INTRODUCTION TO GLOBALIZATION, THE HISTORY, THE THREATS AND OPPORTUNITIES OF GLOBALIZATION

SYNOPSIS

A study was conducted to asses economic changes with the globalization process. We gathered export & import, population growth rate, GDP growth rate, real Per capita income, income distribution, capital flows data to see the changes on the indicators of world economies. We used these data to compare selected regions and developed & developing countries. So, our main problem statement is How the globalization process affected developed and developing countries. We identified the problem like that, because this the general idea about the globalization process. Our main economic indicator is real per income to assess economic wealth. We used the population growth rate data. Because the data is related with real per capita income directly. Exports & Imports factors are related to GDP growth rate, the higher amount of foreign trade growths mean the higher GDP growth rate. And GDP data are used to calculate real Per capita income by dividing it to population.

We selected the developed countries which are most famous (USA, Germany, England, France, Japan...) and developing countries ( Turkey, Poland, Malaise, S. Korea. Thailand and so on...).It not possible to assess all countries economic data because of fatigues, time, difficulties to reach all countries economic data. Our sample has right countries because, they are effective countries on the international area.

Our study consist of 6 main headings. First we prepared introduction section about globalization, its history, weaknesses and opportunities. And than we examined regional economic integration. Because the integrations accelerated the globalization process. Third main heading is global integration. These integration mainly focus on agreements instead of regions. Then we compare the data of economic indicators. We tried to test our hypothesis. In fifth main heading we examined the effects of globalization process on Turkish economy. Finally we examined global financial crises in the world and turkey.

The study is important. Because the world focuses on economic broader rather than regional broader. The globalization is the most important catalyst. if we guess the new world map based on market economics, we must understand the globalization. And so, we could evaluate the turkeys chance on new world. We sought the model countries which have used the globalization process to increase their national wealth.

In our study we examined countries as an unit of analysis. Because we wanted to see the changes in world economies. Our study covered about 30 years. So, our time is not a point in time. Time horizon of our study can be defined as a longitudinal study.We used secondary data from government web sites and important financial institutions annual reports and their web sites, books about globalization and the some claims from important authors & people.

Our Theoritical Framework

Independent Variables

Dependent Variable

When we started to gather data firstly we identified the types of necessary data which are abstracts, full text and statistics data, for our study. And then we selected some books from libraries and statistics data from web-sites. Finally we wrote up and arranged these informations and data which are necessary for our study.

The purpose of our study is based on hypothesis. Our main hypothesis is the globalization process provided more benefits to developed countries than developing countries. the main hypothesis were supported with the following hypothesizes:

1. The greater the effects of globalization the greater the differences GDPs of developed and developing countries.

2. The greater the effects of globalization the greater the differences of Per capita income of developed countries and developing countries.

3. The greater the effects of globalization, the greater the differences of export of developed countries and developing countries.

4. The greater the effects of globalization the greater the differences of import of developed countries and developing countries.5. The greater the effects of globalization, the greater the inequality in the world countries.

We will test our hypothesizes and we will observe whether or not they support our main hypothesis. We will clarify the result in conclusion section.

THE EFFECTS OF GLOBALIZATION ON WORLD ECONOMIES

1.INTRODUCTION TO GLOBALIZATION, THE HISTORY, THE THREATS AND OPPORTUNITIES OF GLOBALIZATION

1.1What Is Globalization?

There are some change winds in these days. The most important of these change winds is globalization. Now, national cultures, economies and boundaries are disappearing slowly, politic pole were disappeared, liberal economy is popular, technology is growing up and social life is determined by globalization.

Technology and communication is growing up. Because of that countries were became close to each other.

Globalization became popular after 1980s. This concept has been named by Roland Robertson and he defines it the compression of the world. And this concept named a global village by McLuhan in 1960firstly.

There is not an absolute definition of globalization. Some authors focus on economic aspect of globalization, some of them focus on political, legal, cultural aspects of globalization in addition to economy.

Quatha look from economic perspective (1997) to globalization integration and this integration is caused from changes in trade, financial flows and technology. According to IMF in globalization product, service, international capital, technologic development flow increase. zeyir Garih defines globalization as Globalization is the process that focus on markets and production regions instead of country boundaries, and in this process information, capital, products and service disperse to all over the world with respect to specific rules. Also he adds that globalization is based on free market economy. This definition means that production should be in the most suitable area in both of service and products.

Some authors attract attentions to political and social - cultural dimensions together with economic dimensions. So, they consider the globalization with broad perspective. Because, in the process of globalization, democracy, superiority of law, to protect natural environment, terrorism and fighting with organized crimes, human rights, and liberalism are becoming a matter of primary importance.

William Greedier describes the globalization as a machine which destroy something and than it takes their responses. Also he says that in globalization process rich people become more rich and poor people become more poor. But this process cannot be controlled by anyone. The source of power of globalization is its own dynamics. Globalization restructures the world, works itself and it is the modern capitalism.

Some authors think that globalization has increased the dependence. Globalization is becoming the part of the world (Pr. Dr. Sleyman Hayri Bolay). Also he says that globalization states the increases in over the borders interactions and becoming intense.

The commission of 8. Five years development plan explain that globalization includes some common values which are accepted by world countries. In economic area, the economic systems of developed and developing countries are becoming familiar with time passes. Liberal economic systems are spreading fast with collapsing of Soviet Russia.

In all over the world the duties and functions of public economies are re-identifying. Governments are wanted to be limited and to be smaller, so, market economies can be more active. The ??? is becoming familiar and is gaining importance all over the world. Liberalism is supported not only in foreign trade but also in financial and monetary fields. According to this opinion government have to use tax, debt policy, monetary tools but government should not affect the open market by using them. Well, implemented economic policies in the world are becoming similar, so, there is a positive relationship between liberalism global economies. In politic field democracy is getting more values with globalization. Liberal economic system and the politics based on democracy are accepted. All over the world. The new trend which is called liberal democracy spreads fast.

As a result, globalization includes economic, politic, social and cultural dimensions. Globalization has made to increase capital activities, to become widespread the foreign trade, to conclude ideological polarized opinions, to become close countries thanks to technological development.

Humans are more important than borders

Havel (President of Czech Republic)

Effects of French revaluation started to decrease, now, borders, currencies, armies, flags have become less valuable. Well then, the human beings who use their minds instead of arm force have been important.

Of course globalization has both advantages and disadvantages as all deep reevaluations.

1.2.The Historical Development Of Globalization

It is hard to determine a specific time for when the globalization started. Some blame that it goes as old ages as manhood goes and the beginning it is with the efforts of man of civilization.

Some blame that beginning of globalization is the beginning of the modern age, some other blames that it is the 19th century years when globalization started. Another group shows the years after 1950's or 1970's for the term when globalization sprang out.

During historical time according to their sizes and range countries has passed several levels of globalization. It is possible to show EGYPT, Rome, and Helen as an example for that. But being different from these nowadays globalization is completely set on western values.

Capitalism, which forms the western economical base, comes up as an important factor for globalization. Between the years 1870 and 1914 when capitalism sprang out and developed economic relationships among countries increased.

Economical development term of globalization is not new. the times between 1870 and 1914 became a term when there was shown quick development in capital and free goods activity, telegraph technology was developed, international communication and transport became faster, easier and cheaper with the invention of steamship.

This different period of development in global economy was cut with the world war 2 and cold war; But with the coming down of soviet union the first alternative for the market capitalism disappeared. The share of exportation in world production has hit to its top just before the world war 1. World economies have reached this stage in 19701s

The explosion of world war 1 in 1914, the coming up of Great Depression in 1929, later the start of world war 2 have made the globalization slow down. Either with the effects of wars or the great depression countries have directed themselves to defensiveness in export and limitations on market activities have increased. Beyond these international market activities have also been effected from the limitations. And as a result of countries tries to save themselves from the effects of war and economical stagnation market activities have slowed down at important rates.

The coming into life of IMF, which was set up just after world war 2, world bank, GATT, OECD has made globalization gain speed. Besides in 1950s and 1960s global production and global trade has increased in both developed and developing countries.

1970's can be stated as a turning point in globalization. After the coming down of system of Bretten Woods in August 1971 fixed currency system was left and developed countries firstly USA, Germany, England, Japan-broke the limitations over market activities. The broke of the limitations over market activities has caused financial globalization gain an excellent speed. Besides; while some transnational firms from the American origin compassed

nearly the complete world production after 1970s other developed countries and Japan and some of the Latin American firms and in international markets they have become strong rivals of these countries firms. All these developments have caused an increase in volume of the world trade and the challenge between firms, and so have prepared a suitable position for the globalization of production.

The developing countries after the beginning of 1980s have also come into the adventure of liberalization. Later in many of the developing countries terms like specialization; market economy, financial freedom and integration with the world gained importance. All these developments have made developing countries come close to each other.

Globalization has come into a more clear situation in the years of 1980s with the coming down of old Eastern. Black countries in economy and politics in 1990s this term reached its top.

Again, with the limits of GATT Uruguay Round, which has the fame of being the greatest agreement in history in December 15 in 1993with the gathering of 117 countries, is one of the most important developments about economic globalization. Nihai senet which was signed in Morocco on April 15 in 1994 hasnt only supplied a freedom in world trade, it has also made if possible for the elimination of subventions in exportation, applications of anti damping, distractions of the technical handicaps in trade, the coming into reality of the rules like precautions of protection.

