Domestic savings from the short-term and long-term perspective
Fatih Özatay, PhD
20 August 2013
In conclusion, Turkey cannot keep up with rich countries just by raising savings and investments. Last Thursday I compared domestic savings rates of Turkey, upper-medium income countries that includes Turkey, and emerging market economies (with a regional classification). According to this, Turkey’s domestic savings rate was extremely low. Yesterday in Star, Eser Karakaş made critical assessments taking departure from that commentary of mine.
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Some of this, some of that
Fatih Özatay, PhD
17 August 2013
We sure do not desire a drastic increase in these rates within a short time frame. But given the low domestic savings rate, all you can do is to wait for your destiny. I have not been writing about the credit statistics for a long time. The last observation in the datasheet on my computer that I constructed with the method the Central Bank uses (annualized rate of growth in thirteen-week average credit volume compared to the previous week) was for May. As of today, weekly figures for the early August are available. So I decided to update the database. When I did, however, I could not believe my eyes. Remember the Central Bank once declared that for financial stability the credit growth rate should not exceed 15 percent?
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Ankara’s bad habits
Güven Sak, PhD
17 August 2013
The Wall Street Journal now has an online Turkish portal. It’s very useful. The other day, it carried a piece on the agenda of Turkey’s Cabinet. In 2012, a whopping 60 percent of the Cabinet’s decisions were about construction projects. They actually counted every decision of the body, which is headed by the prime minister himself. I find this rather telling of the Turkish way of doing things. Let me elaborate. Construction projects are inherently local. You first need a piece of land to build something on. Most of the time, there are locals there who need to be consulted and manage the project. Yet, in Turkey’s case, all large-scale construction decisions are taken by the highest administrative body of the country, in Ankara. They know what’s best for you and they will come and
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Why was I a homebirth baby?
Güven Sak, PhD
16 August 2013
Since the Gezi Park incident, I have started to differentiate between rural and urban people when thinking about world affairs. The other day I was waiting my turn in a clinic. The registrar lady checking my ID card said, “I guess you were a homebirth baby.” At first, I did not understand what she meant. Then she noted the birth date, “I guess this is not your real date of birth. It is the formal one.” Finally she said, “It was like this in the old times,” reminding me of the fact that I was getting old. Probably that’s why I asked my parents last bayram why I had been born at home.
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Savings are astonishingly low
Fatih Özatay, PhD
15 August 2013
Turkey’s savings rate is low in comparison to not only the BRICs but also developing and upper-middle income countries. I previously compared the savings rates of Turkey, the BRICs (Brazil, Russia, India and China) and South Korea. It was not a pleasant picture for Turkey. The upper rows of the Table 1 below compares Turkey’s savings rate with that of developing countries. I used the data and the categorization of the IMF. Lower rows show Turkey’s performance compared to “upper-middle income countries” as categorized by the World Bank on the basis of GDP per capita. I ranked the countries by their GDP per capita in 2012 and excluded small countries off the list. I gave the observations for three sub-periods: 1990-2001, 2002-07 during which Turkey attained high growth rates, and 2008-12 whi
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How did the chief of General Staff become a terrorist?
Nihat Ali Özcan, PhD
15 August 2013
The Recep Tayyip Erdoğan government had two goals when it “trimmed” the Turkish Armed Forces (TSK) in legal, psychological, political, technical, intelligence and social terms: Establishing “absolute party control” over the military and “clearing the road” for negotiating with the Kurdistan Workers’ Party (PKK).The government worked patiently and systematically to reach its goals. It entered into interesting alliances both at home and abroad. It empowered the police forces to balance the army. It opened several legally controversial investigations. It used the pro-government media. As a result, many retired and active generals and officers were arrested. “Potential contrarians” in the lower ranks were preemptively removed. Some opted out voluntarily. The government, it seemed, wa
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Have you seen a map of the Mediterranean railway network?
Güven Sak, PhD
13 August 2013
There is a dramatic difference between the north and the south concerning the number of railway connections. North Africa hardly has any.
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The second half 2013 at a glance
Fatih Özatay, PhD
13 August 2013
Industrial output growth in the first quarter was radically below the impressive rates in 2011. Yet, there is the bright side of the story. Industrial output figures for June were released yesterday. I will focus on the three-month averages to clear off monthly fluctuations in figures. In the second quarter of the year industrial output increased by 3.2 percent. This is significantly below the impressive rates in 2011. In fact, it is even below that in the first half of 2012, when per capita GDP growth was almost zero. Yet, there is the bright side of the story and here it goes:
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Why gold imports are increasing?
Fatih Özatay, PhD
10 August 2013
The current environment is evidently marked by uncertainties, which is the nemesis of the confidence in the economy. Although a week has passed after its release, I would like to comment on the foreign trade statistics for June benefiting from the bayram break.
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Turks have not forgotten the inflation of old
Güven Sak, PhD
10 August 2013
We had another lottery millionaire during the holy month of Ramadan this year. The lottery is a peculiar institution: It is about guessing six randomly drawn numbers. You get the full prize if you guess all six of the numbers correctly, and it accumulates each week if nobody is able to do so. It had been accumulating for several weeks in Turkey, making the grand prize about 10 million dollars. Then, just before bayram, we had the winner. Talk shows were abuzz, talking about what one could do with that kind of money. Not surprisingly, all converged on one investment: buying homes. The question was what kind, which cities and neighborhoods, which projects? So forget about dining and traveling around, or private university for the kids. When it comes to investment, you’re talking r
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