth rate, real Per capita income,
income distribution, capital flows data to see the changes on the indicators of world
economies. We used these data to compare selected regions and developed & developing
countries. So, our main problem statement is How the globalization process affected
developed and developing countries. We identified the problem like that, because this the
general idea about the globalization process. Our main economic indicator is real per income
to assess economic wealth. We used the population growth rate data. Because the data is
related with real per capita income directly. Exports & Imports factors are related to GDP
growth rate, the higher amount of foreign trade growths mean the higher GDP growth rate.
And GDP data are used to calculate real Per capita income by dividing it to population.
We selected the developed countries which are most famous (USA, Germany, England,
France, Japan...) and developing countries ( Turkey, Poland, Malaise, S. Korea. Thailand and
so on...).It not possible to assess all countries economic data because of fatigues, time,
difficulties to reach all countries economic data. Our sample has right countries because, they
are effective countries on the international area.
Our study consist of 6 main headings. First we prepared introduction section about
globalization, its history, weaknesses and opportunities. And than we examined regional
economic integration. Because the integrations accelerated the globalization process. Third
main heading is global integration. These integration mainly focus on agreements instead
of regions. Then we compare the data of economic indicators. We tried to test our hypothesis.
In fifth main heading we examined the effects of globalization process on Turkish
economy. Finally we examined global financial crises in the world and turkey.
The study is important. Because the world focuses on economic broader rather than regional
broader. The globalization is the most important catalyst. if we guess the new world map
based on market economics, we must understand the globalization. And so, we could evaluate
the turkeys chance on new world. We sought the model countries which have used the
globalization process to increase their national wealth.
In our study we examined countries as an unit of analysis. Because we wanted to see the
changes in world economies. Our study covered about 30 years. So, our time is not a point in
time. Time horizon of our study can be defined as a longitudinal study.We used secondary

data from government web sites and important financial institutions annual reports and their
web sites, books about globalization and the some claims from important authors & people.

Our Theoritical Framework

Population
Foreign Trade (Export and Imports)

Per Capita Income

GDP
Independent Variables

Dependent Variable

When we started to gather data firstly we identified the types of necessary data which are
abstracts, full text and statistics data, for our study. And then we selected some books from
libraries and statistics data from web-sites. Finally we wrote up and arranged these
informations and data which are necessary for our study.
The purpose of our study is based on hypothesis. Our main hypothesis is the globalization
process provided more benefits to developed countries than developing countries. the main
hypothesis were supported with the following hypothesizes:
1. The greater the effects of globalization the greater the differences GDPs of developed and
developing countries.
2. The greater the effects of globalization the greater the differences of Per capita income of
developed countries and developing countries.
3. The greater the effects of globalization, the greater the differences of export of developed
countries and developing countries.
4. The greater the effects of globalization the greater the differences of import of developed
countries and developing countries.
5. The greater the effects of globalization, the greater the inequality in the world countries.

We will test our hypothesizes and we will observe whether or not they support our main
hypothesis. We will clarify the result in conclusion section.

THE EFFECTS OF GLOBALIZATION ON WORLD

ECONOMIES

1.INTRODUCTION TO GLOBALIZATION, THE HISTORY, THE

THREATS AND OPPORTUNITIES OF GLOBALIZATION
1.1What Is Globalization?
There are some change winds in these days. The most important of these change winds is
globalization. Now, national cultures, economies and boundaries are disappearing slowly,
politic pole were disappeared, liberal economy is popular, technology is growing up and
social life is determined by globalization.
Technology and communication is growing up. Because of that countries were became close
to each other.
Globalization became popular after 1980s. This concept has been named by Roland Robertson
and he defines it the compression of the world. And this concept named a global village
by McLuhan in 1960firstly.
There is not an absolute definition of globalization. Some authors focus on economic aspect
of globalization, some of them focus on political, legal, cultural aspects of globalization in
addition to economy.
Quatha look from economic perspective (1997) to globalization integration and this
integration is caused from changes in trade, financial flows and technology. According to
IMF in globalization product, service, international capital, technologic development flow
increase. zeyir Garih defines globalization as Globalization is the process that focus on
markets and production regions instead of country boundaries, and in this process
information, capital, products and service disperse to all over the world with respect to

specific rules. Also he adds that globalization is based on free market economy. This
definition means that production should be in the most suitable area in both of service and
products.
Some authors attract attentions to political and social - cultural dimensions together with
economic dimensions. So, they consider the globalization with broad perspective. Because, in
the process of globalization, democracy, superiority of law, to protect natural environment,
terrorism and fighting with organized crimes, human rights, and liberalism are becoming a
matter of primary importance.
William Greedier describes the globalization as a machine which destroy something and than
it takes their responses. Also he says that in globalization process rich people become more
rich and poor people become more poor. But this process cannot be controlled by anyone. The
source of power of globalization is its own dynamics. Globalization restructures the world,
works itself and it is the modern capitalism.
Some authors think that globalization has increased the dependence. Globalization is
becoming the part of the world (Pr. Dr. Sleyman Hayri Bolay). Also he says that
globalization states the increases in over the borders interactions and becoming intense.
The commission of 8. Five years development plan explain that globalization includes some
common values which are accepted by world countries. In economic area, the economic
systems of developed and developing countries are becoming familiar with time passes.
Liberal economic systems are spreading fast with collapsing of Soviet Russia.
In all over the world the duties and functions of public economies are re-identifying.
Governments are wanted to be limited and to be smaller, so, market economies can be more
active. The ??? is becoming familiar and is gaining importance all over the world. Liberalism
is supported not only in foreign trade but also in financial and monetary fields. According to
this opinion government have to use tax, debt policy, monetary tools but government should
not affect the open market by using them. Well, implemented economic policies in the world
are becoming similar, so, there is a positive relationship between liberalism global economies.
In politic field democracy is getting more values with globalization. Liberal economic system

and the politics based on democracy are accepted. All over the world. The new trend which is
called liberal democracy spreads fast.
As a result, globalization includes economic, politic, social and cultural dimensions.
Globalization has made to increase capital activities, to become widespread the foreign trade,
to conclude ideological polarized opinions, to become close countries thanks to technological
development.
Humans are more important than borders
Havel (President of Czech Republic)
Effects of French revaluation started to decrease, now, borders, currencies, armies, flags have
become less valuable. Well then, the human beings who use their minds instead of arm force
have been important.
Of course globalization has both advantages and disadvantages as all deep reevaluations.

1.2.The Historical Development Of Globalization

It is hard to determine a specific time for when the globalization started. Some blame that it
goes as old ages as manhood goes and the beginning it is with the efforts of man of
civilization.
Some blame that beginning of globalization is the beginning of the modern age, some other
blames that it is the 19th century years when globalization started. Another group shows the
years after 1950's or 1970's for the term when globalization sprang out.
During historical time according to their sizes and range countries has passed several levels of
globalization. It is possible to show EGYPT, Rome, and Helen as an example for that. But
being different from these nowadays globalization is completely set on western values.

Capitalism, which forms the western economical base, comes up as an important factor for
globalization. Between the years 1870 and 1914 when capitalism sprang out and developed
economic relationships among countries increased.
Economical development term of globalization is not new. the times between 1870 and 1914
became a term when there was shown quick development in capital and free goods activity,
telegraph technology was developed, international communication and transport became
faster, easier and cheaper with the invention of steamship.
This different period of development in global economy was cut with the world war 2 and
cold war; But with the coming down of soviet union the first alternative for the market
capitalism disappeared. The share of exportation in world production has hit to its top just
before the world war 1. World economies have reached this stage in 19701s
The explosion of world war 1 in 1914, the coming up of Great Depression in 1929, later the
start of world war 2 have made the globalization slow down. Either with the effects of wars or
the great depression countries have directed themselves to defensiveness in export and
limitations on market activities have increased. Beyond these international market activities
have also been effected from the limitations. And as a result of countries tries to save
themselves from the effects of war and economical stagnation market activities have slowed
down at important rates.
The coming into life of IMF, which was set up just after world war 2, world bank, GATT,
OECD has made globalization gain speed. Besides in 1950s and 1960s global production and
global trade has increased in both developed and developing countries.
1970's can be stated as a turning point in globalization. After the coming down of system of
Bretten Woods in August 1971 fixed currency system was left and developed countries firstly
USA, Germany, England, Japan-broke the limitations over market activities. The broke of the
limitations over market activities has caused financial globalization gain an excellent speed.
Besides; while some transnational firms from the American origin compassed
nearly the complete world production after 1970s other developed countries and Japan and
some of the Latin American firms and in international markets they have become strong
rivals of these countries firms. All these developments have caused an increase in volume of

the world trade and the challenge between firms, and so have prepared a suitable position for
the globalization of production.
The developing countries after the beginning of 1980s have also come into the adventure of
liberalization. Later in many of the developing countries terms like specialization; market
economy, financial freedom and integration with the world gained importance. All these
developments have made developing countries come close to each other.
Globalization has come into a more clear situation in the years of 1980s with the coming
down of old Eastern. Black countries in economy and politics in 1990s this term reached its
top.
Again, with the limits of GATT Uruguay Round, which has the fame of being the greatest
agreement in history in December 15 in 1993with the gathering of 117 countries, is one of the
most important developments about economic globalization. Nihai senet which was signed
in Morocco on April 15 in 1994 hasnt only supplied a freedom in world trade, it has also
made if possible for the elimination of subventions in exportation, applications of anti
damping, distractions of the technical handicaps in trade, the coming into reality of the rules
like precautions of protection.
World Trade Organization, which was set to apply these results, is an important developments
about economical globalization is many sided agreement of investment. According to this
agreement, any of the firms working in international area can easily work in the country of the
firm which applied the agreement as if it is a firm of that country.
As a conclusion: the globalization form that showed out a development period has come down
between 1914 and 1945 and after world war 2 It has come into a period of coming up. This
period gained speed in 1980s and reached the top in 1990s.

