The freedom of taking sides
Fatih Özatay, PhD
01 May 2012
Tight fiscal policy can as well be expansionary under certain circumstances. This was the case with Turkey after the 2001 crisis. In some other cases, however, the exact opposite applies. The fiscal policy could have been tighter in 2011, a year when even official statements complained about the high current account deficit. When general government budget balance is adjusted for positive or negative revenue and expenditure impacts stemming from economic cycles, the “structural budget balance” is derived. This enables you to identify whether and to what extent fiscal policy was tightened or loosened year-on-year. Such analysis reveals that structural budget balance of Turkey has deteriorated slightly in 2011 compared to 2010. The second problem about the fiscal policy relates to the quality
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What the hell have they been doing there for ten hours?
Güven Sak, PhD
01 May 2012
It is of significance that the constitution-making process started with the Constitution Platform Citizens’ Assemblies, the biggest event for deliberative democracy in Turkey. If hundreds of people who do not know or resemble each other spend ten hours in a meeting hall, don’t you wonder what they are doing in there? I think you should. I am talking about the Constitution Platform Citizens’ Assembly series, the last one of which was held in Istanbul. During the Istanbul Assembly, there were almost a thousand citizens in the hall. They discussed constitutional issues all day long. I believe that the new constitution-making process started in an unaccustomed manner in Turkey. In this country, there are some things to which we are accustomed and some others we are not. The former is what we w
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Higher interest rate, valuable lira
Fatih Özatay, PhD
28 April 2012
Funding cost will be determined by the changes about the exchange rate, and thus the international risk appetite. The Central Bank of Turkey (CBT) announced the second inflation report of 2012 with a press meeting. My impressions of the report and Governor Erdem Başçı’s presentation during the press meeting are as follows:
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Banking, but not saving
Güven Sak, PhD
28 April 2012
Turks don’t like to borrow from financial institutions, but do like the credit cards those institutions give out. They have bank accounts, but they don’t save. That’s Turks according to the recent results of the Global Financial Inclusion Index. I find the 2011 results for Turkey fascinating. I noted last week in this column that from the 1980s to 2010, domestic savings in Turkey went down from about 25% to 12%. That drastic decline requires an explanation. The question there is rather simple: “Why are Turks not saving?” Now the 2011 results of the Global Financial Inclusion Index bring us to the logical next question: Why are Turks prefer bank credit cards but not bank savings accounts?
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Turks love credit cards but hate saving
Ozan Acar
28 April 2012
Why do people save? So that they can consume more in the future. The day to go on a diet is always tomorrow, but we would never think of postponing a good plate of baklava. I guess this is in our nature as humans. Our emotional intelligence (the limbic system of our brain) makes it difficult for us to oppose the temptation of immediate consumption and resists the idea of saving[1]. Looking at the consumption and saving propensities in Turkey, I could not help but wonder whether the limbic system is obstructing things a little bit more for Turks. A new database by the World Bank supports this notion.
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Does Turkey need high-speed train service between Ankara and Istanbul?
Güven Sak, PhD
27 April 2012
Steps tailored to enhance the connection between Konya and Ankara are more important than those to connect Istanbul to Ankara. Is Turkey’s transportation priority high-speed passenger transportation? This is the first question. Is Turkey’s transportation priority high-speed passenger transportation between Istanbul and Ankara? This is the second one. And the answer to both of these questions is a big no. High-speed passenger transportation is not Turkey’s transportation priority. Neither is high-speed transportation between Istanbul and Ankara. Turkey’s priority is not about passengers. It is about the rapid delivery of goods. It is to connect east to west, not to connect Istanbul to Ankara. Then, what is the purpose of the high-speed passenger train project financed by the European Union
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Fighting against inflation back on the agenda?
Fatih Özatay, PhD
26 April 2012
The CBT started to tighten the monetary policy and prioritize anti-inflationary targets, which must be considered as steps in the right direction. By the time you are reading these lines, the Central Bank of Turkey (CBT) will have announced the second inflation report of the year. This report is of special importance given the current picture marked with high levels of CPI and a tight CBT monetary policy.
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Iran, sectarianism and proxy war
Nihat Ali Özcan, PhD
26 April 2012
The government continues its war of words with the Iraqi prime minister. Remarks exchanged between them have become stiffer, especially following the visit of the Sunni vice president of Iraq, Tariq al-Hashemi, to Turkey. Shiite Iranian Prime Minister al-Maliki has renewed his claim that Turkish Prime Minister Recep Tayyip Erdoğan is interfering in Iraq’s internal affairs.
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If you can’t teach them English, let them have iPads
24 April 2012
I learned German in a Turkish public school. I took elective courses for five years, starting in the seventh grade. Today all I can say in German is “Ich spreche Deutch nicht.” [1] Needless to say, my German skills did not open any doors. Thank God I accidentally learned English and had the chance to connect with the rest of the world. If my failure to learn German has taught me anything, it is that there is a large number of people in Turkey who think they can speak English (or say that they can on their CVs), but are no better at the language than I am at German.
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When the Russians did first climb the Everest?
Güven Sak, PhD
24 April 2012
When it comes to entrepreneurship, we belong to the school of “first succeed, then we'll talk.” The height of Mount Everest is 8,848 meters. Climbing Everest is a dream for every mountaineer. Until today, many have attempted to climb to the peak; some have succeeded and some have failed. Climbing to the peak of Everest is such a big deal that there are books and movies about it. Successful attempts to climb the mountain are celebrated and failed attempts are described. Except for one. No one talks about the failed Russian expedition of 1952. So, today let me share an observation on the entrepreneurship culture here and there. Here is the key question: why do Turkish people who have carried out successful R&D activities abroad rust when they return to Turkey? What is it that affects the
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