Let’s see the next candidate in Egypt
Güven Sak, PhD
06 July 2013
It is now back to square one in Egypt. So early. It has just been a year with their first democratically elected president. Yet so obvious. Mohamed Morsi has been character familiar from a Greek tragedy, if you ask me. You know that mood, the (“When a god plans harm against a man, he first damages the mind of the man he is plotting against”) mood. Remember Antigone of Sophocles. That is why his approval rating has fallen from the high 78 percent at the end his first 100 days to a low 32 percent at the end of his first year. Yet he was the first democratically elected president of modern Egypt and a coup is always a coup. Inherently evil. Bad to institution-building.So is a coup-with-Tahrir-backing the solution? No. Definitely not. Remember the 1919 Keynes introductory. Let me dir
[More]
Will the European crisis continue for another decade?
Güven Sak, PhD
05 July 2013
I claim that the European crisis will continue for another decade. They have been in denial for five years, you see. Europe is important for Turkey. It is our primary trade partner. More than half of Turkey’s exports are still to Europe. True, the share of the Middle East and North Africa in Turkey’s exports is increasing, but the European market in the north is five times as big as the sum of southern and eastern Mediterranean markets. Moreover, the former demands more sophisticated goods. The economic health of Europe is important for Turkey. But the European economy has yet to overcome the global economic crisis of 2008. And it does not seem likely to do so in the coming decade. Let me tell you why I think so.
[More]
Obsession about interest rates: Good or bad?
Fatih Özatay, PhD
04 July 2013
If some people are obsessed with interest rates and if they hold important offices, it becomes difficult to design economic policy. You might sure want interest rates to be low regardless of the general economic circumstances. But this would be nothing but a fantasy. Rather than fantasizing, it is necessary to make sure that conditions which will keep interest rates low are fulfilled. For instance, if the problem is indebtedness, borrowing behavior must be revised. Or if there is a savings gap and the economy needs to borrow from abroad, the economy will inevitably be affected by external developments. If interest rates abroad are rising, they inevitably rise in the borrowing country as well. To overcome this, it is necessary to improve the domestic savings rate and lower economic risks.
[More]
Turkey is a highly centralized unitary state
Güven Sak, PhD
02 July 2013
With only 15 percent of public officials working in local administrations, can we expect there to be a meaningful local goal? The Gezi Park Protests taught us how important it is to delegate local decisions to local authorities. I don’t know about you, but I loved how Istanbul’s Mayor Kadir Topbaş said, “I will not even change the location of a bus stop without asking the people.” That’s how it should be. Administrators should not take any action before consulting local opinion. For a better administration, Turkey needs to upgrade its local democracy. Local representatives elected by the people should act knowing that they will be held accountable. But I think there is one issue to be solved first. Let me touch upon it today. In Turkey, localization is generally seen homologous with federa
[More]
Caution for the next three years
Fatih Özatay, PhD
02 July 2013
The FED will evidently clear away the lump as soon as growth and employment figures reach desired levels. If people give up the conspiracy theories and try to understand what is actually going on, they will realize that important economic risks will be facing Turkey in the next three years. Evidently, chief among these is that the Federal Reserve (FED) withdraws liquidity it has generously injected over three quantitative easing programs. During this process, US interest rates will increase considerably.
[More]
Let’s see what the constitutional court will decide this time
Fatih Özatay, PhD
29 June 2013
The hearing will potentially be a top item on the financial markets’ radar in the coming days. In the fall 2012, all we talk about was a constitutional court. Not Turkey’s but Germany’s. Due to the European crisis, European leaders had held a number of meetings. In the one held in December 2011 leaders decided among others to put into operation the European Stability Mechanism, the permanent body that will replace the temporary European Financial Stability Fund in July 2012 instead of 2013. The advantage was that if opened earlier, the Stability Fund would be larger. Moreover, the temporary fund relied on guarantees and did not have fresh funds while the Stability Fund would have fresh funds. The positive mood enabled by this decision and others melted into air in a couple of days.
[More]
Egypt as the sand castle of Morsi
Güven Sak, PhD
29 June 2013
Mohamed Morsi, as the first democratically elected president of Egypt, assumed office on June 30, 2012. So, this Sunday is his first anniversary, and there will demonstrations in Egypt on the day. His promise was to tackle the problems of Egypt head on in the first 100 days. At the end of his first 100 days, his approval rating was around 78 percent. Now at the end his first year, it has declined to 32 percent. Why this steep decline? I see two reasons here. First, he could not formulate a more inclusive form of government. Yet he should. He should have reached out and started healing the polarization in Egypt. He could not. Second, he just could not start dealing with the sandy and false foundations of the Egyptian economy. No major economic reform project still in sight. IMF a
[More]
Turkey was as rich as South Korea back when it demanded freedom
Güven Sak, PhD
28 June 2013
In 2012, South Korea obtained 14.168 patents from the United States Patent and Trademark Office. Taiwan had 11.624 patents and earned the fourth place on the list. The other day I was in Washington DC, listening to the American official who is the head of the office that carries out the EU-US Transatlantic Trade and Investment Partnership (TTIP) and Trans Pacific Partnership (TPP) negotiations. He talked about the TTIP as a new-generation free trade agreement that will set new norms of investment and doing business in the entire world. The talk instantaneously jumped to North Africa. A lady stressed that it was important for the region to sign a series of free trade agreements with the countries of the region in order to ensure its economic development in this new era. This is the very iss
[More]
We should be aware of economic vulnerabilities
Fatih Özatay, PhD
27 June 2013
Tough days are to come. We should be aware of our vulnerabilities when taking our steps. The possible policy reversal by the Federal Reserve (FED) affected emerging market economies adversely due to the rise in risk perception in the international markets. Reports by the international financial markets suggest that if this trend continues, Turkey will be among the countries that will be affected at the highest degree.
[More]
Turkey’s contribution to the new world order
Güven Sak, PhD
25 June 2013
The TTIP engagement between the EU and the US should not be considered just another free trade agreement. Turkey immediately needs to overcome its domestic agenda and get back to world events. The modus operandi of the beautiful blue planet of ours has been taking new shape. The European Union (EU) and the U.S. decided in June to launch a new process of transatlantic trade and investment partnership (TTIP). This means the investment and doing business climate of the world’s biggest market will be redesigned. We are talking about almost half of the world’s GDP and Turkey’s largest trade partner. This is nor merely a matter of the EU turning on us to side with the US after swindling Turkey into a Customs Union agreement. There is a qualitative difference, if you ask me. A new world order is
[More]
