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    “For God’s sake, what aspect of this crisis psychological!”
    Güven Sak, PhD 31 January 2009
    Doomsday Superstitions Catalogue; Entry No Two: "For God's sake, what aspect of this crisis psychological!" Since the international banking crisis hit the shores of Turkey, a form of explanation that is not even slightly related with the reality began to spread around. Whenever you say the word "crisis", people, with the common pedantry of those who does not know anything, take the lead and say "hey, that is totally psychological" even before you start talking about the measures needed to be taken. They assume such an attitude as if there is no problem in reality and you had a sort of a nightmare so that all problems will disappear once you wake up. Or, as if the problem will disappear completely right away if you do not ever mention it. Well, this is not the case. The people thinking that [More]
    When the EU seems to come up in the agenda...
    Fatih Özatay, PhD 29 January 2009
    Currently, we are wondering what will be the magnitude of the economic contraction in 2009. The only thing we care about is whether we can decrease the size of this contraction via taking measures. Because, if it is manage, less people will lose their jobs and we will limit the rise in unemployment. However, just one and a half year ago, we were still discussing the second generation (micro) reforms. The issue considerably occupied the agenda, a lot of people started to comment and speak on the issue, which was a good thing. [More]
    It is not normal that Washington is more important than New York
    Güven Sak, PhD 29 January 2009
    We are in an interesting period. We are under influences that we are not used to face. It might be quite dangerous to get excited upon each development and try to react to each new development. Periods of crises are not periods for rapid action at all. The approach that shall be pursued is to limit actions to the highest extent possible and try not to waste energy. The important thing to do in busy days with different news flowing in every second is to focus on the question of the day. It is crucial to find out the question of the day for avoiding to get excited by every single development. So, what is the question of the day nowadays? A finding by an American friend summarizes the question of the day: Washington being more important than New York is not a situation we are used to see. Let [More]
    Turkey has taken the first measure against the crisis with the BRSA regulation
    Güven Sak, PhD 27 January 2009
    I have good news. We just saw that Turkey has the ability to be proactive. The first right step to tackle the crisis is taken. Banking Regulation and Supervision Agency (BRSA) has broadened the framework of the Reserves Regulation. First of all, it is the first time a public authority takes an action oriented towards the real problem. Secondly, Turkey has for the first time introduced a pro-active measure. This measure, though necessary, is also not sufficient. Now, it is time to take rapid new steps towards the required direction. If you are wondering what we are talking about, please keep on reading. [More]
    This was exactly what we needed now...
    Fatih Özatay, PhD 26 January 2009
    Global shock, and the big earthquake and then the global crisis and recession... We have been using these phrases since recently. However, we were talking about how Turkey needs to create a new wave of reforms for instance in most of 2007 and in 2006. You know, the reforms we used to call 'micro reforms' and we started to call 'second generation reforms' as we thought it implied the real meaning better. In professional terms, it was quite exciting to comment on these reforms. On the other hand, as the economists of a country that shockingly did not manage to understand the terms like 'stability', 'budget constraint' and 'disciplined economic policy' we were proud that the archaic times have passed and that it was time for saying new things considering the medium and long term. [More]
    Need for a nut-case team
    Fatih Özatay, PhD 25 January 2009
    Among the most unpleasant aspects of this crisis for Turkey is that it creates a great ambiguity that we cannot and will not be able to control. Measures are taken throughout the world, one after another. Nonetheless, the pessimistic climate is not disappearing. It seems like it is beginning to disappear, but the optimism lasts only for a couple of weeks. After that, new unfavorable developments appear, some people or countries are getting into trouble and the world is becoming covered by a new pessimistic climate. This implies a great ambiguity regarding what tomorrow will bring. [More]
    Is height enough for success?
    Güven Sak, PhD 24 January 2009
    What is the secret of success in life? Is it the chemical process a fetus is exposed to that determines the future? Or, is what we call success is just the ability to take the opportunity, which is an ability that proves itself in any case? Of course, the mentioned "ability to take the opportunity" is not a gift of the nature, but it is to be nurtured.  But, how is it possible? How can one attain the ability to take the opportunity?  In fact, what Joseph Nye, an international relations professor at Harvard University defines "smart power" is exactly this "ability to take the opportunity" and is nothing but the product of a series of skills. And, nowadays, it is the "ability to take the opportunity" that Turkey needs. [More]
    Need for an integrated approach
    Fatih Özatay, PhD 22 January 2009
    We shall not pin our hopes upon individual solutions in the period of crisis we are going through. This fact was relevant even for four months earlier, but it is much more relevant today. There exist interrelated problems and there is a need for an economic program that will take into account and at least ease all of those problems - expecting that a program would completely resolve problems would not be realistic - so as to be able to reach the shore (2010).  To clarify the situation, I will enumerate the mentioned interrelated problems once more. [More]
    Obama era is a window of opportunity for Turkey
    Güven Sak, PhD 20 January 2009
    Today is a historic day. President Obama will begin his term as the President of the United States.  Though Israel's latest Gaza operations will force Obama to make immediate foreign policy decisions, the new President will most likely have to focus on economic issues. Expectations are quite high and the problem is more serious than any other that we have ever faced. While immediate foreign policy decisions are forcing the doors, we will see that domestic decisions for the economy will in fact be foreign policy decisions. And the task to shape a new global economic architecture will be carried out by the administration that is to take the office. By this way, a change in style will take place. This is what is going to happen, regardless of whether it is desired or not. We are standing just [More]
    Search for a bridge to the other side
    Fatih Özatay, PhD 19 January 2009
    I have been repeating after and after that the global crisis will affect Turkey through four different channels. There are measures to tackle with the first three, namely the fall in external credits, narrowing down of domestic credits and worsening of confidence, as we also discussed here in this column. On the other hand, we do not have any means eliminate the negative affects realizing through the fourth channel, i.e. to prevent the fall in foreign demand for the goods produced in Turkey, in the short term. [More]