Silence of the east augurs no good.
Güven Sak, PhD
24 December 2010
The problem is not limited to Southeastern Anatolia.; it seems industry did not visit the said part of the country. The era of shouting about the Kurdish issue was ended a while ago by the Honorable Prime Minister. The Don't War, Talk campaign initiated by the the daily Radikal daily also is also related to the end of the "shouting era." Today we are in a process where any matter and proposal related to the Kurdish issue is made clear and discussed openly. This is a good thing. Listening to what others say rather talking at the same time with other will better the circumstances. But the silence of the east augurs no good. It is related not only to the silence of the residents. In the east, the machinery is also silent and production plants are nonexistent. How can we define this silence an
[More]
Breaking the routine
Fatih Özatay, PhD
23 December 2010
We owe the Central Bank a debt of gratitude for pursuing the second option. Is human mind so advanced to come up with a theory that will never change? Please leave the 'isolated' world of theories and meet the chaos of the real life. Can you draw an inalterable implementation framework based on a theory?
[More]
This time it is even more dangerous than you think
Güven Sak, PhD
21 December 2010
To succeed, the measures introduced by the two must be reinforced by policies to improve public savings. We have always loved danger. Just take a look at the history of Turkey's economy: the savings-investment imbalance has always been a prevalent phenomenon. The economy has grown beyond its means in any given period. Turkey's growth always has required net capital inflows. And in any given period the financing of this growth-beyond-means has been troubled and has given anxiety to us. And indeed this is what is happening now. From this perspective, yes, we have seen this movie before, but this is the first time we have watched the new version. I guess this is the message that the Central Bank also is trying to deliver nowadays. Since the world has entered this twilight zone life has become
[More]
On the Spread of Industry and Expressways in Anatolia...
20 December 2010
Since the ban on smoking in closed areas, the event that has excited me most was the groundbreaking ceremony of the Izmir-Izmit expressway. I wish we could see such assertive infrastructure projects more often on the country's agenda. Turkey's shell will change, it will become a high-income country in parallel with the spread of expressway networks throughout the country. The spread of expressways can be understood in a way similar to how the spread of movie theatres in Anatolia has the potential to improve the quality of life and reinforce competitiveness.
[More]
Dwarf stars
Fatih Özatay, PhD
20 December 2010
Growth performance since 1950 was inadequate to close the income gap between developed countries and Turkey. The last general elections were in 2007. On the eve of next elections we had better check how Turkey's economy performed between 2007 and 2010. Assessing two important macroeconomic variables - growth rate and unemployment rate - would be enough for a healthy assessment. I take growth rate and unemployment rate for 2010 as 7.5 percent and 12.2 percent, respectively where the latter corresponds to the average of the first nine months of the year.
[More]
Interest rate decision was necessary but not sufficient
Fatih Özatay, PhD
19 December 2010
The measures introduced by the Central Bank are not sufficient. It appears that the decisions announced by the Central Bank of Turkey (CBT) will be highly debated. On Friday BRSA (Bank Regulation and Supervision Agency) also made similar regulations. This way the will to limit the rapid credit expansion was reinforced to a certain extent.
[More]
Turkey should not become like Iraq as it increases exports to Iraq
Güven Sak, PhD
17 December 2010
Turkey needs a process of comprehensive structural reforms in order to maintain competitiveness in European markets. Demand sets supply. The quality of import demand naturally affects the technical quality of the industrial production capacity. You are what you export. There is the risk that you turkey We should always keep this in mind when diversifying our export destinations. Turkey is in need of a smart industrial strategy particularly in the recent milieu. What does the recent milieu stand for? It stands for the times where shift of axis is observed in Turkey's exports, though temporarily. Let us see what the currently shaping industrial strategy implies in this regard.
[More]
New era in monetary policy
Fatih Özatay, PhD
16 December 2010
Which option should Turkey pursue to overcome the trouble caused by developed countries? The latest Financial Stability Report (FCR) by the Central Bank of Turkey (CBT) says: "Developing countries mainly preferred to respond to the surging capital flows with policy tools discouraging capital inflows. In Turkey, different than other developing countries, measures reinforcing financial stability are preferred alongside with the hike in capital flows."
[More]
I advise you to invest in the Turkish Lira
Güven Sak, PhD
14 December 2010
Erdem Başçı talks about the comprehensive change in the monetary policy in line with the new normal. Recently I chatted with a Venezuelan friend who is a resident in the USA. At one point the conversation came to the appreciation of the Turkish lira. My friend told me, "Before I came here my broker called. He said that I should allocate some part of my portfolio to TL and Singapore dollar denominated investments. He said the TL offers great returns. And if the appetite for TL investments has spread to affect even small investors like me, you are done." I noted down his comments with keen interest. I had these comments in mind when I read the speech of Erdem Başçı, Vice Governor of the Central Bank of Turkey. So today let me underline some important points for those who are yet not aware th
[More]
If you obstinate with the market, you will become a plaything
Fatih Özatay, PhD
13 December 2010
European leaders' inability to make decisions until the last minute gets reactions. Take a look the conditions facing the European Central Bank. It has to purchase the bonds of problematic countries of the European Union. Thus it gives way to monetary expansion. This way it saves time for the European Union leaders which somehow cannot make decisions to provide a radical solution to the existing problem. On the other hand European Central Bank's saving time for the leaders also play a role in the delay in leaders' decisions or in the introduction of band aid measures which reinforces the problems felt in the troubled countries. This is such a bitter situation facing a central banks. Reaction grows against European leaders
[More]