World Trade Organization, which was set to apply these results, is an important developments about economical globalization is many sided agreement of investment. According to this agreement, any of the firms working in international area can easily work in the country of the firm which applied the agreement as if it is a firm of that country.

As a conclusion: the globalization form that showed out a development period has come down between 1914 and 1945 and after world war 2 It has come into a period of coming up. This period gained speed in 1980s and reached the top in 1990s.

1.3.The Opportunities Of The Globalization

The integration that get bigger and bigger of the emerging countries contribute the rising of the economic property in the emerging and developed countries. The integration that is caused from the rising of the product service movements could be possible to make relationship with different geographic areas. The integration of the developing countries to the world market provide these countries to increase their competitive advantage. Globalization provides developing countries to reach new and wider markets and bigger capitals, and also to increase the ratio of exported and imported goods.

Globalization on the other side decreases transportation and communication costs, by this way it provides division of labor and specialists in production, and also increase productivity.

Increasing productivity provides developing countries to increase competitive advantage in international markets.(Qureshi, 1996; Brahmbhatt and Dadush, 1996). Globalization also provides to increase saving usage rates, by this way increase the productivity and provides consumers reach easily low price and high quality foreign product

The countries that achieves global trade , duo to this some industries related with export and import develops.

Globalization encourages activity and foreign resources in developing countries and also contribute developments. Foreign resources in developing countries provides the finance of investments.

Globalization of financial activities provides the better relations between the fund demander and fund supplier countries. In this case developing countries have a change to come into developed countries market. Due to this they have a change to do high profit, low risk investments.

As the production process becomes global in developed countries, industrial community concept changed knowledge community concept. Thus production industry loosed its attractiveness and banking insurance, finance industry become more important. The goop, which takes place in production industry in, met by developing countries. As a result in globalization process bath countries get benefits.

Globalization changed the world to a global village, radio, television, phone and Internet provides information transfer cheaper and faster.

Political ideas and trends, cultures start to be global rather than national. Security, environmental problems, terrorism, health problems, human rights start to related with international politics.

1.4.The Threats Of Globalization

Political and social- cultural integration between countries with the globalization decreased the power of national countries. National countries started to have problems about controlling economical policies, political tools and idea trends. Also national countries lost their main responsibilities like defense and economic management. These things are now under the control of IMF , world bank , WTO and NATO

Transactions that exceeds the boundary of national countries affects the countries power negatively. In globalization process multinational firms become more powerful to effect the economical and political decisions .

With the globalization, the industrial products ratio in the developing countries national income and export is increasing with regard to the globalization, its the hard to say that its providing to these countries to product technology. Those countries export technology depended structure an regular foreign payment capacity and being foreign shock are still important.

From the other sides west culture caused from the cultural globalization. In short ; western valves is dominated in the world. There are lot of different culture. The cultural globalization will be true how the regional cultures accept.

Globalization prepare the conditions to build sub village under the global village and make common market to minimize to Beal differences. People dont want to give up their local / national valves so these improvements help to make local blocks and create the global paradoxes.

When the globalization improve ; the unglobalization tendency will seem. Protectionism and localism are important behavior of unglobalinationium.

Most of the countries sustain the protectionism with some bureaucratic difficulties . after 1970s economic blockinizm (bloklama) or localism tendencies get more important. Economic integrations ( EU,NAFTA and APEL) are most important boundaries against the globalization.

Capital movements with globalization are improving and change the their way to the short date.

The changing face of the foreign capital cause negative economic behavior macroeconomic imbalances. Its the main responsible of the financial crisis. Mexico Crisis (94-95) ,Asia- Pacific Crisis (97-98) are the example of this financial crisis.

The reasons of crisis are not clear but capital movements are the source of the imbalances and the globalization make the problem worse.

In developed country , globalization cause the dense unemployment and un quality

Work force is the victim of the competition. Passing from industrial society to knowledge society change the work area from production sector to the service sector so the employment position change and the employer that is the member of labor union loose their employment opportunity

Globalization rise the unfair on the income distribution in the world. Specially; when the interval of the society level in the developed countries .

Is between the developed and emerging countries is rising. In addition to this some countries (Korea, Malaysia, Thailand) could catch the rise of the developed countries; some Asian countries (Indian, Bangladesh ) rising would be small.

Beside this ; it is claimed that globalization cause the imbalances of the income distribution. Technologic changing and trade are the important factors globalization these cause the imbalances on the income distribution.

The environment pollution and rising environment problems are the threats that cause from globalization. The rising competition and the world population create global environment problems.

2.REGIONAL ECONOMIC INTEGRATIONS

2.1.Regional Integrations Activities

World economies have not had stable growth after 1970. They have had low growth rate, high unemployment and unstable prices. So protection politics have been popular again. Eventually in some areas, globalization had continued, but in some areas regional integration action had speed up.

Globalization have speed up after multi-aspect production and developing relation of commercial and financial. This relation cause to the increasing relation of the countries which are in the same region. Actually this regional integration is a stage of globalization and free commercial & financial relations. But developed countries are introverted and implement protection policies when they have social and economic problems. When the number of blocks are increasing, relations in the blocks will be important. So inter-block relations will be at secondary importance. Regional integrations can benefit when they reinforce to the multi-aspect liberate and they generate to this trend.

Regional integrations may include economic, political, social and military integrations. Integrations actions will be more successful if countries share their political, social, economic, cultural values.

World is becoming globalization, but at the same time it is becoming zoning. Economic, political and technological relations have increased between the countries. IMF, WTO, WB, UN, MERCOSUR, APEC, EFTA, ASEA are being become zoning. Moreover power which effect to this organizations and future of the world is provided by groups which include strong countries. Some of these groups are G-7, G-10 and G 20. Most important of them is G-7 which includes the USA, Japan, Germany, England, France, Canada and Italy. These countries GDPs share is 60% in world countries GDP. And trade share is 52% in total world trade. Group members consult to each other, they discuss about different subjects and they can shape the future of world economies as growth rate, trade......

Regional economic integrations between countries are becoming very important in economic area. Regional trade blocks are in 3 different continent. In Europe continent EU and EFTA, in America continent NAFAT and MERCOSUR, in Asia continent ASEAN and APEC are the most important regional economic integrations.

2.1.1 European Union

EU is the oldest and most developed economic integration in the world. There are 15 members of EU today. These countries are Germany, France, Belgium, Holland, Luxembourg, Italy, England, Ireland, Denmark, Greece, Spain, Portugal, Austria, Sweden and Finland.

EU can produce all of the things which they need. In 1980 trade of EU countries to EU countries rate was 58,1%, in 1997, it was about 61%, in 1998 it was 62% and it was 63% in 1999.

On the other hand the rate of EU countries import from EU countries in total import was 55.9% in 1980 and was 65 in 1999. This shows EU is successful. After the becoming block trade between EU countries increased and import of EU from external world decreased.

TABLE 1: Trade Distribution Of EU (Billion $)PRIVATE

199719981999

Export of EU to EU1.3001.3571.378

Export of EU to External820844804

Total Export2.1202.2012.182

Export of EU to EU/Total Export (%)616263

Import of EU from EU1.2861.3601.381

Import of EU from External718744750

Total Import2.0042.1042.131

Import of EU from EU/Total Import (%)646565

After the 1980, EU export in total world export has been hilly. In 1999, EU trade decreased because of decreasing of increasing rate of GDP in EU. In 1997 EUs GDP increased about 2.5%. At the same way rate of EU GDP at world GDP was 22.9% but this rate was 21.9% in 1998

TABLE 2: The Level of Openness to External World of EU(Billion $)PRIVATE

19951996199719981999

World GDP33.57835.01436.51137.48638.805

EU GDP8.3128.5438.3128.5828.513

EU GDP/World GDP (%)24,824,422,822,921,9

Export of EU2.0612.1242.1202.2012.182

Import of EU1.9702.0152.0042.1042.131

EU Trade Volume/ EU GDP (%)48,548,549,650,250,7

EU Trade Volume/ World Trade Volume (%)39,338,637,139,438,0

Source: DT, Uluslararas Ticaret statistikleri, 2000; IMF;Uluslararas Finansal statistikler, 2001 The rate of EU total import at total world import was 38,1% in 1998 and 37% in 1999.

2.1.2.NAFTA

NAFTA is a free trade agreement which is made between USA, Canada and Mexico in 1994. If we look at NAFTA export after 1995, the rate of NAFTA export in total world export has increased regularly. In 1995, it was 16.8% and 19.3% in 1999. NAFTA import has increased like export and it was 19.7% in 1995 and 24.8% in 1999.

