The Structure of Turkish Economy The Early Years of the Republic of Turkey

Turkish Economic Congress 1923 Objectives of the congress: Tradesmen, farmers, workers, manufacturers presented their problems, needs and wants Present the general picture of the Turkish Economy to the foreign world.

In the congress the parties presented their needs some of which are summarized below: Farmers: 80% of the population. They want the tax burden and the tobacco monopoly to be abolished. Tradesmen: Bank; Laws and regulations; chambers of trade; transportation; foreign capital

Manufacturers: Protecting industry through customs tax; taxreduction in machinery purchase; Industry Incentive Law (Sanayi Teşvik Yasası); education; Chambers of Industry Workers: 8 hrs. Of work; pay leave; security; insurance; work safety measures.

Lozan Peace Treaty 1. Capitalizations were abolished 2. Foreign privileges 3. Ottoman debt 4. Customs measures 5. War losses 6. Population exchange 7. Musul problem

Reforms Comprehensive revolutions Revolutions that cover both social life and economic life This is the key idea through 1940s.

Institutions Trade Associations and Professional Unions (Meslek oda ve birlikleri) Central Bank (Merkez Bankası) Hygiene Institute (Hıfzısıhha Enstitüsü) Community Centers (Halkevleri) Dil ve Tarih Kurumu

Budget Balanced budget Sources of income: Primarily through indirect taxes (mainly through salt, tobacco, sugar consumption) Expenditures: National defence, railway acquisitions from the foreigners, domestic and foreign debt

Table III.l Public Finance Data, Total Credits,and Wholesale Price Index (WPI), (Current Prices, Million TL) General Budget (Resultant) Deficit(-) Surplus(+) Indirect TaxesDirect TaxesBudget Expenditure Additive National Income Ratio Total CreditsWPI 1914=100 Income Expenditure ,3105,95,490,68,111, ,4131,66,8117,38,612,927, ,7202,3-31,6130,612,313,363, ,2172,59,114312,810,454, ,6199,12,1157,415,113,595, ,7200,822,917215,612,3105, ,2212,811,4179,415,310,3129, ,5210,17,4166,813,813,3124, ,5207, ,417,614, ,42122,4132,434,418,1123,3848 Source: Genel Bütce: Maliye ve Gumrük Bakanlığı Bütçe Kesin Hesap Kanunları, C. I. Ankara, 1992; Vergiler, Ulusal Gelir ve Fiyatlar: Bulutay, Tezel, Yıldırım, Turkiye Milli Geliri ( ), Table 8.4a ve 9. 10; Krediler: Akguc, Öztin, Cumhuriyet Dönemi'nde Bankacilik Alanında Gelişmeler, Ankara, 1971, ss

Triple balance until the end of WWII Balance in budget Stability in money supply Balance in foreign economic affairs

Agriculture Reforms in Taxes Credits Land ownership Taxes: Abolition of the tithe. (Aşar vergisinin kaldırılması.) Credit: For irrigation, fertilizers, seed, technical education. Land ownership: Land for landless farmers; laws for private land ownership Census of Agriculture

TABLE: III.2. Credits of Ziraat Bank, (Current Prices, 000 TL) Z.B.Credits Annual Increase(%) Ratio of Z.B Credits to Total Credits , , ,837, ,621, ,625, ,421, ,426, ,128, ,127,3 Source: Bulutay, T. Tezel, Y. S. Yildinm, N. National Income of Turkey , Ankara: SBF, 1974, Table App.40

Industry Sanayi ve Maadin Bankası (1925) Sanayi Teşvik Yasası (1927) Gümrük Saptama Serbestisi (1929). Incentives: Land offer for the manufacturers Tax exemption No fee for communication, energy Reduced rates in transportation of goods State aid

65000 manufacturing firms 44% food 24% weaving 22% mining, machinery

Services Restructuring Nationalization of railways Railways were not effective tools for industrialization but was helpful in advancement of trade

Tablo III.3 Foreign Trade Data, (Current Prices, Million TL) Source:Bulutay,T.,Tezel,Y.S. ve Yıldırım N., age. Table 9.5 and 8.4A. ExportImport Deficit()/Surpl us() Export/Im port Export/Additive National Income Import/Additive National Income Foreign Trade Amount ,58,915,224, ,113,216,120, ,616,615,828, ,411,314,225, ,910,714, ,610,613,724, ,67,413,320, ,79,69,318, ,59,1918, ,88,67,315,9

Table:III.4. Foreign Trade Price Ratios, F s /F a (*) (a)IndexF s /F a (b)Index 19231,531000, ,681260, ,51130, ,11830, ,19890, ,2900, ,15860, ,96720, ,96720, ,76570,4557 (*) Fs=Export;Fa=Import Prices Index Source:Price Indexes a)Bulutay,T..,Tezel,Y.S. ve Yıldırım,N..,age. Table 52. b)Ministry of Commerce, Ministry of Commerce and 50 Years,s. 48 vd.(Average Price Per Ton)

FIGURE: III.l. Export Coverage Import Ratio and Foreign Trade Amount, Source:Table III

Tablo:III.5. Number of Students, (1000) İlkOrtaLiseMesleki TeknikYüksek ,95,91,26,52, ,410,12,27,13, ,811,62,76,83, ,615,63,16,33, ,43,27,73, ,623,24,28,53, ,125,44,78,23, ,327,15,79,14, ,630,36,99,24, ,436,17,975, ,242,39,67,75, ,443,89,88,26,6 Source: TUIK, Türkiye'de Toplumsal ve Ekonomik Gellişmenin 50 Yılı, Ankara 1973, s. 456 vd. and Ministry of Education Statistics (various numbers).

Tablo:III.6. National Income, (Current Prices,Million TL) Agriculture 379,3573, ,7608, ,2723,2632,4470,9 (39,8)(47,6)(48,6)(49)(41,4)(44,3)(51,9)(45,8)(45,5)(40,2) Industry 126,1118,8147,7166,3191,6188,8204,5180,2175,8165,2 (13,2)(9,9)(9,7)(10,1)(13)(11,6)(9,9)(11,4)(2,9)(14,1) Trade 73,984, ,5118,3119,8131,2162,995,584,8 (7,8)(7,1)(7,2)(7)(8)(7,3)(6,3)(6,5)(6,9)(7,2) Other Services 373,3276,8534, ,8599,9662,2574,2487,9470,2 (39,29)(35,4)(35,1)(33,2)(37,6)(36,8)(31,9)(36,3)(34,7)(38,5) Additive National Production 952,61 023,81 525,61 650,51 471,21 632,52 073,11 580,51 391,61 171,2 (100) Chain Index- 126,4186,7108,289, ,28884,2 Note:Numbers in paranthesis shows percentage shares Source:Bulutay,T. Tezel,Y.S. Yıldırım,N.age,Table:8.2A