Are the signals clearer?
Fatih Özatay, PhD
09 April 2013
With the industrial output growth in February, however, those signaling the start of a moderate recovery are stronger now. The most popular question lately is whether or not the economy started recovering in the last quarter. Yesterday another relevant piece of information was released: industrial output figures for February. I do not rely on seasonally and working day adjusted figures except for certain occasions. I will address the reason in detail next time if the agenda allows. I am interested rather in the year-on-year changes in industrial output, and hence I will examine the working day adjusted figures this time.
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A long way to go
Fatih Özatay, PhD
06 April 2013
For the consumer price inflation to decrease to 5 percent, headline inflation must decrease to 3 percent. I want to continue with inflation dynamics from where I left on Thursday. Some of you might think that in the week when we learned that growth performance was way below the potential, two commentaries on inflation is too much. But it is not. The fall in inflation is not necessarily counter to growth. This is supported by many academic studies. But I will just present some figures today. Annual inflation rates in Turkey were 8.8 percent in 2007; 8.9 percent in 2010, and 8.9 percent in 2012. Respective annual growth rates were 4.7 percent, 9.2 percent and 2.2 percent. In the studied years, average inflation was almost the same while growth rates were diverse: Growth was close to the pote
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Why Kurdish politicians should start learning the language of development
Güven Sak, PhD
06 April 2013
Turkey is in a process of reconciliation. After 30 years of armed Kurdish uprising, the country is in a state of cautious optimism. This is Turkey’s second attempt in the last 10 years to move toward a solution. The first one failed after a series of public diplomacy disasters. The government was at the time unaware of the nonlinear dynamics of reconciliation processes. I hope that this time is different.If peace does come about, should we expect a dividend? Yes. But who has the most to gain from the process, Gaziantep or Diyarbakır? Gaziantep, definitely. The economic impact of the reconciliation process is best analyzed by comparing the investment climate in different cities around Turkey. At TEPAV, we have been assessing investment climates at the city level for the past two
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A new perspective on inflation
Fatih Özatay, PhD
04 April 2013
Global competitiveness cannot be improved simply by intentionally pushing up exchange rate. The concomitant inflation hikes offset the competitiveness effect. The rain of data is continuing. Yesterday inflation data for March was released. Actually, we were mainly focused on the growth figures, since growth rates have been in decline since the first quarter of 2011. We have been trying to answer when the downturn in growth will end, whether the recovery process has begun and if the 4 percent growth target is achievable. But inflation dynamics should never be neglected. The authorities that have to take inflation seriously might push the issue to the background or give this impression with their decisions and remarks. At least we, columnists, keep the issue on our radar.
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Erdoğan’s order, laws and the Turkish Armed Forces
Nihat Ali Özcan, PhD
04 April 2013
Although the negotiations between Turkish Prime Minister Recep Tayyip Erdoğan and Abdullah Öcalan, the jailed leader of the outlawed Kurdistan Workers’ Party (PKK) continue, there seems to be a problem of trust. That’s why the PKK representative, Murat Karayılan, and others demand legal guarantees. The militants demand a law that will enable withdrawal with no security risks. Moreover, the PKK says that this is necessary not only for itself, but also for the sake of the professional future of the prosecutors, police officers, gendarmes and military personnel in the region.Last week, the prime minister “personally” guaranteed that there would be no problems. Most recently, he changed his tune and said that “the terrorists should bury their weapons, wear civilian clothes and leave Turkey usi
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The economy grew only by 2.2 percent in 2012
Fatih Özatay, PhD
02 April 2013
Is Turkey’s sustainable growth rate so far assumed to be at the 4-4.5 percent interval declining? Gross domestic product (GDP) figures for 2012 were released yesterday: GDP growth rate decreased to 2.2 percent in 2012 from 8.8 percent in 2011. Indeed, this came as no surprise. In the late 2011, I discussed in an op-ed series the macroeconomic indicators for 2012 under different scenarios. The most reasonable one estimated 1 to 3 percent GDP growth for 2012. When GDP figures for the first quarter was released, I estimated year-end GDP growth at the 2.2-2.3 percent interval, in the light of the capacity utilization, real sector confidence, credit growth, industrial output growth and export figures. And here are some observations on the GDP figures:
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As we live longer, why don't we get wealthier?
Güven Sak, PhD
02 April 2013
If the investment climate puts a country’s entrepreneurs down and out, that country cannot make the leap to prosperity. This is what I have been occupied with lately: Forty decades ago, the average life expectancy of a baby born in Turkey who was one year old was 23 years less than that of a Swedish baby. Since that time, the difference has been reduced to eight years. At the same time, the life expectancy in Turkey has risen from 50 to 74 years meanwhile.
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Is the 2023 Vision Represented by Çukurambar?
01 April 2013
Do you know the Çukurambar neighborhood in Ankara? Those living in here will know it, but it would seem familiar to many others, too. It is a slum in the middle of the city that underwent urban transformation in the last decade. The former jerry-built houses were replaced by tall buildings, some of which are luxurious and others ultra-luxurious. Since TEPAV lies only 5 minutes away from this odd neighborhood, we have been watching how Çukurambar has been transformed during the years of Turkey’s economic transformation. While we were discussing the country's middle-income trap, we witnessed how a nearby neighborhood climbed from low-income to high-income status, skipping the middle-income trap.
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Mending Israel-Turkey ties
Güven Sak, PhD
30 March 2013
I was in Israel last week, right after Israel’s apology for any wrongdoing during the Mavi Marmara incident. Indeed, Turkey deserved an apology for the incident long ago, but ultimately it was the Obama factor that made it come through. It was under the watchful eyes of President Obama himself that Prime Minister Netanyahu finally read the text to Prime Minister Erdoğan over the telephone. His voice did not sound happy, but he finally did the right thing. The apology text was agreed on over a year ago but only now, after the Israeli elections, did Netanyahu finally give in and read it. There was a sense of relief; not only in political but also in business circles, not only in Israel and the U.S. but also in Turkey and Palestine. However, without Obama in action, I believe that w
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Turkey’s fertility rate is now same as that of Sweden
Güven Sak, PhD
29 March 2013
Forty years ago, the fertility rate of Sweden was two while it was five in Turkey. Sweden has maintained the fertility rate of four decades ago while that of Turkey has decreased to two. What do you think is the chief determinant factor that affects our lives? Technological change, if you ask me. More precisely, the rapid diffusion of technological change throughout the world. It used to be a concern for some in the West, at the center of our civilization. Today, however, it has become popularized. The access to innovations has become democratized. Our civilization is a technical one and technology has spread throughout the world. Engineers raise buildings in the same way everywhere. Surgical operations do not have a language, religion, or race. If you are a doctor, you are so everywhere.
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