TABLE 3: NAFTA Export (Billion $)PRIVATE

1980199019951996199719981999

USA225,6393,6584,7625,1688,7682,1702,1

Canada67,7127,6192,2201,6214,4214,3238,5

Mexico15,627,179,596,0110,4117,5136,4

NAFTA Total308,9548,4856,5922,71.013,61.013,91.076,9

World Total Export1.920,83.379,15.103,65.319,85.504,65.417,35.587,0

Share of NAFTA (%)16,116,216,817,318,418,719,3

TABLE 4: NAFTA Import (Billion $)PRIVATE

1980199019951996199719981999

USA256,9516,9770,8822,0899,0944,351.059,4

Canada62,5123,2168,0174,9200,9206,0220,1

Mexico19,529,975,993,7114,9130,9148,6

NAFTA Total338,9670,21.014,81.090,71.214,71.281,41.428,3

Total World Import1.999,13.466,25.162,05.413,35.597,45.516,95.752,0

Share of NAFTA (%)17,019,319,720,121,723,224,8

Source: DT, Uluslararas Ticaret statistikleri, 2000; IMF;Uluslararas Finansal statistikler, 2001 The rate of trade between NAFTA countries in NAFAT export was 43%, 49%, 51%, and 54% in 19990, 1997, 1998, 1999 respectively. These rates show that NAFTA countries consider important of becoming blocked. After the 1997, export of NAFTA countries to out of NAFTA has decreased.

TABLE 5: Trade Distribution of NAFTA (Billion $)PRIVATE

1990199719981999

Export of NAFTA to NAFTA240495520579

Export of NAFTA to External322519495491

Total Export562101410141.070

Export of NAFTA to NAFTA/ Total Export (%)43495154

Source: DT, Uluslararas Ticaret statistikleri, 2000. In 1999 NAFTAs GDP increased about 4.9% and reached to 10.2 trillion. Rate of NAFTA GDP in total world GDP was 26,5 and it was more than EUs rate.

The rate of trade volume in GDP shows the independence to external world. And this rate is small for NAFTA, it was 23.4% and 24.3% in 1998 and 1999 respectively. This rate was 50.2% and 50.7% in 1998 and 1999 for EU

TABLE 6: The Level of Openness to External World of NAFTA(Billion $)PRIVATE

19951996199719981999

World GDP33.57835.01436.51137.48638.805

NAFTA GDP8.6148.9579.4069.81710.298

NAFTA GDP / World GDP (%)25,725,625,826,226,5

Export of NAFTA8569231.0141.0141.077

Import of NAFTA1.0151.0911.2151.2811.428

NAFTA Trade Vol./NAFTA GDP (%)21,722,523,723,424,3

NAFTA Trade Vol./World Trade Vol. (%)18,218,820,121,022,1

Source: DT, Uluslararas Ticaret statistikleri, 2000; IMF;Uluslararas Finansal statistikler, 20012.2.International Trade Activities

2.2.1World Trade

Globalization will be discussed about;

Some states activities and control in the economy and trade are disappeared

Multi-national firms are active, so international markets have existed.

In this market, there is not a boundary between people, products, services and capital.

Communications have increased fast.

Technology was used in production and marketing all over the world

Financial markets have become independent and hard extraordinary power.

Like EU, NAFTA and APEC regional integrations trade rate in total trade in the world have become 90 %

The rate of trade volume in world GDP average 20 %

30 % of the world population integrated to the world economy

most of the population live in developing countries

there are 3 different table below

at first table , distribution of export according to the region, second table shows world import and its distribution, third one is about world trade volume and turkey export and import

TABLE 7: Distribution of Export According to the Region (%)

PRIVATE

1948195319631973198319931999

World ( Billion $)58,083,0157,0578,01.835,03.639,05.473,0

Share of World100100100100100100100

North America27,524,619,417,215,416,817,1

Latin America12,310,57,04,75,84,45,4

West Europe Countries31,034,941,044,839,043,743,0

Central, East Europe, Baltk Countries 6,08,211,08,99,52,93,9

Africa7,46,55,74,84,42,52,0

Middle East2,12,13,34,56,83,43,1

Asia13,813,212,615,019,126,325,5

Japan0,41,53,56,48,010,07,7

China0,91,41,31,01,22,53,6

Australia, New Zealand3,73,22,42,11,41,51,3

Six East Asia Countries*3,02,62,43,45,89,710,0

Other Asia Countries5,84,53,12,12,72,63,0

TABLE 8: Distribution of the Import According to the Region (%)

PRIVATE

1948195319631973198319931999

World ( Billion $)66,084,0163,0589,01.880,03.752,05.729,0

Share of World100,0100,0100,0100,0100,0100,0100,0

North America19,819,715,516,717,819,822,3

Latin America10,69,36,85,14,55,25,8

West Europe Countries40,439,445,447,440,042,942,2

Central, East Europe, Baltk Countries 5,87,610,38,98,42,93,7

Africa7,67,05,54,04,62,62,3

Middle East1,72,02,32,86,33,22,6

Asia14,215,114,215,118,523,420,9

Japan1,02,94,16,56,76,45,4

China1,11,70,90,91,12,82,9

Australia, New Zealand2,62,42,31,61,41,51,5

Six East Asia Countries*3,03,43,13,76,19,98,5

Other Asia Countries6,54,73,82,33,12,82,7

Source: DTTABLE 9: World Trade Volume and Turkeys Share

PRIVATE

World Trade VolumeExport of TurkeyImport of TurkeyTurkey Export/ World Export(%)Turkey Import/ World Import(%)

194866,00,20,30,2980,417

195384,00,40,50,4710,634

1963163,00,40,70,2260,422

1964169,70,40,50,2420,317

1965184,70,50,60,2510,310

1966203,20,50,70,2410,353

1967212,40,50,70,2460,322

1968235,60,50,80,2110,324

1969268,20,50,80,2000,299

1970308,30,60,90,1910,307

1971343,20,71,20,1970,341

1972404,00,91,60,2190,387

1973589,01,32,10,2240,354

1974818,31,53,80,1870,462

1975849,71,44,70,1650,558

1976935,52,05,10,2100,548

19771.091,91,85,80,1610,531

19781.268,42,34,60,1800,363

19791.604,72,35,10,1410,316

19801.971,72,97,90,1480,401

19811.954,34,78,90,2410,457

19821.826,45,78,80,3150,484

19831.880,05,79,20,3050,491

19841.885,37,110,80,3780,571

19851.893,38,011,30,4200,599

19862.073,67,511,10,3600,536

19872.422,910,214,20,4210,584

19882.769,211,714,30,4210,518

19893.008,411,615,80,3860,525

19903.438,313,022,30,3770,649

19913.560,213,621,00,3820,591

19923.807,614,722,90,3870,601

19933.752,015,329,40,4090,784

19944.328,718,123,30,4180,538

19955.175,321,635,70,4180,690

19965.418,223,243,60,4290,805

19975.604,826,348,60,4690,866

19985.511,427,045,90,4890,833

19995.824,926,640,70,4560,699

If we look at the rate of turkey export in world trade volume, it was changeable from 1948 to 1990. After the 1990s it has been about 0,4 % and it was between 0,14-0,38 % at the other years. In 1979 and 1980, this rate was at the smallest level which is 0,14 %, was at the highest level which is 0,14 % in 1953 and 1998. In 1953, infrastructure investments had been started. And foreign capital entered to turkey and agriculture had been modernized. Like Et ve Balk Kurumu, a lot of production factory has been established. At the same time in the world, second globalization process had not been completed so they always were providing raw material

to find a market for products

to search for high population.

Increasing the efficiency at the capital

And 1998 is at the third globalization process. At this process

Multinational corporations become powerful and soviet unions block has collapsed so east European countries have been leader

2.3.CONCLUSION

61% of the world trade is belong to the regional integrations. The most important of them are EU, APEC and NAFTA. The most important reasons of existing these integrations are political competition & conflict and economic. For example one of the reason of setting up of MERCOSUR is to prevent weapon competition of Argentina and Brazil.

Regional integrations is a necessary step for globalization. And international harmony is necessary to earn profit from free trade. This harmony requires the concessions of the countries

Everybody says that free trade provided the world prosperity. But there is conflict on this prosperitys share. Because of regional integrations, block country groups has been existed. This reasons assisted to the globalization. Because make a decision with 100 independent countries is harder than make a decision with 5 blocks which include these 100 countries.

Regional integrations is not an alternative of globalization, it is the firs step and these two concepts are supplements of each other. If regional integrations include the less developed countries, globalization will be good for all of the countries

3-GLOBAL INTEGTEGRATION

3.1.The Dimensions Of Global Economic Integration & Global Economic Integration Index

The world economies have been introduced to the globalization process especially in recent 25 years. Cooperation opportunities have extended among developed, developing and less developed countries. Trade difficulties and problems have started to decrease because of new trade and tariffs regulations. Technologic transfers increased from developed countries to developing countries. International financial markets extended, labors transfers and foreign investment have increased. Global economic integration means that products , labors, capital activities and economic cooperations increase among world countries.

3.2.International Products Activities: international trade is the most important part of global economic integration. international trade volume can be calculated by export and import separately and/or together divided by GDP.

3.3.International Capital Activities: is the other part of global economic integration. It can be calculated by direct foreign investment and the volume of buying & selling common stock and bonds in other countries exchanges.

