Why the growth slowdown in Turkey now?
30 October 2016
Have you seen the Putinphone? Caviar, a Russian jewelry company, has designed a limited edition of them on the occasion of the 63rd birthday of the Russian president. It looks like the iPhone 6, except Putin’s face is encrusted in gold on the back, as is the seal of the Russian presidency and a few lines of the country’s national anthem. This is all on top of a titanium base that is supposed to reflect the national will of the Russian people, as embodied by their omnipresent president. Here’s the rub though: When you turn the phone on, it’s just a regular iPhone, “designed by Apple in California” and manufactured by Foxconn in China. That’s because there are two types of countries in the world: Countries that make iPhones and countries that make iPhone covers. It’s a pity that Russ
A small but decisive step towards rule of law in Turkey?
23 October 2016
“The power to become habituated to his surroundings is a marked characteristic of mankind,” writes John Maynard Keynes in the opening sentence of The Economic Consequences of the Peace. “Very few of us realize with conviction the intensely unusual, unstable, complicated, unreliable, temporary nature of the … organization by which Western Europe has lived for the last half century.”
Why is the Turkish Lira rapidly depreciating?
16 October 2016
According to the latest round of the World Values Survey, only 11 percent of Turks believe that “most people can be trusted”. In Germany, that number is 45 percent. When it comes to trusting others, Turks are at the bottom of the list. Yet in comparison to others, Turks save less and borrow more. The current account deficit stands testimony to that. So Turks are surrounded by people they don’t trust, but don’t build up financial security around them. Sounds like a recipe for anxiety to me.
Increasing inflows into Turkey after downgrade
09 October 2016
Moody’s downgraded Turkey to a speculative level on 22 September. That makes two such grades, the first being S&P’s decision soon after the attempted coup in July. Moody’s downgrade was based on the “weakening in previously supportive credit fundamentals, particularly growth and institutional strength.” So, one would expect foreign fund outflows from the country as investors shy away from Turkish assets. Yet, like a slap in the face of Moody’s and S&P analysts, portfolio investors are flocking in. Foreign investors bought a net of $618 million worth of stocks and bonds in five trading days through September 30. That’s the highest inflow in the last 7 weeks, mind you. So, foreign investors reacted to Moody’s downgrade by buying more Turkish assets.
Why I don’t have a photo with Shimon Peres
01 October 2016
I first met the late Shimon Peres more than 12 years ago. Israeli disengagements on Gaza were just a theoretical construct under discussion then. I was there to find a way to privatize the peace process. The idea wasn’t mine, but that of Peres, so who better to talk to about it? He was then Minister of Development for Negev, Galilee and provided generous support a process we came to call the “Ankara Forum,” and effort to use connections of business to drown out the conflict. Peres’ support lasted throughout his Presidency.
2016: The year China kicked G20 in the butt
24 September 2016
The day after the G20 Hangzhou Summit in China, I read an article in the Jakarta Post. “The G20 needs a kick in the butt” was its title. The author, the veteran Singaporean diplomat Kishore Mahbubani, was asking G20 countries to leave their 19th centuriesque national trenches, finally arrive in the 21st century and start thinking globally. Having read the G20 Hangzhou Communique and all the other relevant documents on the same day, I think that China followed Mr. Mahbubani’s wise counsel and gave the G20 a rather hard kick in its (rather voluminous) behind. This comes after a year of transformational leadership, in which China set the G20 on a course to become a 21st century mechanism. It is significant that China, which up until recently was thought of as a developing country, was the cou
Erdoğan’s call for restraint
17 September 2016
Turkey is now coming back from a long bayram holiday, or I should say from a feast, in the Russian philosopher Bakthin’s sense of the term. “The feast” says Bakthin, “has no utilitarian connotation (as has daily rest and relaxation after working hours.) On the contrary, the feast means liberation from all that is utilitarian, practical. It is a temporary transfer to the utopian world.” I guess that is why he also describes the feast as “the primary and indestructible ingredient of human civilization.” It might be the result of the feast he is coming from, but your analyst is definitely in a positive mood today.
Low growth, bad politics?
03 September 2016
The G20 Summit is to meet in Hangzhou, China this weekend, so be ready for a flood on global leaders’ meetings. Christine Lagarde, managing director of the IMF, started it off this Thursday. “We need forceful policies to avoid the low-growth trap” was the headline of her G20 briefing note. This is a reality check coming after the summer recess: either take measures to jumpstart growth, or get ready for rising populist rhetoric about globalization and its consequences. At the end of the day, economics doesn’t stay confined to its own world . It is all about politics in the last analysis. Low growth brings in bad politics, and bad politics is what has been eroding the stability of the global system.
Why Turkish boots are on Syrian Soil
27 August 2016
Ten days after the failed coup, I was at a meeting with CEOs of international companies operating in Turkey. It was all about the domestic security situation. The CEOs said it was getting harder for them to bring even temporary R&D personnel into Turkey. “We need to bring around 2000 such people for short term assignments to the country and it has become increasingly difficult to do so,” said one. “This is not something directly related to the failed coup attempt,” he explained, “We have had this problem for the last year and a half.” He was talking about ISIL and the PKK.
Joe Biden is coming to Turkey
20 August 2016
“Life punishes those who come too late” said Mikhail Gorbachev on October 7, 1989 to Erich Honecker, the General Secretary of the Socialist Unity Party in East Germany. Honecker resigned on October 18. It was him who predicted in January of 1989 that the Wall would remain for another 50 to 100 years. A broad range, yet grossly off the mark. Demolition off the Wall started in early November of that year. Honecker, like the rest of the USSR, was late in responding to the winds of change, and was swept away by them. East Germany is no more.