A COMPARISON OF THE IMPACTS BETWEEN TURKEY AND FIVE SELECTED DEVELOPING ECONOMIES DURING THE GLOBAL FINANCIAL CRISIS

Abstract

Purpose- We would like to examine the impacts of the global economic crisis on the Turkish economy and compare it with some other developing economies like Brazil, Russian Federation, India, China, and South Africa, namely the BRICS countries. We chose these countries because they are well-known developing countries in the world. Methodology- We compared the economic variables of unemployment rates, current deficit, GDP growth, and foreign direct investments for each country. Therefore, we obtained statistics from the World Bank and analyzed them. Findings- The banking and financial sector showed a similar trend in all countries. Developing countries did not take a direct hit to the banking sector because of robust regulations in the banking sector, relatively low toxic assets, and fiscal & monetary measures taken in developing countries. Consequently, country-specific factors played an essential role in some countries. Especially for South Africa, the FIFA World Cup held in 2010 was influential in offsetting the crisis’s adverse effects. Also, for the Russian Federation, Georgia’s occupation in 2008 led to the protest against Russian goods, and therefore demand for Russian goods decreased Conclusion- As a result, it is concluded that Turkey and the Russian Federation were directly hit by the crisis with substantial reductions in economic growth and unemployment rates. In China, India, Brazil, and South Africa, GDP growth and unemployment rates did not change greatly. Except for Turkey and the Russian Federation, other countries were not primarily affected by the global financial crisis. For the current account balance, there is a whole different scenario. Commodity and oil exporter countries like Russia were severely affected by decreasing oil prices in terms of the current account. Meanwhile, oil and commodity importer countries like Turkey were less damaged and had their lowest current account deficit in this era