The CHP’s plan is more functional than that of the AKP
Güven Sak, PhD
04 March 2011
Your distributing goods in the form of benefits says, "I know what you need better than you do." I have been reviewing a survey conducted in February. Inequality in income distribution is among the top three challenges for Turkey. When you ask people what problems the new constitution must solve, they respond, "economic and social rights and thus the improvement of welfare." These are always among the top three answers. This is the agenda of the people in Turkey. On the eve of the elections, the Republican People's Party (CHP) has brought a plan for family insurance onto the agenda. I think this is a perfect move. The family insurance scheme is a good idea in the current environment. Moreover, the CHP has designed a mechanism that is more market-friendly than the current social assistance
[More]
Destabilizing interest expenditures
Fatih Özatay, PhD
03 March 2011
Turkey has a higher interest expenditure/GDP ratio than all European countries but Greece. I am now obsessed with the 'stability' issue; I have to write stably on stability. Or I might harm the stability, God forbid. The concept "stability" has a dual character: there is "good stability" and "bad stability". Interestingly, the "things" stability evokes in our minds is not at all stable. Therefore, with a different perspective stability has no character.
[More]
An odd form of stability
Fatih Özatay, PhD
01 March 2011
Favorable economic developments in the recent period disguise an unpleasant form of stability. Gaddafi is in power for more than 40 years; and he is about to be overthrown. Hosni Mobarak stayed in power for about thirty years and Zeynel Abidin Bin Ali for more than 20 years. Compared to democratic countries, we can talk about an outstanding persistence in management: 'management stability'.
[More]
2011 is 2001 for Northern Cyprus
Güven Sak, PhD
01 March 2011
2001 was an opportunity for Turkey. We seized that opportunity. 2011 is an opportunity for Northern Cyprus. Let us wait and see what the Turkish Cypriots do. It is emancipating to face the truth. This was the case for Turkey. It was 2001 when Turkey faced its reality. 2011 similarly must be the year Northern Cyprus faces its own reality. What they need is the courage to look in the mirror. The economic crisis of 2001 taught us that what we thought to be sustainable was not. Now it is the Northern Cypriots' turn. 2011 must be for them what 2001 was for us. Let me explain why.
[More]
Taking advantage of the 2001 crisis (2)
Fatih Özatay, PhD
26 February 2011
'Tenth anniversary of the 2001 crisis' celebrations must not be exaggerated or used to disrepute the ruling government back then. It is evidently good the recall the 2001 crisis to emphasize how important macroeconomic stability is. However when doing this we must also note that stability alone will not move Turkey to the first league. Recalling and remembering the crisis will have limited impact unless we keep in mind that the income gap between developed countries and Turkey did not close down even slightly over the last three decades and therefore that Turkey ran around in circles in this respect.
[More]
Fasten your seatbelts, please
Güven Sak, PhD
25 February 2011
In the light of the Libya incident we must expect that not only will the current account deficit grow, but also that it will become more difficult to finance. "I believe that we are riding faster than the car and the road conditions allow." I wrote this last Tuesday to illustrate my understanding of the latest monitoring note of the IMF on Turkey. Since then, the dangerous trend of the current account deficit has become clearer. The challenge is even more serious with the recent developments in Libya. The movements in the Arab streets seem to have the potential to make the structural imbalances in Turkey's economy more evident. The concerns of the Gadafi's made-up state will strain Turkey in economic terms. Let us discuss what we can expect.
[More]
Taking advantage of the 2001 crisis
Fatih Özatay, PhD
24 February 2011
The biggest mistake made was the failure to advance upon the banking sector the major weaknesses of which became to be understood much later. Which crisis was deeper? The 2001 crisis or the 2008-2009 crisis? To answer this question, assessing two indicators will be sufficient: the change in unemployment rate and in gross domestic product (GDP).
[More]
Gender imbalance brings macroeconomic imbalance
Güven Sak, PhD
22 February 2011
As studies reveal, the gender ratio imbalance in China plays an important role in shaping the macroeconomic imbalances in the country. I think this was world imbalance review week. We heard news on imbalances both from Paris and Washington. One was about China and the other one was about Turkey. If you wonder what the imbalances of the week are, please read on.
[More]
On tax revenues
Fatih Özatay, PhD
22 February 2011
We can achieve Ireland's tax revenue/GDP ratio for 2008, for instance. This corresponds to a 4.6 points of improvement in the ratio relative to the GDP. Having examined the per capita income levels, now it is time to compare the tax revenues. I have carried out a similar evaluation on the basis of Organization for Economic Cooperation and Development (OECD) data. The newest data in that evaluation was on the year 2007. How data for 2008 and partially for 2009 are available. Therefore it will be wise to revisit this highly important issue.
[More]
Per capita incomes revisited
Fatih Özatay, PhD
19 February 2011
Over the last three decades Turkey did not make as much progress as Korea and Ireland in terms of per capita income by purchasing power parity. I am keeping the promise I gave in my previous commentary. First a small reminder for those who are not familiar with the subject: It is needed to make some arrangements to compare the level of income in different countries. The aim is to calculate the income of countries in a way to reveal the 'purchasing' power implied by a certain level of income. The income derived as a result of this calculation is called 'income at purchasing power parity'. I will call this the 'corrected income'.
[More]
