Export-Led Growth: Onwards Outward Orientation Financial Liberalization

Export-Led Growth: Onwards  Economy at 1970’s: High inflation Unsustainable trade deficits High unemployment rates

Export-Led Growth: Onwards  External factors: Increases in oil prices (OPEC) Cyprus operation Economic crises in trade partners The collapse of the Bretton-Woods system USA  Reaganomics UK  Thatcherism

Export-Led Growth: Onwards  Stages of the import substitution: Consumption goods  Etatism period Durable consumption goods  Planned economy Intermediate goods Investment goods

Structural Adjustment Program: January 24, 1980  General Principles: Long-term economy policy  To end economic crisis  Structural change Price Mechanism  Automatic equilibrium  Private sector The role of government

Structural Adjustment Program: Policies  1. Pricing Goods and services market Labor market Money market Foreign exchange market

Structural Adjustment Program: Policies  2. Outward Orientation Export promotion  Exchange rate policy  Export tax rebate system  Cash premiums  Export credits Import liberalization

Structural Adjustment Program: Policies  3. Foreign Investment Expectation  4. Public Sector Reform To broaden the tax base Rationalization of public investment To improve the functioning of the SEEs Privatization

Financial Liberalization: 1989  Liberalization of capital movements  Transactions with foreign exchange is free

Main Economic Indicators (%) GNP GrowthEmployment Growth Savings/GNPManufac./ GDP Agriculture/ GDP

Main Economic Indicators (%) Exports/GNPImports/GNPCurrent acc. /GNP Foreign debt/GNP

Main Economic Indicators (%) Inflation rateMonetary growth (M1) Nominal Depreciation R

Yeldan, 2001, s.52.