Economics

The economic history of Turkey can be traced back to the times of Ottoman. Then, the economy was underdeveloped with its agricultural sector using archaic models and livestock being of poor quality. However between the periods of 1923-85 the economy grew at a record 6 annually. This was mainly attributed to the development of the countries economic structures into complex ones. The goods were produced for both local and international markets. This acted as impetus to the country to move from take off to drive to maturity (Todaro, 123). This did not however effectively materialize as had been projected by the government. The economy was bedeviled by international debt which had gone as high as 18 billions particularly owed to the International Monitory Fund (IMF).  

The Iraq war of the 1980-88 benefited the Turkish state largely. After the war Iraq and Iran became major trade partner of the Turkish government. Because of the restrictions that had been put on the Iraqi and Iranian governments, the two countries largely depended on Turkey for the export of crude oil. In 1991 Persian Gulf War devastated the economy again. UN embargo restricted the export of oil by Iraq. This dealt a blow on Turkey because then, it was receiving a lot of fees from the pipeline that transported the oil. In 1994 Turkey suffered another setback. This was as a result of large salaries offered to its civil servants. This triggered an unprecedented public and external borrowing. As a result of the borrowing, the rate of inflation went up with a record 73.

The role turkey was playing in international politics affected its growth in 2006. Overall, the world started developing some interest in Turkey because of the then presidents stand on international politics. This jeopardized the economic growth of Turkey. Further, this created a rather difficult political state with far reaching repercussions on the countrys internal infrastructural stability. This totally changed the international balance.

Politics has not been left out in this economic fray that Turkey was undergoing. The dispute between the prime minister and the central bank governor over the approval of extra borrowing, led to loss of public confidence in the government. This lack of confidence led to the fall in the exchange rate of the local currency. These happenings of 1993 preceded the stable economic policy of 1994. The country embarked on a dollarisation policy in which most of the investments were done in terms of dollars.  While this looked lucrative in the eyes of the investors, it dealt a blow on the Turkish Lira. However, these aforementioned fluctuations prepared a fair landing for the Turkish economy.

The Turkish economy showed unrelenting signs of growth in the beginning of the 21st century (Erbaykal). Within the following analysis I do consider the incomes and per capita income of Turkey and its nationalities. Steadily as can be captured from the data below, the income of the Turkish government increased through, 2006, 2007 and 2008. Notice that they there was some economic slump in the year 2009 and the projected total out come for 2010.

20062007200820092010Annual Disposable Income (US million)411,867.81506,494.08560,334.75481,136.82490,368.88The per capita income for the period translates to 82.37, 102.04, 112.06, 98.32 and 94.33. These incomes show a steady increase. The trend changes in 2009 to the projected 2010.
If the incomes are translated into income indexes and per capita indexes with 2006 as the base year the indexes derived are
Income Index 1.0000, 1.2297, 1.3605, 1.1681, 1.1906
Per capita index 1.00, 1.24, 1.36, 1.36, 1.19
By plotting the figures on a trend curve, it can be adduced the growth in the period of 200809 stagnated.

EMBED MSGraph.Chart.8 s
From this chart, it is notable that the Turkish government was on a growth trend. However, like most countries it has also been affected by the economic slump that has hit the world particularly the developed countries.

The trend reflected above picks from a period (2006) when the Turkish nation was suffering from some international dilemma. The dilemma arose from its position on whether to continue with pro-western policy that appeared particularly anti-Islamic. Its launch of its nuclear reactor in the year showered its alignment to the Iranian side. Further, this accounted for the low economic performance. This dilemma affected its relationship with the Europe and America. This consequently dealt a blow on the financial markets, translating into economic slowdown (Todaro, 230).

The increased inflation in the year increased the price deflator relative to 2004 as a base year. However from the data considered the Turkish nations showered steady signs of economic growth. It can be adduced from the data that international economic policy will always tend to eat into both major and minor economies.

Conclusion
In conclusion, it should be noted that any trade shocks both arising from within or without the nation may largely affect the performance of a nations economy. The war in Iraq for example had a multiple effect on Turkey. It was a blessing at the time Iraq was transporting its petroleum products through the country. On the contrary, it dealt a blow on its international relations hence reducing its international activity (Erbaykal). Further, it can be concluded that provided a nation is engaged in some international dealing, shocks in the international spheres will always trickle down to individual nations.

The economic grunge that was experienced in 2008-09 affected the performance of Turkey in the same period accounting for the negative gradient of the trend curve above. Politics can not be separated from economic performance of any nation. The Turkish nation experienced relative calm in the period 2006-2009, this accounts for it steady performance over the same period. Ultimately therefore, as Todaro (6) asserts economic development will remain a multidimensional aspect, involving the reorientation and restructuring of institutions economic, political, social and cultural. Herein lies the parameters that have shaped and reshaped the Turkish economy.