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    The BRSA’s decisions: Both timely and not (2)
    Güven Sak, PhD 30 November 2013
    So, the billion-dollar question is, why did the BRSA not step up earlier in the late 2010 or early 2011? The Banking Regulation and Supervision Agency (BRSA) has attempted critical decisions. The draft documents were released on the Agency’s webpage for public discussion. High credit growth rate is a threat to financial stability. It pushes up consumption and investment and hence the current account deficit. If the level and the growth of investment are already weak, consumption comes to the radar for intervention. [More]
    Sanctions shifting from Iran to Turkey?
    Güven Sak, PhD 30 November 2013
    Let’s try to name the winter of our discontent in Ankara. With the Geneva interim agreement, we were able to see a change in the regional landscape by way of a partial respite from sanctions. A U.S.-Iran deal might lift sanctions from the region while Turkey’s potential long-range air defense deal with China could bring them back. It is good for our neighborhood for the sanctions on Iran to be lifted – it would be bad however, to see sanctions imposed on Turkish companies. It is as if the U.S. needed to maintain a set number and level of sanctions in our neighborhood at all cost. I have to confess that I have difficulty in understanding the benefits. The whole thing is more like an improvisation act getting out of hand then a full-fledged strategy. It simply possesses a downside r [More]
    Why doesn't our higher level of income equality make us happier?
    Güven Sak, PhD 29 November 2013
    Turkey is one of the two OECD countries which have achieved the most rapid decrease in income gap between the rich and the poor; yet, this has not resulted in an equally successful increase in Turkey’s life satisfaction score. [More]
    Is Turkey more equitable now?
    Güven Sak, PhD 26 November 2013
    In the 1960s, Turkey, Korea, and Egypt had the same GDP per capita. Should we compare ourselves with Korea and feel frustrated or should we look at Egypt and be pleased? In the previous decade, Turkey by 62 percent, the figures say. Did all income groups benefit from the growth equally? Was the process inclusive or exclusive? Has poverty increased or decreased in the meantime? Is Turkey a more equitable country today? How you formulate the question shapes the answer you get. Today I would like to talk about a recent blog post by Martin Raiser, World Bank Turkey Director, who believes that the growth process of Turkey in the last decade was inclusive. True, figures validate that Turkey is performing relatively better concerning income equality, but it is still not doing as well as South Kor [More]
    It’s Gangnam Style to have dershanes
    Güven Sak, PhD 23 November 2013
    Have you read Murakami’s 1Q84? One of the main characters of the novel, Tengo, is a cram school math teacher by day and a wannabe novelist by night. I did not get the feeling that he hates what he does for a living. Yet nowadays, that is the ongoing debate in Turkey. The government says they would like to phase out dershanes and reinvent them as private schools. This is a big ongoing debate without any information around it. First of all, the terms for the transition from dershanes into private schools are nowhere to be found. Secondly, the government is advancing its proposal as part of an education reform package, of which the details are yet to be seen. So the debate continues without information being exchanged between the government and the public. This is typical for polit [More]
    Innovate something and we will pay for it, my dear brother
    Güven Sak, PhD 22 November 2013
    If I had a good idea, I would make use of the entrepreneurship support programs in Turkey and launch my company in the US. That’s the wisest option, if you ask me. Last week, Vint Cerf, who is recognized as one of the two fathers of the Internet together with Bob Kahn, was in Turkey. He currently is the vice president of Google. When he was a program manager for the United States Department of Defense, he led several project to develop TCP/IP technology. His reputation as father of the Internet dates back to that time. During a meeting in Ankara, a university student asked Cerf if he should open a business in Turkey or the US. In response to this practical and meaningful question, Cerf said, “Open it in Turkey so that your country can get wealthier.” [More]
    Turkey is not as good as Uruguay
    Güven Sak, PhD 19 November 2013
    In countries that are governed well, the decisions are made in the capital cities. In the others, the decisions are made in other capital cities. All economies are in slowdown lately. The IMF has been revising its growth estimates downwards. Although economic slowdown is everywhere, it is more alarming in some countries. In China, the GDP growth diminished to 7 percent. In times of rapid growth, China’s foreign trade surplus was around 10 percent of the GDP. With a sharp fall, it is now 2 percent. Turkey’s GDP growth also has decreased swiftly from 10 percent to 3 percent. Yet, the current account deficit has eased only from 10 percent to 8 percent. China’s growth is driven by external surplus, while Turkey’s is driven by external deficit. When the Chinese economy slowed down a little bit, [More]
    Turkey still does not speak English
    Güven Sak, PhD 15 November 2013
    The domination of the English language is not going to decrease; it’s going to keep growing. In order to understand the world correctly and not struggle with the spirit of the time, learning English has never been so important. [More]
    Angry Birds has overthrown the cinema
    Güven Sak, PhD 12 November 2013
    The Angry Birds era asks for quality, not quantity. Finland, the country of the creators of Angry Birds, performs well in OECD’s PISA tests. Coincidence? The structure of the entertainment industry has been changing. Have you noticed? I have just noticed it. Now I also understood why all of the young people in entrepreneurship accelerator programs are going into game development. I missed the change because I wasn’t looking around myself. The annual turnover of the videogames industry has reached around 70 percent that of the movie industry. And considering that the latest movies look more and more like videogames, we might assume that they have taken over movies, too. The most-watched five movies in the world feature digitally strengthened visual effects. World War Z, Avatar, and Star Wa [More]
    Turks do not trust each other
    Güven Sak, PhD 09 November 2013
    I just saw a graph in OECD’s “How’s Life” showing that Turkey is the weakest among a number of countries in terms of social connections. The data comes from a Gallup World Poll. It shows the percentage of people who can count on someone to borrow money from at the last minute, like a relative or a friend. Turkey is the lowest, followed by Mexico and Greece. The highest is Iceland. The share of respondents saying that they have no relatives or friends to turn to in times of need is four times higher in Turkey than it is in Iceland and Ireland. But why? The findings are not intuitive. The presumption in Turkey is always that we might not be rich, smart or skilled, but we have strong family and friendship ties. Not so much, when compared to other OECD countries. That is bad.I remem [More]