3.4.International Labor Activities: globalization is not current only for product and capital but also it is current for labors. Labors forces can transfer among countries more easily in world economies with globalization. However, some countries has high unemployment rates, this situation brings to problem for developed countries. So, developed countries may implement some restriction via visa and other precautions for free labor forces circulation

3.5.Global Economic Integration Index:The index can be measured by the rate of international trade volume to GDP, the direct foreign investment to GDP and the credibility position of the country. According to the index, Singapore, Mauritius Hong Kong, Thailand are the most successful countries between 1980-1995. The score of turkey is 1,87. This number can be accepted successful.

On the other hand, the less successful countries are Iraq, Peru, Colombia, Bulgaria, Russia, Saudi Arabia and Algeria. But, this index cannot asses the global integration wholly.

When we look at the regions, the most successful region is Asia. In east Asia Per capita real income increased by 8,2, Per capita export volume increased 14,1, direct foreign investment increased by 3,1 between 1991-1993. Also, south Asia is successful, too. Latin America has good performance especially in high export volume rate. Africa, the countries of center Asia and new developing European countries are the less successful countries. Despite of that in Africa many countries still follows closed economy strategies.

(global economic integration index in some countries between 1980-1995

TABLE -10: Global Economic Integration Indexes ( 1980-1995 )CountryGEE Value

Singapore 3.52

Mauritius 2.35

Hong Kong 2.29

Thailand 2.12

Portugal 1.89

TURKEY 1.87

Malaysia 1.80

Mexico 1.44

Holland 1.14

Philippines 0.99

Hungary 0.95

Indonesia 0.81

Taiwan 0.77

Costa Rica 0.73

South Korea 0.63

Colombia -0.54

Peru -0.95

Algeria -1.51

Iraq-1.68

Bulgaria -1.73

Nigeria -1.87

Russia-2.23

S.Arabia -3.40

Source : World Bank ; World Economic Prospects and Developing Economies, 1996.

Note: global economic integration index is the average of values of four main criterions. These are:

1. The changing of the rate of trade volume to GDP (from 1980-83 to1990-93)

2. The percentage changing of the rate of direct foreign investment to GDP (from 1983-85 to1993-1995)

3. The share of changing of manufacturing sector in the export. (from 1980-83 to1990-93)

4. The percentage changing in institutional investor creditability lists. (from 1983-85 to1993-1995)

3.6.International Trade Activities And Turkey

When we want to identify our position in the world compare to international trade activities, we can start to analyze the trend of world trade liberalism. We examine free trade theory and protection theory firstly. The internationalism and liberalism will be considered:

International competition drives businesses to work more effectively and efficiency. And then businesses can produce and cheaper more quality.

Free trade and competition;

Increase technological innovations and inventions

Helps to develop know-how

To eliminate faulty competition forming

Helps to transfer technology and skilled labor force.

Thanks to international labor forces and capital activities, free trade and competitions provides to develop national economy. New employment open thanks to foreign investments.

On the other hand protection defenders criticize to free trade.

Free trade and competition Can be caused that New established industries are left under no-protection and then national industries cannot develop and can be caused to increase shortages in importer countries foreign trade balance sheet.

To increase dependency to external world especially in developing countries.

Both defenders have rights in their opinions. The experiences of 20th century brings up that free trade is necessary for increasing in economic growth and wealth level. Nevertheless, in sectors, temporary protection is necessary in the beginning of economic development. Only, if the protection will be continual, nation economy can be affected negatively.

As a result, protection is an old opinion in global world. Countries must trade with external world, economic relations should be increased and they should be part of the world economies.

TABLE-11:Performance Level of Regions According to the Global Economic Integration

RegionGrowth of Per Capita Income1991-95Growth of Export1991-95Foreign Capital Investment/GDP 1993-95Other Private Capital Investment/

GDP1993-95

East Asia

South AsiaHigh Income LevelLatin America Middle East and North

Africa8.02.21.21.1-0.2-1.5

14.18.45.07.20.4- 1.6

3.10.30.61.10.40.9

2.51.20.42.00.30.1

Sonra tablo 5 6 7 8 9 ve altndaki yazl ksmlar 7. 8. 9. Sayfadaki

3.7.The Liberalism Trend In World Trades

Since year 1947 which is GATT signed and established, world trade have overcome a lot of restrictions. Tariffs rates decreased as time passed with trade agreements according to GATT. In 1947 tariffs rates were 40 percent, however in 1962 these rates decreased to nearly 15 percent. 36 % discount released for Tariff taxes in the end of Kennedy discussions. And then important success acquired to decrease tariffs taxes in the end of Uruguay the discussion and according to the discussion final document was signed in 15 April 1994 and world Trade Organization (WTO) was established instead of GATT. We will analyze that what is the level of liberalism on foreign trade activities in some world countries.FIGURE 1 : The Liberalism On World Trade After GATT

Table -12 : Tax Rate on International Trade(1995)

CountryTax Rate %(1995) CountryTax Rate %(1995)

Countries which applied high tax

Rwanda

PakistanIndiaDominic RepublicBelizeMoroccoBotswanaTunisiaRussiaMadagascarZimbabweSierra LeoneCameroonJordanPolandGhanaMauritiusPhilippinesZaireNicaraguaNepalTurkey14,6313,6212,7012,2110,859,919,879,548,808,498,107,747,716,546,386,326,266,176,055,855,293,97Countries which apply low tax rate

TurkeySwitzerlandIndonesiaMalaysiaTaiwanSouth KoreaAustraliaJapanMexicoIrelandBahrainPanamaNew ZealandChinaUSACzech Republic

UnmanLatviaLithuaniaCanadaIcelandAustriaFinlandSwedenEstoniaNorwayHong KongIsraelSingaporeGreeceDenmark

SpainItalyPortugalGermanyBelgiumHolland3,972,292,212,081,971,961,941,601,521,501,461,391,371,201,181,131,070,880,740,720,670,610,460,430,380,320,300,240,110,050,030,030,010,010,000,000,00

Source : Fraser Institute , Economic Freedom of The World,1997.

When we look at the table, almost all developed countries implement very low tax rate on the total of export and imports. These rates are below the 2 % in developed countries.

Some countries which appropriate protection strategy and implement high tax rate on foreign trade, are Botswana, Russia, Tunisia, Zimbabwe, Morocco, Madagascar, Cameroon, sierra Leone, Zaire, Ghana and Jordan. Their tax rates on foreign trades are between 5-10 %

In turkey, this rate was 3,97 in 1995. Tax rate on foreign trades are not high in turkey generally.

Up to this point we talked about tax rates on foreign trade. But, foreign trade restrictions are not only tax rates (tariffs) but also they includes other restrictions similar to tariffs. Sometimes, the other restrictions can be more effective than tariffs.

According to World Bank investigation, when w look at the tariffs and other restrictions (quantity restrictions) the countries which follow the liberalism politics are Hong Kong, Singapore, USA, Belgium, Denmark, France, Germany, Spain, England, Ireland, Italy, Japan, Holland, new Zealand, Norway and Portugal respectively. The countries which follow restrictions politics are India, Pakistan, Bangladesh, china Egypt, Ethiopia, Iran, Kenya, Tanzania.

In Turkey the calculated tariff rate is 9,5 %. However, other restrictions is 96,4 % between 1990-1993. so we can say according to these results, our country follows hidden restrictions politics.

3.8.The Turkeys Position With Respect To Foreign Trade Volume In The World

Now, we will analyze the countries with respect to foreign trade volume.

In 1995, the most successful countries are Hong Kong, malaise, Estonia, Jordan, Lesotho, Angola, Kong, Uzhbekistan and republic of Slovakia. For example, in 1995 in Hong Kong the rate of the total export and imports to GDP is 297 %. The rate is 197 % in Malaysia

TABLE-13: Countries which apply the Protection Politics

Average Tariffs Rate % (*)(1990-1993)Other Barriers% (**) (1990-1993)

Hong KongSingaporeUSABelgiumDenmarkFranceGermanySpain

England

IrelandItalyJapanHollandNew ZealandNorwayPortugal0,00,55,96,76,76,76,76,76,76,76,76,36,78,55,76,70,52,74,313,4

13,413,413,413,413,413,413,43,913,40,05,413,4

IndiaPakistanBangladeshChinaEgyptEtyopyaIranKenyaNigeriaRwandaTanzaniaTurkeyZaireZimbabweMalawiEcuador56,351,084,136,328,328,820,735,134,334,819,59,5---12,362,614,5-11,345,222,599,337,88,8-79,796,410010091,363,6

Source: World Bank, World Development Indicator, s.253-255den yararlanlarak tarafmzdan oluturulmutur.

3.9.Foreign Capital Investment And Turkey

One of the dimensions of global economies integration is direct foreign capital investment

if we evaluate the positions of countries according to the direct foreign capital investment, we can find arrangement

Angola ,Hungary, Papua new Gina, Vietnam, Malaysia. Check republic ,Trinidad Tobago and Estonia. At these countries rate of foreign investment in GDP is more than 5 % .

in turkey this rate was less than 1 % in 1995. According to the World Banks data the countries which have the lowest rate are Sierra Leone, Ethiopia, Rwanda, Syria and El Salvador

we can see the countries which gathered the highest amount foreign investment in table 11. According to the table private capital flowed mostly in china , Brazil , Mexico Indonesia Malaysia, Thailand, Hungary check republic Poland and Philippines in 1995. 45 $ billion private capital entered the china in a year. At second there is brazil. 20 $ billion private capital entered the brazil in 1995. At the sane year $2 billion private capital entered the turkey. Private capital is not direct foreign capital investment.

