Thisstudy has examined empirically the needof foreign borrowing. and foreign debt burfienof Turkey from 1963 to 1995. The two-gap analysis was used to assess the requirements of foreign resourcesas additional to domestic resources in order to achieve e a reasonabletargetground rate of national income. This studyhas shown that in the light of two-gap analvsis, foreignaid will still continue to plan a crucial role during the Seventh Five Year Plan period (1996-2000) bv helping to overcomeforeign exchange constraints, although it has put Turkev under a large foreignindebtedness. However, as long as the economykeeps its ability to repav foreign debt, it isbeneficial for the economic development of Turkey.