How Fragile Is Turkey: A Comparative Study on the Social Impacts of the Global Financial Crisis in Emerging Market Economies

The Global Financial Crisis of 2007- 2008 and its global repercussions hit the world economy leading to deteriorations in growth, inequality and poverty indicators. Despite the unconventionally strong state support to countervail the spillover effects associated with the global financial crisis, the pace of the progress towards the targeted Millennium Development Goals by 2015 has lost momentum in a number of countries. Since emerging market economies are expected to be more vulnerable to contagion given their dependency on international capital flows the paper examines the social impacts of the global financial crisis of 2007- 2008 in a number of emerging market countries and assesses the vulnerability of the Turkish economy in comparison with other fragile developing economies such as Mexico, Brazil, South Africa, India and Indonesia. It is concluded that although the initial effects of the Global Financial Crisis on the Turkish economy is not as pronounced as the effects observed in some of the other developing economies, Turkey has incurred large losses in terms of growth, employment and income distribution due to the spillover effects of the Global Financial Crisis.