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    Rise in profits of the corporate sector does not necessarily imply that things are on track
    Güven Sak, PhD 31 August 2010
    My favorite news features from the last week was those which read "We could not see what the Honorable Prime Minister saw; we did not notice that the crisis missed Turkey." The features were related with the rising profit rates of the corporate sector. But first, let me what I think: I call this the 'our elephant needs company' syndrome. Do you remember this Hodja Nasreddin narrative? It was back when Timur 's army oppressed the whole Anatolian region; i.e. it was after the Battle of Ankara in 1402. Timur wins against Bayezit I and tyrannizes the Anatolia. In the meanwhile, he sends an elephant to the village where the Hodja lives so that it can be fed and taken care of. But the residents of the village are tired of taking care of the elephant as it eats all they have for their subsistence [More]
    The story of “No” in Turkish-American relations
    Güven Sak, PhD 17 August 2010
    They say, every no is a blessing. Although the Prime Minister of Turkey has been walking around saying "yes" throughout the country, Turkey is recently famous around the world with its 'no's. Today's topic is the recent remoteness. Turkey - US relations are recently not as warm as toast. We used to have periods like this. Each of these periods had a unique remoteness. Today, let us take a look at the remoteness of the day. The source of the recent remoteness is closely related with two 'no's of today. I believe if we can successfully comprehend the difference between the two 'no's  we can better assess the current process. Would you like to listen the story of the 'no's in Turkish-American relations? [More]
    Rising input costs are of key importance for the exchange rate debates
    Güven Sak, PhD 12 August 2010
    It is like we are living in a global Hodja Nasreddin anecdote. We get amused for finding what we had lost. The world has been trying to compensate for the loss of the economic crisis that has completed the second year. Therefore, the matter at hand has a dual character. On the one hand, we are no longer at the bottom of the pitch as we were two years ago. However, we are yet not out of the pitch, either. We are in the middle. Meanwhile, some countries perform better than some others. For now, Turkey is not among the best-performers. We will continue questioning why. But first let me finish my undone business. Last week I was questioning why the exporters are not happy with the current value of lira. Today let me finish with this issue so that I can switch to the "what must be done" part. F [More]
    “It is not that we became fake exporters although Turkey has a solid industrial policy”
    Güven Sak, PhD 10 August 2010
    Recovery in Turkey's economy since the end of the first wave of the 2008 crisis relies on domestic demand. The recovery in the export markets is relatively slower. Here, the prolonged crisis in the Europe and the resultant slowdown in European economy have a role in this. We should underline that the challenges facing Turkish exporters due to intensified competition also play a role. The fact that recovery is driven by domestic demand brought current account deficit issue to the fore once again. In the aftermaths of the crisis Turkey has been growing compared to the year before, let aside the previous periods. In the meanwhile, imports grow more rapidly than exports. Since exports cannot boost due to certain specific circumstances, the increase in imports grab more attention. What does thi [More]
    So, how must we asses this exchange rate issue?
    Güven Sak, PhD 05 August 2010
    Things were not like this before. When domestic tension on political issues increased, exchange rate used to go out of control. It is different not. While the negotiations in the context of the Supreme Military Council continue, Turkish lira tends to appreciate quietly. As the Turkish lira appreciates, or remains constant in nominal terms, exports get disturbed. As exporters get disturbed, the responsible Minister now and then loses consciousness. Then things turn entertaining. So, how shat we assess this situation? Why does not Turkish lira depreciate despite intense negotiations taking place in the country? Why are exporters so upset about the irresponsiveness of the exchange rate to these 'political developments'? Why does everyone tend to get angry at the Central Bank nowadays? If you [More]
    “Beware the middle income trap!”
    Güven Sak, PhD 03 August 2010
    Do you look up at the sky once in a while? If you do not, please start doing. Particularly in Ankara and Istanbul, you first notice huge airplanes on scheduled flights. You can rarely see private planes and helicopters. Thirty years ago, when I was a child, you could not see such a picture when you looked up. Even if you could see something, it would be military helicopters or war crafts.  Nowadays it is enough to look out from your window to realize how Turkey has changed. This is the case particularly for my generation. However, the splendor of the progress made so far must not make us miss out the critical brink Turkey is at. Turkey is quite close to the middle income trap. We should protect the country from this middle income trap. The recent data from the export markets must be analyz [More]
    Why Turkey’s exports are still in the pit?
    Güven Sak, PhD 29 July 2010
    Please take a look at the figure below? It shows the movements in world trade and Turkey's total exports. What the figure reveals is clear: In terms of exports, the world seems to have come out of the pit whereas Turkey has not. Why is that so and what must be done? If you wonder what this is all about, please read on. [More]
    Are you happy with the TURKSTAT?
    Güven Sak, PhD 27 July 2010
    One who wants to conduct a research on Turkey must definitely be aware of TURKSTAT (Turkish Statistical Institute). If you need data, that is the databank. The TURKSTAT was formerly called State Statistical Institute (SSI). But the European Union (EU) said that it was not state's duty to collect data and that there is need for a separate institution with relative autonomy, the TURKSTAT was established. Back then, the EU accession process was not crippled by the way. It was thought that the problem was resolved as the SSI was replaced with the TURKSTAT. The statistical institute was never a beloved one, neither as the SSI nor as the TURKSTAT. I currently am not contented with the TURKSTAT nowadays. They continuously change the definition of the data; assumptions change or coefficients are m [More]
    Can a country without an immigration policy be a regional power?
    Güven Sak, PhD 22 July 2010
    Recently, the Chairman of the Higher Education Council (HEC) said: "We have established many new universities; so we are in need of instructors. Now we are looking ways to facilitate bringing instructors from abroad. What is more, we will also allow them to work in jobs outside the university." I do not know what you think, but found this statement surprisingly sound and wise. I was surprise because I am not used to hear such wise things from the HEC. But I believe that this time HEC Chairman initiated a quite beneficial discussion. Let us see why. If you want to take a walk at the undiscovered roads, please join me down the article. The first tour begins. [More]
    Policy uncertainty is bad for the recovery process.
    Güven Sak, PhD 13 July 2010
    Policy uncertainty does not necessarily follow from political uncertainty. Political uncertainty implies that it is not certain who will govern. On the other hand, policy uncertainty implies that even it is certain who will govern; it is not certain which policy the government will choose. In other words, government policies keep changing continuously and unpredictably (does this sound familiar?). I started to think that in the current milieu, the intense policy uncertainty started to hinder more and more the economic recovery process. Recently, I heard the complaints of Jeffrey Immelt, General Electric CEO, on the US government and decided to note down what I think about this issue. Do not say "An elected government cannot be in policy uncertainty." First, hear me. Those of you interested [More]