A partnership business is one of the most common forms to run a business today, with several hundred partnerships currently in existence. The most common alternatives are the sole trader and limited company. Looked at positively, the business partnership model enables you to go into business with someone else without the perceived formality of a limited company; less formal with fewer legal obligations; easy to get started; sharing the burden; access to knowledge skills, experience and contacts; better decision-making; easy access to profits; and more partners, more capital. From a less positive perspective, with a partnership business you are losing control of the direction of your business without putting adequate protection in place. The business has no independent legal status; unlimited liability; perceived lack of prestige; limited access to capital; and potential for differences and conflict.
was also part of the cause of the 2001 crisis. If the IMF had better acquainted itself with specifics of the countries to which it made loans instead of applying a standard model, a different program could have been applied and would likely not have precipitated another crisis (Öniş p. 12).
This program with its ‘no-sterilization’ requirement was meant to be mostly passive but it did allow short-term liquidity changes; so as of December 1999 there could be no changes in the domestic asset level of the monetary base, but fluctuations within 5 percent were allowed in the short-run, but domestic interest rates were still determined by the market, so the Central Bank had limited scope to act (Nas p. 89). Since Turkey’s liberalization had been a beleaguered and grudging process, the 1999 program for Disinflation and Fiscal Adjustment also stressed structural reforms “to make the fiscal adjustment sustainable, improve economic efficiency, and accelerate the privatization of SEEs [State Economic Enterprises]. That and an exchange-rate-based monetary policy that was an important aspect of the program were expected to lower interest rates and inflationary expectations,” (Nas, p. 90). As Eichengreen points out, “the removal of capital controls makes it harder to bottle up private financial transactions which apply pressure to the current constellation of exchange rates. This forces central banks today to undertake more extensive, more costly, and more difficult sterilization and intervention operations in order to maintain the status quo,” (Eichengreen, 2004 p. 6). But the principal crisis in 2000 was one of liquidity, and part of the stabilization program was a no-sterilization rule, which meant that only variations in the foreign exchange reserves could change the money supply (Nas p. 89). This no-sterilization rule that had been implemented in the post-1994 crisis reforms was meant to protect the economy from indiscipline and give credibility to the program, but, “The conditions engendered by this approach restricted the monetary autonomy of the Central Bank by forcing it to operate like a quasi-currency board, allowing the interest rate to be freely determined by the market while leaving the control of monetary policy in the hand of capital flows,” (Öniş p. 13). However, a currency board only issues currency that is backed fully by foreign assets, and fixed by law (Frankel, p. 18) which was not the case in Turkey, though it did lack monetary stability, due to its history of high, if not hyper-, inflation. Rather, Nas identifies the new exchange rate system as a crawling peg regime in which “exchange rate adjustments are declared in advance, and with a built-in feature of pre-announced exit strategy from the system of the exchange-rate policy.” (Nas p.89). In high inflation countries like Turkey, the peg ‘crawls’ through a series of regular mini-devaluations that have been announced ahead of time, and the ‘crawl’ rate is deliberately set lower than inflation, (Frankel p. 4).
2000-2001
