The BRICs and Turkey (3)
Fatih Özatay, PhD
15 January 2013
Its “seventh-grade dropout” adult population coupled with low savings and investment rates do not depict a bright picture about Turkey’s future. Having a high domestic savings rate is critical so as to raise investments and thus to attain high GDP and per capita income growth rates for a considerably long time frame. For a permanent rapid growth trajectory, however, elements to enhance productivity levels also should be in the work. In terms of domestic savings, Turkey has the lowest rate among the BRICs and Korea. China, India and Korea that have attained stunning growth rates in the recent era not surprisingly have high savings rates.
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The BRICs and Turkey (2)
Fatih Özatay, PhD
12 January 2013
China, India and Korea will be able to initiate major investments without borrowing from abroad for a longer time. Last Thursday I compared the BRICs (Brazil, Russia, India and China) economies with the Turkish economy. Figures revealed that Korea has the highest GDP per capita. Korea was followed by Turkey and Brazil while China remained at the top among the rising economies. Korea and India had strong GDP growth rates though not as high as China’s. In other words, if they China and India can maintain the current pace of growth we should expect that they will soon outperform Brazil, Russia and Turkey concerning GDP per capita, unless the latter group initiates a leap.
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The ethnic conflict in Cyprus is turning into a greater game
Güven Sak, PhD
12 January 2013
Cyprus was already a rather complex problem. The discovery of natural gas reserves around the island has made it even harder to disentangle. There are two communities on the island: the Greek and Turkish Cypriots, both claiming to have their own sovereign states. The Greek Cypriot state is recognized broadly by the international community, while only Turkey recognizes the Turkish Cypriots. But whatever your politics on the issue, the reality on the ground is clear: the island is divided between two distinct communities. Mr. Demetris Christofias, the President of the Republic of Cyprus, issued a statement as the outgoing head of the European Union Presidency in Nicosia on the occasion of the New Year. Have you read his end-of-term speech? I highly recommend it. That was a true Cypri
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Turkey does not consume meat and milk
Güven Sak, PhD
11 January 2013
In Turkey, the kilogram price of milk in 2010 was €0.89. Compared to the EU average, milk prices are 30 percent higher and milk consumption is 40 percent lower. Statistics show that people in Turkey do not eat meat or drink milk. Why is meat and milk consumption low? The answer is out there: meat and milk are expensive. Let me stress it once again: meat and milk prices are higher in Turkey than in relatively wealthier countries. Not only that, people in Turkey do not have enough money to spare for meat and milk. We have a case of double jeopardy here. And the underlying reason is that the design of the agricultural and livestock policy is not consumer-oriented. Let me summarize the basics for you.
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Why promote the ex-Marxist Öcalan as a devout Muslim?
Nihat Ali Özcan, PhD
10 January 2013
The Recep Tayyip Erdoğan government and the outlawed Kurdistan Workers’ Party (PKK) have started negotiating again. Several difficulties lie ahead. In addition to regional political uncertainties and psychological pressures stemming from the harsh debates in domestic politics, there are risks related to the PKK itself. However, we must consider the dominant characters of the leaders at the table.Today, I’d like to focus on Öcalan in terms of the outcome of the negotiation process. Despite being imprisoned since 1999, Öcalan is still powerful and holds the reins of the PKK both due to its organizational culture and his authoritarian personality.One factor that will affect the negotiation process will be the personality war of two leaders with big egos. Öcalan owes his power to his 4
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The BRICs and Turkey (1)
Fatih Özatay, PhD
10 January 2013
For the 2010-2012 period, Russia has the highest GDP per capita among the BRICs. Turkey’s GDP per capita is higher than the rest of the group. Brazil, Russia, India and China’s economies are generally assessed under a separate category. The view is that these four countries will become major economic powers in the medium-long term. These are referred to with the acronym BRIC. I want to compare the BRICs with Turkey as long as the economic agenda allows. I will include Korea in the comparison in order to provide a clearer picture of key challenges facing Turkey. These challenges are well known actually. But I believe it will be useful to address them with a comparative perspective.
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Build your own satellite at home
Güven Sak, PhD
08 January 2013
It is good that Turkey has launched a satellite for military purposes, designed the satellite domestically and started envisioning. “Do-it-yourself” has always been a familiar concept in Turkey, owing to our cook-for-yourself restaurant tradition. Then, we met with IKEA’s build-it-yourself products recently. In the latter case the design was given. But today the world has been moving into the do-your-own-satellite period. That’s new. I am not talking about countries manufacturing satellites like Turkey’s Göktürk-2, by the way. I am talking about a brand new era in which individuals make their own satellites at home at the cost of buying a car. I believe that Turkey is not prepared for this new episode. Let me first explain what I understand about this new era.
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A pessimistic assessment on Europe
Fatih Özatay, PhD
08 January 2013
Even a limited downturn in Europe might risk 4 percent growth in Turkey. Industrial output figures for November will have been announced when you read these lines. Expectations are that industrial output will demonstrate a remarkable year-on-year increase. There are two factors shaping the expectations. First, there was a long holiday in November 2011 and the number of days worked being higher in November 2012 might have enabled a substantial increase in industrial output. Second, the economy might have hit the bottom in the third quarter and started recovering thereon. The former is beyond doubt. Whether the latter assumption is realistic, however, is yet to be observed. Capacity utilization and real sector confidence index series do not provide solid evidence on any recovery. Yet, we can
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What do basic sciences imply for Turkey’s 2023 targets?
Ozan Acar
07 January 2013
As Turkey retires from basic sciences, it becomes more difficult to achieve the 2023 targets. The results of the national university placement examinations lately have been pointing at a decreasing interest in physics, chemistry and mathematics programs of universities. From this point of view, it seems that it will not be as simple as expected to overcome the mediocrity of Turkey’s production structure.
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Inflation outlook from a different perspective
Fatih Özatay, PhD
05 January 2013
It is hard to overcome the rigidity and Turkey generally was unable to overcome it. As a result, inflation rate commonly exceeded the target, damaging confidence. The lowest year-end inflation rate since 2002 was recorded in 2012, at 6.2 percent. A few months ago everyone, the Central Bank (CB) to begin with, was pessimist about the inflation outlook. In a report dated 24 October for instance, the CB estimated that year-end inflation will float between 6.9 and 7.9 percent.
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