Why is land so important for Turks?
Güven Sak, PhD
05 January 2013
We have not had major structural reforms in the last 10 years. This is the basis of our fascination with land ownership I have been thinking about the Turkish fascination with land lately. Real estate makes our world go around, but I increasingly find it odd and outdated. Our hyperactive real estate drive is harmful for industrial development and registered activities. However, it is still with us. Show us a piece of land and immediately we start making calculations. The first thing we typically do is to build a fence around it.
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Is the construction frenzy necessarily bad for industry?
Güven Sak, PhD
04 January 2013
If Turkey abides by the same 1930s’ mentality in urban transformation policy, it cannot overcome the middle income trap. No, it is not. For a while now, I have been trying to explain how the ongoing “construction frenzy” could put Turkey in trouble. I have argued that the loose taxation of the rent earned on land has both escalated the informal economy and prevented a possible leap to advanced industrialization. Also, I have argued it is bad for savings rates. I have complained frequently about the second era of rentier economy. Yet, the construction rush per se is not necessarily bad. I believe that Turkish industry can make the best use of the urban transformation process. The industrial sector is in need of smart incentive mechanisms. The problem is we do not know how to design them. If
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Though the picture seems complex, it is not
Fatih Özatay, PhD
03 January 2013
In the third quarter of 2012, Turkey’s economy grew by 1.6 percent. It appears that the fourth quarter will not be worse than the third in terms of growth performance. The US has reached a decision to avoid the fiscal cliff, which relieved the world largely if not completely. Not completely, because some issues delayed for two months might lead to new debates. Switching to domestic matters, capacity utilization rate (CUR) decreased year-on-year. I ignore the seasonally adjusted CUR figures as they might be misleading. I want to explain why in the end in order to avoid technical details for now.
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Negotiations with the PKK and Erdoğan’s difficulties
Nihat Ali Özcan, PhD
03 January 2013
Erdoğan is faced with the dilemma of his ambition to become president and the bargaining with the PKK. Prime Minister Recep Tayyip Erdoğan officially announced that negotiations with outlawed Kurdistan Workers’ Party (PKK) leader Abdullah Öcalan are continuing. Apparently, the government saw that the developments could not be managed either with the current form or with the current means.
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Better keep optimistic at the beginning of the year
Fatih Özatay, PhD
01 January 2013
There are critical questions, but I will only give the good news today. Happy new year! During the last commentary of 2012, I tried to assess the year from different perspectives. We can possibly draw to contrasting pictures, I argued as the economic developments of the year were conflicting. This piece will be released on the first day of 2013, so I will try to draw a purely optimistic picture. I want to go beyond transient positive developments such as a fall in inflation or a rise in capacity utilization ratio. I will try to raise longer-term and structural aspects of the Turkish economy.
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Let 2013 be the year of a new constitution
Güven Sak, PhD
01 January 2013
I am of the view that we should count on the judgment of the people. 2013 must be the year of a new constitution. The politicians must keep their promise. Having entered the new year, it is a tradition to make a wish. It is the time to decide what aspects of our lives we want to change. I wish that 2013 will be the year of a new constitution for Turkey. I wish that Turkey proves to the world that it can resolve all of its issues via parliamentary negotiations. The achievements of 2012 imply that the new constitution is doable. Politics is the art of finding a middle way, of whining. The purpose of negotiating is to find the middle way. The year 2013 should be the year of a new constitution for Turkey.
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The same old phenomenon
Fatih Özatay, PhD
29 December 2012
Macroeconomic stability is not the only factor that attracts foreign funds. The risk appetite also must be strong. It is possible to draw two contrasting pictures. On the bright side, the economy has grown during a period when the largest export market Europe suffered from economic contraction. Unemployment rate that was rigid at around 10 percent before the crisis diminished to 9.3 percent in 2012. The two key vulnerabilities of the economy were tackled successfully: first, current account deficit was lowered remarkably. Second, credit growth rate that reached levels that could threaten financial stability was reduced.
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Egypt’s referendum that never was
Güven Sak, PhD
29 December 2012
Egypt is still divided and the voter participation rate revealed by the ballot box was only in the thirties. Both Turkey and Egypt have set up constitutional commissions these past couple of years. The one in Egypt was established in March 2012 while Turkey’s became operational around October 2011. Last week, Egypt’s concluded its operation with a referendum that never materialized. We in Turkey are still waiting for the results of the commission. Why do I called the one in Egypt a referendum that never was? And why I am still quite optimistic about the one in Turkey? Here are a few comparisons between the two constitutional processes.
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Protesters are the patrons of the police
Güven Sak, PhD
28 December 2012
I believe that the attitude of the police towards protesters is one of the most critical stages of their mental transformation. So what happened at Middle East Technical University (METU)? Exactly what happened during the October 29th Republic Day ceremonies in Ankara, if you ask me. Thousands of police officers failed to control a few hundreds of students with democratic practices. Visiting METU for the launch ceremony of the first Turkish satellite, Göktürk-2, prime minister Erdoğan was protested by a group of students, as always.
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State and substate actors in Turkey: Which has more intelligence?
Nihat Ali Özcan, PhD
27 December 2012
The bugging devices found in Prime Minister Erdoğan’s office triggered a debate on the Turkish intelligence services. To understand this story, we need historical background. The capacity, organization and roles of Turkey’s intelligence services generally depend on domestic political struggles rather than international intelligence competition. For instance, during the 1960s and ‘70s the police was weak, ideologically divided and incapacitated against leftist, right-wing and ethnic terrorism. After the 1980 coup, the army forced the government to preserve the unity of the police against ideological division, strengthen its discipline and increase its intelligence, operational and technical capacities. The capacity of the police significantly increased in the decade following the
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