This is what a man from the "I currently live what the figures will tell you three months later" school said recently:  "I am sixty years old. In my whole life I have not seen such low interest rate. Can this be maintained?" We have this view on the one hand, and we are going through a period where banks' credit portfolio insists on not rising while employment insists on falling on the other hand. Factors which would be expected to lead to excitement imply doubts. Those looking forward believe that entrepreneurship gradually becomes harder. Recently I was reading a speech Russian President Medvedev made at the Parliament, and thoughts occupied my mind: have you ever thought what the missing piece of puzzle for Turkey today? The most important one is that Turkey lacks a target and is not confident about the future. Turkey craves for big targets beyond the "IMF is not the primary credibility factor for Turkey anymore" statement. It is the lack of a target to pursue what makes us sorry. Let us see what the issue is.

The speech Russian President Medvedev delivered last year on November 12 in Duma underlined the policy strategy Russia has to develop. He emphasized that the acquisitions made during the Soviet revolution gave power to today's Russia and that it is necessary though not enough to thank those two established today's infrastructure during rough times of yesterday. Medvedev pointed out that share of industrial exports in Russia's total exports is 20 percent and that export structure based on natural resources is important but unstable. Putting special emphasis on the fact that the technological infrastructure of industrial sector should be revised, Medvedev underlined that Russia has to go through a technological renovation based on innovations, and that they take steps and make investments to this end. The framework he drew was sort of a state policy. Putin also used to stress the same points during his presidency.

But why is this important? It is important because Russia seems to have realized what it should do in the coming period and to have mobilized the wealth it holds to this end. The graph above shows three bubbles representing the manufacturing industry of Russia, Turkey, and Israel. Only these three countries are examined as there are no other important industrial countries in the region. Let us note down this as the first point. The vertical axis shows the share of manufacturing industry exports in total manufacturing industry exports of the region. It can be noted that Russia's hare is around 35 percent and Turkey's share is around 40 percent. In 1995, the shares were 45 percent and 25 percent for Russia and Turkey, respectively. So, time passed in Turkey's advantage. Particularly thanks to the correct policies implemented after 2002, Turkey increased its share in regional exports as an industrial country. And this would be the second point. Horizontal axis shows the share of manufacturing industry exports in total exports of the relevant country. This fall from 35 to 20 percent level in Russia and rose from 75 to 80 percent in Turkey from 1996 to 2008. Turkey, implementing correct policies, not only increased its share in total industrial exports of the country but also improved the share of industrial exports in its total exports. And this is the third point.

The world is trying to define a new "normal". The quality of the industrial exports is not same for Israel and for Turkey. Israel makes high-technology exports whereas Turkey makes intermediate-technology exports. In his speech at Duma, Russian President was talking about improving the export quality of the Russia bubble in the graph up to the quality exported by Israel. He was also referring to the article "Come on Russia" he wrote with this purpose.

In the post-communist period, Russia tries to redefine its target in the world. It reconciles with its past and looks at the future. It sets big targets.

And what are we dealing with here? We are dealing with the "Signing a deal with the IMF is not the primary credibility factor for Turkey anymore" statement.

Now, let us go back to the beginning:  why does the statement "I am sixty years old. In my whole life I have not seen such low interest rate." raise doubts instead of leading to excitement? Why?

Turkey is misgoverned.

This commentary was published in Referans daily on 16.02.2010