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Economic Liberalization and Turkey

“Economic Liberalization and Turkey” provides comprehensive information relat- ed to liberalization of trade in agricultural and industrial goods, the liberalization of services, and the role of regulatory intu- itions in trade liberalization. The book is divided into three parts. Part I consist of two chapters.


“Economic Liberalization and Turkey” provides comprehensive information relat- ed to liberalization of trade in agricultural and industrial goods, the liberalization of services, and the role of regulatory intu- itions in trade liberalization. The book is divided into three parts. Part I consist of two chapters. The first two chapters pro- vide readers with an informed background about the liberalization of the Turkish economy. It also looks at the liberalization of trade in goods. Part II of this book con- sists of six chapters. The 6 chapters describe liberalization of Turkey’s service sector, including telecommunication, electricity, natural gas, banking, maritime freight, and the road freight transport sector. The Part III is devoted to quantifying the impact of economic liberalization and consists of only one chapter.

Part I consists of two chapters, which are focused on Turkey’s trade regime and trade liberalization.. According to this first chapter, entitled “The Foreign Trade Re- gime and Trade Liberalization in Turkey,” co-authored by Bartlomeij Kaminski, the Turkish economy is stable because mac- roeconomic conditions are stable and do- mestic market competition has given way to greater domestic consumption satisfac- tion since 2001. Because of the Customs Union Decision (CUD) and Turkey’s ac- cession process to the EU, the liberalization process of Turkey’s economy allowed for an increased competition in Turkey’s do- mestic market and a more efficient service sector. The CUD contributed to Turkeys domestic market competition by providing predictability, transparency, and stability. Even though, there is a free movement of products between Turkey and the EU, cer- tain protectionist measures remain in place on both sides of the alley. In the “Standards, Conformity Assess- ment and Technical Barriers to Trade,” co-authored by Saadettin Doğan, exports are the main focus of this chapter. For the Turkish economy, exports have become the primary source foreign currency and economic growth. For this reason, Tur- key tries to eliminate barriers by improv- ing trade standards and adapting the EU’s technical legislation into Turkish legisla- tion for Turkish exporters. Unfortunately, technical barriers to trade between the EU and Turkey have not yet been eliminated. It is argued that Turkey still needs to adopt the model EU technical legislation, estab- lish institutions required for the efficient functioning of quality infrastructure, train a substantial number of qualified staff, and build a modern technical infrastructure. Moreover, the adjustment costs required to eliminate the technical barriers to trade will be significant for the Turkish public sector.

Part II of the book is focused on the lib- eralization of sectors, such as telecommu- nication, electricity, natural gas, the bank- ing service, maritime freight transport, and road freight transport sector. The first chapter is entitled “Liberalization of Tele- communications Services,” co-authored by Erkan Akdemir and Erdem Başçı, and it relates to the history of Turkish telecom- munication services. Before 1994, one na- tional company held the monopoly over this sector, the “PTT.” Afterwards, the tele- communications sector was liberalized. Al- though there have been efforts to enhance the competitiveness of the telecommunica- tion’s sector, much is still left on the draw- ing board. The chapter entitled, “Electricity Sec- tor Policy Reform,” co-authored by Os- man Sevaioğlu, evaluates the comparison between the EU countries and Turkey. Sevaioğlu argues that at the time the EU put into place the electricity sector policy reform, Turkey’s electricity reform was not yet introduced because of its deteriorat- ing fiscal situation. Today, Turkey has yet to reach full efficiency and security in its Electricity’s sector supply although its fis- cal problems have been solved.

The chapter, entitled “Policy Reform in the Natural Gas Sector,” co-authored by Cenk Pala, focuses on the natural gas sec- tor. It discusses the existing conditions of Turkey’s natural gas sector. The authors claim that only the United States and the United Kingdom can put in place the nec- essary conditions for a fully efficient nat- ural gas market, such as full production competition, wholesaling, retailing, and establishing the proper conduits for trans- mission and distribution. There are ten- sions between Turkey and Russia regard- ing the location and control of these natu- ral gas pipelines. Much of which are under Russian control. Therefore, Turkey needs to find alternative natural gas sources in order to achieve greater efficiency.
“Liberalization of the Banking Ser- vices,” co-authored by Hakan Berument and Hasan Ersel, is another chapter of this book. They claim that the lack of regulation is Turkey’s banking sector is its quintes- sential problem. Each country has its own regulations concerning its banking sector. This leads to a belief that their own sys- tem is more reliable than the ones in other countries. When Turkey did not adopt the Basel Core Principles, its banking sector subsequently faced a crisis in 2001. The 2008 crisis called into question the ability of supervisory authorities and the adequa- cy of the existing regulations domestically and internationally.

The chapter, entitled “Maritime Freight Transport Sector Policy Reform,” argues that the EU’s regulations on maritime transport are expensive now. Owing to the nature of the maritime freight transport, countries need to harmonize their own.

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