Growth rate significantly below the potential
Fatih Özatay, PhD
11 September 2012
Second quarter’s growth rate is substantially below the potential rate of 4.5-5 percent. During July, I speculated on growth rate of the second half of the year. Here is a section from the commentary dated July 17: “it appears that second quarter growth was not much different than the first concerning growth performance and that it might outperform the first only slightly.” And this one is from July 10: “In other words, the second quarter is hardly different from the first. All we can expect is a slightly higher growth rate; not relatively or evidently.”
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You see Samsung when you open up an Apple
Güven Sak, PhD
11 September 2012
Apple is buying parts from its rival because Samsung produces the highest-quality parts at the lowest prices. Apple has needed Samsung to become what it is today. Such is the current era. You buy an Apple iPhone, but when you disassemble it, you see many parts that have been produced by Samsung. Korean Samsung is one of the main suppliers for American Apple. The major supplier, actually. Apple is a US-based company that produces products that we had not heard of five years ago, yet are indispensible for us today. Apple is a global trademark, but none of its products are manufactured entirely in the US. Why? Because you cannot create global trademarks with domestic goods. I recommend you the latest commentary of TEPAV economist N. Emrah Aydınonat on how you see Samsung when you slice an App
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The race for the iron rice bowl
Güven Sak, PhD
08 September 2012
A highly disproportional number of university graduates in Turkey are looking for a civil service job. This Ramadan, on August 26, a crowd of unemployed university graduates broke their fast outside the prime ministerial residence. Hundreds of demonstrators coming from all around the country condemned their government’s indecision on public service employment. This happened in Rabat, Morocco, but it could have easily been in Ankara. Figures and emails I have received from unemployed university graduates attest to this. Let me tell you why this is a problem.
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Self-criticism over gold trade
Fatih Özatay, PhD
06 September 2012
Temporary changes in gold trade overstate both exports and imports. Gold exports and imports became a hot issue once again after the latest foreign trade statistics were announced. So, on this occasion, I would like to fulfill my responsibility as a columnist and an academician, and address an issue I wanted to write on for long: earlier, I stated that gold exports and imports taking place in different quarters affected the growth rate. The TURSTAT President, however, stated the opposite last month.
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How can generals take initiative from the PKK?
Nihat Ali Özcan, PhD
06 September 2012
Arguments about the outlawed Kurdistan Workers’ Party (PKK) reminded me of an event that happened years ago. In 1989 PKK attacks increased and many soldiers lost their lives. During the funeral of a soldier a large crowd gathered at Kocatepe mosque in Ankara. Some reproved Chief of General Staff for the soldier’s death by saying “why don’t you do anything?” Pasha tried to explain that they have a limited responsibility and authority against the PKK and that the Ministry of Interior was authorized by laws for this issue. However, he was not successfully able to convince the people and their criticisms continued. The general resigned during the Iraq crisis in 1991 when he said it wasn’t his mission. The Pasha designated after him acted differently due to the army’s feelings of “exagg
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Inflation, exports and FED President Bernanke
Fatih Özatay, PhD
04 September 2012
From an academic perspective, Bernanke’s remarks on monetary policy were critical, but he didn’t say anything new from the perspective of financial markets. Goodish and baddish developments on the inflation front: the baddish one is that consumer prices increased beyond expectations in August, with annual CPI at 8.9 percent. The goodish news is about the l index that excludes certain goods and services in calculations in order to give a better picture of inflationary trends. Since February, the headline inflation measured on the basis of annual changes in the l index has been rigid at 7.8 percent. In August, the first sign of the breaking of the rigidity were seen: annual headline inflation rate decreased to 7.2 percent. The Central Bank alike many economists expect a significant fall in i
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The number of applicants for public employee exams has reached a million
Güven Sak, PhD
04 September 2012
Over the last decade, the number of public employees has increased by 30 percent. New employment in the public sector in the first half of 2012 was about 250,000. Let’s admit that this was a first: in 2012, the number of people seeking to become public employee reached almost a million. 987,000 people applied for the Public Personnel Selection Examination (KPSS). Out of these, 931,000 took the exam. In 2009, I remember seeing a photo of Chinese youth standing in rows like an army of ants in the The Guardian and I was greatly impressed. That year, one million people took the public personnel election examination in China. Back then, this was not the case in Turkey. The number of applicants for the KPSS in 2008 was around 500,000. Meanwhile, Turkey has taken the growth record from China or s
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Not back to the salt mines yet
Fatih Özatay, PhD
01 September 2012
Heavily discussing latest ECB and FED decisions, Turkey will come and go back to the salt mines. The school year is starting next week. Ankara will liven up soon. Economic developments and statistics that will double the joy are also around the corner: only a few hours after the time I am writing these lines, Federal Reserve (FED) President Bernanke will be speaking at the Jackson Hole. Will he announce a quantitative easing? On September 6th, the European Central Bank (ECB) will hold its awaited meeting. Will the ECB pull a rabbit out of the hat or continue empty talks as to how “the euro will survive.” Later on September 12th, Germany’s Constitutional Court will reach a verdict on Germany’s law against the European Stability Mechanism. Will the court grant an injunction or not? On Septe
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How to solve a 19th-century problem?
Güven Sak, PhD
01 September 2012
Today, the Turkish political elite are still looking at the problem with a 19th-century bias. Why did the call of Mr. Cemil Çiçek, the speaker of Parliament, for national reconciliation fall on deaf ears? Once again, PKK activity is on the rise. It was right after the Gaziantep bombing. Everything we see and hear is so much like the early 1990s. We are all frustrated. This time Çiçek’s call was different.
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Why has Turkey always been a loser?
Güven Sak, PhD
31 August 2012
In the current era where growth is indexed to ideas, Turkey needs creative minds and an infrastructure to protect their products. The other day I cited the European Union’s Innovation Union Scoreboard. The new version of the study covers Turkey as well as 27 EU countries. They are grouped in four categories: innovation leaders, innovation followers, moderate innovators, and modest innovators. Turkey, Romania, Bulgaria, Lithuania, and Latvia are in the fourth category, which is more like the losers' category. So, why have we always been a loser? I think that prosperity cannot exist in the absence of education and justice. Restructuring the ministries of education and justice should be among the priorities of the growth strategy. Let me emphasize this while preparations for the new five-year
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