We are living the deepest and most far reaching crisis of the world history. The crisis is approaching our shores in full flood. Did you notice the emphasis: It has not arrived yet, it is to arrive. So, what shall be done in such an environment? What kind of an attitude shall be assumed in particular by the corporate sector? There exist a number of views with this respect starting with the importance of being innovative and ending with defining the opportunities created by the crisis in the right time. But one thing is obvious: it is crucial to make a move forward and act differently than the past. But, in our case, it is not so. In the process we are in, it is more important to avoid making a move. Let us state it clearly: It is time to get through the day without facing any trouble rather than making a move. Energy saving is the major issue of this period. It is wise to leave the old phenomena and avoid the "you do not say embarrassment".
As regards the question what the corporate sector shall do, it is important to define the period we are in first. Crisis period is composed of two different phases. First one is the transition phase which represents a period where yesterday has ended but tomorrow is not yet shaped. It is an interim period. After the transition phase, there comes the beginning phase. The future will be shaped during this beginning phase. The coalitions of the new period will be built during this second phase.
So, where are we now? It is obvious that the world is still in the very early stages of the transition phase. Recent discussions point out that this phase might extend from 2009 to 2010. At the end of last year, while saying "Forget 2009, head towards 2010", we where assuming that this transition phase might end in the first half of 2009. However, now we get to acknowledge something: The transition phase will not be completed even at the end of 2009. Transition phase will not be completed until the crisis affects Turkey and similar countries; the effect emerging from these developing countries jump to the banking sector and economies of developed countries; and thus all dimensions of the issue comes completely into light. In this context, the instability period that emerged in the Central and Eastern Europe implies another step towards the end of the transition phase.
So, first all dimensions of the issue will come completely into light and then the involved parties will agree on a coordinated action plan. The action plan referred to pertains to clearing the ruins of yesterday. From this perspective, it is necessary to note that the world has not come to that point yet. Therefore, if it is considered that the future decision making mechanisms and capital accumulation models will not be set during the transition phase, we will wait a long time.
Transition phase will end after the global coordination mechanism determining now the ruins of yesterday will be cleared is built. Then in the beginning phase, the principles on which the new period will lie will be critical. At this point, it is wise to highlight a point: The current transition phase will not proceed on the basis of the conceptual framework we are familiar with.
So, how this new period be different? First, in the distribution of international funds, private markets will be replaced by credits from one state to another. It is apparent that the decision making mechanism employed in a market-driven fund transfer period will be different than that employed in a period of public resource transfer.
Second, in the upcoming period, public sector driven fund distribution mechanisms seem to be important also in terms of fund distribution among domestic actors. How to distribute the foreign savings flowing in the country via transfers between states among private sector actors will be the most important challenge to be faced.
Third, protecting the domestic market will be a top priority. But it is not enough to employ a unilateral perspective and pursue the "no, we shall not be obsessed with protectionism" argument. Struggle with protectionism shall be carried out under a global-scale coordination mechanism. In the absence of such a mechanism, "we are against protectionism" argument does not make any sense. Fourth, corporate sector shall try to survive the day rather than getting prepared to make a move. Long term plans cannot be made in such periods. It is important to keep in mind that life is composed of short moments. The thing to be done in such periods is to focus on how to survive this moment with minimum loss. In this context, it will be wise to minimize movements as much as possible and avoid to waste energy. The thing that matters is to keep a keen eye on the discussions on the shape of the future and pay attention to enter the beginning period from the right spot.
Fifth, it is actually the government that will protect us during the transition and beginning phases. Then, we are in a period where the corporate sector has limited ability to maneuver while the government has a high ability to move. This shall be kept in mind. Basically, the decisions to be made by the public sector can preserve the current production capacity.
Today is different than yesterday. It appears that the beginning phase following the transition phase will as well be different. As a first step, everyone shall let go the "you do not say embarrassment". The more we purify the thinking framework from the embarrassment based on market economy dynamics, the better we will proceed. The more active the Turkish government in the transition period, the more active our future will be.
This commentary was published in Referans daily on 24.02.2009
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