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”.Keywords: Globalization- Effects, Strategies, Emerging Markets, BRIC, Balkan, Turkey, Eastern Europe