1.3.The Opportunities Of The Globalization

The integration that get bigger and bigger of the emerging countries contribute the rising of
the economic property in the emerging and developed countries. The integration that is caused
from the rising of the product service movements could be possible to make relationship with

different geographic areas. The integration of the developing countries to the world market
provide

these countries to increase their competitive advantage. Globalization provides

developing countries to reach new and wider markets and bigger capitals, and also to increase
the ratio of exported and imported goods.
Globalization on the other side decreases transportation and communication costs, by this way
it provides division of labor and specialists in production, and also increase productivity.

Increasing productivity provides developing countries to increase competitive

advantage in international markets.(Qureshi, 1996; Brahmbhatt and Dadush, 1996).
Globalization also provides to increase saving usage rates, by this way increase the
productivity and provides consumers reach easily low price and high quality foreign
product

The countries that achieves global trade , duo to this some industries related with
export and import develops.

Globalization encourages activity and foreign resources in developing countries

and also contribute developments. Foreign

resources in developing countries

provides the finance of investments.

Globalization of financial activities provides the better relations between the fund
demander

and fund supplier countries. In this case developing countries have a

change to come into developed countries market. Due to this they have a change to do
high profit, low risk investments.

As the production process becomes global in developed countries, industrial community

concept changed knowledge community concept. Thus production industry loosed its
attractiveness and banking insurance, finance industry become more important. The goop,
which takes place in production industry in, met by developing countries. As a result in
globalization process bath countries get benefits.

Globalization changed the world to a global village, radio, television, phone and Internet

provides information transfer cheaper and faster.

Political ideas and trends, cultures start to be global rather than national. Security,

environmental problems, terrorism, health problems, human rights start to related with
international politics.

1.4.The Threats Of Globalization

Political and social- cultural integration between countries with the globalization decreased
the power of national countries. National countries started to have problems about controlling
economical policies, political tools and idea trends. Also national countries lost their main
responsibilities like defense and economic management. These things are now under the
control of IMF , world bank , WTO and NATO
Transactions that exceeds the boundary of national countries affects the countries power
negatively. In globalization process multinational firms become more powerful to effect the
economical and political decisions .
With the globalization, the industrial products ratio in the developing countries national
income and export is increasing with regard to the globalization, its the hard to say that its
providing to these countries to product technology. Those countries export technology
depended structure an regular foreign payment capacity and being foreign shock are still
important.
From the other sides west culture caused from the cultural globalization. In short ; western
valves is dominated in the world. There are lot of different culture. The cultural globalization
will be true how the regional cultures accept.
Globalization prepare the conditions to build sub village under the global village and make
common market to minimize to Beal differences. People dont want to give up their local /
national valves so these improvements help to make local blocks and create the global
paradoxes.
When the globalization improve ; the unglobalization tendency will seem. Protectionism and
localism are important behavior of unglobalinationium.
Most of the countries sustain the protectionism with some bureaucratic difficulties . after
1970s economic blockinizm (bloklama) or localism tendencies get more important.

Economic integrations ( EU,NAFTA and APEL) are most important boundaries against the
globalization.
Capital movements with globalization are improving and change the their way to the short
date.
The changing face of the foreign capital cause negative economic behavior macroeconomic
imbalances. Its the main responsible of the financial crisis. Mexico Crisis (94-95) ,AsiaPacific Crisis (97-98) are the example of this financial crisis.
The reasons of crisis are not clear but capital movements are the source of the imbalances and
the globalization make the problem worse.
In developed country , globalization cause the dense unemployment and un quality
Work force is the victim of the competition. Passing from industrial society to knowledge
society change the work area from production sector to the service sector so the employment
position change and the employer that is the member of labor union loose their employment
opportunity
Globalization rise the unfair on the income distribution in the world. Specially; when the
interval of the society level in the developed countries .
Is between the developed and emerging countries is rising. In addition to this some countries
(Korea, Malaysia, Thailand) could catch the rise of the developed countries; some Asian
countries (Indian, Bangladesh ) rising would be small.
Beside this ; it is claimed that globalization cause the imbalances of the income distribution.
Technologic changing and trade are the important factors globalization these cause the
imbalances on the income distribution.
The environment pollution and rising environment problems are the threats that cause from
globalization. The rising competition and the world population create global environment
problems.

2.REGIONAL ECONOMIC INTEGRATIONS

2.1.Regional Integrations Activities
World economies have not had stable growth after 1970. They have had low growth rate, high
unemployment and unstable prices. So protection politics have been popular again. Eventually
in some areas, globalization had continued, but in some areas regional integration action had
speed up.
Globalization have speed up after multi-aspect production and developing relation of
commercial and financial. This relation cause to the increasing relation of the countries which
are in the same region. Actually this regional integration is a stage of globalization and free
commercial & financial relations. But developed countries are introverted and implement
protection policies when they have social and economic problems. When the number of
blocks are increasing, relations in the blocks will be important. So inter-block relations will be
at secondary importance. Regional integrations can benefit when they reinforce to the multiaspect liberate and they generate to this trend.
Regional integrations may include economic, political, social and military integrations.
Integrations actions will be more successful if countries share their political, social,
economic, cultural values.
World is becoming globalization, but at the same time it is becoming zoning. Economic,
political and technological relations have increased between the countries. IMF, WTO, WB,
UN, MERCOSUR, APEC, EFTA, ASEA are being become zoning. Moreover power which
effect to this organizations and future of the world is provided by groups which include strong
countries. Some of these groups are G-7, G-10 and G 20. Most important of them is G-7
which includes the USA, Japan, Germany, England, France, Canada and Italy. These
countries GDPs share is 60% in world countries GDP. And trade share is 52% in total world
trade. Group members consult to each other, they discuss about different subjects and they can
shape the future of world economies as growth rate, trade......
Regional economic integrations between countries are becoming very important in economic
area. Regional trade blocks are in 3 different continent. In Europe continent EU and EFTA, in

America continent NAFAT and MERCOSUR, in Asia continent ASEAN and APEC are the
most important regional economic integrations.
2.1.1 European Union
EU is the oldest and most developed economic integration in the world. There are 15
members of EU today. These countries are Germany, France, Belgium, Holland, Luxembourg,
Italy, England, Ireland, Denmark, Greece, Spain, Portugal, Austria, Sweden and Finland.
EU can produce all of the things which they need. In 1980 trade of EU countries to EU
countries rate was 58,1%, in 1997, it was about 61%, in 1998 it was 62% and it was 63% in
1999.
On the other hand the rate of EU countries import from EU countries in total import was
55.9% in 1980 and was 65 in 1999. This shows EU is successful. After the becoming block
trade between EU countries increased and import of EU from external world decreased.
TABLE 1: Trade Distribution Of EU (Billion $)

Export of EU to EU
Export of EU to External
Total Export
Export of EU to EU/Total
Export (%)
Import of EU from EU
Import of EU from
External
Total Import
Import of EU from
EU/Total Import (%)

1997
1.300
820
2.120
61

1998
1.357
844
2.201
62

1999
1.378
804
2.182
63

1.286
718

1.360
744

1.381
750

2.004
64

2.104
65

2.131
65

After the 1980, EU export in total world export has been hilly. In 1999, EU trade decreased
because of decreasing of increasing rate of GDP in EU. In 1997 EUs GDP increased about
2.5%. At the same way rate of EU GDP at world GDP was 22.9% but this rate was 21.9% in
1998

TABLE 2: The Level of Openness to External World of EU(Billion $)

1995
1996
1997
1998

1999

World GDP

33.578

35.014

36.511

37.486

38.805

EU GDP

8.312

8.543

8.312

8.582

8.513

EU GDP/World GDP (%)

24,8

24,4

22,8

22,9

21,9

Export of EU

2.061

2.124

2.120

2.201

2.182

Import of EU

1.970

2.015

2.004

2.104

2.131

EU Trade Volume/ EU GDP (%)

48,5

48,5

49,6

50,2

50,7

EU Trade Volume/ World Trade

39,3
38,6
37,1
39,4
38,0
Volume (%)
Source: DT, Uluslararas Ticaret statistikleri, 2000; IMF;Uluslararas Finansal statistikler,
2001

The rate of EU total import at total world import was 38,1% in 1998 and 37% in 1999.
2.1.2.NAFTA
NAFTA is a free trade agreement which is made between USA, Canada and Mexico in 1994.
If we look at NAFTA export after 1995, the rate of NAFTA export in total world export has
increased regularly. In 1995, it was 16.8% and 19.3% in 1999. NAFTA import has increased
like export and it was 19.7% in 1995 and 24.8% in 1999.
TABLE 3: NAFTA Export (Billion $)

USA
Canada
Mexico
NAFTA Total
World Total Export

1980 1990 1995 1996 1997 1998 1999

225,6 393,6 584,7 625,1 688,7 682,1 702,1
67,7 127,6 192,2 201,6 214,4 214,3 238,5
15,6
27,1
79,5
96,0 110,4 117,5 136,4
308,9 548,4 856,5 922,7 1.013, 1.013, 1.076,
6
9
9
1.920, 3.379, 5.103, 5.319, 5.504, 5.417, 5.587,
8
1
6
8
6
3
0

Share of NAFTA (%)

16,1

16,2

16,8

17,3

18,4

18,7

19,3

TABLE 4: NAFTA Import (Billion $)

1980 1990 1995 1996 1997 1998

1999
USA
256,9 516,9 770,8 822,0 899,0 944,35 1.059,4
Canada
62,5 123,2 168,0 174,9 200,9 206,0
220,1
Mexico
19,5
29,9
75,9
93,7 114,9 130,9
148,6
NAFTA Total
338,9 670,2 1.014, 1.090, 1.214, 1.281, 1.428,
8
7
7
4
3
Total World Import 1.999, 3.466, 5.162, 5.413, 5.597, 5.516, 5.752,
1
2
0
3
4
9
0
Share of NAFTA
17,0
19,3
19,7
20,1
21,7
23,2
24,8
(%)
Source: DT, Uluslararas Ticaret statistikleri, 2000; IMF;Uluslararas Finansal statistikler,
2001

The rate of trade between NAFTA countries in NAFAT export was 43%, 49%, 51%, and 54%
in 19990, 1997, 1998, 1999 respectively. These rates show that NAFTA countries consider
important of becoming blocked. After the 1997, export of NAFTA countries to out of NAFTA
has decreased.
TABLE 5: Trade Distribution of NAFTA (Billion $)

Export of NAFTA to
NAFTA
Export of NAFTA to
External
Total Export
Export of NAFTA to
NAFTA/ Total Export (%)

1990
240

1997
495

1998
520

1999
579

322

519

495

491

562
43

1014
49

1014
51

1.070
54

Source: DT, Uluslararas Ticaret statistikleri, 2000.

