IMF exempts Turkey from list of countries hit by external crisis post-2008

Published 20.04.2016 21:41

In its April World Economic Outlook, the International Monetary Fund (IMF) highlighted Turkey as an exceptional country that was not affected by the external crisis felt around the world between 2008 and 2015. This latest assessment gave credence to President Recep Tayyip Erdoğan's prediction in 2008 that "The crisis will bypass Turkey," the year of the onset of the global financial crisis.

The IMF listed the countries that experienced external crises chronologically in its latest economic outlook report, classifying them in the periods 1980-89, 1990-2007 and 2008-2015.

While Turkey, which experienced financial and trade liberalization in the 1980s, was not included on the list during the 1980s as a country hit by external crisis, between 1990 and 2007 when Turkey experienced a series of crises, including a major banking crisis in 2001, the IMF included the country among those affected by external economic shocks.

Although Turkey was included in the 2008-2015 period, the IMF put an endnote stating: "Turkey in 2008 is a special case. Because the disbursement of the preapproved final tranche under the ongoing IMF program at the time brought Turkey's IMF exposure to more than 200 percent of quota, the chapter's coding classifies it as a crisis event, even though Turkey's country risk was clearly dropping, and the country did not experience an external crisis." Thereby, Turkey was nominally included in the list due to the debt installments it had to pay to the IMF. With this statement, Turkey is exempted from the list of those countries that were actually affected by external shocks stemming from the 2008 global financial crisis.

Just after the world began reeling from the shock of the financial crisis, Erdoğan delivered a speech at the yearly inauguration ceremony of Dicle University in 2008, saying: "Hopefully, this global crisis will bypass us. I firmly believe that it will not hit us as it has affected other countries because we have not abdicated our fiscal discipline." These remarks were employed as a weapon by the opposition to criticize the government.

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