Foreign borrowing, reasons and results: Turkey sample

Abstract

The first steps of the external indebtedness of the Republic of Turkey have been taken in the late years of the Ottoman with approximately 3 to 5 million liras as a start and advanced to the discouraging state of quarter trillion dollars in 1.5 centuries. External debt is evaluated as one of the mutual problems of many developing countries in the global world at the present day. 20% of the present day world population lives in the developed countries and the rest of the 80% lives in the developing countries. There is a very big difference in the distribution of income that falls per capita between these two classes and the developing countries struggle in the cycle of external indebtedness and dependence. The developing countries need sufficient savings to be able to make development investments. The countries in such circumstance refer to external borrowing with the reason of the internal borrowing made from domestic borrowing parties such as the banks, wealthy people and the financial institutions causing economical imbalances. In the scope of the article; the concept of the external debt is evaluated, the statistics and data are discussed and it is attempted to make solutions and suggestions orienting the subject.