Oil should not hinder change in Cyprus
Güven Sak, PhD
12 October 2012
Did you know that Northern Cyprus’s is not performing as strongly as Muğla in terms of tourism? When it comes to the economy of Cyprus, I instantly think of an anecdote I heard two years ago, one that’s like a joke, but summarizes the state of affairs in the Northern Cyprus. The owner of a pizza shop located on a university campus in Northern Cyprus rushes into the office of a university administrator. “I have a complaint," he says. "I serve hot pizzas on campus, but students are ordering pizza from a village half an hour away. This is unacceptable!” The administrator asks, “what do you want me to do?” and the owner responds, “put a ban on ordering pizza from off campus.” This is the automatic option shop owners in Northern Cyprus think of. Prices are controlled by the state and it is neve
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There still is a positive development despite all the negative ones
Fatih Özatay, PhD
11 October 2012
So, now it is a greater probability that in the third quarter, growth rate might be weaker than the 2.9 percent in the second quarter. Last week I promised to write on the Central Bank’s required reserve ratio policy. But I want to postpone this discussion as important figures related to growth rate were announced meanwhile. On Tuesday, industrial output figures for August were released: industrial output diminished year-on-year by 1.5 percent. Year-on-year industrial output growth excluding monthly fluctuations had assumed a downwards starting in January 2011. As a result, annual output growth rates became insignificant lately. In August, industrial output decreased for the first time after a long period.
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Syria and neo-Ottoman artillery fire
Nihat Ali Özcan, PhD
11 October 2012
As internal and external complications kept piling up, a mortar strike coming from a country suffering from a civil war with no front line was not surprising. As Bashar al-Assad lingers in power, the Turkish government’s anger and repulsion intensifies. This is not only reflected in the diplomatic realm, but also visible in the refugee camps and its support to armed groups.
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No advanced-technology without basic sciences
Güven Sak, PhD
09 October 2012
Turkey’s export statistics signal low-growth in the medium-term. The resource constraints indicate that the solution will not be easy.
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Forced steps at the wrong time
Fatih Özatay, PhD
09 October 2012
The combination of the first three in particular is a new phenomenon for Turkey. New and critical… Over the past two years, Turkey made economic policy mistakes. First one was about fiscal policy: in the second half of 2010 and the first half of 2011, current account deficit that reached record-high levels constituted the main concern. In addition, the FX requirement resulting from the current account deficit was predominantly met by short term external borrowing. With these circumstances and record-high growth rates, fiscal policy was not tightened. Tax revenues picked up with the help of rapid growth, but budget expenditures also rose equally. If the rise in expenditures could have been limited, rapid growth would have decreased relatively along with a fall in current account deficit fro
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Medium-term or infinite-term?
Fatih Özatay, PhD
06 October 2012
The core problem is that, that “medium-term” somehow turns into “infinite-term.” There is no need to put yourself in the line of fire. God forbid all my beloved ones and all the good people that I am not acquainted with from becoming the target. I am trying to come up with an epigram like “It’s better to have a target than to become the target.” But I know it is not full of meaning and it can easily be read into something else. There is no doubt that it is better to have a target. Yet, if you have only short-term targets, you can still be criticized for being short-sighted. I want to ask who isn’t, but anyways… If you have long-term targets only, on the other hand, the famous saying of Lord Maynard Keynes, may he rest in peace, comes to mind: “in the long run, we are all dead.” As the sequ
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Can Morsi be Egypt’s Özal?
Güven Sak, PhD
06 October 2012
If I were Egyptian, I would look for an urbanization policy that goes hand in hand with the industrial policy. Turkey and Egypt have just signed an agreement for Turkey to extend $2 billion of credit to Egypt. This is meant to support the new economic program that the Egyptian government is trying to put together with the IMF. The program is almost complete, but there are tough choices that Egypt needs to make.
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The youth do not even want to be engineers
Güven Sak, PhD
05 October 2012
First, the best members of a generation refrain from studying the basic sciences as they believe that other options offer better job opportunities and thus a better life standard. We can say that choosing a profession in Turkey depends on your luck: you take the university exam and select universities you prefer among those for which your score qualifies. So, you can choose the university you want to study at provided that you perform well in the exam and fill out the university selection form reasonably. Actually, let me correct myself: this is the de facto picture. Students who ranked in the top 1000 in the Student Selection and Placement Examination choose whatever profession they desire as they are the best of their year. Examination results have a meaning, but have you ever checked wh
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Is this a game?
Fatih Özatay, PhD
04 October 2012
Is it possible that bureaucrats from the Ministry of Finance and the Treasury did not inform the CB of the plans? Yesterday, inflation figures were announced. In short, consumer price inflation rose slightly while headline inflation (that excludes goods prices of which were raised recently) decreased. Given the factors I mentioned during my previous commentary, the Central Bank (CB) might lower the upper limit of the interest rate corridor more.
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Political Islam and Kurdish nationalism
Nihat Ali Özcan, PhD
04 October 2012
A number of Islamist Kurds are planning to stop supporting the AKP and establish a new party. Last weekend, Prime Minister Erdoğan demanded that Kurds show a reaction against the Kurdistan Workers’ Party (PKK), just as a million citizens did after similar ethnically-motivated terrorist attacks in Spain. Turkey has not seen similar protests, because the two countries differ significantly in terms of history, culture, political systems, the zeitgeist, and individual perceptions. The Spanish case might be inspiring, but one hat does not fit all.
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