Medvedev’s remarks on Armenia and connectivity
Güven Sak, PhD
03 December 2011
Turkey needs to design intermodal transport networks in the Black Sea region to pave the way for more interaction and fully deploy its capabilities across its neighborhood. What do Russia, Turkey, Armenia, Georgia, Azerbaijan, Greece, Bulgaria and Romania have in common? They are all members of the Black Sea Economic Cooperation Organization, (BSEC) which was established in 1992. The BSEC does not serve its purpose well, if you ask me. Its member states’ economies differ in their structure and levels of development.
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It was the debt crisis that made Washington the capital city.
Güven Sak, PhD
02 December 2011
The current issue under debate in Europe is whether the European Union will take on the sovereign Euro bonds of countries (states) as a supra-national or a supra-state agency. I guess now is the moment of truth for Europe. The decision is not economic, but highly political. The day before, central banks stepped in to provide dollar liquidity. This decision, however, was in fact window dressing. Political issues require political solutions. As time has been wasted, Europe’s banking crisis has turned into a political crisis. The markets have been waiting for a political decision from European leaders. There appear two roads ahead: either European Union countries will engage in a deeper federation all together or will take their own paths individually. Just as the case was in the United State
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Vicious loop
Fatih Özatay, PhD
01 December 2011
The current public debt/GDP ratio in Italy is too high, at 120 percent. The main reason why the interest rate is high is the high level of public debt. During the auction held on Tuesday, Italian Treasury sold bonds worth € 7.5 million. Interest on three-year and ten-year bonds rose to 7.89 percent and 7.56 percent, respectively. The rate that appeared in the previous auction on ten-year bonds was 6.06 percent. Average inflation rate for the last twelve months was 2.5 percent. If we assume that the rate will remain more or less constant, the given rates correspond to 5 percent in real terms. In short, currently Italy has to agree to pay 5 percent interest to borrow. OECD expects that Italy will grow by 0.5 percent in 2011. Growth estimations for 2012 and 2013 are minus 0.5 percent and 0.5
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Turkey’s new position and Israel’s interests
Nihat Ali Özcan, PhD
01 December 2011
We are witnessing multi-faceted changes triggered by the Arab Spring. Changing balances and weakening state structures create risks for some and opportunities for others. We are focusing mostly on countries and incidents separately, but when taken as a whole, we could recognize that incidents have the capacity of producing results that are more complicated than they seem.
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Need for a new economic program (4)
Fatih Özatay, PhD
29 November 2011
It is quite difficult for Turkey to improve per capita income to the level of developed countries with the current savings rate. I started to write this series a while ago and said that I will continue writing regularly on this issue as occasion serves. Until today, I did not have the chance to give a break and here comes the fourth commentary of the series. As you might remember, I kind of implied that I was not happy with this title. Since it is the fourth commentary of the series, however, the best is not to change it. So, please assume it says “need for a new long-term economic program” or “need for a long-term economic program” as we do not have an “old” one. I believe this would be a better title to convey my message.
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Turkey in between Arab Countries and South Korea: A picture of mediocrity?
28 November 2011
If I was to draw a picture worth a thousand words, it would be the graph below. It shows per capita income in Turkey, Arab countries and in South Korea in proportion to that of the US, the largest economy in the world. It starts in 1980 (the year of my birth) when a Turk, an Arab and a South Korean had the same per capita income, which was one-fifth of an American’s. By 2010, income per capita in proportion to that of the US increased to 70 percent in Korea, 30 percent in Turkey and dropped to 19 percent in Arab countries.
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Need for a new economic program (3)
Fatih Özatay, PhD
26 November 2011
Turkey’s trade deficit heals during crises, but this is not exactly pleasing as the underlying reason of this improvement is the contraction of the economy. Merkel, Sarkozy and new Italian Prime Minister, Monti, met in Strasbourg on Thursday. During the press meeting, Merkel reiterated her opposition to the proposal to issue a common bond, Eurobond, or to the intervention of the European Central Bank putting its weight behind the debt crisis. In short, Germany persists on its acknowledged attitude. According to many analysts, however, this attitude is about to cause Europe to hit the brick wall at full speed. Meanwhile, the Joint Select Committee on Deficit Reduction of the US has failed before reaching any agreement. Republicans once again opposed to the plan to raise tax rates in expense
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Tahrir as a thermostat
Güven Sak, PhD
26 November 2011
Tahrir 2.0 has shown the control system is effective. Now Egyptians have to devise a way to transfer this function to the ballot box. You probably remember the beginnings of the Egyptian Awakening. It was Dickensian: the best of times, the worst of times. Happiness and anxiety were in the air, fearful talk was spreading of Islamists taking power in Cairo.
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One trouble at a time, please
Güven Sak, PhD
25 November 2011
Fitch Ratings cut Turkey’s outlook from positive to stable which means that Turkey no longer as attractive for investment in the short term despite its successful record and bright future. Don’t you feel that the world is like a watch with a broken driving spring lately? I think so. When the spring of my grandfather’s old mechanical watch broke, the hour and minute hands would start to spin like crazy. I felt like time rushed and that I was being left behind. In fact, the time is not rushing. Then, where does this “one trouble at a time, please” feeling stem from? I call this “the syndrome of a student who has not done his homework.” The world has been changing and we are postponing our responsibilities to catch up with it. Then comes the syndrome. It is like the exam questions have been s
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Need for a new economic program (2)
Fatih Özatay, PhD
24 November 2011
Turkey’s production is highly dependent on the import of intermediate goods and investments are highly dependent on the import of investment goods. Adding the fact that it is a net energy importer, the picture is not surprising.
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