In 1999 NAFTAs GDP increased about 4.9% and reached to 10.2 trillion. Rate of NAFTA
GDP in total world GDP was 26,5 and it was more than EUs rate.

The rate of trade volume in GDP shows the independence to external world. And this rate is
small for NAFTA, it was 23.4% and 24.3% in 1998 and 1999 respectively. This rate was
50.2% and 50.7% in 1998 and 1999 for EU

TABLE 6: The Level of Openness to External World of NAFTA(Billion $)

World GDP
NAFTA GDP
NAFTA GDP / World GDP (%)
Export of NAFTA
Import of NAFTA
NAFTA Trade Vol./NAFTA GDP (%)
NAFTA Trade Vol./World Trade Vol. (%)

1995 1996 1997 1998 1999

33.57 35.01 36.51 37.48 38.80
8
4
1
6
5
8.614 8.957 9.406 9.817 10.29
8
25,7 25,6 25,8 26,2 26,5
856
923 1.014 1.014 1.077
1.015 1.091 1.215 1.281 1.428
21,7 22,5 23,7 23,4 24,3
18,2

18,8

20,1

21,0

22,1

Source: DT, Uluslararas Ticaret statistikleri, 2000; IMF;Uluslararas Finansal statistikler,

2001

2.2.International Trade Activities

2.2.1World Trade
Globalization will be discussed about;

Some states activities and control in the economy and trade are disappeared

Multi-national firms are active, so international markets have existed.

In this market, there is not a boundary between people, products, services and capital.

Communications have increased fast.

Technology was used in production and marketing all over the world

Financial markets have become independent and hard extraordinary power.

Like EU, NAFTA and APEC regional integrations trade rate in total trade in the world
have become 90 %

The rate of trade volume in world GDP average 20 %

30 % of the world population integrated to the world economy

most of the population live in developing countries

there are 3 different table below

at first table , distribution of export according to the region, second table shows world import
and its distribution, third one is about world trade volume and turkey export and import
TABLE 7: Distribution of Export According to the Region (%)

1948 1953

1963

1973

1983

1993

1999

World ( Billion $)

58,0

83,0

Share of World
North America
Latin America
West
Europe
Countries
Central,
East
Europe,
Baltk
Countries
Africa
Middle East
Asia
Japan
China
Australia,
New
Zealand
Six
East
Asia
Countries*
Other Asia Countries

100
27,5
12,3
31,0

100
24,6
10,5
34,9

157,0 578,0 1.835, 3.639, 5.473,

0
0
0
100
100
100
100
100
19,4
17,2
15,4
16,8
17,1
7,0
4,7
5,8
4,4
5,4
41,0
44,8
39,0
43,7
43,0

6,0

8,2

11,0

8,9

9,5

2,9

3,9

7,4
2,1
13,8
0,4
0,9
3,7

6,5
2,1
13,2
1,5
1,4
3,2

5,7
3,3
12,6
3,5
1,3
2,4

4,8
4,5
15,0
6,4
1,0
2,1

4,4
6,8
19,1
8,0
1,2
1,4

2,5
3,4
26,3
10,0
2,5
1,5

2,0
3,1
25,5
7,7
3,6
1,3

3,0

2,6

2,4

3,4

5,8

9,7

10,0

5,8

4,5

3,1

2,1

2,7

2,6

3,0

TABLE 8: Distribution of the Import According to the Region (%)

World ( Billion $)
Share of World

1948
66,0

1953 1963 1973 1983 1993 1999

84,0 163,0 589,0 1.880, 3.752, 5.729,
0
0
0
100,0 100,0 100,0 100,0 100,0 100,0 100,0

North America
Latin America
West
Europe
Countries
Central,
East
Europe,
Baltk
Countries
Africa
Middle East
Asia
Japan
China
Australia,
New
Zealand
Six
East
Asia
Countries*
Other Asia Countries
Source: DT

19,8
10,6
40,4

19,7
9,3
39,4

15,5
6,8
45,4

16,7
5,1
47,4

17,8
4,5
40,0

19,8
5,2
42,9

22,3
5,8
42,2

5,8

7,6

10,3

8,9

8,4

2,9

3,7

7,6
1,7
14,2
1,0
1,1
2,6

7,0
2,0
15,1
2,9
1,7
2,4

5,5
2,3
14,2
4,1
0,9
2,3

4,0
2,8
15,1
6,5
0,9
1,6

4,6
6,3
18,5
6,7
1,1
1,4

2,6
3,2
23,4
6,4
2,8
1,5

2,3
2,6
20,9
5,4
2,9
1,5

3,0

3,4

3,1

3,7

6,1

9,9

8,5

6,5

4,7

3,8

2,3

3,1

2,8

2,7

TABLE 9: World Trade Volume and Turkeys Share

World
Export of
Import of
Turkey Export/ Turkey Import/
Trade
Turkey
Turkey
World
World
Volume
Export(%)
Import(%)
194
66,0
0,2
0,3
0,298
0,417
8
195
84,0
0,4
0,5
0,471
0,634
3
196
163,0
0,4
0,7
0,226
0,422
3
196
169,7
0,4
0,5
0,242
0,317
4
196
184,7
0,5
0,6
0,251
0,310
5
196
203,2
0,5
0,7
0,241
0,353
6
196
212,4
0,5
0,7
0,246
0,322
7
196
235,6
0,5
0,8
0,211
0,324
8
196
268,2
0,5
0,8
0,200
0,299
9
197
308,3
0,6
0,9
0,191
0,307
0
197
343,2
0,7
1,2
0,197
0,341
1
197
404,0
0,9
1,6
0,219
0,387
2

197
3
197
4
197
5
197
6
197
7
197
8
197
9
198
0
198
1
198
2
198
3
198
4
198
5
198
6
198
7
198
8
198
9
199
0
199
1
199
2
199
3
199
4
199
5
199
6
199
7
199

589,0

1,3

2,1

0,224

0,354

818,3

1,5

3,8

0,187

0,462

849,7

1,4

4,7

0,165

0,558

935,5

2,0

5,1

0,210

0,548

1.091,9

1,8

5,8

0,161

0,531

1.268,4

2,3

4,6

0,180

0,363

1.604,7

2,3

5,1

0,141

0,316

1.971,7

2,9

7,9

0,148

0,401

1.954,3

4,7

8,9

0,241

0,457

1.826,4

5,7

8,8

0,315

0,484

1.880,0

5,7

9,2

0,305

0,491

1.885,3

7,1

10,8

0,378

0,571

1.893,3

8,0

11,3

0,420

0,599

2.073,6

7,5

11,1

0,360

0,536

2.422,9

10,2

14,2

0,421

0,584

2.769,2

11,7

14,3

0,421

0,518

3.008,4

11,6

15,8

0,386

0,525

3.438,3

13,0

22,3

0,377

0,649

3.560,2

13,6

21,0

0,382

0,591

3.807,6

14,7

22,9

0,387

0,601

3.752,0

15,3

29,4

0,409

0,784

4.328,7

18,1

23,3

0,418

0,538

5.175,3

21,6

35,7

0,418

0,690

5.418,2

23,2

43,6

0,429

0,805

5.604,8

26,3

48,6

0,469

0,866

5.511,4

27,0

45,9

0,489

0,833

8
199
9

5.824,9

26,6

40,7

0,456

0,699

If we look at the rate of turkey export in world trade volume, it was changeable from 1948 to
1990. After the 1990s it has been about 0,4 % and it was between 0,14-0,38 % at the other
years. In 1979 and 1980, this rate was at the smallest level which is 0,14 %, was at the highest
level which is 0,14 % in 1953 and 1998. In 1953, infrastructure investments had been started.
And foreign capital entered to turkey and agriculture had been modernized. Like Et ve Balk
Kurumu, a lot of production factory has been established. At the same time in the world,
second globalization process had not been completed so they always were providing raw
material

to find a market for products

to search for high population.

Increasing the efficiency at the capital

And 1998 is at the third globalization process. At this process

Multinational corporations become powerful and soviet unions block has collapsed so east
European countries have been leader

2.3.CONCLUSION
61% of the world trade is belong to the regional integrations. The most important of them are
EU, APEC and NAFTA. The most important reasons of existing these integrations are
political competition & conflict and economic. For example one of the reason of setting up of
MERCOSUR is to prevent weapon competition of Argentina and Brazil.
Regional integrations is a necessary step for globalization. And international harmony is
necessary to earn profit from free trade. This harmony requires the concessions of the
countries
Everybody says that free trade provided the world prosperity. But there is conflict on this
prosperitys share. Because of regional integrations, block country groups has been existed.
This reasons assisted to the globalization. Because make a decision with 100 independent
countries is harder than make a decision with 5 blocks which include these 100 countries.

Regional integrations is not an alternative of globalization, it is the firs step and these two
concepts are supplements of each other. If regional integrations include the less developed
countries, globalization will be good for all of the countries

3-GLOBAL INTEGTEGRATION
3.1.The Dimensions Of Global Economic Integration & Global Economic
Integration Index
The world economies have been introduced to the globalization process especially in recent
25 years. Cooperation opportunities have extended among developed, developing and less
developed countries. Trade difficulties and problems have started to decrease because of new
trade and tariffs regulations. Technologic transfers increased from developed countries to
developing countries. International financial markets extended, labors transfers and foreign
investment have increased. Global economic integration means that products , labors, capital
activities and economic cooperations increase among world countries.

3.2.International Products Activities: international trade is the most important part of

global economic integration. international trade volume can be calculated by export and
import separately and/or together divided by GDP.

3.3.International Capital Activities: is the other part of global economic integration. It

can be calculated by direct foreign investment and the volume of buying & selling common
stock and bonds in other countries exchanges.

