Unemployment inertia persists
Fatih Özatay, PhD
17 July 2012
Unemployment figures have been fiercely inert and steady except extraordinary periods. Unemployment figures for April were announced yesterday. I prefer not to use seasonally and working day adjusted figures for most macroeconomic indicators mainly in order to investigate whether or not existing trends have been changing. Adjusted data filtered several times may misinform you about the turning points. When it comes to unemployment figures, however, the picture changes. Unemployment figures have been fiercely inert and steady except extraordinary periods as the global crisis. Therefore, seasonally and working day adjusted figures give important intuitions on actual dynamics.
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Adjusted growth figures necessary
Fatih Özatay, PhD
14 July 2012
It will be quite useful if the TURKSTAT releases GDP figures adjusted to extraordinary movements in gold trade. The Turkish Statistical Institute (TURKSTAT) has to assume a major role concerning the gold trade issue. Here is the story according to the press: to pay for the crude oil and natural gas imports from Iran, Turkey deposits money at a domestic bank on behalf of relevant exporter company. Since Iran is not able to fully benefit from the international transaction system, the exporter company asks the bank to transfer the payment in gold. The relevant bank imports gold for Iranian companies’ accounts and transfer the gold to Iran.
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Egypt is no Sudan
Güven Sak, PhD
14 July 2012
Like Sudan, Egypt’s economic situation looks gloomy. Unlike Sudan there is hope on the ground in Egypt, which is rather good for expectations management. Egypt and Sudan are neighbors. The Arab Spring has toppled Egypt’s political status quo of three decades. President Omar al-Bashir of Sudan, representing that country’s status quo, has said there would be no similar movement against him. Yet the unrest is already there. The challenge here is to reform your economy without rocking the boat too much. If you fiddle with an extensive subsidy system, as al-Bashir has done, you get caught up in demonstrations. Egypt has an extensive system of subsidies, too. Can President Mohamed Morsi get rid of them? He has to. It is time for price reforms in Egypt. But Egypt is no Sudan. Let me t
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If it was TOKİ, Barcelona would not be as it is today
Güven Sak, PhD
13 July 2012
If it was TOKİ, Barcelona would probably have turned into a compilation of distant and strictly separated satellite towns. I am sincerely sorry that I cannot cite Istanbul as a case to explain my point today. At the end of the commentary, you will agree that I am right. Today, I have decided to use Barcelona as my example, also because I visited the city last weekend.
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Current account deficit decreases, financing eases
Fatih Özatay, PhD
12 July 2012
It is quite pleasing that current account deficit has been decreasing and the quality of finance has been improving. Balance of payments figures for May were announced. Since 2010, high current account deficit and the large share of short term funds in deficit finance have been the major vulnerabilities of the Turkish economy. In October 2011, two-month cumulative current account deficit reached a record high $78.3 billion. Since then, the rate has been decreasing. Current account deficit in May was $67 billion, indicating a fall by $11.3 billion since October. Also, non-energy current account deficit decreased considerably. One of Turkey’s major vulnerabilities has been easing. Capital inflows pick up
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The Leyla Zana Case
Nihat Ali Özcan, PhD
12 July 2012
Leyla Zana was able to find a place in the media with her female, Kurdish identity and experiences in jail. Her explanation on a solution to the Kurdish problem, which ascribed a special role to Prime Minister Erdoğan, provoked reactions in the media. Erdoğan was not silent. He reacted kindly and smartly, and then he negotiated with Zana. Unfortunately, the negotiation that started optimistically and with exaggerated meanings fell from the agenda, and some people could not understand this. This article analyzes the “Zana case” in terms of these actors. During this period, we saw Erdoğan’s ability to manage public opinion one more time. He did the right thing for himself and for his party, because he could not keep silent on an explanation that was full of messages of peace and b
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The TOKİ model dates from the 1930s
Güven Sak, PhD
10 July 2012
Why can't the TOKİ model deliver any good even with good intentions? Sudden floods claimed lives in Russia and Turkey last week. Twelve people were killed in Turkey’s Samsun and 170 people in Russia’s Krymsk. Krymsk made it into the news as it lies close to Sochi, which will host the 2014 Winter Olympics. The flood in Samsun put the Housing Development Administration of Turkey (TOKİ) back on top of the agenda. I believe that TOKİ is the best example of the recent ghost of statism of the 1930s in Turkey. If the judge, the prosecutor, and the police are the same, can the system produce justice? No, it cannot. Designed with the same logic, TOKİ also cannot deliver any good.
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Is the phase of slow growth over?
Fatih Özatay, PhD
10 July 2012
In May, industrial output picked up by 5.9 percent year-on-year. Have the period of slow growth that started in the first quarter of 2011 ended in the first quarter of 2012? If yes, will the growth performance in the second quarter differ greatly? I have been trying to answer these questions for some time now. This is why a number of recent commentaries focused on the assessment of latest figures. This commentary too is one of those. Yesterday, another data critical for the answer of above questions was announced. In May, industrial output picked up by 5.9 percent year-on-year.
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Temporary gold exports and repercussions on growth
Fatih Özatay, PhD
07 July 2012
If Turkey’s gold exports were one million dollar lower; growth rate would be 2.6 percent instead of 3.2 percent. Recent changes in domestic demand have verified the analysis covered in a number of commentaries on this column before the gross domestic product (GDP) figures were announced. As was implied by several indicators, domestic demand grew year-on-year only by 0.9 percent in the first quarter. On the other hand, net foreign demand contributed to growth more than I expected. GDP thus grew by 3.2 percent in the first quarter of the year. Exports were determinant Imports decreased and net foreign demand increased. What triggered net foreign demand growth was the strong rise in the export of goods and services, however: year-on-year export growth by 13.2 percent is almost record-high.
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Muslims don’t trade enough
Güven Sak, PhD
07 July 2012
Most of the OIC countries have closed and heavily controlled economies and they don’t trade enough among themselves. Because their governments don’t allow them. I used to enjoy participating in the Economic and Commercial Committee meetings of the Organization of Islamic Cooperation (OIC). Not anymore. I get the feeling that the business people there are constrained.
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