This is not it
Güven Sak, PhD
25 February 2012
The new education reform bill is not in line with the objective function of this government. An education reform bill is in Parliament. Or perhaps I should say the “so-called” education reform bill, as it has been termed in the jargon of this lovely country. It is not that the new bill fails to change the system. On the contrary, it would mean radical overhaul. The problem is that this new bill could actually incapacitate Turkey’s desultory education system further. Even the sparse achievements of the existing system could be lost. This would be done under the guise of providing choice to parents. The first four years of education would still be compulsory, but children would get to stay at home for the second four years. Options can have harmful consequences, say experts. The ER
[More]
Turkey is not becoming like China
Güven Sak, PhD
24 February 2012
Fortunately, we have corrected this acute problem with the intervention of deputy prime minister Ali Babacan. Let me stress one point as Xi Jinping, leader-to-be of the Communist Party of China (CPC), is in Turkey: Turkey is not becoming like China. Turkey is not approaching the statism of the 1930s as systematically as China. In my commentary titled “Turkey is Becoming Just like China,” published on February 3, I drew your attention to the drafted amendment to the Law of Capital Markets Board (CMB) and argued that the arrangement about independent board members of the Board under the title of principles for corporate management eventually would put corporations under the tutelage of the central government. But fortunately, we have corrected this acute problem with the intervention of dep
[More]
What if Greece leaves the Eurozone?
Fatih Özatay, PhD
23 February 2012
Many experts argue that the only viable option for Greece is to leave the Euro and return to the Drachma. Here is the million-dollar question: What is the risk that the recent development about Greece will change the risk appetite across international markets, affecting the level of fund inflows to Turkey and thus the 2012 growth?
[More]
The PKK and the ‘Child Soldiers’
Nihat Ali Özcan, PhD
23 February 2012
Turkey has been struggling with the outlawed Kurdistan Workers’ Party (PKK) for a long time. The question has, of course, political, legal, economic, social and psychological aspects. Among the most important aspects of the issue, which has been ignored up to now, is the “child soldiers” who have been abused for various purposes. A survey which I conducted with a friend of mine on the data regarding the age, gender, region, survival time and so on of the PKK recruits has pointed out how serious a problem we are facing. The survey is based mainly on the data of 1,362 militants among the PKK’s mountain cadres who lost their lives for various reasons between 2001 and September 2011. According to this, 12 percent of armed militants were females while 88 percent were males. Some 73.3 percent of
[More]
What if Mark Zuckerberg joined the army in Turkey?
22 February 2012
If Mark Zuckerberg had not been born in New York but in Istanbul, he would now probably be brooding over when and how to fulfill his mandatory military service. In a previous commentary [1], I tried to portray how the Turkish entrepreneurship ecosystem is far from offering young people opportunities similar to those that Zuckerberg enjoyed in the US. I see now that I missed one important element: mandatory military service.
[More]
Zero interest rate
Fatih Özatay, PhD
21 February 2012
Should the interest rate will go zero in line with the Friedman rule and if the normal real interest rate aimed at 2 percent, inflation has to be -2 percent. There is one subject I did not write about as it did not attract attention when it was raised: ‘Zero interest rate’. Today I would like to address it with a different perspective. ‘Zero interest rate’ is one of the debatable topics of monetary economics. It is generally covered as a sub-section in advanced monetary policy textbooks. The issue also has to do with the question “what is the optimal rate of inflation?” which I will raise today. Studies which aim to answer this question generally start with examining how interest rate can go zero. For example, Handbook of Monetary Economics (Elsevier, 2011) Volume 3 has a chapter titled “T
[More]
It is poor children who become paint-thinner addicts
Güven Sak, PhD
21 February 2012
One out of every four children in Turkey lives in a poor household. The OECD average for child poverty is 12.6 percent. According to OECD figures, Turkey is among the countries where child poverty is the highest. Prime minister Erdoğan recently jumped on the opposition parties, saying, “Do you want the youth to become thinner addicts?” I personally do not. I know Mr. Erdoğan does not, either. But the figures are clear: It is poor children who become paint-thinner addicts. They live on the streets. During the last decade, as OECD figures suggest, child poverty has increased in Turkey. Today, let me tell you what I understand from these figures. What we need is to devise policies on the basis of these figures, not to talk through our hats like we are competing on secondary school debate team
[More]
Turkey’s position in the world growth volatility league
Fatih Özatay, PhD
18 February 2012
For the 2000-2010 period, the volatility of growth in Turkey is higher than that in 130 of 184 countries. Forecasting is a technical issue. Estimates are made upon a predicted model which runs according to certain assumptions. These include, among others, the barrel price of crude oil, the policy rate set by the Federal Reserve (FED), whether or not the European Central Bank (ECB) will introduce a quantitative easing, or whether or not domestic tax rates will be changed. Different scenarios can be set based on particular combinations of these variables. For instance, if you are to estimate growth and if your model tells you that risk appetite is chief among external indicators which affect growth, you can construct different scenarios by keeping tax ratios and the price of crude oil consta
[More]
Number one in the world
Güven Sak, PhD
18 February 2012
The global crisis has led to a relative saving surplus in Europe and the United States that is sustaining the unsustainable. There is no need to deny it. As Turks we like to be on top of charts. What kind of chart doesn’t really matter - Turkey is number one, and that’s what counts. So here is the good news: we are number one in the share of current account deficit to the GDP. There is no need for in depth research, just pick up a copy of the Economist and take a look at the economic and financial indicators section. It’s right there.This February, the Central Bank announced its latest figures for the current account deficit. The year-on-year increase in the deficit was about 65 percent. The figure now has reached an all time high if you consider the Republican era as a whole. So he
[More]
How was Greece?
Güven Sak, PhD
17 February 2012
Politicians are abundant in Greece, but the lack of a statesman is obvious. The Greek people are aware of this, indeed. Last Monday I was in Athens. It was only twenty-four hours after the Greek parliament had approved the austerity package. I had seen online the photos of Starbucks aflame the day before, right before I was going to bed in Brussels. The day after, however, Athens in the dark was tranquil. The Acropolis was as gorgeous as always. On the Athens-Pireas road, in the Plaka, there was no chaos. Athens is too big to turn into a bedlam with a few demonstrations. Lately, I have been reading some articles on how Greece has been ruined within the European Union (EU). Today, let me write my impressions about Greece briefly and touch upon how Greece benefits from being a member of the
[More]