3.4.International Labor Activities: globalization is not current only for product and
capital but also it is current for labors. Labors forces can transfer among countries more easily
in world economies with globalization. However, some countries has high unemployment
rates, this situation brings to problem for developed countries. So, developed countries may
implement some restriction via visa and other precautions for free labor forces circulation

3.5.Global Economic Integration Index:

The index can be measured by the rate of international trade volume to GDP, the direct
foreign investment to GDP and the credibility position of the country. According to the index,
Singapore, Mauritius Hong Kong, Thailand are the most successful countries between 19801995. The score of turkey is 1,87. This number can be accepted successful.
On the other hand, the less successful countries are Iraq, Peru, Colombia, Bulgaria, Russia,
Saudi Arabia and Algeria. But, this index cannot asses the global integration wholly.
When we look at the regions, the most successful region is Asia. In east Asia Per
capita real income increased by 8,2, Per capita export volume increased 14,1, direct foreign
investment increased by 3,1 between 1991-1993. Also, south Asia is successful, too. Latin
America has good performance especially in high export volume rate. Africa, the countries of
center Asia and new developing European countries are the less successful countries. Despite
of that in Africa many countries still follows closed economy strategies.
(global economic integration index in some countries between 1980-1995
TABLE -10: Global Economic Integration Indexes ( 1980-1995 )

Country
Singapore
Mauritius
Hong Kong
Thailand
Portugal
TURKEY
Malaysia
Mexico
Holland
Philippines
Hungary

GEE
Value
3.52
2.35
2.29
2.12
1.89
1.87
1.80
1.44
1.14
0.99
0.95

Indonesia
Taiwan
Costa Rica
South
Korea
Colombia
Peru
Algeria
Iraq
Bulgaria
Nigeria
Russia
S.Arabia

0.81
0.77
0.73
0.63
-0.54
-0.95
-1.51
-1.68
-1.73
-1.87
-2.23
-3.40

Source : World Bank ; World Economic Prospects and Developing Economies, 1996.

Note: global economic integration index is the average of values of four main criterions.
These are:
1. The changing of the rate of trade volume to GDP (from 1980-83 to1990-93)

2. The percentage changing of the rate of direct foreign investment to GDP (from 1983-85
to1993-1995)
3. The share of changing of manufacturing sector in the export. (from 1980-83 to1990-93)
4. The percentage changing in institutional investor creditability lists. (from 1983-85 to19931995)

3.6.International Trade Activities And Turkey

When we want to identify our position in the world compare to international trade activities,
we can start to analyze the trend of world trade liberalism. We examine free trade theory and
protection theory firstly. The internationalism and liberalism will be considered:

International competition drives businesses to work more effectively and efficiency. And
then businesses can produce and cheaper more quality.

Free trade and competition;

Increase technological innovations and inventions

Helps to develop know-how

To eliminate faulty competition forming

Helps to transfer technology and skilled labor force.

Thanks to international labor forces and capital activities, free trade and
competitions provides to develop national economy. New employment open thanks
to foreign investments.

On the other hand protection defenders criticize to free trade.

Free trade and competition Can be caused that

New established industries are left under no-protection and then national industries
cannot develop and can be caused to increase shortages in importer countries
foreign trade balance sheet.

To increase dependency to external world especially in developing countries.

Both defenders have rights in their opinions. The experiences of 20th century brings up that
free trade is necessary for increasing in economic growth and wealth level. Nevertheless, in

sectors, temporary protection is necessary in the beginning of economic development. Only, if

the protection will be continual, nation economy can be affected negatively.
As a result, protection is an old opinion in global world. Countries must trade with external
world, economic relations should be increased and they should be part of the world
economies.
TABLE-11:Performance Level of Regions According to the Global Economic
Integration

Region

East Asia
South Asia
High Income
Level
Latin America
Middle East and
North
Africa

Growth
of Per
Capita
Income
1991-95
8.0
2.2
1.2
1.1
-0.2
-1.5

Growth
Foreign
of
Capital
Export Investment/
1991-95
GDP
1993-95
14.1
8.4
5.0
7.2
0.4
- 1.6

3.1
0.3
0.6
1.1
0.4
0.9

Other
Private
Capital
Investmen
t/
GDP
1993-95
2.5
1.2
0.4
2.0
0.3
0.1

Sonra tablo 5 6 7 8 9 ve altndaki yazl ksmlar 7. 8. 9. Sayfadaki

3.7.The Liberalism Trend In World Trades

Since year 1947 which is GATT signed and established, world trade have overcome a lot of
restrictions. Tariffs rates decreased as time passed with trade agreements according to GATT.
In 1947 tariffs rates were 40 percent, however in 1962 these rates decreased to nearly 15
percent. 36 % discount released for Tariff taxes in the end of Kennedy discussions. And then
important success acquired to decrease tariffs taxes in the end of Uruguay the discussion and
according to the discussion final document was signed in 15 April 1994 and world Trade
Organization (WTO) was established instead of GATT. We will analyze that what is the level
of liberalism on foreign trade activities in some world countries.

FIGURE 1 : The Liberalism On World Trade After GATT

Table -12 : Tax Rate on International Trade(1995)

Country
Countries which
applied high tax
Rwanda
Pakistan
India
Dominic Republic
Belize

Morocco
Botswana
Tunisia
Russia

Tax Rate
%(1995)

Country

Tax Rate
%(1995)

Countries which
apply low tax rate
14,63
13,62
12,70 Turkey
12,21 Switzerland
10,85 Indonesia
Malaysia
Taiwan
South Korea
9,91 Australia
9,87 Japan
9,54 Mexico
8,80 Ireland
8,49 Bahrain

3,97
2,29
2,21
2,08
1,97
1,96
1,94
1,60
1,52
1,50
1,46

Madagascar
Zimbabwe
Sierra Leone
Cameroon
Jordan
Poland
Ghana
Mauritius
Philippines
Zaire
Nicaragua
Nepal
Turkey

8,10
7,74
7,71
6,54
6,38
6,32
6,26
6,17
6,05
5,85
5,29
3,97

Panama
New Zealand
China
USA
Czech Republic
Unman
Latvia
Lithuania
Canada
Iceland
Austria
Finland
Sweden
Estonia
Norway
Hong Kong
Israel
Singapore
Greece
Denmark
Spain
Italy
Portugal
Germany
Belgium
Holland

Source : Fraser Institute , Economic Freedom of The World,1997.

When we look at the table, almost all developed countries implement very low tax rate on
the total of export and imports. These rates are below the 2 % in developed countries.

Some countries which appropriate protection strategy and implement high tax rate on
foreign trade, are Botswana, Russia, Tunisia, Zimbabwe, Morocco, Madagascar,
Cameroon, sierra Leone, Zaire, Ghana and Jordan. Their tax rates on foreign trades are
between 5-10 %

In turkey, this rate was 3,97 in 1995. Tax rate on foreign trades are not high in turkey
generally.

Up to this point we talked about tax rates on foreign trade. But, foreign trade restrictions are
not only tax rates (tariffs) but also they includes other restrictions similar to tariffs.
Sometimes, the other restrictions can be more effective than tariffs.

1,39
1,37
1,20
1,18
1,13
1,07
0,88
0,74
0,72
0,67
0,61
0,46
0,43
0,38
0,32
0,30
0,24
0,11
0,05
0,03
0,03
0,01
0,01
0,00
0,00
0,00

According to World Bank investigation, when w look at the tariffs and other restrictions
(quantity restrictions) the countries which follow the liberalism politics are Hong Kong,
Singapore, USA, Belgium, Denmark, France, Germany, Spain, England, Ireland, Italy, Japan,
Holland, new Zealand, Norway and Portugal respectively. The countries which follow
restrictions politics are India, Pakistan, Bangladesh, china Egypt, Ethiopia, Iran, Kenya,
Tanzania.
In Turkey the calculated tariff rate is 9,5 %. However, other restrictions is 96,4 % between
1990-1993. so we can say according to these results, our country follows hidden restrictions
politics.

3.8.The Turkeys Position With Respect To Foreign Trade Volume In The World
Now, we will analyze the countries with respect to foreign trade volume.
In 1995, the most successful countries are Hong Kong, malaise, Estonia, Jordan, Lesotho,
Angola, Kong, Uzhbekistan and republic of Slovakia. For example, in 1995 in Hong Kong the
rate of the total export and imports to GDP is 297 %. The rate is 197 % in Malaysia
TABLE-13: Countries which apply the Protection Politics

Hong Kong
Singapore
USA
Belgium
Denmark
France
Germany
Spain
England
Ireland
Italy
Japan
Holland
New Zealand
Norway
Portugal

Average
Tariffs
Rate
% (*)
(1990-1993)
0,0
0,5
5,9
6,7
6,7
6,7
6,7
6,7
6,7
6,7
6,7
6,3
6,7
8,5
5,7
6,7

Other Barriers
% (**)
(1990-1993)
0,5
2,7
4,3
13,4
13,4
13,4
13,4
13,4
13,4
13,4
13,4
3,9
13,4
0,0
5,4
13,4

India
Pakistan
Bangladesh
China
Egypt
Etyopya
Iran
Kenya
Nigeria
Rwanda
Tanzania
Turkey
Zaire
Zimbabwe
Malawi
Ecuador

56,3
51,0
84,1
36,3
28,3
28,8
20,7
35,1
34,3
34,8
19,5
9,5
12,3

62,6
14,5
11,3
45,2
22,5
99,3
37,8
8,8
79,7
96,4
100
100
91,3
63,6

Source: World Bank, World Development Indicator, s.253-255den yararlanlarak

tarafmzdan oluturulmutur.

