Abstract
It seems impossible to drive a general rule concerning the outcomes of privatization that would be applicable to each country or sector. Privatization may lead to better use of resources but also to extraction of profit overseas and growing industrial concentration. Privatization of banking is more delicate an issue because of the potential to undermine confidence in the system. Moreover, there is the problem of obtaining data on bank privatization as public banks have always been an important government tool and it is generally the politicians who plan what, when and how to privatize. Hence, the results of banking privatization, that are only visible in the long run, change in each country depending on the timing, objectives and methods of privatization.
The recent financial crises in the Turkish economy has caused a vast number of bank nationalisations. While some of the nationalised banks are privatized in 2001, the remaining nationalised banks and the stateowned banks are on the agenda of privatization now. However, the results of the previous bank privatisations of 1990s are not promising as two banks that were privatized previously had to be renationalised recently. The problems concerning bank privatizations in Turkey regarding the market structure, lack of competitive environment, lack of legal and regulatory framework, the objectives and the method of privatization still persist. Today, the problem is even more severe due to economic and political instability in the Turkish economy since success in bank privatizations depends also on the proper timing.
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Abstract
Although the level of FDI exceeded that of the previous decade, throughout 1990s Turkey felt behind the rest of the world. The paper, from the theoretical perspective and also by using the results of the interviews with foreign businessmen in Turkey provides some insight into the reasons for the lack of FDI in Turkey.
The views of the foreign investors are investigated for the motives of FDI, for the characteristics of the investment environment in Turkey and also for the role of the government to promote FDI in Turkey. The results of the interviews show that country specific factors are of greater importance in the foreign firms ' decision to invest in Turkey and that the government has an important role in maintaining economic and political stability, in improving Turkey's negative image abroad and in providing effective investment incentives. The relationship between FDI and Labour markets in Turkey, Inflation in Turkey, and Trade Policy in Turkey are amongst the other topics investigated. The views of the foreign investors regarding the growth potential of the country in the region as well as the effects of Turkey 's Customs Union and possible membership to EU are also sought. The paper comments on the internal and external reasons behind the inability of Turkey in attracting FDI and the factors that need to be changed for Turkey to attract FDI.
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Details
| Primary Language | English |
|---|---|
| Journal Section | Makaleler |
| Authors | |
| Publication Date | December 27, 2001 |
| Published in Issue | Year 2001 Volume: 9 Issue: 2 |
