Strange dynamics
Fatih Özatay, PhD
16 March 2013
In the case of turmoil in international financial markets, economies with high FX open position are affected at the highest degree Last time I argued that real depreciation of the domestic currency, that is, a rise in the exchange rate beyond the difference between domestic and foreign inflation rate, would be detrimental for the level of economic activity. The main feature of such economies is that they have higher FX debt compared to FX receivables. Of course, certain sectors might have higher FX assets than FX liabilities. Exporter companies are in this group, for instance. What matters for the entire economy, however, is the FX liability to asset ratio in the aggregate balance sheet of all sectors. I will call this the FX open position. This is the case for Turkey’s corporate sector to
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Let the sun shine in on Turkey’s Constitution process
Güven Sak, PhD
16 March 2013
Slowly but surely, Turkey is crafting its new Constitution. The Conciliation Commission of 12 MPs from four political parties and the Speaker of Parliament are currently coming together every day to work on drafts. Meanwhile, the Syrian refugee crisis is on our southeastern borders, NATO patriots and radar stations are installed on Turkish soil, non-linear confidence building measures (CBM) to end a 30-year armed insurgency in Kurdistan are under way, and whatever remains of the Arab Spring is blocking Turkish access to MENA markets. Despite everything, these 13 individuals are still sitting around a table, calmly negotiating the future of Turkey. That is fortunate for us.Turks are still patiently waiting for their new Constitution. A recent national poll showed that more than 70
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Boarding from Stockholm Airport is not the same as boarding from New Delhi Airport
Güven Sak, PhD
15 March 2013
We are at the outset of a new era in which it is hard to make a good life for ourselves without having any skills. I had a small panic attack when I was boarding at the Stockholm Arlanda Airport the other day. I got out of the cab and entered the airport. The screen that is supposed to show the flight and gate information as well as where you can get your boarding pass only showed the former. There were people lined up in queues and a number of counters, but I didn’t know which one was for my flight. So, I went to the information desk and asked where I could get my boarding pass. He pointed at the self-service boarding pass machines. He told me that I also could get my luggage tag and then leave my luggage at the counter. The boarding machine was unattended. It gave a single boarding pass
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The inability to become normal
Fatih Özatay, PhD
14 March 2013
Factors that trigger exchange rate hikes will inevitably affect the economic growth and unemployment rate adversely. The rise in the exchange rate beyond the CPI inflation, that is, the depreciation of the lira in real terms, evidently has a positive effect on exports, unless other elements offset this gain. In the final analysis, growth rate and the real value of domestic currency are closely related where growth rises as the real value of the domestic currency decreases.
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The PKK and negotiations alla Turca
Nihat Ali Özcan, PhD
14 March 2013
You can have both covert and overt negotiations in order to solve the problems with an organization pursuing a politico-military strategy. You can keep the negotiations covert until a certain stage and then open them to the public eye. In any case, both modalities have their advantages and disadvantages. However, regardless of the method chosen, the professionalism of those managing the process, the political system and culture all affect the outcome.
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Egyptian economy
Fatih Özatay, PhD
12 March 2013
Budget deficit is one of the most dangerous indicators. The year-end estimation for 2012 is 10 percent of GDP. I was at the nineteenth annual conference of the Economic Research Forum based in Cairo. This year’s conference was held at Kuwait on 3-5 March. The main theme was “Economic Development and the Rise of Islamist Parties.” Hussein El Kazzaz, economic advisor to Egypt’s president Mohammed Morsi was one of the speakers at the third day’s plenary session. Kazzaz used to be in the academia.
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How did Markafoni overtake Yeni Karamürsel?
Güven Sak, PhD
12 March 2013
In the past, large stores threatened my grandfather’s business. Today, Markafoni has overtaken YKM. It appears that the online shopping company Markafoni is worth more than Yeni Karamürsel, one of Turkey’s most prominent and rooted chain stores. It was rumored in July 2011 that one of the group companies of the global online shopping giant Naspers paid $200 million for a 70 percent share of Markafoni. We don’t know the value precisely as the transaction was private. Markafoni was one of the first online shopping clubs in Turkey. At $200 million for 70 percent of its shares, the total value would have been 320 million TL based on the exchange rate back then. Recently, the Boyner Group declared that 63 percent of the shares of Yeni Karamürsel had been sold for 190 million TL. Then, the prese
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First signs of recovery in industrial production
Fatih Özatay, PhD
09 March 2013
4 percent growth rate target is still achievable. In addition, industrial output figures for January imply that a mild recovery has started. The Turkish Statistical Institute, TURKSTAT, has updated the industrial output index and released a completely new series with base year 2010=100. I am using working day adjusted figures. Annual industrial output growth decreased constantly between the first quarters of 2011 and 2012, floated around low levels until the fourth quarter and decreased further until the end of the year. Here are the figures (please note that all indicate year-on-year growth):
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The future of El Socialismo Bolivariano after Chavez
Güven Sak, PhD
09 March 2013
Only in Caracas did I ever see moto-taxis. You hail one, put on the spare helmet, sit behind the driver and watch him sail you through the heavily congested traffic. That, at least, is what it was like a few years ago: Large American cars and congested roads.
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1 TL to pee, 1.29 TL with tax for a urinary test
Güven Sak, PhD
08 March 2013
You cannot check if your MR test was done and examined properly when you get the report Last year, a friend of mine who runs a hospital told me this. You have to pay 1 TL to use a public toilet. If you went to a laboratory instead, you could both use the toilet and get a urinary test for about 2 TL. Aiming to privatize health services, the Ministry of Health was supporting private health institutions recklessly back then. But this was not based on a plan. Everyone was burning with the desire to provide services. The Ministry was spending without taking into account the budget constraints. In the end, health expenditures escalated and the number of doctors in university hospitals went downhill, after which the Ministry started to block the way of private health institutions the opening of w
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