3.9.Foreign Capital Investment And Turkey

One of the dimensions of global economies integration is direct foreign capital investment
if we evaluate the positions of countries according to the direct foreign capital investment, we
can find arrangement
Angola ,Hungary, Papua new Gina, Vietnam, Malaysia. Check republic ,Trinidad Tobago and
Estonia. At these countries rate of foreign investment in GDP is more than 5 % .
in turkey this rate was less than 1 % in 1995. According to the World Banks data the
countries which have the lowest rate are Sierra Leone, Ethiopia, Rwanda, Syria and El
Salvador
we can see the countries which gathered the highest amount foreign investment in table 11.
According to the table private capital flowed mostly in china , Brazil , Mexico Indonesia
Malaysia, Thailand, Hungary check republic Poland and Philippines in 1995. 45 $ billion
private capital entered the china in a year. At second there is brazil. 20 $ billion private capital
entered the brazil in 1995. At the sane year $2 billion private capital entered the turkey.
Private capital is not direct foreign capital investment.
Private capital = credits which are provided by private and public sectors to foreign country +
direct foreign capital investment + portfolio investment

TABLE 14-Most Successful Countries According To The Direct Foreign Capital Investment countries
which are made private capital in 1995

Country
Angola
Hungary
Papua New Ghana
Vietnam
Malaysia
Czech Republic
Trinidad and
Tobago
Estonia
Tanzania
Costa Rica
Jamaica
Nicaragua
Ghana
Peru
Poland
TURKEY
Guatemala
India
Kenya
El Salvador
Syria
Rwanda
Etiyopya
Sierra Leone

Direct foreign Capital/GDP (1995)

10,7
10,3
9,2
6,9
6,8
5,7
5,6
5,0
4,2
4,3
3,8
3,7
3,6
3,3
3,1
0,5
0,5
0,4
0,4
0,4
0,4
0,1
0,1
0,1

Source : World Bank, World Development Indicators , 1997. s. 232-235.

Tablo-15: Private Capital Flowing in 1995

Country
China
Brazil
Mexico
Malaysia
Indonesia
Thailand
Hungary
Czech Republic
Poland
Philippines
TURKEY

Net Private
Capital Flowing
44.339
19.097
13.068
11.924
11.648
9.143
7.841
5.596
5.058
4.605
2.000

If we look at according to the regions, private capital flow was about $ 109 billion. At the
second, there is Latin America regions. In 1996 private capital flowed about 4 75 billion to
this region private capital flowed middle east, north America, south Asia and south Africa
regions minimum. All of 3 regions, private capital flowed about $ 30 billion.
In 1996, private capital flowed to the developing countries $ 250 billion all over the world.
Private capital flowed to developing countries especially between 1990 and 1996, but foreign
aid to these countries was decreased rapidly.
TABLE 16-Private Capital Flow Amount To Developing Countries According To The Regions (Billion $)

Regions
East Asia
Latin America
Europe/ Middle East
South Africa
South Asia
North Africa

1990
19,3
12,5
9,5
0,3
2,2
0,6

1994
71,0
53,6
17,2
5,2
8,5
5,8

1996
108,7
74,3
31,2
11,8
10,7
6,9

FIGURE 2- Private Capital Flow Amount To Developing Countries

FIGURE 3- Foreign Support To The Developing Countries.

4.THE COMPARING OF DEVELOPED AND DEVELOPING

COUNTRIES

4.1.Population and population increasing rate:

The population increase rate was 0.37% for developed countries between 1980-1990. USA
and Japan have the big shares with 0.9% and 0.6% growth rate respectively among developed
countries. at the same time the average growth rate of developing countries is 1.81%.
TABLE 17 : Population and Population Growth Rate

Germany
Italy
Greece
Portugal
Spain
Turkey
Poland
Hungary
Egypt
Tunisia
Morocco
Sweden

Population
(Million)
1995
82
57
11
10
39
61
39
10
58
9
27
9

Population Growth Rate

1980-90
0,1
0,1
0,5
0,1
0,4
2,3
0,7
-0,3
2,5
2,5
2,2
0,3

1990-95
0,6
0,2
0,6
0,1
0,2
1,7
0,3
-0,3
2,0
1,9
2,0
0,6

USA
Mexico
Brazil
Argentina

263
92
159
35

0,9
2,3
2,0
1,5

1,0
1,9
1,5
1,3

Japan
S. Korea
Philippines
Malaysia
Thailand

125
45
69
20
58

0,6
1,2
2,4
2,6
1,7

0,3
0,9
2,2
2,4
0,9

Source: Dnya Bankas, World Development Report 1992, 1993, 1997.

The population increasing rate of developed countries increased between 1990-1995 years.
The essential reason of this increasing is population increasing in Germany when we look at
the population increasing rate in developing countries, the rate followed decreasing trend.
Average increasing rate receded to 1.4%.

When we examine the after 1980 Hungary is the unique country which has population
decreasing.

4.2. GNP, GDP, Per Capita Income:

Our First And Second Hypothesizes Are:
The greater the effects of globalization the greater the differences GDPs of developed and
developing countries.
The greater the effects of globalization the greater the differences of Per capita income of
developed countries and developing countries.
TABLE 18 : GDP Growth Rate
GDP Growth Rate

Germany
Italy
Greece
Portugal
Spain
Turkey
Poland
Hungary
Egypt
Tunisia
Morocco
Sweden

1980-90
2,2
2,4
1,4
2,9
3,2
5,3
1,9
1,6
5,0
3,3
4,2
2,3

1990-95
1,0
1,1
0,8
1,1
3,2
2,4
-0,1
1,3
3,9
1,2
-0,1

USA
Mexico
Brazil
Argentina

3,0
1,0
2,7
-0,3

2,6
1,1
2,7
5,7

Japan
S. Korea
Philippines
Malaysia
Thailand

4,0
9,4
1,0
5,2
7,6

1,0
7,2
2,3
8,7
8,4

Source: Dnya Bankas, World Development Report 1992, 1993, 1997

At the same period, when we look at the economic growth rate, developing countries
including Turkey have the higher rate than developed countries.

Excluding Latin America in the other two blocks, developing countries have good high
growth rate between 1980-1990. Also, south east Asia countries growth rate jumped to high
level. However the importance of the increasing in growth rate diminishes because of
increasing in population. Because, the population increase rates of these countries are greater
than developed countries population increasing rates
TABLE 19: Gross Domestic Product Growth Rates

INDICATOR
PERIOD
COUNTRY_GROUP
World
Developed countries
Developing countries
Source: Unctad

Total
real
1990product
2000
2.7
2.4
4.8

19952000
3.0
2.9
3.9

Per
capita
19991990real
2000
2000
3.9 product
1.2
3.4
1.7
5.6
3.0

19952000
1.7
2.2
2.3

19992000
2.6
2.9
4.0

At the examining of the data of World Bank for Per capita income, countries were separated
in three groups. These are low, middle and high income groups. Also low income group
separated two subgroups. These are middle-low and middle-high. In this research one of the
countries are developing countries. Some of them take place in middle high group.
TABLO 20: Per Capita Income
Per Capita Income

Germany
Italy
Greece
Portugal
Spain
Turkey
Poland
Hungary
Egypt
Tunisia
Morocco
Sweden

1976
7,380
3,05
2,590
1,690
2,920
990
2,860
2,280
280
840
540
8,670

1995
27,510
19,020
8,210
9,740
13,580
2,780
2,790
4,120
790
1,820
1,110
23,750

USA
Mexico
Brazil
Argentina

7,890
1,090
1,140
1,550

26,980
3,320
3,640
8,030

Japan

4,910

39,640

S. Korea
Philippines
Malaysia
Thailand

670
410
860
380

9,700
1,050
3,890
2,740

Source: Dnya Bankas, World Development Report 1992, 1993, 1997.

We get interesting results when we look at the changing of developing countries Per capita
income between 1976-1995 years. For example, in 1976, south east Asia countries had low
Per capita income than Latin America countries, but in 1995 all of the south east Asia
countries reached and passed the level of Per capita income in Latin America countries. on the
other hand one of the EU members which are Portugal, Spain and Greece had quite increasing
for Per capita income between 1976-1975
G-7 Countries
G-7 effects financial and commercial institutions with its very high economic power
TABLE 21: GDP of G-7(Billion $ )

USA
Germany
France
England
Italy
Japan
Canada
Total GDP of G-7s
Their Share In The World

1990
1999
5.554 8.709
1.720 2.081
1.195 1.410
976 1.374
1.094 1.150
2.970 4.395
573
612
14.081 19.731
65,8
65,3

The decisions which are decided by the leaders of G-7, are very effective to manage the
politics of international institutions like World Bank, IMF, OECD, DT and NATO. The
sources of these affects are the economic powers of G-7. In 1999 7 countries produced 19,7
trillion $ GDP. The GDP is the 65% of the total world countries GDP. Also USA, France,
England which are members of G-7, have the strategic importances on international relations
and they are accepted by world countries.

G-20 COUNTRIES
TABLE 22: GDP of G-20 (Billion $)

1990
5.554
1.720
141
297
465
355
114
1.195
112

1999
8.709
2.081
282
390
760
991
141
1.410
131

75,5

77,1

USA
Germany
Argentina
Austria
Brazil
China
Indenosia
France
South
Africa
South
253
407
Korea
India
323
460
England
976 1.374
Italy
1.094 1.150
Japan
2.970 4.395
Canada
573
612
Mexico
263
475
Russia
579
375
Saudi
105
129
Arabia
Turkey
151
188
Total GDP 16.142 23.293
of G-20s
Their
Share In
The
World

Source: World Development Report, 2000/2001

In 1999, the total GDP of 19 countries forms the 77% of the total GDP with $23.3 trillion.
Also, G-20 members have 59.93% share in total world population.
In 1990, the share of G-20s was 75,5% in total GDP of world countries, but in 1999 the share
increased to 77.1%

TABLE 23- Value And Shares Of Exports And Imports

Exports

FLOW
GROUP
World

Developed
countries

Imports

Exports Import Expo Impo Expo Impo Expo Impo

s
rts
rts
rts
rts
rts
rts

UNIT
Millions of
3,483,03 3,603,5 5,126
2,031,210 2,071,416
dollars
8
33 ,570
100.0
Percentage
100.00
100.00
100.00 100.00
0
Millions of
2,490,72 2,612,7 3,518
1,296,877 1,431,012
dollars
1
53 ,946
Percentage
63.85
69.08
71.51 72.51 68.64
Millions of
814,08 1,420
581,238
490,599 830,598
dollars
7 ,556
Percentage
28.62
23.68
23.85 22.59 27.71

Developin
g
countries
Countries
Millions of
in Eastern
dollars
Europe
Source: Unctad

