How can Turkey benefit from Gen Petraeus’ experience?
Nihat Ali Özcan, PhD
21 July 2011
Last week, Turkey had an important visitor: Hillary Rodham Clinton, the U.S. secretary of state. Her appearance on TV overlooking the Bosphorus with President Abdullah Gül and Foreign Minister Ahmet Davutoğlu was quite impressive. This seemed to be a message to the public about the strong cooperation between "the allies." Their agenda was most probably a long one, including the current position of Colonel Moammar Gadhafi, the Syrian problem, the anti-Iran missile shield, and ways to rejuvenate the deteriorating relations between Israel and Turkey.
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No new orders from Syria since the New Year
Güven Sak, PhD
19 July 2011
Syria is among the top five trading partners of Kocaeli. It seems that the country's lack of an industrial strategy will be very costly. Recently I visited Kocaeli, an industrialized province in northwestern Turkey. I attended a meeting organized by the Kocaeli Chamber of Commerce. During the lunch, a businessman from the Chamber Assembly said, "We have not received any orders from Syria since the New Year." He seemed to be concerned about the Arab Spring. I remember thinking, "How important can trade with Syria be for Kocaeli?" It appears that I was wrong. Syria is one of the top five trading partners of the province. I have to admit that this has confused me. It seems that the lack of an industrial strategy will be costly. Let me tell you why.
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Will external conditions cool down the economy?
Fatih Özatay, PhD
19 July 2011
Given Italy's condition, the challenges facing the European Union have grown. In such milieu, caution can be expected in both demand side and supply side. One way to understand whether the economy has heated up or not is to examine outcomes which might be associated with heating up, as I did last Saturday. Inflation and current account deficit are perfect indicators for such analysis. Particularly the headline inflation that ignores the price movements and current account deficit movements (that is, the current account deficit with constant energy prices) that are not associated with the heating up of the economy prove very useful in this analysis. This second indicator in particular is an important signal for the heating up of the economy.
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Preventing evaporation: What to do?
Fatih Özatay, PhD
16 July 2011
I believe that to ease the heating up, the fiscal policy should be tightened. Let me begin with a thesis that I cannot understand. There are some who think that when you say the economy has heated up, you imply that the Central Bank (CBT) has to increase the interest rates. Is this the only conclusion to be drawn from the heating up argument?
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It's the politics, stupid
Güven Sak, PhD
16 July 2011
For a professional economist, the global crisis is a heaven-sent opportunity to observe what is normally unobservable. Crises are good laboratories. Nowadays, I am thinking of the dynamics of policy response in the case of a "global economic crisis" versus an "economic crisis in one country." The policy response to an economic crisis is almost always a political one. The question is this: Is an economic crisis an opportunity to start dealing with the long-neglected structural problems of a country? Or Does the latter eventually require a political crisis? Which one do you think is easier? "Crisis in one country" case or a "global economic crisis case"? Looking at the Turkish experience, I tend to favor the first one. Look at Italy, for example. Berlusconi vs. Tremonti is more un
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Turkish companies rank first in World Bank tenders
Güven Sak, PhD
15 July 2011
Companies that built highways and big construction projects in the Özal period today have become giants which seek business opportunities on the global scale. Recently a friend of mine working as a vice president at the World Bank (WB) told me, "The successes of Turkish construction firms are astonishing." Seeing no spark in my eyes, he added, "Turkish firms are number one in WB tenders." I have been hearing this constantly for some time. A couple of days later, he sent me a large computer file about the WB tenders. The figures were really impressive. Between 2003 and 2011, almost all construction tenders opened by the WB were won by Turkish companies. Almost all tenders in various parts of the world from Venezuela to Tobago, Afghanistan and Ethiopia were won by Turkish companies. The late
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Do you need to see evaporation to be convinced?
Fatih Özatay, PhD
14 July 2011
In the last two quarters, and in the last quarter in particular, private consumption expenditures stand clearly above the trend line. Topics are coming over me. Of course I cannot complain. Who would like to beat their brain to decide what to write in these summer days? But I was actually willing to continue from where I stopped on Tuesday. In fact, I promised to do so. However, I am sorry to say that cannot keep that promise.
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Arab Spring, ‘model’ debate and the Turkish experience
Nihat Ali Özcan, PhD
14 July 2011
Three distinct groups of people believe that Turkish democracy was built after the 2002 general elections. First are some cunning Westerners. They present Turkey as an example in order to deal with events in the Middle East with the least possible damage and to pacify political Islamists. "Be patient, look at Turkey," they say. "You can come to power without causing too much trouble."
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What should monetary policy debates focus on?
Fatih Özatay, PhD
12 July 2011
The new monetary policy implemented by the CBT can hardly be successful without the support of the BRSA. Can an independent authority (The Central Bank of Turkey - CBT) take a decision that will not give results unless supported by another independent authority (The Banking Regulation and Supervision Agency - BRSA) and expect the latter to act in compliance? In that case, who will ensure the coordination? Even if the coordination is established, how will it be made binding? Can the authority which the mentioned institutions are independent from (The Treasury-The Minister of Finance) secure that compliance is binding? If it can, does independence not vanish? The ongoing debates about the new policies of the CBT do not focus on these questions. However these are of critical importance since
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PM Erdoğan must take care of neglected issues.
Güven Sak, PhD
12 July 2011
Turkey has to get over the attitude of an average student who is content with the minimum grade to pass the class. Turkey has neglected issues, as I mentioned last week. Today, Turkey is looking for someone to take care of them. One election campaign poster remains on a billboard on the Ankara airport road. It has a giant picture of the Prime Minister and the slogan, "We will take care of the neglected." I like to read it as "We will take care of the neglected issues of this country." A series of issues that have been left on the back burners must now be addressed. The Honorable PM Erdoğan also must deal with these neglected issues. I want to reiterate this before the parliament is formed so that I can recall this when I am asked, "why did not you speak if you knew about it?" Let me tell y
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