Bad management comes with a cost
Güven Sak, PhD
29 April 2011
Turkey can benefit from the global attention to be paid to countries with large domestic markets. The rate of mergers and acquisitions can increase dramatically. Dunder Mifflin is the paper and office supplies company in the TV series "The Office." We used to watch "Yes, Prime Minister"; now, we watch "The Office." Also, I occasionally watch the 1970s series "Fawlty Towers," starring John Cleese, over and over. The theme is always the same: Managers are very important. The skills of the manager can make or break a company, or a country. For some time now I have been sharing my views about the overall managerial capacity in Turkey. Soon, I will tell you what I think about the gloomy project disclosed two days ago. But today, let me tell you why I think that the lack of managerial skills f
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Opinion follow-up: Do the credit expansion slow down?
Fatih Özatay, PhD
26 April 2011
It appears that the new policy could not fulfill its objective, yet. However, we need to see up-to-date data. In the context of the new policy framework, the Central Bank of Turkey (CBT) last week has decided to increase the required reserve ratio for short term TL deposits. This is the sixth decision to this end since September 2010. The Bank aims to slow down the rise in the credit volume as it believes that this is needed to secure financial stability, one of the two major objectives of the bank. I have written many commentaries on this subject. The main question was this: to what extent a central bank applying inflation targeting regime can slow down the credit expansion given that the liabilities of the banks are mainly short term? Liquidity problem
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Why is Turkey not in the 3G?
Güven Sak, PhD
26 April 2011
I do not remember hearing of any completed reform related to the EU accession since 2006 except the ban on smoking. My last commentary concluded that "Countries can be grouped in two categories, those dealing mainly with the issues of the current century, and those unable to let go of the issues of the previous generations." I stated that global firms now follow good customers, not solely cheap labor. Therefore, more mergers and acquisitions can be expected to take place among Turkish firms. But I underlined that it is quite difficult for Turkey, which has failed to overcome the nineteenth century agenda, to become a target country for global firms. In my last commentary I simply asked, "Is Turkey ready for this? Not exactly." Today let me continue.
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An assessment of the economic opening of CHP
25 April 2011
A period similar to the second half of April 2011 must be as rare as an eclipse for those concerned with Turkey's economic policies and growth problems. Turkey has started to discuss the future of economic policies intensely, maybe for the first time since after the end of the Cold War. As the year 2023 comes closer, the importance of the growth phenomenon occupies the election agenda to offset the inertia of the previous decades.
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Index obsession-2
Fatih Özatay, PhD
23 April 2011
Having qualified academic publications is one of the prominent criteria used for measuring the performance of academics in some universities. Continued from last Saturday. First the summary of the previous week's commentary: Academic researchers submit their studies to academic journals to share their research. This is a thing explorative academics like to do. On the other hand, academics must have conducted qualified studies in order to be awarded the assistant professor, associate professor and professor titles. Moreover, having qualified academic publications is one of the prominent criteria used for measuring the performance of academics in some universities.
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We are living the nineteenth century in the twenty-first century
Güven Sak, PhD
22 April 2011
The performance of global firms have undergone major changes. They now follow good customers, not cheap labor. Countries can be grouped in two categories, those dealing mainly with the issues of the current century, and those unable to let go of the issues of the previous generations. Turkey, unfortunately, has not been able to quit the second group. The world is living in the twenty-first century while Turkey is dealing with the issues of the nineteenth. The Kurdish issue is just one among these. We do not even know how to handle an issue, let alone solve it. When exactly? Halfway through the first quarter of the twenty-first century. We are surrounded by chaos. The Election Board, based on an amendment to Article 13/A of the penal code as introduced in 2006 during the term of the govern
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Is Mr. Başçı left with the “hot tray”?
Fatih Özatay, PhD
21 April 2011
Is it possible that Erdem Başçı did not participate in the design of the unorthodox monetary policy in effect? Let me begin with a phenomenon the readers of this column are familiar with: available studies suggest that the differences in institutional structure are quite important for understanding the income gap among countries. This can be read as follows for the case with Turkey: one of the major reasons why the welfare gap between developed countries and Turkey did not change considerably must be traced in the institutional structure.
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Does the AKP’s Plan for 2023 ensure 8.48 percent annual growth?
19 April 2011
The Justice and Development Party (AKP) announced its election manifesto last Saturday. The ruling party, on the eve of the third general elections in which it will take part, aims to increase the GDP to US$ 1 trillion by 2015 and to US$ 2 trillion by 2023. A simple calculation suggests that to achieve this target, an annual growth at 8.48 percent must be attained until 2023. In other words, it assumes that Turkey's growth rate until 2023 will double the historical 4 percent growth average attained in the last three decades. This was exactly an assertion I wanted to see on Turkey's agenda.
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With this constitution, presidential elections will only bring political crisis
Güven Sak, PhD
19 April 2011
Presidential elections held as per the current constitutional framework will bring structural instability. The way we debate the issues here in Turkey is weird. We raise all issues upside down. We proceed backwards to forward. In the end, the debate fails to advance on a normal course. We keep talking, but we make no headway. Take the presidential system debates, for instance. I believe that a presidential system issue exists with which Turkey has to deal independent of the particular people who seek to become president. However, we pretend that it does not. How can we make the debate about the presidential system stand on its own feet? I think herein lies today's billion-dollar question about stability. This question also is associated closely with the maintenance political and economic s
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2010 budget comparatively looser than the 2009 budget
Fatih Özatay, PhD
19 April 2011
If you are not happy with the high level of current account deficit in 2010 you should have tightened the budget. This is currently missing. Last Thursday I stated that Turkey preferred to carry out a loose fiscal policy in 2010 despite the general opinion. Today I want to prove this argument based on statistical figures.
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