153,096

149,806

161,718

5,199,
077
100.0
0
3,495,
402
67.23
1,507,
651
29.00

6,338
,198
100.0
0
4,058
,531
64.03
2,026
,930
31.98

6,510,
806
100.0
0
4,384,
368
67.34
1,892,
317
29.06

6,112
,052
100.0
0
3,919
,236
64.12
1,922
,706
31.46

6,298,
652
100.0
0
4,202,
859
66.73
1,835,
647
29.14

176,69 187,0 196,0 252,7 234,1 270,1 260,1

3
68
23
37
21
10
46

We used SPSS aplication to find the descriptive statistics after 1980

GDP growth rate Descriptive Statistics
N Minimum Maximum

Mean

Std.
Deviation
2,3444
1,2310

Developed 80-90

-,30

4,00

Developed 90-95

-,10

2,60

,9375

,8280

Developing 80-90
Developing 90-95

13
13

-,30
-,10

9,40
8,70

3,6923
3,6923

2,7981
2,9082

As a result when we look at the growth rate of GDP, developing countries have the higher rate
than developed countries. So, our first hypothesis was rejected. And also the share of G-7s in
total GDP decreased with globalization process. So we can say that the difference between
GDP of developed and developing countries is less than preceding period and globalization
effects developing countries positively from GDP growth rate perspective.
Descriptive Statistics for Per capita income
N Minimum Maximum
Mean Std. Deviation
Developed in 1976
8
305,00 8670,00 4544,3750
3138,8436
Developing in 1976
13
280,00 2860,00 1068,4615
762,8876
Developed in 1995
8 8210,00 39640,00 21053,7500
10572,7276
Developing in 1995
13
790,00 9700,00 3521,5385
2630,3449

The importance of the increasing in growth rate of GDP diminishes because of increasing in
population. Because, the population increase rates of developing countries are greater than
developed countries population increasing rates. So, our second hypothesis was accepted.

4.3.EXPORTS & IMPORTS

Our Third And Fourth Hypothesizes Are:
The greater the effects of globalization, the greater the differences of export of developed
countries and developing countries.
The greater the effects of globalization the greater the differences of import of developed
countries and developing countries.
Developed countries had the 63.8% share in total world exports with 1.3 trillion $ in 1980.
They increased their exports by 100% between 1980 and 1990. In 1990 their exports is
71.51% share with $2.5 trillion in total exports. When we look at the year 1995, they have the
68.84% share in total with 3.5 trillion $. In 2001 they exported $ 4 trillions and its share was
64.12% in total. When we examine developed countries, import levels; in 1980 they had the
share of 69% in total world imports with $1.4 trillion. Its share was 72.5% in 1990. Also, in
1995 their export volume was greater than their import level. In the same year their import
amount was about 3,5 trillion $. In 2001 developed countries had the share of 67% in total
import with 4.2 trillion. As a result generally imports level followed stable trend however
exports level had changeable trend.
When we look at the developing countries export level; in 1980, they had the share of 28.6%
in total exports. In 1990 this share decreased to 23.8% and their export amount was 830
billion. In 1995 the share of their exports increased to 28% in total with 1.5 trillion. Their
share again increased and they exported 2 trillion in 2001
The imports levels of developing countries. In past two decades the import levels followed
increasing trend. The share of them are 24%, 23%, 29% and 29.1% respectively in years
1980, 1990, 1995 and 2001. And their imports amounts are 0.5 trillion, 1.5 trillion and 1.8
trillion respectively.
TABLE 24: Outside Trade Indicators

Growth of Export
Growth of Import
(Annul average)
(Annul average)
70-80 80-90 90-95 70-80 80-90 90-95

World
Germany
Italy
Greece
Portugal
Spain
Sweden
USA
Japan
Turkey
Poland
Hungary
Egypt
Tunisia
Morocco
Mexico
Brazil
Argentina

5,0
5,0
6,0
10,9
1,2
9,1
2,5
6,5
9,0
4,3
5,4
3,8
-2,6
7,5
3,9
13,5
8,5
7,1

4,7
4,6
4,3
5,1
12,2
6,9
6,0
3,6
5,0
12,0
4,8
3,0
-0,2
6,2
4,2
12,2
6,1
3,1

6,0
2,2
6,0
11,9
0,5
11,2
3,3
5,6
0,4
8,8
3,9
-1,8
-1,0
7,7
0,8
14,7
6,6
-1,0

3,1
2,8
0,7
3,2
1,0
1,9
-0,2
4,3
0,4
5,7
5,8
2,0
7,8
12,5
6,6
5,5
4,0
2,3

4,9
4,9
5,3
5,8
9,8
10,1
4,9
7,2
6,5
11,3
1,5
0,7
-0,7
1,3
2,9
5,7
-1,5
-8,6

5,8
2,9
-1,7
12,8
2,4
5,3
-6,7
7,4
4,0
11,2
26,4
7,9
-2,9
6,4
1,7
18,7
8,5
45,8

S. Korea
Philippines
Malaysia
Thailand

23,5
6,0
4,8
10,3

13,7
2,9
11,5
14,3

7,4
10,2
17,8
21,6

11,6
3,3
3,7
5,0

11,2
2,4
6,0
12,1

7,7
15,2
15,7
12,7

Between years 1970-1995, then average growth rate of imports & exports of developed and
developing countries are like these;
Between 1970-1980:
The average export growth rate of developed countries was 6%. But the same rate is 7.3% for
developing countries. the average import growth rate of developed countries was 1.7% and for
developing countries the rate was 5.8% in the same period.
Between 1990-1995
The average export growth rate of developed countries was 5% and the rate was 7.3% in
developing countries. The same rate for import growth was 3.3% and 1.4% respectively for
developed and developing countries.
TABLE 25-THE EXPORT & IMPORT Of G-7s MEMBERS

Export(Billion $)

Import (Billion $)

1980 1990 1995 1999 2000 1980 1990 1995 1999

USA
226 394 585 702 782 257 517 771 1.059
Germany
193 410 524 543 552 188 346 464 474
France
116 217 285 301 298 135 234 281 291
England
110 185 242 268 280 116 223 265 318
Italy
78 170 234 230 235 101 182 206 217
Japan
130 288 443 419 479 142 235 336 311
Canada
68 128 192 238 277
63 123 168 220
G-7 Total Export
921 1.791 2.505 2.702 2.903 1.001 1.861 2.492 2.890
World Total Export 1.921 3.379 5.104 5.588 6.358 1.999 3.466 5.162 5.740
Share of G-7 (%)
47,9 53,0 49,1 48,4 45,7 50,1 53,7 48,3 50,4

2000
1.258
500
305
332
233
380
249
3.257
6.662
48,9

Source: IMF, International Financial Statistics, Mart, 2001

G-7s members have important share in world trade. In 2000 they had the share of 45.7% of
export volume in total exports, their import share was 48.9% in total imports.
USA is the biggest country for export with amount of 782 billion in Germany and Spain
followed USA with 552 billion and 479 billion respectively.
When we look at the biggest importer countries in G-/s are USA, Germany 380 billion $
respectively.

TABLE 26-The EXPORT & IMPORTS of G-20

Export(Billion $)

USA
Germany
Argentina
Austria
Brazil
China

Import (Billion $)

1980 1990 1995 1999 1980 1990 1995 1999

226 394 585 702 257 517 771 1.059
193 410 524 543 188 346 464 474
8
12
21
23
11
4
20
26
22
40
53
56
22
42
61
69
20
31
47
48
25
23
54
52
18
62 149 195
20
53 129 166

Indesonia
France
South
Africa
South
Korea
India
England
Italy
Japan
Canada
Mexico
Russia
Saudi
Arabia
Turkey
G-20 Total
Export
World total
Export
Share of G20 (%)

22
116
26

26
217
24

45
285
28

49
301
27

11
135
20

22
234
18

41
281
31

24
291
27

18

65

125

145

22

70

135

120

9
110
78
130
68
16
109

18
185
170
288
128
27
44

31
242
234
443
192
80
81
50

36
268
230
419
238
136
75
51

15
116
101
142
63
19
30

24
223
182
235
123
30
24

35
265
206
336
168
76
61
28

45
318
217
311
220
149
40
28

3
13
22
27
8
22
36
41
1.190 2.153 3.235 3.569 1.204 2.193 3.198 3.675
1.921 3.379 5.104 5.588 1.999 3.466 5.162 5.740
62,0

63,7

63,4

63,9

60,2

63,3

61,9

64,0

Source: IMF, International Financial Statistics, 2001

The foreign trade volume of G-20, have the important share in world trade. The increasing in
export growth of G-20 was 3% from 1998 to 1999.
Their imports was 3.7 trillion with the increasing rate of 5,6%. So they imported the share of
64% in total world imports.
Developed countries had the 63.8% share in total world exports in 1980 and the share was
64.12% in total. When we look at the developing countries export level; in 1980, they had the
share of 28.6% in total exports and 31.4% in 2001. So the increase in the export share of
developing countries is higher than developed countries.
Also average growth rate of export in developing countries is higher than developed countries
after 1980 and our third hypothesis was rejected.

When we examine developed countries import levels; in 1980 they had the share of 69% in
total world imports and %67 in 2001. The import share of developing countries was 24% in
1980 and 29% in 2001.
The average import growth rate of developed countries was lower than developing countries
after 1980. Our fourth hypothesis was accepted.
Also shares of G-7s export and import in world total both decreased.

