This paper concludes that the deep transformations caused by the Covid-19 crisis provide developing countries like Turkey with more space and flexibility for policymaking. This enables Turkey to take bold steps in realising its ambitions.

M. Metin Başbay 22 June 2020

This paper introduces the recent history of the Turkish economy, and explains the main dynamics that led to high-income growth since the early 2000s. Secondly, it describes the nature of change in the government’s approach to the economy and explains why government interventionism, including trade regulations, is required for changing the sectoral composition of production towards more sophisticated, high-value-added industries. Finally, it reflects on how trade regulations should be applied and the missteps that should be avoided on the ground. This paper concludes that the deep transformations caused by the Covid-19 crisis provide developing countries like Turkey with more space and flexibility for policymaking. This enables Turkey to take bold steps in realising its ambitions. Overall, this is a positive development, but it should be well-designed to reap the maximum benefits.

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