Owing to the aforementioned reasons, many countries, including Turkey, has been able to be resilient beyond expectations, in the face of the crisis. However, it was undoubtedly impossible to fully avoid the adverse effects of the crisis. In fact, an analysis of quarterly growth rates of world economies suggests that almost half of the economies contracted in the final quarter of 2008, and more than 90 percent in the first half of 2009. The first half of 2008 became a period where problems driven by the crisis were ignored by the markets. Nevertheless, despite certain monetary policy measures that were taken, the global crisis entered the second stage, where the feeling of “denial and rejection” was replaced by “disappointment” and “anger” due to the growing frequency of problems emerging across financial markets. In this period, money markets were almost at a standstill due to the deterioration of risk perceptions, banks were faced with liquidity problems, asset prices experienced slumps, non-performing loans increased, balance sheets incurred losses that led to serious damage to the health of banking system, numerous banks and investment agencies came under strain and even went bankrupt – all of which describe the main characteristics of the second stage. Especially the rescue packages that were inevitably implemented by governments to prevent the collapse of the financial system in developed countries gave way to serious public anger directed towards banks and investment agencies.
First, we must give credit where credit is due: the capital provided by global markets has been a key factor in Southeast Asia’s exceptional growth rates and its ability to lift so many out of poverty. Certainly, there are risks in tapping global markets to which no country is immune. At times, markets can be slow to react to changes in economic conditions and then react sharply; and in some instances, herd instinct seems to prevail. But let us not forget that markets also provide tremendous opportunities to accelerate growth and development, as Southeast Asia itself so vividly shows. Thus, the lesson to be drawn from recent developments is not about the risks of global markets, but rather about the importance of approaching markets in a responsible manner -- with strong macroeconomic fundamentals and sound structural policies that give markets confidence and therefore encourage long-term investment; with respect for the signals that markets provide; and with transparent and market-friendly policies that allow markets to allocate resources efficiently. IV. Perspectives for stronger regional cooperation Spillover and contagion effects can be so rapid, so costly, to countries with basically sound policies, that every country has an obligation to keep its own house in order. No country should run the risk of becoming the tinder for a wider conflagration. At the same time, there is also much that can be done on a regional and multilateral basis to bolster the efforts of individual countries seeking to manage their economies well.