Globalization and its Effects on Turkey, Bric, Balkan, East European Countries and the Different Strategies Pursued by the Emerging Markets

Abstract

This article intends to study globalization
particularly from the perspective of less developed countries
(LDCs) and newly industrializing countries (NICs).After World
War 2 (WW2), LDCs and NICs implemented a closed economy
model, import-substitute industrialization, interventionalism and
protectionalism. This was in line with most development
economists at the time who observed market imperfections,
increasing returns to scale and interdependence between sectors
in these countries. However, implementations in most went
overboard with excesses resulting in balance of payments crises,
high inflations and worsening of income distributions.This was
observed by many new breed development economies economists
in the ‘70s who advised New Classical Development Theory of
non-interventionalism. Since public opinion in many of these
countries had also arisen against closed economy, during the ‘70s
and ‘80s, they turned toward market economy, outward
orientation and export encouragement through flexible exchange
rates. In he ‘90s, the use of computers and open attitudes ushered
in globalization stage in which freer trade, direct private
investment flows are fully encouraged and in addition, free flow
of financial funds are allowed. 1997-98 Global Financial Crisis
which emanated in South East Asian Countries due to misuse of
financial funds received spread all over the world, including
Russia, Turkey, Argentina, etc. Hence there was a substantial
contraction in the flow of financial funds and direct private
investments. Starting from a lower level, in the ‘90s, globalization
nonetheless continued to expand till these days as an inevitable
and irreversible trend.The volume of international trade today,
direct private investments (DPI) and private financial funds
(PFF) going to LDCs, NICs and emerging markets definitely
prove that globalization has become widespread and
irretrievable. Accordingly, all these countries, rather than
denying or opposing globalization, seek to obtain maximum
benefit from the process. This requires choosing a “suitable
globalization strategy” that should be part and parcel of “good
(overall) governess”.