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Business Daily: What Turkey Did Next

18/05/2010

What Turkey Did Next

BBC World Service - Business Daily, What Turkey Did Next

Turkey faced economic disaster 10 years ago, so how has it turned itself around?

Turkey faced economic disaster 10 years ago, so how has it turned itself around?  

Plus just how awful is it for countries which don't pay their debts?  And the future for Indian agriculture.

Why isn't Turkey in the same parlous financial state as Greece? The two historic rivals share a 260 kilometre long border, but their economic fortunes are poles apart.
While Greece has triggered a crisis for the entire Eurozone, Turkey has relatively low levels of debt, healthy growth and a stable banking sector. The BBC's Jonathan Head reports from Istanbul.  

And as the crisis over Greece's debt continues to make headlines, you might assume that not being able to repay the money it owes to creditors in the global markets is the worst thing that can possibly happen to a country's finances. But is it really? To stave off what's called a default, various countries, not just Greece, have brought in austerity regimes which provoke public anger, when public sector jobs and pensions are slashed. Is it worth the price? Ugo Panizza is the chief of the debt and finance unit of UNCTAD, the United Nations Conference on Trade and Development.  He has published a paper looking at the past costs of Sovereign Default.  So what does happen to a country that fails to pay its debt? 

With all the worries about the gaping deficits and sluggish growth in so many rich countries, India's economy, by contrast, looks fit and healthy. Figures for the first quarter of this year show Indian industry growing by 13.5 per cent.  But the farming business in India is quite a different story. Last year, it actually shrank because of a drought. The government believes the answer lies with contract farming. The BBC's Mark Tully reports on feeling amongst farmers in Punjab.

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