Why Turkey’s industrial giants have switched to construction
Güven Sak, PhD
21 September 2012
I am starting to believe that the flaws of the industrial incentive system are not what push an electronics giant to do construction in Istanbul. Here is the issue that has occupied my thinking lately: how was South Korea’s electronics giant Samsung able to become a global giant while a peer in Turkey prefers to engage in the construction business in Istanbul? Why did the one in Turkey switch from being an industrialist to a contractor, while its Korean peer did the exact opposite? I still cannot forget a meeting with Turkish companies from a couple of years ago. When making investment plans, Turkey’s industrial giants aimed at growing nationally in the service sector. I am starting to believe that the flaws of the industrial incentive system are not what push an electronic giant to do con
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Risks everywhere!
Fatih Özatay, PhD
20 September 2012
European stability funds will impose certain terms for applicant countries and will closely monitor if these terms are met or not. The other day, I stressed three risk factors ahead us: first was the risk that Spain and Italy don’t apply to the European stability mechanism. These countries need a mechanism that will enable borrowing at low interests until the economic policies in place deliver positive results. The latest decision by the European Central Bank gives them the opportunity. To benefit from this opportunity, however, they need to apply to the stability funds. From the beginning of the week to Wednesday morning, Spain acted ambivalently, which disturbed the markets. Ten-year securities of Spain started to be traded at higher interest rates due to the rise in the risk perception
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The country off the agenda: Syria
Nihat Ali Özcan, PhD
20 September 2012
The bitter side is that the issue of Syria is progressively falling off the agenda of world public opinion. While the uprising in Syria turns into a civil war, gloomy news is continuing to come. Too many innocent people are either losing their lives or leaving their homes as refugees. On the other hand, it is seen that the struggle is coming to a deadlock. The bitter side is that the issue of Syria is progressively falling off the agenda of world public opinion. Unfortunately, there is neither the power nor will to solve this issue in the foreseeable future.
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The Central Bank could take a lesson from Steve Jobs
Güven Sak, PhD
18 September 2012
The way to slow down the economy is to increase interest rates. If you want the opposite, do the opposite in financial policy Turkey’s economy is slowing down; its growth rate is dropping off. The distress you feel everywhere is most probably related to this. Ankara has wanted the Turkish economy to slow down. Lately, however, I cannot stop wondering whether this was what Ankara actually wanted. Yes, the economy has cooled down, but it has not yet shown a sign of a rally despite the Central Bank (CB) having recently lowered the effective interest rate. If you think about you, you might suspect that something is going wrong. What is the reason? And why do I think that in the current environment the CB has a lot to learn from Steve Jobs about putting things back on track?
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Let’s hope that international conditions do not deteriorate in 2013
Fatih Özatay, PhD
18 September 2012
Domestic economic policy will make a limited contribution to growth. All we can do is hope that international conditions do not deteriorate In the first three quarters of the year, growth rate was significantly below the potential, translated into rigidity of unemployment around 9 percent. Yesterday, unemployment rate for June was announced at 8.9 percent (seasonally and working day adjusted), which verified the rigidity once again. Then, what can be Turkey’s economic policy response to the slow growth?
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How is the atmosphere lately?
Fatih Özatay, PhD
15 September 2012
The recent upward trend in foreign fund inflows to Turkey will continue and maybe strengthen to some degree.
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The Paris Protocol is bad economics for Palestine
Güven Sak, PhD
15 September 2012
I had a déjà vu experience in Ramallah last Monday. It was like old intifada times. Slogans being chanted, burning tires placed over large rocks blocking cars, children throwing stones again. There was, however, an important difference. The demonstrations were not about Palestinian resistance to Israeli occupation but about the policy of the prime minister of the Palestinian Authority, Dr. Salam Fayyad. People are demonstrating against recent price hikes due to the Israeli government’s decision to raise the value added tax on certain items. The measure was taken as a way to control Israel’s budget, but it’s the Palestinians who feel its impact. Why? Because of the 1994 Paris Protocol between Israelis and Palestinians. Let me tell you why the protocol is bad for Palestinian economi
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Turkey ranks third in the world in housing price growth
Güven Sak, PhD
14 September 2012
Between June 2011 and 2012, house prices in Turkey increased by 10.5 percent. The rate for Brazil was 18.4 percent As of June 2012, Turkey was third in the world in terms of housing price growth, according to the Global House Price Index. Should we be concerned? I don’t think so. Let me tell you how I read this picture. Last weekend, I was in Israel’s capital, Tel Aviv. I’ve always loved visiting Tel Aviv. It is a beautiful port city in the eastern Mediterranean. It’s a city that doesn’t have a history. It came and completely absorbed the ancient city of Haffa. Tel Aviv resembles Beirut, Alexandria, and Izmir. I had not been to Tel Aviv for the previous two years. This time, I was attracted by the high-rise apartments that are newly built or under construction. Normally in Tel Aviv there a
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German court has saved the Union
Fatih Özatay, PhD
13 September 2012
Recent decisions of the ECB and the German Constitutional Court have prohibited things from getting worse. The German Constitutional Court has dismissed the rejections against the European Stability Mechanism (ESM), but stipulated two conditions for the ESM to be signed into a law: before the signing by the president, Germany’s relevant liabilities will be capped (that is €190 billion which is the countries share in the ESM capital). The ESM will not have the mandate to change this limit, though it will otherwise operate independently. Second, ESM will have to share all information, even if confidential, with relevant officials at the German parliament. The ESM therefore can become operable by the end of the year (originally, the ESM was planned to be launched by the end of 2013 but later
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Turkey and the unity of Iraq
Nihat Ali Özcan, PhD
13 September 2012
The problem in the region goes beyond hosting al-Hashemi or efforts to take the competition of Sunnis and Shiites as a reference point. Tariq al-Hashemi, vice president of Iraq, has been sentenced to the death penalty. The judgment of the court was not a surprise for many, because in Iraq and the Middle East everyone knows that the courts are one of the most-used and classical tools to eliminate the political opposition. Anyway, this paper does not aim to analyze the judgment of the court. My aim is to analyze regional developments on the basis of the internal strife of Iraq.
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