Private capital = credits which are provided by private and public sectors to foreign country + direct foreign capital investment + portfolio investment

TABLE 14-Most Successful Countries According To The Direct Foreign Capital Investment countries which are made private capital in 1995CountryDirect foreign Capital/GDP (1995)

Angola

HungaryPapua New GhanaVietnamMalaysia

Czech Republic Trinidad and TobagoEstonia

TanzaniaCosta RicaJamaicaNicaraguaGhanaPeruPolandTURKEYGuatemalaIndiaKenyaEl SalvadorSyriaRwandaEtiyopyaSierra Leone10,710,39,26,96,85,75,65,04,24,33,83,73,63,33,10,50,50,40,40,40,40,10,10,1

Source : World Bank, World Development Indicators , 1997. s. 232-235.

Tablo-15: Private Capital Flowing in 1995CountryNet Private Capital Flowing

China

BrazilMexicoMalaysiaIndonesiaThailandHungaryCzech RepublicPolandPhilippines44.33919.09713.06811.92411.6489.1437.8415.5965.0584.605

TURKEY2.000

If we look at according to the regions, private capital flow was about $ 109 billion. At the second, there is Latin America regions. In 1996 private capital flowed about 4 75 billion to this region private capital flowed middle east, north America, south Asia and south Africa regions minimum. All of 3 regions, private capital flowed about $ 30 billion.

In 1996, private capital flowed to the developing countries $ 250 billion all over the world. Private capital flowed to developing countries especially between 1990 and 1996, but foreign aid to these countries was decreased rapidly.

TABLE 16-Private Capital Flow Amount To Developing Countries According To The Regions (Billion $)Regions199019941996

East Asia

Latin AmericaEurope/ Middle EastSouth AfricaSouth AsiaNorth Africa19,312,59,50,32,20,671,053,617,25,28,55,8108,774,331,211,810,76,9

FIGURE 2- Private Capital Flow Amount To Developing Countries FIGURE 3- Foreign Support To The Developing Countries.4.THE COMPARING OF DEVELOPED AND DEVELOPING COUNTRIES

4.1.Population and population increasing rate:

The population increase rate was 0.37% for developed countries between 1980-1990. USA and Japan have the big shares with 0.9% and 0.6% growth rate respectively among developed countries. at the same time the average growth rate of developing countries is 1.81%.

TABLE 17 : Population and Population Growth Rate

Population

(Million)Population Growth Rate

19951980-901990-95

Germany820,10,6

Italy570,10,2

Greece110,50,6

Portugal100,10,1

Spain390,40,2

Turkey612,31,7

Poland390,70,3

Hungary10-0,3-0,3

Egypt582,52,0

Tunisia92,51,9

Morocco272,22,0

Sweden

90,30,6

USA2630,91,0

Mexico922,31,9

Brazil1592,01,5

Argentina

351,51,3

Japan1250,60,3

S. Korea451,20,9

Philippines692,42,2

Malaysia202,62,4

Thailand581,70,9

Source: Dnya Bankas, World Development Report 1992, 1993, 1997.

The population increasing rate of developed countries increased between 1990-1995 years. The essential reason of this increasing is population increasing in Germany when we look at the population increasing rate in developing countries, the rate followed decreasing trend. Average increasing rate receded to 1.4%.

When we examine the after 1980 Hungary is the unique country which has population decreasing.

4.2. GNP, GDP, Per Capita Income:Our First And Second Hypothesizes Are:

The greater the effects of globalization the greater the differences GDPs of developed and developing countries.

The greater the effects of globalization the greater the differences of Per capita income of developed countries and developing countries.

TABLE 18 : GDP Growth Rate

GDP Growth Rate

1980-901990-95

Germany2,2-

Italy2,41,0

Greece1,41,1

Portugal2,90,8

Spain3,21,1

Turkey5,33,2

Poland1,92,4

Hungary1,6-0,1

Egypt5,01,3

Tunisia3,33,9

Morocco4,21,2

Sweden

2,3-0,1

USA3,02,6

Mexico1,01,1

Brazil2,72,7

Argentina

-0,35,7

Japan4,01,0

S. Korea9,47,2

Philippines1,02,3

Malaysia5,28,7

Thailand7,68,4

Source: Dnya Bankas, World Development Report 1992, 1993, 1997At the same period, when we look at the economic growth rate, developing countries including Turkey have the higher rate than developed countries.

Excluding Latin America in the other two blocks, developing countries have good high growth rate between 1980-1990. Also, south east Asia countries growth rate jumped to high level. However the importance of the increasing in growth rate diminishes because of increasing in population. Because, the population increase rates of these countries are greater than developed countries population increasing rates

TABLE 19: Gross Domestic Product Growth Rates

INDICATOR Total real product

Per capita real product

PERIOD1990-20001995-20001999-20001990-20001995-20001999-2000

COUNTRY_GROUP

World2.73.03.91.21.72.6

Developed countries2.42.93.41.72.22.9

Developing countries4.83.95.63.02.34.0

Source: UnctadAt the examining of the data of World Bank for Per capita income, countries were separated in three groups. These are low, middle and high income groups. Also low income group separated two subgroups. These are middle-low and middle-high. In this research one of the countries are developing countries. Some of them take place in middle high group.

TABLO 20: Per Capita Income

Per Capita Income

19761995

Germany7,38027,510

Italy3,0519,020

Greece2,5908,210

Portugal1,6909,740

Spain2,92013,580

Turkey9902,780

Poland2,8602,790

Hungary2,2804,120

Egypt280790

Tunisia8401,820

Morocco5401,110

Sweden

8,67023,750

USA7,89026,980

Mexico1,0903,320

Brazil1,1403,640

Argentina

1,5508,030

Japan4,91039,640

S. Korea6709,700

Philippines4101,050

Malaysia8603,890

Thailand3802,740

Source: Dnya Bankas, World Development Report 1992, 1993, 1997.

We get interesting results when we look at the changing of developing countries Per capita income between 1976-1995 years. For example, in 1976, south east Asia countries had low Per capita income than Latin America countries, but in 1995 all of the south east Asia countries reached and passed the level of Per capita income in Latin America countries. on the other hand one of the EU members which are Portugal, Spain and Greece had quite increasing for Per capita income between 1976-1975

G-7 Countries

G-7 effects financial and commercial institutions with its very high economic power

TABLE 21: GDP of G-7(Billion $ )

19901999

USA5.5548.709

Germany 1.7202.081

France 1.1951.410

England9761.374

Italy1.0941.150

Japan2.9704.395

Canada573612

Total GDP of G-7s14.08119.731

Their Share In The World65,865,3

The decisions which are decided by the leaders of G-7, are very effective to manage the politics of international institutions like World Bank, IMF, OECD, DT and NATO. The sources of these affects are the economic powers of G-7. In 1999 7 countries produced 19,7 trillion $ GDP. The GDP is the 65% of the total world countries GDP. Also USA, France, England which are members of G-7, have the strategic importances on international relations and they are accepted by world countries.

G-20 COUNTRIES

TABLE 22: GDP of G-20 (Billion $)

19901999

USA5.5548.709

Germany1.7202.081

Argentina141282

Austria297390

Brazil465760

China355991

Indenosia114141

France1.1951.410

South Africa112131

South Korea253407

India323460

England9761.374

Italy1.0941.150

Japan2.9704.395

Canada573612

Mexico263475

Russia579375

Saudi Arabia105129

Turkey 151188

Total GDP of G-20s 16.14223.293

Their Share In The World75,577,1

Source: World Development Report, 2000/2001

In 1999, the total GDP of 19 countries forms the 77% of the total GDP with $23.3 trillion. Also, G-20 members have 59.93% share in total world population.

In 1990, the share of G-20s was 75,5% in total GDP of world countries, but in 1999 the share increased to 77.1%

TABLE 23- Value And Shares Of Exports And Imports

YEAR

1980

1990

1995

2000

2001

FLOW

ExportsImportsExportsImportsExportsImportsExportsImportsExportsImports

GROUP UNIT

WorldMillions of dollars2,031,2102,071,4163,483,0383,603,5335,126,5705,199,0776,338,1986,510,8066,112,0526,298,652

Percentage100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00

Developed countriesMillions of dollars1,296,8771,431,0122,490,7212,612,7533,518,9463,495,4024,058,5314,384,3683,919,2364,202,859

Percentage63.8569.0871.5172.5168.6467.2364.0367.3464.1266.73

Developing countriesMillions of dollars581,238490,599830,598814,0871,420,5561,507,6512,026,9301,892,3171,922,7061,835,647

Percentage28.6223.6823.8522.5927.7129.0031.9829.0631.4629.14

Countries in Eastern EuropeMillions of dollars153,096149,806161,718176,693187,068196,023252,737234,121270,110260,146

Source: Unctad

We used SPSS aplication to find the descriptive statistics after 1980

GDP growth rate Descriptive Statistics

NMinimumMaximumMeanStd. Deviation Developed 80-90

9-,304,002,34441,2310 Developed 90-95

9-,102,60,9375,8280 Developing 80-9013-,309,403,69232,7981

Developing 90-95

13-,108,703,69232,9082

As a result when we look at the growth rate of GDP, developing countries have the higher rate than developed countries. So, our first hypothesis was rejected. And also the share of G-7s in total GDP decreased with globalization process. So we can say that the difference between GDP of developed and developing countries is less than preceding period and globalization effects developing countries positively from GDP growth rate perspective.

