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), 1923-1932(Current Prices, Million TL)

  General Budget(Resultant)

Deficit(-) Surplus(+)

Indirect Taxes Direct Taxes Budget Expenditure

Additive National

Income Ratio

Total Credits WPI1914=100

Income Expenditure

1923 111,3 105,9 5,4 90,6 8,1 11,1 -- 1278

1924 138,4 131,6 6,8 117,3 8,6 12,9 27,9 1 343

1925 170,7 202,3 -31,6 130,6 12,3 13,3 63,5 1413

1926 180,2 172,5 9,1 143 12,8 10,4 54,4 1.465

1927 201,6 199,1 2,1 157,4 15,1 13,5 95,2 1452

1928 223,7 200,8 22,9 172 15,6 12,3 105,1 1491

1929 224,2 212,8 11,4 179,4 15,3 10,3 129,1 1 513

1930 217,5 210,1 7,4 166,8 13,8 13,3 124,1 1 152

1931 185,5 207,5 -22 138,4 17,6 14,9 120 987

1932 214,4 212 2,4 132,4 34,4 18,1 123,3 848Source: 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 (1923 -1948), Table 8.4a ve 9. 10; Krediler: Akguc, Öztin, Cumhuriyet Dönemi'nde Bankacilik Alanında Gelişmeler, Ankara, 1971, ss. 69-

71.

Triple balance until the end of WWIIBalance in budgetStability in money supplyBalance 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.

1927 Census of Agriculture

TABLE: III.2. Credits of Ziraat Bank, 1923-1932 (Current Prices, 000 TL)

  Z.B.CreditsAnnual Increase(%)

Ratio of Z.B Credits to Total Credits

1923 8037 - -

1924 17040 112 61,1

1925 19937 17 31,4

1926 20492 2,8 37,7

1927 20376 -0,6 21,4

1928 26806 31,6 25,5

1929 27176 1,4 21,4

1930 35713 31,4 26,6

1931 34634 -3,1 28,9

1932 33629 -3,1 27,3

Source: Bulutay, T. Tezel, Y. S. Yildinm, N. National Income of Turkey 1923-1948, 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 firms44% food24% weaving22% 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, 1923-1932 (Current Prices, Million TL)

Source:Bulutay,T.,Tezel,Y.S. ve Yıldırım N., age. Table 9.5 and 8.4A.

Export Import

Deficit()/Surplus()

Export/Import

Export/Additive National Income

Import/Additive National Income

Foreign Trade Amount

1923 85 145 -60 58,5 8,9 15,2 24,1

1924 159 194 -60 82,1 13,2 16,1 20,3

1925 192 241 -49 79,6 16,6 15,8 28,4

1926 187 235 -48 79,4 11,3 14,2 25,5

1927 158 211 -53 74,9 10,7 14,3 25

1928 173 223 -50 77,6 10,6 13,7 24,3

1929 155 256 -101 60,6 7,4 13,3 20,7

1930 151 147 +4 102,7 9,6 9,3 18,9

1931 127 126 +1 100,5 9,1 9 18,1

1932 101 86 +15 117,8 8,6 7,3 15,9

Table:III.4. Foreign Trade Price Ratios,1923-1932    Fs/Fa

(*) (a) Index Fs/Fa (b) Index

1923 1,53 100 0,79 100

1924 1,68 126 0,91 115

1925 1,5 113 0,88 111

1926 1,11 83 0,63 80

1927 1,19 89 0,69 87

1928 1,2 90 0,86 109

1929 1,15 86 0,88 111

1930 0,96 72 0,85 108

1931 0,96 72 0,56 71

1932 0,76 57 0,45 57

(*) 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, 1923-1932

Source:Table III.3

1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933

Tablo:III.5. Number of Students ,1923-1934(1000)

  İlk Orta Lise Mesleki Teknik Yüksek

1923 341,9 5,9 1,2 6,5 2,9

1924 390,4 10,1 2,2 7,1 3,5

1925 406,8 11,6 2,7 6,8 3,9

1926 235,6 15,6 3,1 6,3 3,5

1927 462 19,4 3,2 7,7 3,9

1928 477,6 23,2 4,2 8,5 3,8

1929 469,1 25,4 4,7 8,2 3,6

1930 489,3 27,1 5,7 9,1 4,2

1931 523,6 30,3 6,9 9,2 4,7

1932 567,4 36,1 7,9 7 5,3

1933 591,2 42,3 9,6 7,7 5,9

1934 643,4 43,8 9,8 8,2 6,6

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, 1923-1932(Current Prices,Million TL)

1923 1924 1925 1926 1927 1928 1929 1930 1931 1932

Agriculture

379,3 573,3 733 820,7 608,5 724 1 075,2 723,2 632,4 470,9

(39,8) (47,6) (48,6) (49) (41,4) (44,3) (51,9) (45,8) (45,5) (40,2)

Industry

126,1 118,8 147,7 166,3 191,6 188,8 204,5 180,2 175,8 165,2

(13,2) (9,9) (9,7) (10,1) (13) (11,6) (9,9) (11,4) (2,9) (14,1)

Trade

73,9 84,9 110 115,5 118,3 119,8 131,2 162,9 95,5 84,8

(7,8) (7,1) (7,2) (7) (8) (7,3) (6,3) (6,5) (6,9) (7,2)

Other Services

373,3 276,8 534,9 548 552,8 599,9 662,2 574,2 487,9 470,2

(39,29) (35,4) (35,1) (33,2) (37,6) (36,8) (31,9) (36,3) (34,7) (38,5)

Additive National Production

952,6 1 023,8 1 525,6 1 650,5 1 471,2 1 632,5 2 073,1 1 580,5 1 391,6 1 171,2

(100) (100) (100) (100) (100) (100) (100) (100) (100) (100)

Chain Index - 126,4 186,7 108,2 89,1 111 127 76,2 88 84,2

Note:Numbers in paranthesis shows percentage sharesSource:Bulutay,T. Tezel,Y.S. Yıldırım,N.age,Table:8.2A