4.4.Income Distribution
Our Fifth Hypothesis Is :
The greater the effects of globalization, the greater the inequality in the world countries.
10% of the world population produce 70% of the products and services, and they take the
70% of the total world GDP. Half of the people work less than 2% for a day. Number of these
people are 3 billion and their share in production is only about 6%. Although the countries
and people are so close to each other because of globalization and technological development,
income distortions are so far. According to the some people, globalization cause to the
inequality. Poor people did not become more poor after the modern technology and economic
liberalization. Nevertheless rich people became more rich.
According to the World Bank data, half of the world population consume less than $2 Per a
day, and 20% of the world population consume less than $1. Number of the second group is
the same as year 1987s number. But in 1987 rate of people in this group at total population
was 24% and today it is 20%. Very poor people rate decreased from 27% to 15% in east Asia.
Same rate decreased from 45% to 40% in south Asia, but same rate was stable between 46%
and 47% in Sub-Saharan in Africa.
TABLE 27- People Who Live With Less Than $1 In A Day (Million)

East Asia
East Asia(except China)
East Europe and Middle
East
Latin America
South Africa
South Asia
Sub-Saharan Africa

1987
417,5
114,1
1,1

1990
452,4
92
7,1

1998
267,1
53,7
17,6

63,7
9,3
474,4
217,2

73,8
5,7
495,1
242,3

60,7
6
521,8
301,6

Total
Total except China

1.183,20

1.276,40

1.174,90

879,8

915,9

961,4

Source: Dnya Bankas, Global Economic Prospects and the Developing Countries 2001

The rate of the richest 20 countries income at the poorest 20 countries was 20 before40 years
ago, and same rate is 40 in today. According to the some economics history professors this
rate was about 5 in 1900 and about 2 in 1820.
According to the World Development Report, income inequality between the people had
increased rapidly in 19th century and was the stable in 20th century. But at the second half of
20th century this rate increased.
According to the table 27, income inequality increased between 1970-1989. This is verified
by Gini Coefficient. Countries which are the richest the 20% of the total world population
rate of GDP at total GDP increased from 73.9% to 82.7% between 1970 and 1989
Countries which are the poorest the 20% of the total world population rate of GDP of total
GDP decreased from 2.3% to 1.4%.
As a result this table show us the inequality of income had increased at the last period of 20th
century.
Half of the world population consume less than $2 per a day, and 20% of the world population
consume less than $1. According to the table , income inequality increased after 1970. So, our
fifth hypothesis was accepted.

5.MACROECONOMIC DEVELOPMENTS IN THE TURKISH

ECONOMY BETWEEN 1980-2000 AND TURKEY IN THE WORLD
ECONOMIES
5.1.Population
Turkey had the high population growth rate in both of 1980-1990 and 1990-1995 among
middle population size countries. If we compare turkey with European counties, we see that

Turkey the highest population increase rate. When we compare the Turkey with around of
European countries, it is similar to North African countries.

5.2.Growth
The economy, which contracted in 1979 and 1980, entered the growth path from 1981 on.
However, the average growth rates in the 1980s and the 1990s were below that of the 1970s
and were more volatile. The average growth rate of GNP, which was 4.8 percent during the
1970s, declined to 4 percent during the last two decades. (Figure 4). since the beginning of the
1980s, the share of agriculture in GDP continued its downward trend steadily, while the share
of industry, mainly manufacturing, displayed an upward trend.
FIGURE 4: Growth rates (annual percentage change)

Source: SIS, SPO (Central Bank of the Republic of Turkey)

The growth rate of Turkey boomed with the share of 5.3 % for GNP (Table-28) between 19801990. This rate is the highest rate after than S. Koreas and Thailands. However, Turkey did
not continue to develop between 1990-1999. So Southeast Asia and Latin America countries
passed to Turkey according to growth rates.
According to the classification of World Bank, Turkey takes part in middle-low income group.
When we look at the per capita income of the countries are in Table -28 , the results are

interesting. For example in 1976 per capita income of Southeast Asia countries were less than
Turkey, however in 1995 they passed Turkey. In this period Turkey stayed behind the
Southeast Asia and Latin America. So Turkey have loosed its position relatively, only Turkey
has continued the position in front of North Africa countries. On the other hand, Portugal,
Spain and Greece which are EU members stayed in front of Turkey both in 1976 and 1995
according to per capita income. But, the difference has increased quietly in 1995.

5.3.Balance of Payments
With the January 24th, 1980 Decisions the government accepted export-led growth strategy
and sustained the external competitiveness of the Turkish economy through exchange rate
policy and export subsidies. On the other hand, the 1980s witnessed a deliberate contraction
in real wages, which aimed at producing an exportable surplus and enhancing export
competitiveness through lower labor costs. These export-oriented policies succeeded in
raising exports considerably.
As a result, exports raised from 2.9 billion US dollars in 1980 to 11.8 billion US dollars in
1989 in annual terms (Figure-5). The composition of exports has changed considerably within
the same period: the share of industrial products in total exports rose from 36 percent to 78
percent. With the gradual liberalization of the import regime during the 1980s, imports started
to increase, with a slower pace than exports, from 7.9 billion dollars in 1980 to 15.8 billion
dollars in 1989.
FIGURE 5- Exports and Imports (percent of GNP)

Aside from the foreign trade deficit, which averaged 4 percent of GNP in the 1980s, the
invisible accounts played an all-important role in relaxing the current account balance. As an
outcome of the policies favoring the tourism sector, steadily improving tourism revenues
became a major source of foreign exchange earnings, despite high foreign debt interest
payments. Along with the favorable developments in tourism, unrequited transfers were
another income for Turkey, with an average slightly above 2 billion dollars each year during
the 1980s. Therefore, current account deficit as a percentage of GNP showed a slight
contraction compared to the 1970s and stood at 0.8 percent of GNP in the 1990s, while the
trade deficit increased from 4 to 6.1 as percent of GNP, respectively.

FIGURE 6 - Current Account and Trade Balances (percent of GNP)

Source: Central Bank

The most important problems of Turkeys economy are foreign trade deficit and increasing in
deficit. After 1980 Turkey introduced to the process of liberalization in foreign trade and this
strategy was caused to increases in import. But the increase was not based not on long-term
precautions, so export increase in export slowed down in end of 1980s.
When we compare the Turkeys foreign trade indicators with the countries which are in Table26, the results are interesting. For example, when the average export growth rate are

compared to selected countries which are in Table-10, between 1980-1990, Turkey is went up
to fifth position with its fast export growth rate.
According to export growth rates, Turkey was in seventh position between 1990-1995, so
Turkey was not successful between 1990-1995 as much as 1980-1990.
The other comparing is according to average import growth rate. If a country wants to
decrease foreign trade deficit, it must care to increase exports and to decrease imports. Among
selected developing, Turkeys import growth rates are greater than its export growth rates both
between 1980-1990 and between 1990-1995. That is one of the important reason for external
payments in Turkey.

5.4.Inflation
Turkeys liberalization efforts coincided with the stabilization program aimed at halting the
balance of payments crisis in the late 1970s and reducing the rate of inflation, which was
above 100 percent in 1980. The stabilization program succeeded in reducing inflation rate in
1981 to around 34 percent. For the decade on the average, both the CPI and WPI increased by
around 50 percent, twice as much as the preceding decade. The rate of inflation measured by
the changes in the CPI jumped to a higher plateau above 65 percent in the 1990s (Figure-7).
In 1994, the inflation rate rose to 106 percent due to the huge depreciation rate of the lira.
After the crisis was overcome, the inflation rate fell to 89 percent, but moving on a higher
plateau. To sum up, the reform attempts since 1980 in terms of reducing inflation in Turkey
were not successful. The CPI, which was around 24 percent during the pre-reform period
almost tripled and reached around 77 percent during the 1990s.

Figure-7: Inflation Rate (annual percentage change)

Source: SIS (Central Bank)

5.5.Income Distribution
One of the successes of the reforms was to increase the GNP Per capita, which was 1073 US
dollars during the pre-reform period to 2810 dollars during the 1990s. Nevertheless, according
to some studies, the distribution of income is worsened by poor performance thus impairing
equitable development efforts of Turkey. Empirical studies on poverty are generally scarce in
Turkey because the most recent data concerning size distribution of income are available only
for 1987 and 1994. However studies about poverty and income distribution in Turkey
generally indicate that there is a worsening of income distribution and increase in poverty
during the 1977-1988 and the post-1994 periods. There are four main characteristics of this
process.
i. Adverse changes in real wages/salaries, in pensions and in agricultural terms of trade;
ii. Further widening of the gap between the wages of high and low paid segments of the
urban working class;
iii. The dual character of labor markets consisting of formal and informal segments,

High interest rates generated trade-off with other income categories. A rising share of interest
payments from the value added, crowds out the share of either net profits and wages or both.
In addition to this, welfare-oriented public expenditures have also been crowded out because
of continuing expansion of the public debt burden.

6.FINANCIAL CRISIS AND SPECULATION

Short term foreign capital flow and speculation are very important in financial crisis in
countries and especially in Turkey.

6-1 Global Financial Crises In The World

A lot of financial crisis existed in the world. If we look at history, crisis exist after 19 months
an other crisis existed.
If we look at crisis which existed after 1970, these are
December- 1973

England Banking Crisis

June- 1974

Herstat Crisis

August 1982

International Debt Crisis

December 1986

Bond Crisis

October 1987

Exchange Crises

1980

Saving and debt Crises in America.

But crisis which had global effect are Latin America Crisis in 1970 and 1980, Europe
Exchange Rate Mechanism (ERM) crisis in 1992-1993, Latin America Crisis in 1994-1995,
Asia Crisis, Russia Crisis, and Brazil Crisis. In turkey, similar crisis existed in 1978 and 1994.

6.1.1 Europe Exchange Rate Mechanism Crisis in 1992-1993 and Speculation

Danish gave rejection vote to the Maastricht Agreement in 1992 which includes European
Monetary Union subjects. After this event, pressure increased on exchange rate in ERM. After
that, Italy did speculative transaction on lire. After this speculation, speculator want towards
to the English Sterile. The famous speculator George Soros had started to speculation. Soros
noticed the devaluation risk of English Sterling and he took short position about 15 billion

with short term credits. After the this attack, interest rate increased about 5% in a day in 16
September 1992.

