The Effects Of The 2008 Global Crisis To The Southern Caucasian Countries

The mountains which are called as the “Caucasus” that are located in the northeast of Turkey between the Black Sea and the Caspian Sea and stretches from Taman Peninsula to Apşeron Peninsula gives their name to the land that is also called the Caucasus Region. With its different language, religion, ethnic groups and cultural structures the Caucasian Region shows a mixture structure although it is a whole land between the Black Sea and the Caspian Sea from the geographic and strategic point of views. Today, this region is divided into two sub-regions such as the Northern and the Southern Caucasus especially because of its historical and political pasts. The Northern Caucasus now belongs to Russian Federation. The tree countries consisting of Armenia, Azerbaijan, Georgia are included in the Southern Caucasus and they won their sovereignty in a period which was called as “globalization” after the collapse of the Soviets Union in 1991. Today, the Southern Caucasus is the entrance gate to Central Asia, migration route of the old Silk Road, an important corridor of energy and transmission lines in one hand and also it is both a potential ethnic challenge geography and a source of cultural welfare with its multi lingual, religious, ethnic structure in the other hand. As in the other countries around the world, banking systems in the South Caucasian economies, comprised of Armenia, Azerbaijan, Georgia were adversely affected by the 2008 global crisis; A common challenge across most economies is to revive private-sector credit growth. Compared with the high increases of 80 percent in the period immediately prior to the crisis, credit growth has slowed sharply and even turned negative in real terms in a number of economies. Governments in many countries have taken measures to address banking sector stress. The measures for restoring credit growth and thus a high economic growth will be discussed in a part of our work. In the short run, such measures include aiding banks to repair balance sheets and also providing liquidity. In the medium term, measures should promote to decrease the use of US dollar and the development of local debt markets.