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    Getting off the blacklist is a good thing
    Güven Sak, PhD 05 July 2011
    Turkey is acting as a responsible member of the political globalization process. The shares of the Arab Turkish Bank belonging to the Libyan government via the Libyan Foreign Bank have been handed over to Turkey's Savings Deposit Insurance Fund (SDIF.) In a way, Libya's assets have been entrusted to Turkey. Turkey thus has joined the "Kaddafi should go" coalition not just in its rhetoric, but also in action. How should one view this decision from the perspective of Turkey's economy? Why "Libya is not enough, we want Iran, too?" Let's take a look. [More]
    What is the problem with Afghanistan?
    Güven Sak, PhD 02 July 2011
    Afghanistan was in the news again. But this time, it was different. This time I am not referring to any kind of a terror attack on anywhere but the root cause. The governor of the Central Bank of Afghanistan announced his resignation from his home in Washington's suburbs. That is what I got from the news reports. Mr. Abdulkadir Fıtrat first left Afghanistan for the United States and then made an announcement regarding his resignation somewhere in northern Virginia. The announcement is further proof that the Kabul Bank scandal of last year was not only a bank failure but a government failure. I saw the problem with Afghanistan one more time when I read the news story. Let me tell you about the problem I saw in Afghanistan. [More]
    Heated or not?
    Güven Sak, PhD 01 July 2011
    Growth is a good thing as long as it is sustainable. Otherwise, it wastes the resources of the private sector. Are you demoralized by the unfruitful economic policy debates in Turkey? Honestly, I am. Today, let me touch upon the ongoing "highly matured(!)," "heated or not" debates. Yesterday, the growth figures for the first quarter of 2011 were announced. Driven by domestic demand, the economy grew above expectations. So it is the right time to touch upon the heating up debates. Has the economy heated up due to the recovery in production? Yes, it has. Is there any indicator of this? Of course there is. The current account deficit is the main indicator. If the current account deficit has reached a historic record, then the economy has heated up to a historic degree. We had better be cautio [More]
    'The library is better than the cafeteria'
    Güven Sak, PhD 28 June 2011
    If the Prime Minister respects books that much, why can't I buy books easily on Amazon? Recently, when talking about the spread of electronic books, I said, "I have been using www.amazon.com to order books for a long time now. They somehow find and send the books right to my desk in just a couple of days." I think I spoke too soon and overlooked a system that had been ­ functioning perfectly for years. They can no longer send the books I order right to my desk. The customs administration has introduced a new regulation that makes the process difficult if the number of packages delivered from abroad to you exceeds a certain limit. This is a new process design that raises additional financial and time costs. It is books we are talking about. Of course, the number exceeds the limit. People wr [More]
    Turkey belongs to Europe
    Güven Sak, PhD 25 June 2011
    I first saw Gaziantep only about five years ago. My fault, totally: I have to admit. What struck me in Gaziantep at first sight was its close resemblance to my hometown, Bursa. That astonished me at the time. Another fault, I know. Gaziantep is in the southeast of Asia Minor, while Bursa is in the northwest. But they look very much alike. Especially nowadays with the opening of new shopping malls in Gaziantep, they resemble each other more. [More]
    “We were building rockets while the Turks were building hotels”
    Güven Sak, PhD 24 June 2011
    The skills set Russians acquired while building rockets earned them Yandex. Why was Eric Schmidt in Turkey? I believe he was in Turkey not for Turkey. He was here to protect the dominance of Google, of which he is the CEO. Against what did he want to protect Google? Russia's Yandex has developed to rival Google. What is the benefit of this to Turkey? It has a limited range of benefits. Why? The deal here is the "they are partners, we are just a market," case as highlighted by former Prime Minister Erbakan, who died in February. He is still right. Let me tell you why this is so and why Turkey has a difficult task ahead of it. [More]
    If the euro is important, the game can somehow be managed
    Güven Sak, PhD 21 June 2011
    The euro is a serious matter; it is not just a currency. It is like the honor of Europe. How would you respond if you were asked, "in whose shoes would you like to be"? I think that no one would ever want to be in the shoes of Yorgo Papandreou. He became the Prime Minister of Greece in the midst of the crisis and has had to undertake one of the most critical decisions for the country. There are two ways ahead for Greece: it will either abandon the euro and go its own way, or focus on austerity measures tailored to protect the euro. If he takes the second path, it will torture the Greek people and lose him votes. But what if he follows the first path? Will he earn votes if he decides not to protect the honor of Europe? I do not think so. Let me tell you why. [More]
    Turkey not a model, but a source of inspiration for change
    Güven Sak, PhD 18 June 2011
    There are two types of countries in the Middle East, the ones that require demonstrations in their Tahrir Squares to initiate change and the ones that can use the ballot box for the same purpose. Turkey belongs to the second group. While Turkey belongs to the second group, Egypt, on the other hand, has invented the Tahrir Square model for change in our region. And I believe that Turkey does have something to offer to Egypt, not as a fully fledged model for change, but as a source for inspiration. If a country's experience is considered as the collection of past policy mistakes, Turkey has a multitude of experiences to share in this transformation business. We made a myriad of policy mistakes in the last three decades. Turkish transformation did not start in 2002. The ballot box [More]
    The Twist has ended
    Güven Sak, PhD 17 June 2011
    It is evident that raising reserve requirements do not push up the costs for banks. It is time to develop a new theory. Every dance ends. This is how I respond to those who ask me what I think about the unusual monetary policy of the Central Bank of Turkey (CBT). Recently in Washington, a friend at the heart of the international financial community asked me, "Do you still remember how to dance the Twist?" The subject of the conversation of the unusual monetary policy framework the CBT initiated in the late 2010. At first, I was like, "What are you talking about?" He said, "The Twist is an outdated dance from the 1960s. In my opinion, your Central Bank still does the Twist." The CBT tries to fake the markets with some attractions. This made sense yesterday. But if people start to think "thi [More]
    Political polarization becomes structural
    Güven Sak, PhD 14 June 2011
    Unfortunately, the curtains did not close on the polarized state of politics with the 2011 elections. The elections were held safely and soundly. The Justice and Development Party (AKP) raised its votes to 50 percent and came to power alone for the third time. The Republican People's Party (CHP) grew stronger as the main opposition party and raised its number of votes in 46 provinces. The Nationalist Movement Party (MHP) entered parliament despite all speculations. The Peace and Democracy Party (BDP) proved that it is the main representative of Kurdish politics. The votes of other right-wing parties decreased to 5 percent, from 13 percent in the 2007 elections. Votes were to a large extent consolidated. It became clearer why the election system has not altered. The votes were consolidated [More]