How we achieved a foreign trade surplus during the Atatürk era

In Turkey, foreign capital investments continued to exist until 1929 during the Atatürk era, particularly in infrastructure services such as electricity, telephone, and gas, as well as in the mining, construction, and transportation sectors. As of 1929, the value of domestic and foreign companies in Turkey was approximately 80 million TL in terms of paid-in capital, with shares split equally.

In his opening speeches to the Grand National Assembly of Turkey (TBMM) during the 1930-1938 period, Atatürk consistently emphasized that the government remained committed to a policy of "a balanced budget and maintaining the stability of the national currency."

The preference for entering into bilateral trade agreements, which applied the "principle of buying from those who buy from us" aimed at achieving balance in foreign trade, had significant effects on the economy of that period. First and foremost, since the "most-favored-nation clause" was not applied in bilateral trade agreements, it became possible to make agreements tailored to the content of existing foreign trade on a country-by-country basis and to act freely in determining quotas for goods to be imported from specific countries. On the other hand, in addition to most bilateral agreements, clearing agreements were also made for the payment of imported goods. In this context, clearing agreements were signed with Germany, France, Hungary, Switzerland, and Australia. Thus, exports and imports were carried out without foreign currency leaving the country, and consequently, a foreign exchange balance was achieved. The government sought to enter into bilateral agreements with all possible countries, thereby linking the increase in imports to an increase in exports, or the decrease in exports to a decrease in imports. One of the significant effects of the clearing practices was that it ensured the prices of Turkey's export products were determined independently of the global economic climate; as a result, countries were forced to purchase Turkish agricultural products due to the clearing balances they had to settle, and consequently, Turkey's exports, which consisted largely of agricultural products, were exported at prices above global market rates. Furthermore, thanks to the industrial goods imported in exchange for the increased agricultural exports through clearing practices, significant developments were also achieved in the field of industrialization.

In 1932, a Clearing Commission was established, and quota and clearing practices began to be implemented. Although fundamentally very similar to clearing practices, barter practices—which differ in terms of the institution mediating the payments—envisioned the import of one good in exchange for the export of another; while the application has changed today, it is also referred to as barter. The barter practice was carried out through accounts opened at the central banks of the two respective countries. In the operation of the practice, when a merchant from one country imported goods from Turkey, they paid the cost of the goods to their own country's central bank in their own national currency, or in Turkish Lira; if merchants in Turkey imported goods, the reverse occurred. Thus, the payment transactions for debts arising from trade between the two countries were carried out without removing foreign currency from the countries. Barter practices had an export-boosting effect, and there was no longer a need for foreign currency for imports.

Barter practices undertook a very critical task for Turkey and largely guided foreign trade. For example, in January 1939, Turkey's total foreign trade volume was 20,863,486 liras, with exports of 11,766,350 liras and imports of 9,909,956 liras. Within the scope of this trade, the share of trade conducted via the barter method was 81.4% in exports and 85.8% in imports.

Apart from these, efforts were also made to influence the consumption tendencies of consumers (the public) to encourage the use of Turkish goods, which can be defined as a psychological factor to prevent imports and increase national savings. In this sense, immediately following the onset of the 1929 Great Depression, the National Economy and Savings Association was established on 12/12/1929 under the chairmanship of TBMM Speaker Kazım Özalp. During the Atatürk era, our country's exports exceeded its imports, and it always ran a trade surplus. As a result, the country never experienced a balance of payments problem like the one today, and the balance of payments always showed a surplus. A small note for history.