Descriptive Statistics for Per capita income

NMinimumMaximumMeanStd. Deviation Developed in 19768305,008670,004544,37503138,8436 Developing in 197613280,002860,001068,4615762,8876 Developed in 199588210,0039640,0021053,750010572,7276 Developing in 199513790,009700,003521,53852630,3449

The importance of the increasing in growth rate of GDP diminishes because of increasing in population. Because, the population increase rates of developing countries are greater than developed countries population increasing rates. So, our second hypothesis was accepted.

4.3.EXPORTS & IMPORTS

Our Third And Fourth Hypothesizes Are:

The greater the effects of globalization, the greater the differences of export of developed countries and developing countries.

The greater the effects of globalization the greater the differences of import of developed countries and developing countries.Developed countries had the 63.8% share in total world exports with 1.3 trillion $ in 1980. They increased their exports by 100% between 1980 and 1990. In 1990 their exports is 71.51% share with $2.5 trillion in total exports. When we look at the year 1995, they have the 68.84% share in total with 3.5 trillion $. In 2001 they exported $ 4 trillions and its share was 64.12% in total. When we examine developed countries, import levels; in 1980 they had the share of 69% in total world imports with $1.4 trillion. Its share was 72.5% in 1990. Also, in 1995 their export volume was greater than their import level. In the same year their import amount was about 3,5 trillion $. In 2001 developed countries had the share of 67% in total import with 4.2 trillion. As a result generally imports level followed stable trend however exports level had changeable trend.

When we look at the developing countries export level; in 1980, they had the share of 28.6% in total exports. In 1990 this share decreased to 23.8% and their export amount was 830 billion. In 1995 the share of their exports increased to 28% in total with 1.5 trillion. Their share again increased and they exported 2 trillion in 2001

The imports levels of developing countries. In past two decades the import levels followed increasing trend. The share of them are 24%, 23%, 29% and 29.1% respectively in years 1980, 1990, 1995 and 2001. And their imports amounts are 0.5 trillion, 1.5 trillion and 1.8 trillion respectively.

TABLE 24: Outside Trade Indicators

Growth of Export

(Annul average)Growth of Import

(Annul average)

70-8080-9090-9570-8080-9090-95

World5,04,76,03,14,95,8

Germany5,04,62,22,84,92,9

Italy6,04,36,00,75,3-1,7

Greece10,95,111,93,25,812,8

Portugal1,212,20,51,09,82,4

Spain9,16,911,21,910,15,3

Sweden2,56,03,3-0,24,9-6,7

USA6,53,65,64,37,27,4

Japan9,05,00,40,46,54,0

Turkey4,312,08,85,711,311,2

Poland5,44,83,95,81,526,4

Hungary3,83,0-1,82,00,77,9

Egypt-2,6-0,2-1,07,8-0,7-2,9

Tunisia7,56,27,712,51,36,4

Morocco3,94,20,86,62,91,7

Mexico13,512,214,75,55,718,7

Brazil8,56,16,64,0-1,58,5

Argentina

7,13,1-1,02,3-8,645,8

S. Korea23,513,77,411,611,27,7

Philippines6,02,910,23,32,415,2

Malaysia4,811,517,83,76,015,7

Thailand10,314,321,65,012,112,7

Between years 1970-1995, then average growth rate of imports & exports of developed and developing countries are like these;

Between 1970-1980:

The average export growth rate of developed countries was 6%. But the same rate is 7.3% for developing countries. the average import growth rate of developed countries was 1.7% and for developing countries the rate was 5.8% in the same period.

Between 1990-1995

The average export growth rate of developed countries was 5% and the rate was 7.3% in developing countries. The same rate for import growth was 3.3% and 1.4% respectively for developed and developing countries.

TABLE 25-THE EXPORT & IMPORT Of G-7s MEMBERS

Export(Billion $)

Import (Billion $)

1980199019951999200019801990199519992000

USA2263945857027822575177711.0591.258

Germany 193410524543552188346464474500

France 116217285301298135234281291305

England110185242268280116223265318332

Italy78170234230235101182206217233

Japan130288443419479142235336311380

Canada6812819223827763123168220249

G-7 Total Export9211.7912.5052.7022.9031.0011.8612.4922.8903.257

World Total Export1.9213.3795.1045.5886.3581.9993.4665.1625.7406.662

Share of G-7 (%)47,953,049,148,445,750,153,748,350,448,9

Source: IMF, International Financial Statistics, Mart, 2001G-7s members have important share in world trade. In 2000 they had the share of 45.7% of export volume in total exports, their import share was 48.9% in total imports.

USA is the biggest country for export with amount of 782 billion in Germany and Spain followed USA with 552 billion and 479 billion respectively.

When we look at the biggest importer countries in G-/s are USA, Germany 380 billion $ respectively.

TABLE 26-The EXPORT & IMPORTS of G-20

Export(Billion $)

Import (Billion $)

19801990199519991980199019951999

USA2263945857022575177711.059

Germany193410524543188346464474

Argentina81221231142026

Austria2240535622426169

Brazil2031474825235452

China18621491952053129166

Indesonia2226454911224124

France116217285301135234281291

South Africa2624282720183127

South Korea18651251452270135120

India918313615243545

England110185242268116223265318

Italy78170234230101182206217

Japan130288443419142235336311

Canada6812819223863123168220

Mexico162780136193076149

Russia--8175--6140

Saudi Arabia10944505130242828

Turkey 31322278223641

G-20 Total Export1.1902.1533.2353.5691.2042.1933.1983.675

World total Export1.9213.3795.1045.5881.9993.4665.1625.740

Share of G-20 (%)62,063,763,463,960,263,361,964,0

Source: IMF, International Financial Statistics, 2001

The foreign trade volume of G-20, have the important share in world trade. The increasing in export growth of G-20 was 3% from 1998 to 1999.

Their imports was 3.7 trillion with the increasing rate of 5,6%. So they imported the share of 64% in total world imports.

Developed countries had the 63.8% share in total world exports in 1980 and the share was 64.12% in total. When we look at the developing countries export level; in 1980, they had the share of 28.6% in total exports and 31.4% in 2001. So the increase in the export share of developing countries is higher than developed countries.

Also average growth rate of export in developing countries is higher than developed countries after 1980 and our third hypothesis was rejected.When we examine developed countries import levels; in 1980 they had the share of 69% in total world imports and %67 in 2001. The import share of developing countries was 24% in 1980 and 29% in 2001.

The average import growth rate of developed countries was lower than developing countries after 1980. Our fourth hypothesis was accepted.Also shares of G-7s export and import in world total both decreased.4.4.Income DistributionOur Fifth Hypothesis Is :

The greater the effects of globalization, the greater the inequality in the world countries.

10% of the world population produce 70% of the products and services, and they take the 70% of the total world GDP. Half of the people work less than 2% for a day. Number of these people are 3 billion and their share in production is only about 6%. Although the countries and people are so close to each other because of globalization and technological development, income distortions are so far. According to the some people, globalization cause to the inequality. Poor people did not become more poor after the modern technology and economic liberalization. Nevertheless rich people became more rich.

According to the World Bank data, half of the world population consume less than $2 Per a day, and 20% of the world population consume less than $1. Number of the second group is the same as year 1987s number. But in 1987 rate of people in this group at total population was 24% and today it is 20%. Very poor people rate decreased from 27% to 15% in east Asia. Same rate decreased from 45% to 40% in south Asia, but same rate was stable between 46% and 47% in Sub-Saharan in Africa.

TABLE 27- People Who Live With Less Than $1 In A Day (Million)PRIVATE

198719901998

East Asia417,5452,4267,1

East Asia(except China)114,19253,7

East Europe and Middle East1,17,117,6

Latin America63,773,860,7

South Africa9,35,76

South Asia474,4495,1521,8

Sub-Saharan Africa217,2242,3301,6

Total1.183,201.276,401.174,90

Total except China879,8915,9961,4

Source: Dnya Bankas, Global Economic Prospects and the Developing Countries 2001The rate of the richest 20 countries income at the poorest 20 countries was 20 before40 years ago, and same rate is 40 in today. According to the some economics history professors this rate was about 5 in 1900 and about 2 in 1820.

According to the World Development Report, income inequality between the people had increased rapidly in 19th century and was the stable in 20th century. But at the second half of 20th century this rate increased.

According to the table 27, income inequality increased between 1970-1989. This is verified by Gini Coefficient. Countries which are the richest the 20% of the total world population rate of GDP at total GDP increased from 73.9% to 82.7% between 1970 and 1989

Countries which are the poorest the 20% of the total world population rate of GDP of total GDP decreased from 2.3% to 1.4%.

As a result this table show us the inequality of income had increased at the last period of 20th century.

