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    Turkey is no Belgium
    Güven Sak, PhD 13 July 2015
    Of course you don’t need to read this column to know that. Turkey’s per capita GDP is only a fifth of that of Belgium. Our economy has been declared part of the “fragile five,” while Belgium is safely embedded in the EU’s currency and trade union. Belgium also has no neighbors like ISIL. In one respect however, we seem to be on track to join Belgium – we take our time with coalitions. After their December 2011 elections, it notoriously took the Belgians 541 days to form a coalition. [More]
    Why do Turks distrust one another?
    10 July 2015
    Could Turkey ever be ruled by a coalition? This was the question on everyone’s minds in the last couple of months. I believe that the answer to this question lies in the magical phenomenon that we call “trust.” If the parties can trust one another, a coalition will work out; otherwise, the system will hit an impasse. It’s a straightforward way of reasoning: Just as spouses who distrust one another can’t work out their marriage, just as two partners who distrust one another cannot manage their company together, two or three parties that distrust one another will unfortunately fail to form a coalition and rule the country. [More]
    “This is not a Maydan, but Baghramyan” – Electricity protests in Yerevan
    Diana Yayloyan 06 July 2015
    Tens of thousands of people in the evening of 22 June took the Baghramyan Street in Yerevan, where the residence of President Serzh Sargsyan is located, as a sign of disagreement with the increase in electricity tariffs. The protest emerged as a strong reaction to the decision, taken on 17 June, to increase electricity tariff from the 1st of August on more than 16%. The situation escalated on early morning, 23th of June, when police used the water cannon against the demonstrators. Contrary to the expectations of the authorities, this action not only failed to disperse the crowd, but increased people desire and readiness to go until their demands are met. Approximately 230 demonstrators were arrested; some journalists became victims of the brutal treatment by police. The demonstrators did n [More]
    The Greek Tragedy of Mario Draghi
    Güven Sak, PhD 04 July 2015
    Central banking is difficult. It requires bankers not only to plan for how they think the future is going to play out, but plan for how they fear it might play out, too. But even the best plans won’t be enough if central bankers don’t know how to talk about them. Banking is all about what is going to happen in the future – who is going to pay whom, and how. So central bankers need to be adept at manipulating the future in the present day. Like everyone else, they do that with words. Each one must be precisely calibrated to instill certain expectations in listeners and readers. [More]
    How to talk about the big picture
    Güven Sak, PhD 27 June 2015
    What would you do if someone asked you to summarize the major tensions of human beings on this blue planet of ours? I’m talking about the big, systemic issues – the problems of capitalism, war, climate change and development. These things are too complicated for any one person or a single generation to solve. [More]
    The Return of the Dispossessed
    Güven Sak, PhD 13 June 2015
    Turkey had its 18th multi-party general election last Sunday. The results bear repeating: our governing party of last 13 years, has come out 18 short of a parliamentary majority. We now have a 4 party parliament. The last time this sort of thing happened was when we used dial-up internet connections, and cell phones had actual antennas on them. [More]
    Turkey’s Great Normalization
    Güven Sak, PhD 06 June 2015
    There are two kinds of countries in the world. Ones where the election results are revealed after the ballots are counted and ones where results are known long before the first vote is cast. Turkey for sure belongs to the first category. We are no Ukraine, no Egypt. [More]
    Turks vote for no confidence every day
    Güven Sak, PhD 30 May 2015
    It is sad to see the deterioration of Turkey’s investment environment. I hear more and more that in order to do business in Turkey, you need to hire fewer lawyers and talk to more politicians. “It’s all about finding the right connections,” they say. Despite it all, Turkey is still a functioning market economy, to borrow a term from the European Union lexicon. We are certainly no Venezuela, but Russia? That we may discuss, especially depending on the results of the upcoming election. [More]
    Turkey and the limits of urbanization
    Güven Sak, PhD 23 May 2015
    We in Turkey compare ourselves to Europe. It is too often a heartbreaking exercise, which is why our persistence in the practice is so telling. I think deep down in our hearts, we know that Turkey belongs to the West in general, and to Europe in particular. Turkish history, starting from the Central Asian steppes, could be summed up as a centuries old, constant movement towards the West. [More]
    Why do Turks invest so much in construction?
    Güven Sak, PhD 16 May 2015
    Since the 1980s, Turkey has transformed itself from a sleepy agricultural economy to a mid-tech industrial economy. Impressive? Yes. But it stopped there. Just have a look at the share of hi-tech products in Turkey’s exports. A lousy 4%, while the OECD average is around 18%. Why? Why do Turks invest in construction rather than biotechnology? The obvious answer is often the right one: it’s about the duration of the investment. The term required to get your money back is much shorter in construction than in hi-tech endeavors. Turkey grows in volatile stop-and-go cycles, which shortens its investment horizon. So it’s all about poor macroeconomic management. [More]