Istanbul / Foreign Influence and the Capitalist Shift

Post the World War II, Turkey had quite a challenging time as the country’s economy was badly affected by the war. Firstly, due to the Soviet pressure and territorial claims on the control of the Straits and the north-eastern border towns of Kars and Ardahan. Secondly, with the economic devastation of Germany, Turkey got impacted as Germany was its major trade partner. Faced with this crisis, Turkey chose to align with the United States and Western Europe.

The alignment of Turkey with US helped Turkey to rebuild itself as it received abundant aid from the United States known as “Marshal Aid” for the economic revival and infrastructure modernization. The aid helped in upgradation of technical expertise and the availability of financial needs. In addition, the American technical and economic help sped up the construction of all-weather roads, which increased accessibility, and the progress of especially the machinery industry. With all this, there was an accelerated internal migration pattern observed. The “Marshall Aid’’ helped in the introduction of farm machinery and technological methods for modernization of agriculture. The era of 1945-1960 was marked with Turkey’s total dependence on the West. Therefore, the transition from the period of etatism to a more Western-influenced economy model was initiated with respect to global changes.

The flow of resources available for investment whether directly or indirectly increased, however in the 1950s, the income distribution gap widened as the share of the wage-earners in the agriculture fell by 7 percent and for the employees working in state enterprises by 22 percent1. This caused the widening income inequality which led to people migrating from rural to urban areas which later on was the starting point of the formation of modern Turkey (Refer to Table 1).  Istanbul, due to its strategic location benefitted and a lot of development took place which included the building of wide road networks connecting Istanbul to rural areas and modernization of its urban landscape.

Table 1 : Urban and Rural Population Growth of Turkey (in thousands) Source: Central Office of Statistics, General Population Censuses for the Given Periods. Referred in: Yurt Ansiklopedisi [Encylopedia of the Country], 1984 ed., s.v., “Yerleşme Düzeni ve Kentleşme [in English: Planning and Urbanization]: Nüfusun Kır-Kent Birleşimi [in English: The Population’s Rural-Urban Combination].”


[1] Eastham, p. 132-133


  1. Akdogan, Gizem., Marwan. Ghandour, Claire. Cardinal-Pett, Hsain. Ilahiane, and Iowa State University. Architecture. Dealing with Rapid Development [electronic Resource]: Creation of the Informal Urban Economy and Gecekondu Housing in Istanbul.
  2. Eastham, J. K. “The Turkish Development Plan: The First Five Years,” The Economic Journal, vol. 74, no.293, (March, 1964): 132-136.
  3. Yalcintan, Murat Cemal, and Adem Erdem Erbas. “Impacts of “Gecekondu” on the Electoral Geography of Istanbul.” International Labor and Working-Class History 64 (2003). doi:10.1017/s0147547903000218.


1 Comment on “Istanbul / Foreign Influence and the Capitalist Shift

  1. It is interesting to know how Turkey relied on other Capitalist countries to have resources and skills to initiate its market and economy.
    However, as you mentioned, there are other negative issues appeared
    such as widening income inequality which led to people migrating from rural to urban areas. Thus, providing comparisons between the positive and negative side of various policies can make a stronger argument — whether the capitalist way is the most effective method to boost its economy.
    In my knowledge, Istanbul has many resources to develop its economies, such as deep cultural value for tourism, geographical advantages for trade and rich natural resources for sale. Therefore, I would like to know your opinion whether Istanbul should rely on the US or develop the economy like Singapore selling government land and cooperating with private sectors to gain revenue.

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