Looking towards 2012 (4)
Fatih Özatay, PhD
25 December 2012
If growth rate remains around the potential rate at 4 percent, unemployment rate will be rigid at around the current 9 percent. In 2013 the economic outlook might as well differ from the base scenario I have drawn previously, of course. So now it is time to set different scenarios. I will address the pessimistic one first as it might probably be realized earlier than the optimistic one.
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Women will save Turkey
Güven Sak, PhD
25 December 2012
If they leave their homes and join the labor force, women really can save Turkey. I remember a story in Bloomberg earlier this year that said the sales of adult diapers in Japan exceeded those for babies for the first time this year. The story was about the rising share of people over 60 in the population changing consumer behavior. By 2050, 36 percent of Japan’s population will be over 60, compared to 9 percent presently. The working age population (15-64) that peaked in 1995 with 87 million people is expected to gradually fall to 54 million, the bottom level recorded in 1945. So, how can Japan grow in the period ahead? Under normal conditions, as the employed population will shrink, the economy also will shrink. So, Japan has to either enhance its productivity level or increase the size
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Looking towards 2012 (3)
Fatih Özatay, PhD
22 December 2012
If external conditions evolve in line with the assumptions I presented in the previous commentary, 2013 will be a better year than 2012 for Turkey in terms of the economy Now it is the time to discuss how main macroeconomic indicators would develop in 2013 under the base scenario. The bottom line is if external conditions evolve in line with the assumptions I presented in the previous commentary, 2013 will be a better year than 2012 for Turkey in terms of the economy. In a nutshell, I think the 4 percent growth estimation of the Medium Term Program is realistic. But provided that the assumptions made in the base scenario are realized. Below I address the factors that will influence Turkey’s growth performance:
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Turkey’s eroding industrial base shows bad policy
Güven Sak, PhD
22 December 2012
Deindustrialization is the surest way to stuck Turkey in the middle. Whenever I am asked to comment on the last 10 years in Turkey, I find myself reaching for the opening lines of “A Tale of Two Cities:” “It was the best of times, it was the worst of times.” Like the Dickensian atmosphere of revolutionary Paris of 1789, Turkey has continued its transformation process over the past decade. Ten years ago, budget deficits and the outstanding government debt were the major issues. Not anymore. Now the rule of the ballot box is stronger. We are talking about things that we could not talk about 10 years ago. As is the case in every transformation, the country stayed divided on every conceivable issue. The freedom of the press has quietly suffered as self-censorship rose. Economically,
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A business is futile if its value is based on the value of the land
Güven Sak, PhD
21 December 2012
Competition driven by rental income takes place behind closed doors. It is for a reason that polls show a strong perception of corruption within municipalities.
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Looking towards 2013 (2)
Fatih Özatay, PhD
20 December 2012
As the majority of the conditions that will influence Turkey’s economic performance in 2013 are not under our control, we have to design a set of different scenarios. Forecasts about the economy in 2013 have to take into account the external conditions that affect Turkey’s. As the majority of these conditions are not under our control, we have to design a set of different scenarios. So, here is my “base scenario.”
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The meaning of ‘terrorist’ for the US and Turkey
Nihat Ali Özcan, PhD
20 December 2012
There seems to be no consensus between the allies regarding the political projections, risk perceptions and the identities of the future actors of the post-al-Assad period. Everyone knew that the developments in Syria would have different and important effects on the features, positions, roles and relations of states and non-state actors. As the conflict spread and deepened, all actors began to act not only in line with ideological motivations, but also in accordance with their interests and with the intention of minimizing the negative effects of the developments. They are trying to understand and participate in the developments. The debate over the post-al-Assad period continues behind closed doors.
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Looking toward 2013 (1)
Fatih Özatay, PhD
19 December 2012
In the light of the available information, we can suggest that Turkey’s annual growth rate in 2012 will be around 2.5 percent. Having approached the new year, it is time to share some forecasts on 2013. To put those into a context, I will depict a few scenarios concerning external conditions and shape my forecasts accordingly. I did the same by the late 2011 and put forth two scenarios, one optimistic and one pessimistic, by 13 September 2011. Later on, I provided some derivative scenarios. So, first let me remind of last year’s scenarios.
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Women are employed only if there are no men left to employ
Güven Sak, PhD
18 December 2012
Today we are about to learn that if half of the population is confined to their homes, Turkey will not become affluent. Turkey is the only OECD country in which the female labor force participation rate (FLFP) is below 30 percent. I am not arguing if this is good or bad, I am just sharing a fact. The number of women in employment is lower than the number of housewives: 8 million and 12 million, respectively. This means, 60 percent of Turkey’s women make dolma and watch daytime television. According to TURKSTAT’s household surveys, women prefer sitting at home over a steady paycheck. Do they, really? Is there nothing to blame on employers? There is, but this is changing now.
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Credit growth rate or interest rate? (2)
Fatih Özatay, PhD
15 December 2012
Encouraging different growth rates for different credit types might trigger investment expenditures. This would be the best option concerning the current account balance. I want to dig deeper into the question I asked the last time: Credit growth rate or interest rate? Last time I argued that given the current circumstances, credit movements had a more critical influence on growth. Also, I said that I will later elaborate on the question “was it the conventional interest rate policy alone that yielded results?”
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