Atatürk and State-Led Industrialisation

How the Republic of Turkey founded in 1923 under Mustafa Kemal Atatürk used state enterprises to industrialise, and how policy shifted to markets in the 1980s.

The Republic of Turkey was founded in 1923 under Mustafa Kemal Atatürk.

Statism

In the 1930s, Turkey adopted etatism (statism):

The state founded enterprises in textiles, sugar, steel and mining.
Five-year plans guided industry.
Aims: build industry quickly when private capital was scarce.

Import substitution

From the 1960s, Turkey pursued import substitution, protecting domestic industry with tariffs.

Crisis and change

Balance of payments crises in the late 1970s led to reforms.

Özal’s liberalisation

From 1980, under Turgut Özal, Turkey:

Shifted to export-led growth.
Liberalised trade and currency controls.
Encouraged private business.

Parallels with India

India also used state-led industrialisation after 1947 and liberalised in 1991, a decade after Turkey.

The state sugar factory

In the 1930s, the Turkish state built sugar factories across Anatolia to create jobs and reduce imports, when private investors wouldn't take the risk.

Thinking Turkey was always market-led

It began with state-led industrialisation before liberalising in the 1980s.

Key takeaways

Turkey was founded in 1923 under Atatürk.
The 1930s brought state-led industrialisation.
Import substitution followed from the 1960s.
Özal liberalised the economy from 1980.