Being a top ten economy: are we dreaming?
14 November 2011
On a TV show recently, the program host was wandering through the streets of a rising Anatolian city, asking people how many weeks there were in a year. The majority of the respondents answered, “4 times 12, so 48 weeks,” while others took guesses like 8, 25 or 50. Even more upsetting was that some who tried to get to the answer by multiplying 4 and 12 failed to solve this simple multiplication problem and blurred out numbers like 46, 45, or 49. These were young university students. What got to me the most however, was that two young primary school teachers confidently responded “54 weeks.”
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Which European Union?
Fatih Özatay, PhD
12 November 2011
Would you like the ECB to impose conditions on Turkey as it may do in the case with Italy, saying “I will purchase your bonds, but you will increase your tax revenues.”? By the end of 2004, the European Union (EU) had defined the conditions for opening Turkey’s accession negotiation, which was an important development for the Turkish economy. It was thought that this perspective would help Turkey to maintain the macroeconomic stability ensured as a result of massive efforts following the 2001 crisis. More importantly, it was hoped that the accession negotiations with the EU and the institutional adjustments to be introduced thereby would contribute to the improvement of Turkey’s potential growth rate, which was expected to enable the convergence with rich economies.
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The end of Turkey’s Indian Summer
Güven Sak, PhD
12 November 2011
The decline of Europe’s Rosy days also marks the end of the Indian summer for Turkey. That, at least, is what I see in the deepening European crisis. Europe is neatly divided into two parts: creditors and debtors. Debtor governments, like Greece and Italy, are going to have technocratic caretaker governments. Germany, among the largest creditors, is dictating the rule of these caretaker governments by limiting the influence of popular will through elections and referendums on important decisions. Europe is now more of a project of the elites than ever. Under Angela Merkel, Germany’s decision is to first focus on a way out of the euro crisis and only then to serve justice through the ballot box. There is more trouble ahead for the European Project.
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Those who build bad buildings must know that they will pay the price
Güven Sak, PhD
11 November 2011
If there is no building inspection, there is no rule. If the building inspections are not made property, sanctions cannot be imposed. Recently the New York Times published a commentary by Nassim Taleb on risk management. The subject of the commentary was the management of risks accumulated in the financial system because of banks. It was a current issue. The commentary was published on the first day of Bayram. The second Van earthquake had not taken place yet. After the second earthquake, which had taken place the day before, I had wanted to write my views on how to manage the earthquake risk in a country located on seismic belts. And here I go. This commentary was inspired by risk management techniques. If you are curious, please read on.
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Questions to the make-up lobby
Fatih Özatay, PhD
10 November 2011
We hope for the help of cosmetics as we cannot lower production costs. But if you overuse the cosmetics, the face will be ruined. Turkey is the fifty first among 182 countries in the ranking of price increases in the period between the beginning of 2005 and the end of 2011. If the ranking is revised on the basis of the rate of inflation in an ascending order, Turkey becomes the 132nd. In short, although we have left behind the high inflation rates of the 1990s, we are not at a good position in this league since other countries fighting with high inflation also succeeded. The beginning of the analysis period is 2005 because it is the year when six digits were omitted from the Lira. This preference of course has a particular importance: “I want to put a bug in ears.” I do not know if I can s
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Barzani’s visit and advices about democracy
Nihat Ali Özcan, PhD
10 November 2011
Increasing public pressure after the recent Kurdistan Workers’ Party (PKK) attacks has prompted the government to take action. Kurdistan Regional Government (KRG) leader Masoud Barzani came to Ankara last week, talked to senior officials and returned to his country. As usual, the main subject of the discussions was related to the PKK, which is exploiting northern Iraq as a safe haven. Barzani’s remarks in the wake of the discussions were so “diplomatic” and yet so “ambiguous.”
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No peace, no innovation
Güven Sak, PhD
08 November 2011
Systems in which all parties can remain in their own space are suitable for innovation. There are many signs. If you focus on the signs instead of empty talk, you will see that Turkey has been stealthily returning to the statism of the 1930s. We argue that we are supporting the rule of the private sector, but the practices do not say so. The statism of the 1930s had a meaning in the 1930s. Then, there was no private space. This new form of statism pioneered by the current government, on the other hand, aims directly at liquidating the private space that is beyond of the radius of the state. This is what the signs imply. Today let me tell you what these signs are and assess one among these, the role of the state in the innovation process. I will let you decide.
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We need to take inflation seriously
Fatih Özatay, PhD
08 November 2011
Lately, many commentators stopped considering inflation as a key problem. Along with the global crisis, stimulating the financial sector, reviving the volume economic activity and reducing unemployment rate became the prominent objectives. Everyone excluding some weak voices in developed countries stopped talking about inflation. This climate has affected Turkey, too. Many commentators stopped considering inflation as a key problem. With the upwards movement in inflation rate lately, however, the question “will we be facing two-digit inflation rates again?” began to be evoked in our minds.
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Once you hit the road…
Fatih Özatay, PhD
05 November 2011
Unfortunately, at the point we arrived at, maintaining macroeconomic stability has once again become the primary concern. It appears that Papandreou withdrew from this decision to hold a referendum. But he did not declare of the vote of confidence. The outcome of the voting was not definite when I have been writing these lines. Despite his step back, my view that Papandreou has made a wise maneuver did not change as I have stated in my previous commentary. He turned to Greek people and said, “It is your call” easing the burden on his shoulders. Although he did not call for a referendum, the public realized better what they are faced with. Also, he conveyed an important message to the opposition party implying that they have to shoulder the current bailout package together. Otherwise, the c
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The 'R-Word' between Greece and Germany
Güven Sak, PhD
05 November 2011
Europe’s leaders were shocked when Greek Prime Minister George Papandreou announced his intention of holding a referendum on a debt deal reached with the European Union. Financial markets cried out in indignation. Papandreou thankfully backed out yesterday, making do with a vote of confidence in his Parliament. The announcement of a referendum was worrying nonetheless, because it could pave the way for a German referendum which could permanently halt the EU’s financial rescue operations. Now that referendum would count. And it was Papandreou who opened Pandora’s Box by saying you-know-what out loud.
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