'Turks have the sense of time'
Güven Sak, PhD
06 July 2012
Any country willing to undertake a regional role has to go beyond rural coffee talk. The other day in Barcelona, an official from a company that does business in Turkey and North Africa said to me: “I am not saying this because you also are a Turk, but if a Turk makes an appointment, he or she arrives on time. Turks have a developed sense of time.” At first, I was greatly surprised; his remark was quite unexpected. I personally do not have a sense of time and space. But people abroad appear to see us differently, relative to other countries that they do business with. Or perhaps you take after the qualities and characteristics of the people with whom you trade. More than half of Turkey’s exports go to European Union countries. Maybe we have started to resemble Europeans as we interact and
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Turkey’s and Syria’s proxy war capacity
Nihat Ali Özcan, PhD
05 July 2012
The tension in Turkey-Syria relations is rising. For now, no one expects a conventional war. However, this does not mean that there is no struggle. While diplomatic and psychological warfare continue, the preparation for proxy war goes on. Developments show that the parties are setting up the gravity points of their strategies on proxy war, which would be long-standing and abrasive and would have unpredictable results. Turkey is trying to organize a proxy war by bringing out Syrian opposition groups. However, Turkey is at the first step and its task is difficult. During this period, Syria is busy. It might plan to use the PKK, which is Turkey’s Achilles’ heel, or might plan to trigger sectarian Marxist organizations, which had strong ties during the Cold War with the Syrian intell
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An amusing debate
Fatih Özatay, PhD
05 July 2012
In 2012 Turkey can achieve 4 percent growth as targeted in the Medium Term Program, which is in harmony with my expectations for soft landing. “Hardness” and “softness” are relative concepts. When the gross domestic product (GDP) figures for Q1 were announced, an amusing debate that had been shelved for some time came back on our agendas: will Turkey experience the economic slowdown as “soft landing” or a “hard landing?” Some of you might ask “why does it matter if it was hard or soft when the economy will eventually land?” And you are right. In Q1 2012 the economy grew by 3.2 percent compared to the impressive 11.9 percent in Q1 2011 and there is an evident “landing.” Potential growth rate I would like to draw your attention to something so as to put an end to the soft vs. hard abstrac
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80 Mango stores in Turkey, 5 in Egypt
Güven Sak, PhD
03 July 2012
To be able to assess the countries of the region with a different perspective, Turkey has to compile data. You cannot easily become the order-setter by just saying it. Mango is a Spanish clothing design and manufacturing company, founded in 1984. Currently it has 2494 stores worldwide; 80 in Turkey and only 5 in Egypt. Turkey’s and Egypt’s populations are 75 million and 80 million, respectively. But there are a significantly higher number of Mango stores in Turkey. Moreover, the working styles of the stores in the two countries are different. A couple of days ago, I said, “there are two types of countries: those that enrich their populations and those that cannot.” The people living in the former are generally more integrated into the rest of the world. They go shop in any one of the 2494
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Quite a soft landing
Fatih Özatay, PhD
03 July 2012
Though growth rates have decreased remarkably, there appears a soft rather than the dreaded hard landing. Gross domestic product (GDP) for the first quarter of 2012 was announced yesterday: annual growth rate in Q1 was 3.2 percent. Quarterly GDP growth rates since Q1 2011 were as follows: 11.9 percent in 2011Q1, 9.1 percent in 2011Q2, 8.4 percent in 2011Q3, 5.2 percent in 2011Q4 and lastly 3.2 percent in 2012Q1. Though growth rates have decreased remarkably, there appears a soft rather than the dreaded hard landing. Actually the landing was quite soft as I denoted above. Foreign demand was the driving force
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What the Ankara subway construction made me think…
Fatih Özatay, PhD
30 June 2012
When designing and implementing economic policies, “potential future budget deficits” must be taken into account. Now it is way easier to explain the troubles high public debt might cause. You can just cite the Greek or Italian example without making extensive technical remarks. Also, Spain is a “perfect” case on how deep-rooted problems in sectors that don’t seem to be related with the public sector – say the vulnerabilities of the banking sector – unexpectedly turn into a public sector challenge and jump the public debt, extending vulnerabilities towards the entire economy. ‘Implicit’ liability
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Syria and the Golden Rule
Güven Sak, PhD
30 June 2012
In the past, Syria has sponsored Kurdish rebels inside Turkey. Now Turkey seems to be sponsoring a similar insurgency inside Syria. There are struggles for survival going on all around Turkey. It has always been this way. There is one in Syria to the south. More than one generation of Iranians also grew up in that way. We should not forget about Israel either, and even add Putin’s Russia to the picture. Turks definitely have a clear knowledge of the feeling. The Turkish Republic was founded on an existential threat, as its empire crumbled to dust. It is fear that shapes policy in our neighborhood. Incumbent leaders are in a hopeless struggle to consolidate their gains, ever watchful of someone coming in taking what is theirs (read Chiozza and Goemans’ “Leadership and International
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Turkey has to strengthen its middle class
Güven Sak, PhD
29 June 2012
The key challenge is to enrich the people and strengthen the middle class. Without a strong middle class, Turkey cannot become a high-income country. When I was born, we had a refrigerator in the house. Dad later told me that they had bought the AEG refrigerator after I was born. We also had a telephone, which remained as a rare necessity for a long time in Turkey. People used to make an effort to get a phone line connected to their houses. Back then, you had to connect separately to the line via the operator for each toll call. It was not possible to just dial and call. It wasn’t until the 1970s that we had a TV at home. The broadcast was not 24/7 and it was black and white. But it cheered us up big time. That was the first time I watched the Star Trek. In the second half of the 1970s, I
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Second quarter’s growth outlook becomes clearer
Fatih Özatay, PhD
28 June 2012
It is highly probable that slow growth – zero or negative growth when adjusted to population growth – has pertained in the second quarter of the year. The latest data on the second quarter, real sector confidence index and subcomponents for June, was released last week by the Central Bank. The index being below 100 indicate that survey respondents composing of large companies of Turkey are not confident in the economy. Lower the index value, higher is the lack of confidence in the economy, and vice versa. During crisis periods, index value generally stands significantly below 100, as was the case in the late 2008 and in most of 2009. Since 2010, the index fell below 100 only once (in December 2011). We mustn’t regard that one-month observation, though. Thus, we can say that the real sector
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Does Turkey always have to sacrifice growth?
Fatih Özatay, PhD
26 June 2012
Isn’t it a major weakness for Turkey to sacrifice growth in order to ease its current account deficit? The economy slowed down drastically in the first quarter of the year. Certain indicators suggest that the second quarter was no different in this respect. At best, the process of slow growth ends after the second quarter and Turkey’s economy switches to a phase of faster growth unless the European crisis deepens. But in the end, it is quite likely that Turkey will miss the growth target of 4 percent estimated in the Medium Term Program. In that case, the recovery in current account deficit might stop and be replaced with a moderate deterioration, despite the recent drops in oil prices. If the European crisis deepens and threatens global financial markets, however, this analysis will be vo
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