Half of the world population consume less than $2 per a day, and 20% of the world population consume less than $1. According to the table , income inequality increased after 1970. So, our fifth hypothesis was accepted.5.MACROECONOMIC DEVELOPMENTS IN THE TURKISH ECONOMY BETWEEN 1980-2000 AND TURKEY IN THE WORLD ECONOMIES

5.1.Population

Turkey had the high population growth rate in both of 1980-1990 and 1990-1995 among middle population size countries. If we compare turkey with European counties, we see that Turkey the highest population increase rate. When we compare the Turkey with around of European countries, it is similar to North African countries.

5.2.Growth

The economy, which contracted in 1979 and 1980, entered the growth path from 1981 on. However, the average growth rates in the 1980s and the 1990s were below that of the 1970s and were more volatile. The average growth rate of GNP, which was 4.8 percent during the 1970s, declined to 4 percent during the last two decades. (Figure 4). since the beginning of the 1980s, the share of agriculture in GDP continued its downward trend steadily, while the share of industry, mainly manufacturing, displayed an upward trend.

FIGURE 4: Growth rates (annual percentage change)

Source: SIS, SPO (Central Bank of the Republic of Turkey)

The growth rate of Turkey boomed with the share of 5.3 % for GNP (Table-28) between 1980-1990. This rate is the highest rate after than S. Koreas and Thailands. However, Turkey did not continue to develop between 1990-1999. So Southeast Asia and Latin America countries passed to Turkey according to growth rates.

According to the classification of World Bank, Turkey takes part in middle-low income group. When we look at the per capita income of the countries are in Table -28 , the results are interesting. For example in 1976 per capita income of Southeast Asia countries were less than Turkey, however in 1995 they passed Turkey. In this period Turkey stayed behind the Southeast Asia and Latin America. So Turkey have loosed its position relatively, only Turkey has continued the position in front of North Africa countries. On the other hand, Portugal, Spain and Greece which are EU members stayed in front of Turkey both in 1976 and 1995 according to per capita income. But, the difference has increased quietly in 1995.

5.3.Balance of PaymentsWith the January 24th, 1980 Decisions the government accepted export-led growth strategy and sustained the external competitiveness of the Turkish economy through exchange rate policy and export subsidies. On the other hand, the 1980s witnessed a deliberate contraction in real wages, which aimed at producing an exportable surplus and enhancing export competitiveness through lower labor costs. These export-oriented policies succeeded in raising exports considerably.

As a result, exports raised from 2.9 billion US dollars in 1980 to 11.8 billion US dollars in 1989 in annual terms (Figure-5). The composition of exports has changed considerably within the same period: the share of industrial products in total exports rose from 36 percent to 78 percent. With the gradual liberalization of the import regime during the 1980s, imports started to increase, with a slower pace than exports, from 7.9 billion dollars in 1980 to 15.8 billion dollars in 1989.

FIGURE 5- Exports and Imports (percent of GNP)Aside from the foreign trade deficit, which averaged 4 percent of GNP in the 1980s, the invisible accounts played an all-important role in relaxing the current account balance. As an outcome of the policies favoring the tourism sector, steadily improving tourism revenues became a major source of foreign exchange earnings, despite high foreign debt interest payments. Along with the favorable developments in tourism, unrequited transfers were another income for Turkey, with an average slightly above 2 billion dollars each year during the 1980s. Therefore, current account deficit as a percentage of GNP showed a slight contraction compared to the 1970s and stood at 0.8 percent of GNP in the 1990s, while the trade deficit increased from 4 to 6.1 as percent of GNP, respectively.FIGURE 6 - Current Account and Trade Balances (percent of GNP)

Source: Central Bank

The most important problems of Turkeys economy are foreign trade deficit and increasing in deficit. After 1980 Turkey introduced to the process of liberalization in foreign trade and this strategy was caused to increases in import. But the increase was not based not on long-term precautions, so export increase in export slowed down in end of 1980s.

When we compare the Turkeys foreign trade indicators with the countries which are in Table-26, the results are interesting. For example, when the average export growth rate are compared to selected countries which are in Table-10, between 1980-1990, Turkey is went up to fifth position with its fast export growth rate.

According to export growth rates, Turkey was in seventh position between 1990-1995, so Turkey was not successful between 1990-1995 as much as 1980-1990.

The other comparing is according to average import growth rate. If a country wants to decrease foreign trade deficit, it must care to increase exports and to decrease imports. Among selected developing, Turkeys import growth rates are greater than its export growth rates both between 1980-1990 and between 1990-1995. That is one of the important reason for external payments in Turkey.

5.4.InflationTurkeys liberalization efforts coincided with the stabilization program aimed at halting the balance of payments crisis in the late 1970s and reducing the rate of inflation, which was above 100 percent in 1980. The stabilization program succeeded in reducing inflation rate in 1981 to around 34 percent. For the decade on the average, both the CPI and WPI increased by around 50 percent, twice as much as the preceding decade. The rate of inflation measured by the changes in the CPI jumped to a higher plateau above 65 percent in the 1990s (Figure-7). In 1994, the inflation rate rose to 106 percent due to the huge depreciation rate of the lira. After the crisis was overcome, the inflation rate fell to 89 percent, but moving on a higher plateau. To sum up, the reform attempts since 1980 in terms of reducing inflation in Turkey were not successful. The CPI, which was around 24 percent during the pre-reform period almost tripled and reached around 77 percent during the 1990s.

Figure-7: Inflation Rate (annual percentage change)Source: SIS (Central Bank)5.5.Income Distribution

One of the successes of the reforms was to increase the GNP Per capita, which was 1073 US dollars during the pre-reform period to 2810 dollars during the 1990s. Nevertheless, according to some studies, the distribution of income is worsened by poor performance thus impairing equitable development efforts of Turkey. Empirical studies on poverty are generally scarce in Turkey because the most recent data concerning size distribution of income are available only for 1987 and 1994. However studies about poverty and income distribution in Turkey generally indicate that there is a worsening of income distribution and increase in poverty during the 1977-1988 and the post-1994 periods. There are four main characteristics of this process.

i. Adverse changes in real wages/salaries, in pensions and in agricultural terms of trade;ii. Further widening of the gap between the wages of high and low paid segments of the urban working class;iii. The dual character of labor markets consisting of formal and informal segments,High interest rates generated trade-off with other income categories. A rising share of interest payments from the value added, crowds out the share of either net profits and wages or both. In addition to this, welfare-oriented public expenditures have also been crowded out because of continuing expansion of the public debt burden.

6.FINANCIAL CRISIS AND SPECULATION

Short term foreign capital flow and speculation are very important in financial crisis in countries and especially in Turkey.

6-1 Global Financial Crises In The World

A lot of financial crisis existed in the world. If we look at history, crisis exist after 19 months an other crisis existed.

If we look at crisis which existed after 1970, these are

December- 1973

England Banking Crisis

June- 1974

Herstat Crisis

August 1982

International Debt Crisis

December 1986

Bond Crisis

October 1987

Exchange Crises

1980

Saving and debt Crises in America.

But crisis which had global effect are Latin America Crisis in 1970 and 1980, Europe Exchange Rate Mechanism (ERM) crisis in 1992-1993, Latin America Crisis in 1994-1995, Asia Crisis, Russia Crisis, and Brazil Crisis. In turkey, similar crisis existed in 1978 and 1994.

6.1.1 Europe Exchange Rate Mechanism Crisis in 1992-1993 and Speculation

Danish gave rejection vote to the Maastricht Agreement in 1992 which includes European Monetary Union subjects. After this event, pressure increased on exchange rate in ERM. After that, Italy did speculative transaction on lire. After this speculation, speculator want towards to the English Sterile. The famous speculator George Soros had started to speculation. Soros noticed the devaluation risk of English Sterling and he took short position about 15 billion with short term credits. After the this attack, interest rate increased about 5% in a day in 16 September 1992.

6.1.2 Mexico Crisis And Speculation

Mexico which is a Latin America Country had a big crisis in December 1994. And its money lost value and they devaluated the money in 20 December 1994.

If we look at this crisis, the main reason was hot money which left from the country because of high exchange rate, high current payment shortage, decreasing in the private saving and political inconsistent. $72.5 billion private foreign capital entered the country between 1990-1993. No one guessed a crisis will be exist in 1994, in opposition to everybody guessed that more foreign capital will enter the country. Because American Congress accepted the entrance of Mexico into the NAFTA.

But, about at the end of year panic wind existed and exchange reserves decreased from $26 billion to $6 billion. After that a big devaluation had been made.

6.1.3. Asia Crisis and Speculation

the most important financial event existed in southeast Asia in recent years. And this crisis effected the all over the world economies. This crisis had started in February 1997. At the 2nd July Thailand devaluated the its money. After that it spread to the world. After this crisis, international monetary system problems existed and speculative capital activities became popular again. Because this crisis could not be guessed before

6.1.3.1 Foreign Capital Flow to South East Asia Countries

Region countries caused to foreign capital entrance with different politics. Especially China did this well, but South Korea, Indonesia, Thailand, Malaysia and Philippines which were most affected from the crisis, did not do this well. Most of the foreign capital was short-term debt. We can see the total capital flows to the Asia Countries which are affected by crisis in table 6.

