In a new EDAM Discussion Paper published with the support of The German Marshall Fund of the United States (GMF), Murat Üçer examines what Turkey should do in order develop a right growth strategy with respect to the recent financial crisis. The Turkish economy did well in the past several years, thanks to the post-crisis cleanup of the banking sector, an exceptionally benign global environment and a pragmatic single-party government, sticking with the IMF-EU anchors.  But now the world economy is morphing into a more challenging state, which will probably entail slower growth and lower levels of cross-border financial flows, than the past several years.  Although Turkey weathered the global crisis relatively well, it will experience one of the steepest contractions among the emerging markets this year, despite the very expansionary fiscal and monetary policies that were put in place.  Going forward, this stimulus will have to be withdrawn and structural reforms accelerated, in order to move Turkey to a high and sustainable growth path.  But this is no trivial matter:  It calls for tighter thinking on our policy options, reform prioritization, political commitment, consensus-building, and passionate marketing.  Reinstating the IMF-EU anchors would be an important catalyst in this respect.

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