6.1.2 Mexico Crisis And Speculation

Mexico which is a Latin America Country had a big crisis in December 1994. And its money
lost value and they devaluated the money in 20 December 1994.
If we look at this crisis, the main reason was hot money which left from the country because
of high exchange rate, high current payment shortage, decreasing in the private saving and
political inconsistent. $72.5 billion private foreign capital entered the country between 19901993. No one guessed a crisis will be exist in 1994, in opposition to everybody guessed that
more foreign capital will enter the country. Because American Congress accepted the entrance
of Mexico into the NAFTA.
But, about at the end of year panic wind existed and exchange reserves decreased from $26
billion to $6 billion. After that a big devaluation had been made.
6.1.3. Asia Crisis and Speculation
the most important financial event existed in southeast Asia in recent years. And this crisis
effected the all over the world economies. This crisis had started in February 1997. At the 2 nd
July Thailand devaluated the its money. After that it spread to the world. After this crisis,
international monetary system problems existed and speculative capital activities became
popular again. Because this crisis could not be guessed before
6.1.3.1 Foreign Capital Flow to South East Asia Countries
Region countries caused to foreign capital entrance with different politics. Especially China
did this well, but South Korea, Indonesia, Thailand, Malaysia and Philippines which were
most affected from the crisis, did not do this well. Most of the foreign capital was short-term
debt. We can see the total capital flows to the Asia Countries which are affected by crisis in
table 6.
If we look at table 6, total net private capital flow to Asia countries increased about 100%
between 1994 and 1996. If we look at only portfolio investments it increased about 150%. If
we look at the rate of foreign capital and credits at GDP, it is between 2.5% and 10% from
1996 to today. These data shows the foreign capital to Asia countries was a lot before crisis.

6.1.3.2 South East Asia Crises Speculation and its Results

investment became more popular than saving because of weak growth was continuing in
Europe and Japan since 1900. A lot of private capital entered the new growing market by
international investors who want to earn lot money without considering the risk. After that
domestic financial assets price increased and financial markets increased with this
speculation.
So we can say speculation was very important in south east Asia crisis. Prime minister of
Malaysia, Mahattir Mohammed, accused the George Soros for that speculation and he said
currency trading was immoral and it should be forbidden.
Speculators were the effective in this crisis with unstable conducts. If we look at Malaysia,
Ringit, we can see beer and bull named founds sometimes. So foreign capital which had
entered to these region cause to increase of value at this region countries money. But
international capital problems is not limited in one area in global world. Today, markets,
financial capitals are determined by gambling house capitalism rules in which there are a lot
of speculative earning.
Firms which were in this region. Shares decreased rapidly after crisis. Indonesia cigarette firm
Sampoernas a common stock value had been $6.75 before the crisis and it decreased rapidly
to$0.2 after the crisis, and its registered capital had been $6 billion before the crisis and was
$200 million after the crisis. Before the crisis 2300 rupee had been equal to the $1. Money
lost value about 608%. So western firms acquired to Asian firms easily and cheaply. After the
crisis total capital lost was $200 billion in Hong Kong, Indonesia, South Korea and Thailand
in 1997. So these show that because of crisis as manipulation rather than speculation
6.1.4. Russia Crisis And Speculation
economic difficulties had started in Russia in 1997 firstly. And 17 th August 1998, they
devaluated the money and $1 had been 9.5 rubles. And they restricted capital flow, and
announced moratoriums with 90 days. So an economic crisis existed in Russia. The Main
reason of this crisis was short-term capital speculative conduct which was made by people
who want to earn money in short-term.
Before the crisis, foreign capital had increased about 229% in Russia. At this period money
had been flowed to the banks easily because of low interest rate, and banks gave credits with

high interest rate. But all of these credits did not return because of petroleum and energy
prices decreasing. 40% of the Russias exterior income is energy.
Financial dimensions were in the foreground in this crisis. After the 1998 a lot of banks went
bankrupt. Their import decreased rapidly because of Russia increased the customs tariff. The
famous speculator Soros gave low rating to Russia. After that crisis were blazed.
According to the Russia Central Bank President Sergey Dublin, the main reason of crisis is
foreign speculators. Western stockbrokers who were the young and look for adventure, bought
a lot of treasury bill rather than trade in may 1998, foreign investors had $20 billion treasury
bill. And strong petroleum and metal producer waited for losing value of ruble to export their
products and they conduct speculative. This is the an other important reason of crisis.
6.1.5 Brazil Crisis and Speculation
Brazil was the 9th according to the economy. Brazil inflation was 2700% in 1992. But it was
between 1% and 3% in 1997. Their annual growth rate was 4%. They had successful
privatization politics. But in 13 January 1999 crisis existed in Brazil. And this crisis
suppressed to everyone.
We can see the speculation effects on Brazil crisis. Foreign capital flow became fact to this
country before the crisis. But foreign capital entrance decreased a lot in 1998 and 1999,
especially portfolio investments decreased about $18 billions at the crisis period.
Private capital flow which were made to the Latin America countries were affected by Russia
crisis. Russia crisis cause to the international short-term capital withdraw from the developing
countries. After the Russia crisis, Brazil lost $30 billion reserves and $1 billion foreign capital
escaped from the country in a day. And Brazil reserves could not balance the markets and
crisis existed.

6.2 Global Financial Crisis in Turkey and Speculation

There existed financial crisis in 1978, 1994, and 2001. In also Asia and Russia crisis effected
to the Turkey very much. Crisis which existed before 1980 in Turkey were not global because

of product market had not developed and exchange market and monetary product had not set
up yet in Turkey. So we will talk about crisis after 1980 which are 1994, Asia, Russia and
2001 crisis.

6.2.1 1994 Financial Crisis and Results

The first global financial crisis in Turkey existed in 1994. In fact this crisis was a small copy
of south east Asia crisis. The main reasons of this crisis is not only financial structure, also
lameness in the real sector affected to that much.
6.2.1.1 Development of 1994 Crisis in Turkey and Speculation
Economic structure problems of Turkey cause to the high exchange demand in the starting of
1994. And exchange rate started to increase. $1 increased from 15000 TL to 22000 TL in 19
January. And government took measures in 5 April. After this judgement $1 increased to
42000 TL in a day. But then it fell again to 32000 TL
we can see the effect on international hot money on this crisis. Foreign capital which entered
to the Turkey last ten years before crisis was $32 billions. $14 billions of them were current
transaction. $7 billions of the other $18 billions were provided by central bank with credit. So
we can say that $11 billions capital entered to the Turkey. One of the reasons 1994 crisis was
speculative conducts. After the $11 billions entered the Turkey, Turkish money gained value
and crisis existed.
6.2.2 Effects on Asia Crisis on Turkey Finance Market and Results
When crisis existed in Asia, Turkey was implementing the restricted economic politics. At this
conditions hot money wanted to escape from Turkey. Affects of Asia crisis were felt in
October 1997 in Turkey. Foreign capital exited about $313.2 million from Turkey common
stock market in October. This continued to the end of the year. And in January 1998 foreign
capital exited about $94,5 million because of Asia crisis wave. Foreign capital exited about
$565 million in 4 months. Foreign capital which is about $400-500 million enter and exit to
the IMKB. So this amount is not broad as thinking speculative conducts. So we can say Asia

Crisis did not effect the Turkey financial markets very much. Asia Crisis especially effected to
the real markets
6.2.3 Effects of Russia Crisis on Turkey Finance Markets
Russia crisis effected to the both of financial and real market very much. After this crisis,
Turkeys export decreased from $2 billion to $1.3 billion rapidly. And export of suitcase trade
decreased from $8.8 billion to $3.5 billions. And today trade to Russia is very very little.
After the Russia Crisis a lot of foreign capital exit from Turkish developing markets and this
effected the capital flow badly. At the third period of 1998, $10.5 billions foreign capital
exited. After that financial markets became smaller and real interest rates increased.
6.2.4 22 November 2000 and 21 February 2001 Crisis in Turkey and Short Term Capital
Flow
In 22 November 2000 21 February 2001, two financial crisis existed in Turkey. The other
names of these crisis are liquidity and exchange demand crisis. They are different from the
other crisis. This crisis existed when Turkey was implementing the stable program. In both
of the two crisis existed, national markets were affected very much, in also hot money exit
from the turkey and after the crisis this exit was continuing. $7 billions foreign capital exit
from Turkey between 22 November and 6 December. After this event, exchange demand
increased, so exchange rates increased and liquidity demand and interest rates also increased
At 21 February crisis, $ 4.9 billion capital exit from the Turkey in a day and total $7.5 billion
capital exit from the country. There was a high exchange demand so Istanbul Stock Exchange
decreased rapidly and interest for a night increased 7500%
Of course one of the reasons of these crisis were economy politics fault. However because of
short-term capital exit from Turkey, Istanbul Stock Exchange decreased, interest and
exchange rates increased and these crisis became more intense.

CONCLUSION
As we said our hypothesizes, which support the our main hypothesis, are:

1. The greater the effects of globalization the greater the differences GDPs of developed and
developing countries.
Developing countries have the higher rate than developed countries. So, our first hypothesis
was rejected. So we can say that the difference between GDP of developed and developing
countries is less than preceding period and globalization effects developing countries
positively from GDP growth rate perspective.
2. The greater the effects of globalization the greater the differences of Per capita income of
developed countries and developing countries.
The population increase rates of developing countries are greater than developed countries
population increasing rates. So, our second hypothesis was accepted
3. The greater the effects of globalization, the greater the differences of export of developed
countries and developing countries.
Developed countries had the 63.8% share in total world exports in 1980 and the share was
64.12% in total. When we look at the developing countries export level; in 1980, they had the
share of 28.6% in total exports and 31.4% in 2001. So the increase in the export share of
developing countries is higher than developed countries. our third hypothesis was rejected.
4. The greater the effects of globalization the greater the differences of import of developed
countries and developing countries.
When we examine developed countries import levels; in 1980 they had the share of 69% in
total world imports and %67 in 2001. The import share of developing countries was 24% in
1980 and 29% in 2001. The average import growth rate of developed countries was lower
than developing countries after 1980. Our fourth hypothesis was accepted.
5. The greater the effects of globalization, the greater the inequality in the world countries.
Half of the world population consume less than $2 per a day, and 20% of the world population
consume less than $1. According to the table , income inequality increased after 1970. So, our
fifth hypothesis was accepted.
In globalization process developing countries have greater growth rate than developed
countries but also their population growth rate is greater than developed countries. so, their
real growth rate is lower than developed countries. already essential indicator is relal growth
rate. And export and growth rates are higher than developed countries. So, GDPs of
developing countries were affected by this incresing positively. However, real income was not
affected positively. And the inequality increased with globalization. We cannot say exactly

globalization is useful for all human being. But some countries gained more benefits from
globalization.