If we look at table 6, total net private capital flow to Asia countries increased about 100% between 1994 and 1996. If we look at only portfolio investments it increased about 150%. If we look at the rate of foreign capital and credits at GDP, it is between 2.5% and 10% from 1996 to today. These data shows the foreign capital to Asia countries was a lot before crisis.

6.1.3.2 South East Asia Crises Speculation and its Results

investment became more popular than saving because of weak growth was continuing in Europe and Japan since 1900. A lot of private capital entered the new growing market by international investors who want to earn lot money without considering the risk. After that domestic financial assets price increased and financial markets increased with this speculation.

So we can say speculation was very important in south east Asia crisis. Prime minister of Malaysia, Mahattir Mohammed, accused the George Soros for that speculation and he said currency trading was immoral and it should be forbidden.

Speculators were the effective in this crisis with unstable conducts. If we look at Malaysia, Ringit, we can see beer and bull named founds sometimes. So foreign capital which had entered to these region cause to increase of value at this region countries money. But international capital problems is not limited in one area in global world. Today, markets, financial capitals are determined by gambling house capitalism rules in which there are a lot of speculative earning.

Firms which were in this region. Shares decreased rapidly after crisis. Indonesia cigarette firm Sampoernas a common stock value had been $6.75 before the crisis and it decreased rapidly to$0.2 after the crisis, and its registered capital had been $6 billion before the crisis and was $200 million after the crisis. Before the crisis 2300 rupee had been equal to the $1. Money lost value about 608%. So western firms acquired to Asian firms easily and cheaply. After the crisis total capital lost was $200 billion in Hong Kong, Indonesia, South Korea and Thailand in 1997. So these show that because of crisis as manipulation rather than speculation

6.1.4. Russia Crisis And Speculation

economic difficulties had started in Russia in 1997 firstly. And 17th August 1998, they devaluated the money and $1 had been 9.5 rubles. And they restricted capital flow, and announced moratoriums with 90 days. So an economic crisis existed in Russia. The Main reason of this crisis was short-term capital speculative conduct which was made by people who want to earn money in short-term.

Before the crisis, foreign capital had increased about 229% in Russia. At this period money had been flowed to the banks easily because of low interest rate, and banks gave credits with high interest rate. But all of these credits did not return because of petroleum and energy prices decreasing. 40% of the Russias exterior income is energy.

Financial dimensions were in the foreground in this crisis. After the 1998 a lot of banks went bankrupt. Their import decreased rapidly because of Russia increased the customs tariff. The famous speculator Soros gave low rating to Russia. After that crisis were blazed.

According to the Russia Central Bank President Sergey Dublin, the main reason of crisis is foreign speculators. Western stockbrokers who were the young and look for adventure, bought a lot of treasury bill rather than trade in may 1998, foreign investors had $20 billion treasury bill. And strong petroleum and metal producer waited for losing value of ruble to export their products and they conduct speculative. This is the an other important reason of crisis.

6.1.5 Brazil Crisis and Speculation

Brazil was the 9th according to the economy. Brazil inflation was 2700% in 1992. But it was between 1% and 3% in 1997. Their annual growth rate was 4%. They had successful privatization politics. But in 13 January 1999 crisis existed in Brazil. And this crisis suppressed to everyone.

We can see the speculation effects on Brazil crisis. Foreign capital flow became fact to this country before the crisis. But foreign capital entrance decreased a lot in 1998 and 1999, especially portfolio investments decreased about $18 billions at the crisis period.

Private capital flow which were made to the Latin America countries were affected by Russia crisis. Russia crisis cause to the international short-term capital withdraw from the developing countries. After the Russia crisis, Brazil lost $30 billion reserves and $1 billion foreign capital escaped from the country in a day. And Brazil reserves could not balance the markets and crisis existed.

6.2 Global Financial Crisis in Turkey and Speculation

There existed financial crisis in 1978, 1994, and 2001. In also Asia and Russia crisis effected to the Turkey very much. Crisis which existed before 1980 in Turkey were not global because of product market had not developed and exchange market and monetary product had not set up yet in Turkey. So we will talk about crisis after 1980 which are 1994, Asia, Russia and 2001 crisis.

6.2.1 1994 Financial Crisis and Results

The first global financial crisis in Turkey existed in 1994. In fact this crisis was a small copy of south east Asia crisis. The main reasons of this crisis is not only financial structure, also lameness in the real sector affected to that much.

6.2.1.1 Development of 1994 Crisis in Turkey and Speculation

Economic structure problems of Turkey cause to the high exchange demand in the starting of 1994. And exchange rate started to increase. $1 increased from 15000 TL to 22000 TL in 19 January. And government took measures in 5 April. After this judgement $1 increased to 42000 TL in a day. But then it fell again to 32000 TL

we can see the effect on international hot money on this crisis. Foreign capital which entered to the Turkey last ten years before crisis was $32 billions. $14 billions of them were current transaction. $7 billions of the other $18 billions were provided by central bank with credit. So we can say that $11 billions capital entered to the Turkey. One of the reasons 1994 crisis was speculative conducts. After the $11 billions entered the Turkey, Turkish money gained value and crisis existed.

6.2.2 Effects on Asia Crisis on Turkey Finance Market and Results

When crisis existed in Asia, Turkey was implementing the restricted economic politics. At this conditions hot money wanted to escape from Turkey. Affects of Asia crisis were felt in October 1997 in Turkey. Foreign capital exited about $313.2 million from Turkey common stock market in October. This continued to the end of the year. And in January 1998 foreign capital exited about $94,5 million because of Asia crisis wave. Foreign capital exited about $565 million in 4 months. Foreign capital which is about $400-500 million enter and exit to the IMKB. So this amount is not broad as thinking speculative conducts. So we can say Asia Crisis did not effect the Turkey financial markets very much. Asia Crisis especially effected to the real markets

6.2.3 Effects of Russia Crisis on Turkey Finance Markets

Russia crisis effected to the both of financial and real market very much. After this crisis, Turkeys export decreased from $2 billion to $1.3 billion rapidly. And export of suitcase trade decreased from $8.8 billion to $3.5 billions. And today trade to Russia is very very little.

After the Russia Crisis a lot of foreign capital exit from Turkish developing markets and this effected the capital flow badly. At the third period of 1998, $10.5 billions foreign capital exited. After that financial markets became smaller and real interest rates increased.

6.2.4 22 November 2000 and 21 February 2001 Crisis in Turkey and Short Term Capital Flow

In 22 November 2000 21 February 2001, two financial crisis existed in Turkey. The other names of these crisis are liquidity and exchange demand crisis. They are different from the other crisis. This crisis existed when Turkey was implementing the stable program. In both of the two crisis existed, national markets were affected very much, in also hot money exit from the turkey and after the crisis this exit was continuing. $7 billions foreign capital exit from Turkey between 22 November and 6 December. After this event, exchange demand increased, so exchange rates increased and liquidity demand and interest rates also increased

At 21 February crisis, $ 4.9 billion capital exit from the Turkey in a day and total $7.5 billion capital exit from the country. There was a high exchange demand so Istanbul Stock Exchange decreased rapidly and interest for a night increased 7500%

Of course one of the reasons of these crisis were economy politics fault. However because of short-term capital exit from Turkey, Istanbul Stock Exchange decreased, interest and exchange rates increased and these crisis became more intense.

CONCLUSION

As we said our hypothesizes, which support the our main hypothesis, are:

1. The greater the effects of globalization the greater the differences GDPs of developed and developing countries.

Developing countries have the higher rate than developed countries. So, our first hypothesis was rejected. So we can say that the difference between GDP of developed and developing countries is less than preceding period and globalization effects developing countries positively from GDP growth rate perspective.2. The greater the effects of globalization the greater the differences of Per capita income of developed countries and developing countries.

The population increase rates of developing countries are greater than developed countries population increasing rates. So, our second hypothesis was accepted

3. The greater the effects of globalization, the greater the differences of export of developed countries and developing countries.

Developed countries had the 63.8% share in total world exports in 1980 and the share was 64.12% in total. When we look at the developing countries export level; in 1980, they had the share of 28.6% in total exports and 31.4% in 2001. So the increase in the export share of developing countries is higher than developed countries. our third hypothesis was rejected.4. The greater the effects of globalization the greater the differences of import of developed countries and developing countries.When we examine developed countries import levels; in 1980 they had the share of 69% in total world imports and %67 in 2001. The import share of developing countries was 24% in 1980 and 29% in 2001. The average import growth rate of developed countries was lower than developing countries after 1980. Our fourth hypothesis was accepted.5. The greater the effects of globalization, the greater the inequality in the world countries.

Half of the world population consume less than $2 per a day, and 20% of the world population consume less than $1. According to the table , income inequality increased after 1970. So, our fifth hypothesis was accepted.In globalization process developing countries have greater growth rate than developed countries but also their population growth rate is greater than developed countries. so, their real growth rate is lower than developed countries. already essential indicator is relal growth rate. And export and growth rates are higher than developed countries. So, GDPs of developing countries were affected by this incresing positively. However, real income was not affected positively. And the inequality increased with globalization. We cannot say exactly globalization is useful for all human being. But some countries gained more benefits from globalization.Population

Foreign Trade (Export and Imports)

GDP

Per Capita Income