What is the purpose of technoparks?
Güven Sak, PhD
16 August 2011
The Turkish university system lacks the institutional infrastructure to transform research into technology. Turkey now has a Ministry of Science, Industry and Technology. The Scientific and Technological Council of Turkey (TÜBİTAK) is affiliated with this Ministry. I think this is good, in principle. If we could take the lessons learned in the last decade seriously, we might reach a critical turning point in terms of industrial policy. This was what I thought while reading the remarks of the Minister of Science, Industry and Technology, Nihat Ergün, as highlighted in columnist Vahap Munyar's article in Hürriyet yesterday. Today let me tell you why I think that Turkey might be at a critical turning point.
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Hope is the poor man’s bread
Fatih Özatay, PhD
16 August 2011
Hope is the poor man's bread, but it will be wise to draw lessons for Turkey's fiscal policy. The impact of the global financial crisis on production and employment began to be felt completely as of the late 2008 and during the first half of 2009. As of the end of 2010, the outlook in the countries that account for 90 percent of world's gross domestic product (GDP), excluding poor African countries was as follows: All developed countries and emerging market countries excluding China, Indonesia, India and Poland contracted substantially during the crisis. Turkey was also in this group.
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What type of communication policy?
Fatih Özatay, PhD
13 August 2011
The rationale of the decisions of the CBT could not be understood. Therefore, one fails to estimate in which direction which tool will be employed next. It was assumed that once the price stability is achieved; financial stability will come automatically - evidently with the contributions of the micro regulations to be introduced by other relevant institutions. This belief became to be questioned frequently after the global crisis. Experts started to stress that central banks should launch a monetary policy perspective that guards price stability and financial stability at the same time. However, there is no theoretical framework about how to implement a monetary policy that will secure both price stability and financial stability. There is no experience in this regard, either. This lack o
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Weakest link in Turkish economy?
Güven Sak, PhD
13 August 2011
So that is the question nowadays, especially after Central Bank Gov. Erdem Başçı's remarks about foreign exchange short positions. It was the super growth performance of the Turkish economy some time ago. But it seems to have changed a bit. There are concerns and questions in the air. Analyses of the Turkish economy are increasingly looking like that game show in which they seek to reveal the weakest link on the team. Today let me contribute to the debate and underline two structural weaknesses of the Turkish economy.
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Orphanages now are almost completely abandoned.
Güven Sak, PhD
12 August 2011
Orphanages are to be handed over to the Special Provincial Administrations. This brings to mind the localization of the Directorates of Rural Services. We will understand in a couple of years whether this was a good thing or not. We will conduct an impact assessment and see the outcomes like we have done before. Who gets harmed will be the children trying to grow up in the orphanages. It appears that in concentrating on the debt crisis and contingency effects, we are missing out on the authority with which the government was entrusted before the elections to restructure public administration via decree. The bureaucrats in Ankara are currently trying to figure out in which ministry they work. What decrees imply becomes clearer every day. As it does, we need to figure out how to solve the pr
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Two mistakes
Fatih Özatay, PhD
11 August 2011
The crisis thought the CBT that ensuring price stability alone could not be the only objective of the central bank and that the scope of the monetary policy must not be limited to this aim. One of the important monetary policy lessons learned from the global crisis was that ensuring price stability alone could not be the only objective of the Central Bank (CBT) and that the scope of the monetary policy must not be limited to this aim. It was reiterated that central banks need to shape their policies as well considering the financial stability. Of course this has always been among the responsibilities of the central bank. But it was believed that one the price stability is ensured, others would come along with the help of the macroeconomic regulations and checks to be fulfilled by other rel
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Guidelines for beginners to understand civil-military relations in Turkey: Part I
Nihat Ali Özcan, PhD
11 August 2011
Last week's generals' resignations received wide coverage both by media and on the agenda of the political elite. So much attention could be extraordinary for some people; however, understanding the nature of the civil-military relationship in Turkey - without drifting with the tide of the daily ideological debates - is only possible with some background information. My intention is to contribute to understanding the nature of the civil-military relationship in Turkey, and the direction it's going.
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Monetary policy is not a panacea
Güven Sak, PhD
09 August 2011
If you face difficulty in deciphering the meaning behind the actions of the Central Bank, then the Central Bank is not doing its job properly. Years ago when we were working to establish the Economic Policy Research Foundation of Turkey (TEPAV), an American friend of mine said, "It is very difficult to found and operate a think-tank in Turkey. May God make it easy for you!" As he argued, the people of Turkey "first take a side and then started thinking." "In the US, however," he said, "the think-tank tradition is based on thinking and reaching results first and taking a side on the subject matter afterwards." TEPAV became operational in December 2004 and I have never forgotten what my friend told me.
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How to explain?
Fatih Özatay, PhD
09 August 2011
If the CBT aims to ensure price stability and financial stability at the same time, it must deliver remarks separately in relation with these two purposes. On Saturday I tried to write an empathetic article and understand the recent steps of the Central Bank of Turkey (CBT). I want to confess that I made a lot of effort to write that article. The reason is obvious, I guess: The CBT cannot express itself correctly. Let me give a couple of examples.
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The decisions of the CBT are self-consistent
Fatih Özatay, PhD
06 August 2011
The decisions of the CBT are not contradictory. Again chaos is about to erupt. Global risk appetite decreased sharply in the last two days. European and US stocks markets dropped harshly. This increased the demand for German and US bonds, which are seen as the most reliable financial asset in such milieus, and thus reduced their returns. On the other hand, interest rate on many European countries increased due to the fall in demand for their assets.
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