E-books are more expensive than printed ones in Turkey, unlike elsewhere
Güven Sak, PhD
22 February 2013
In the rest of the world, an electronic book is sold at one third of the price of the printed book. Not in Turkey. Electronic books are cheaper than printed books all around the world. In Turkey, printed books are cheaper. The Ministry of Finance must have a reason. I mean, I don’t get it, but I want to believe they have a reason. Anyway.
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Does Turkey encourage hot money inflows?
Fatih Özatay, PhD
21 February 2013
The question I want to answer is whether the Central Bank’s actions fit the purpose of not. Let’s say that you are considering bringing short-term funds to Turkey in order to invest in Turkish lira denominated financial assets. Compared to interest rates in advanced countries, even the minimum interest rate Turkey offers is remarkably higher. Take the lower limit of the Central Bank’s interest rate corridor, for instance: last Tuesday it was cut from 4.75 percent to 4.5 percent. It is still high enough.
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Because we said so, that’s why
Fatih Özatay, PhD
19 February 2013
This year, a system resembling the old one, which was not only unfair but also bad for education quality, was introduced without notice. Parents spend a lot so that their children receive high-quality education, and pass the examinations for science high schools, high schools that teach in English or at least a private school. Assume that your child passed the examination and started studying in one of these. But before he or she graduates, you take your kid from that school and try to place him or her to a “regular” one. Finding a new school for your child might put you into some trouble related to the legislation; but there are a number of options ahead. Anyway, there is no need to make effort to find mediocrity in Turkey.
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The UAE is to be the latest industrial country in our region
Güven Sak, PhD
19 February 2013
The UAE might have made bad investment decisions, but the figures prove that they are taking firm steps towards becoming an industrial country. It appears one of the winners of the Arab Spring was the United Arab Emirates (UAE). Last week, Sheikh Muhammad bin Rashid al Maktum, the prime minister of the UAE and the ruler of Dubai, reported fund inflows of $8.2 billion from Yemen, Egypt, Syria, and Tunisia in the last two years. You might ask why these countries invest in the UAE, which probably will reinvest the funds in western countries. This used to be the case, but not anymore. We still assume that things will stay as they used to be, yet the world has been changing. And the change is rather swift. Just in 1995, 90 percent of the total exports of the UAE were composed of petroleum, natu
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How to raise the savings rate?
Fatih Özatay, PhD
16 February 2013
With a longer-sighted perspective, it is clear that the way to leap to an upper league passes through anti-informality measures among others. It was three weeks ago when I last said “I will continue on this subject.” The subject was growth constraints and shopping lists. Now it’s time.
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What is the problem with Turkish soap operas?
Güven Sak, PhD
16 February 2013
So many questions could be raised about Turkey being a regional power, but one thing stands out beyond argument: Turkey’s “soap opera” power is spreading through the region. Does that juxtapose with the soft power of Turkey? I just don’t know. But Turkey’s “soap opera” power is there for sure. It is spreading from Egypt to Greece and from Iraq to Serbia. It is everywhere. It is the 24-hour glitter of Istanbul and its diversity that is attracting the attention. I do not have any idea about the regional meaning of Turkish soap operas. However, I can say a few words about the problem with Turkish soap operas, the way I see it as an insider. If these shows are a kind of a mirror reflecting the aspirations of Turkish citizens, then “Houston, we have an immense problem.” Let me tell yo
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Why does Turkey trail behind in pharmaceuticals exports?
Güven Sak, PhD
15 February 2013
Turkey has a thousandth share in pharmaceuticals exports worldwide. It has failed to transform its health industry over the last decade. Turkey's health sector transformation program was launched a decade ago, in 2003. Health indicators have improved relatively since then, but the health industries have not developed at a similar rate. The statism of the 1930s failed to mobilize the creative energy of the private sector. If you want to know how, please read on.
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5 percent? 6 percent?
Fatih Özatay, PhD
14 February 2013
No country can sustain such a high current account deficit over GDP ratio for a decade. Given the radically low domestic savings rate, current account deficit has to be assessed on the finance side. Of course this perspective ignores Turkey’s international competitiveness. For instance, it neglects productivity, production cost and exchange rate developments. Similarly, it leaves the economic outlook in the export markets (income growth) and domestic demand movements out off the analysis. Yet, it is obvious that the deficit finance-oriented perspective does not mean that other factors are insignificant. It is impossible to address all elements in a single commentary, though.
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The Kurdish problem and Erdoğan’s roadmap
Nihat Ali Özcan, PhD
14 February 2013
Prime Minister Recep Tayyip Erdoğan aims to get the outlawed Kurdistan Workers’ Party (PKK) out of the way so as to implement his career plan. Last week he made one of his most important statements in this regard. He announced that he could cooperate with the Peace and Democracy Party (BDP) – in other words, the PKK – in the context of the Constitution-making process. This reminds me of the famous words of the great Chinese strategist Sun Tzu, “If you know your enemies and know yourself, you will not be imperiled in a hundred battles.” Erdoğan seems to follow this mantra. However, great difficulties lie ahead.Erdoğan is taking a serious risk with such statements. For the great strategy to work, he needs to be able to manage four separate areas: Maintaining relations with the PKK,
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Harder to raise reserve requirements
Fatih Özatay, PhD
12 February 2013
The latest industrial output figure might hinder a decision to raise the required reserve ratio. In the last quarter of 2012, industrial output increased only by 0.3 percent year-on-year, compared to 2.7 percent in the third quarter, which was believed to be the worst quarter concerning growth performance. In the first nine months of the year, average growth was 2.6 percent, substantially below the potential. The weak industrial output growth in the fourth quarter implies that year-end GDP growth rate might be around 2.3 percent. Indeed, this is a strong probability.
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