The PSA is putting a spoke in the TCC’s wheel
Güven Sak, PhD
10 February 2012
Each new decree is turning out to be worse than the previous one. Frankly, I am having difficulty understanding the goal. Some while ago, I commented, “What a contrast,” referring to the recent arrangements about the Turkish Commercial Code (TCC) and decrees contradicting with the TCC. I have been watching with astonishment that the current government, which is making an effort to modernize the legislations applicable for the commercial life with the TCC, at the same time, has been trying to advance central tutelage with decrees and therefore has been departing from market-friendly achievements. Each new decree has turned out to be worse than the previous one. Frankly, I am having difficulty understanding the goal. With each new decree, “Turkey is becoming just like China.”
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Iran is becoming a lot like the Soviet Union
Güven Sak, PhD
07 February 2012
I see a resemblance between Iran and the collapsed Soviet Union: Inventions focused on a single area spread throughout the economy. Will the sanctions the international community has started to impose on Iran to prevent the country from having atom bombs affect the Iranian economy negatively? They will, and they already are. What is more, these sanctions and the desire of the country to develop atom bombs are causing long-term structural damage to the country’s economy. I feel like these sanctions in some ways are turning Iran into the late Soviet Union. I hope I am wrong. I feel sorry for Iran. Let me tell you why.
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It’s the domestic demand, stupid
Güven Sak, PhD
04 February 2012
Growth always comes from domestic demand in Turkey. Controlling domestic demand through fiscal and monetary discipline is once again the major issue of the day. There are two types of countries in the world when it comes to experience in growth: Ones in which internal demand drives the economy, and others, where external demand does the job. Turkey is in the former category while China is in the latter. High domestic savings in countries like China allow for an exportable surplus to be generated, while in countries like Turkey, the domestic savings rate declines to nil and the exportable surplus shrinks. High growth means a high current account deficit in this category. That is the source of Turkey’s addiction to foreign fund inflows. Is that a bad thing? Definitely, because it ma
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Turkey is becoming just like China
Güven Sak, PhD
03 February 2012
The new draft of the Capital Markets Law will reinforce the notion that Turkey is becoming just like China. It really is. We are witnessing appealing debates. Turkey is becoming just like China. The signs are coming one after another. First, we took the growth record of 2011 off the hands of China. Turkey outperformed China in growth in the first three quarters of 2011. We were delighted, though there was nothing to be delighted about. This was the first sign. Then came the second one: American novelist Paul Auster refused to visit Turkey for his new book, which was published first in Turkey. He said he would not visit countries such as China and Turkey that limited the freedom of the press and imprisoned journalists. Our prime minister talked about this issue joyfully, for some reason. I
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Those without fast broadband access are losers
Güven Sak, PhD
31 January 2012
A country without fast broadband will raise losers without professions, instead of manufacturing a domestic car. Turkey still lags behind in terms of fast broadband access, which is neither prevalent nor cheap. It is relatively better compared to in the past, but still insufficient. Have you ever thought what it means not to have fast broadband access to the Internet? A country which lacks fast broadband access cannot manufacture domestic cars. Nor can it make innovations. All of it is empty talk. Fast Internet connections tie societies and countries together. Those who cannot surf the Internet at high connection speeds are and will be losers. Today let me talk about this.
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Protect the rich, please
Güven Sak, PhD
27 January 2012
It has become an urgent matter of debate that some parts of society are deprived of the benefits of the world. These days we need to protect the rich. They are kind of an endangered species now. Their number has been decreasing gradually around the world, although their wealth has been increasing. Wealth now is accumulated in the hands of fewer individuals. We are living in a world where the number of those who live in material deprivation is increasing compared to those who do not. On top of this, everyone, starting with Obama, has embarked on a rich hunt. Signs of the doomsday are all around: The US President said, as no soldier should be left behind in military operations, no one should be left behind alone in society. The main theme of the Davos meetings was income distribution. Rich p
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Would women work if the subway system was sufficient?
Güven Sak, PhD
24 January 2012
Lack of a sufficient subway system has a role in the low rate of employment among women. Turkey’s economic agenda is quite poor nowadays. Why? I believe that the shallowness of the agenda is related closely to the lack of a government vision and projects for Turkey’s future. I find it sad that the projects for reconstructing Istanbul are presented as a commitment to Turkey’s future. I find this pathetic. Some claims about manufacturing a domestic automobile seem to be made-up news as they are not grounded on a concrete plan. I believe the recent efforts to intimidate economists who criticize the overt policy mistakes of the central bank and accuse them of lobbying with arguments like “the interest late lobby is on the go” are nothing but biting off more than they can chew. I think these tr
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If violinists can’t tell the difference, how can S&P?
Güven Sak, PhD
21 January 2012
I don’t like reports about the Commission working on a plan B for the possible breakup of the eurozone. That paves the way for unintended consequences. We live in interesting times. Are you following the after-effects of Standard & Poor’s (S&P) downgrade of European countries like France, Italy, Austria and Spain? I do not mean the reaction of the financial market. That was obvious. Risk aversion is always good for dollar assets. No, I mean the reaction of the governments themselves. That was fun to follow. If you ask me, what those countries are entering can most nearly be described as the five stages of grief. They are now in the first stage of denial. Just take a look at the reaction of Victor Ginsburgh, from the Universite Libre de Bruxelles. His commentary was tit
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Ankara’s subway is like Nigeria’s subway
Güven Sak, PhD
20 January 2012
Nigeria and Turkey are in the second group due to the lack of organizational capacity. The Hrant Dink trial has ended. The verdict has proven that, during the last decade, there has been no change to the state in Turkey. That Ankara’s subway is no better than Lagos’ subway, when considering the number of stations, is also closely related to the fact that there has been no structural change to the state. Let me tell you why.
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Is Turkey wealthier than the US?
Güven Sak, PhD
15 January 2012
Gas in Turkey is more expensive than in the US due to a weaker tax administration. It was cold in New York last weekend. Extremely cold. The car thermometer said it was minus six centigrade degrees. But high level of humidity and wind made it feel colder, like in Izmir. Anyway, let me share my impressions of New York today.
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