What do the triggering factors prove?
Fatih Özatay, PhD
28 July 2011
It became apparent that Turkey has vulnerabilities that might lead to sharp market movements in the case that sudden changes in perceptions are somehow created or caused by external developments. The way the economy will move towards in the short term is closely related with external factors. External factors refer to the developments in the European Union (EU) and the US. I will make two assumptions which are more likely to prove right: the decisions the EU took late last week implies that will to solution is gaining ground even though doubts started to be raised right after the relief of the markets with the announcement of the decision. So, my first assumption is that steps to this end will continue coming. Of course this assumption might prove wrong, but I will stick to it anyway. Seco
[More]
How can the PKK problem be managed? Lessons learned from Erdoğan
Nihat Ali Özcan, PhD
28 July 2011
Since 1972, Turkey has been struggling against the Kurdistan Workers' Party, or PKK, that has the desire to found "an independent Kurdish state." The problem is quite sophisticated and can be examined from different perspectives such as ethnicity, human rights and insurgency.
[More]
De-industrialization: A dangerous trend in Turkish economy?
Ussal Sahbaz
27 July 2011
Structural change is the major driver of productivity increases in developing economies. If only, it is in the correct direction, says Dani Rodrik in his latest column: In many Asian economies, the movement of workers from agriculture to higher productivity manufacturing and modern services has been the major force that drove overall productivity growth. In Latin America, on the contrast, structural change has been in the wrong direction -- informal service activities of low-productivity gained a large share in expense of manufacturing.
[More]
There is no need to worry
Güven Sak, PhD
26 July 2011
For now, there is no connection between what we are witnessing and what Europe is going through. The recent market movement has domestic causes. There is no need to worry because there is nothing unusual. Because our economy has heated up too quickly, the thermostat system has been activated. The economy will cool down automatically through exchange rate movements. The uncontrolled high growth will slow down. Still, it is wise to maintain the anxiety since a new world will be established with a new price level. In this new world, everyone will earn a share in line with their balance sheets. There is no need to worry; however, there are a number of reasons to be concerned. Let me tell you why.
[More]
Why will Turkey be affected more severely?
Fatih Özatay, PhD
26 July 2011
The reason why Turkey would be affected more severely by the mentioned global circumstances if faced today is that today Turkey is encountered with bigger vulnerabilities. If the external conditions which had been witnessed in the harshest days of the 2008 global crisis were faced today, Turkey would have been affected more severely. Why? Before the answer, we had better take a brief look at that period.
[More]
Unnecessary statements
Fatih Özatay, PhD
23 July 2011
Instead of confusing statements, take steps to overcome the mentioned vulnerability, which clearly attracts attention under the current global circumstances. It was the late 1993. The Treasury was holding auctions each week to sell bonds with different maturities: three-month bonds, six-month bonds, nine-month bonds and finally one-year bills. The public sector borrowing requirement was significantly high. Therefore, despite the annual inflation at 66 percent, the interest on borrowing in auctions fluctuated around 80-90 percent.
[More]
‘Let’s go to Tahrir’ in Nicosia
Güven Sak, PhD
23 July 2011
I have noted some time ago that there are two types of countries in the Middle East, the ones that require demonstrations in their Tahrir Squares to initiate change and the ones that can use the ballot box for the same purpose. Northern Cyprus belongs to the second group while Egypt has invented the Tahrir Square model. There is discontent both in Cairo and Nicosia. A cultural change is needed in both cases to tackle their problems directly. Egypt seems to have found a way, while Cyprus has a way to go yet. Does the Cyprus case show the limits of the ballot box as a transformational device? I do not think so.
[More]
No asphalt roads, no automobiles.
Güven Sak, PhD
22 July 2011
The pictures below of two families from Egypt and Chad, respectively, are good course materials for understanding the technology content of the import demands of the two countries. When I was wandering around Iraqi Kurdistan some while ago, district electricity generators were one of the things that attracted my attention. I learned later that this used to be the case also in Turkey. Back then I wrote a commentary for the newspaper Radikal with the title "Have you ever installed a line at the power plant of a district?" A friend of mine sent me an e-mail saying "We used to do it in Yenipazar, Aydın." Have you ever thought about how the infrastructure can affect the import demand of a country? Let's do that together.
[More]
Trilateral Balkan Summit Held in Croatia
Erhan Türbedar, PhD
21 July 2011
The presidents of Serbia, Croatia and Bosnia and Herzegovina met for a trilateral summit in the Brijuni islands in Croatia on July 18, 2011. A joint statement released at the end of the meeting says the sides will uphold the process of peace-making and work towards finding a solution to the existing problems. It says further that mutual support both political and technical will be lent during the EU membership process and joint infra-structure projects will be developed for the welfare of the region. It was also agreed at the tri-partite summit that meetings of this kind should be repeated at least once a year.
[More]
Unemployment, budget and the crisis at the doorstep
Fatih Özatay, PhD
21 July 2011
We can back the measures against heating up by raising taxes on certain consumption goods. Findings concerning the financial crisis in many countries suggest that the unemployment rate, which moves up along with crises, fall back to the pre-crisis levels way later than the recovery of the gross domestic product (GDP). According to a famous study, if the banking crisis is accompanied with a monetary crisis, the GDP achieves the pre-crisis level in average in 3.8 years. On the other hand, unemployment rate ameliorates a year later.
[More]
