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    What Tekel and university exam candidates have in common
    Güven Sak, PhD 11 February 2010
    This week I shared with you my opinion on TEKEL workers issue. In the meanwhile, the students who will take the university entrance exam this year were drawn into the 'coefficient' trouble. Have you thought what students to take the university entrance exam this year and the workers that will be given the 4C status with the closure of Tekel tobacco processing facilities have in common? Do not directly conclude that there is no link between these two groups; think about it. What they have in common is that they could not foresee the near future because of rapidly changing decisions of the public authority. Inability to foresee the future makes it harder to make decisions and damages the investment climate. It makes raise difficulties for those willing to plan their future. It is depressing [More]
    What is this ‘TEKEL workers’ issue about?
    Güven Sak, PhD 09 February 2010
    It is evident that given the current milieu, TEKEL workers are profoundly righteous; there is no need to hum and haw. There exists the risk of a deep social disaster introduced by the global crisis. And the government does not seem to have taken conscious action to protect social peace. [More]
    Greece is definitely European Union’s concern
    Güven Sak, PhD 04 February 2010
    Public finance problems of Greece are an issue not only for Greece itself. In this context, the declaration made by Papaconstantinou, Finance Minister of Greece is not wrong. Declarations by France and Germany however, do not completely reflect the truth. Greece is a concern for the European Union. It is of course bad that Greece used creative accounting methods and made the budget seem better than it actually was. But the fact that the process of convergence to the European Union reduces the domestic savings rate in late-comer countries should be addressed as a structural issue. This issue is closely related also with Turkey. After this incident in Greece, EU accession discussions for Turkey will move toward a different platform. The statements presented in Radikal daily on last Monday pr [More]
    What is Turkey’s growth strategy?
    Güven Sak, PhD 02 February 2010
    We started to talk about the dynamics of Turkey's economy. First of all in the last week, we addressed low savings rates. The step to be taken in this regard was to introduce a strong fiscal rule and a monitoring mechanism that will ensure its credibility. This week let us talk upon another issue regarding Turkey's economy. Do you think the fact that Turkey is a big economy affects negatively the possibility of building the growth process upon innovations and discoveries? The answer is, yes it does. Or to put it more cautiously, it might. Let us take a look at the existing problem. [More]
    Does growth have to be polluted?
    Güven Sak, PhD 30 January 2010
    Turkey has been changing impressively since 2002. It achieves high growth rates on the one hand and a rapidly changing economic structure on the other. Turkey has become a world economy with an ever increasing rate of transformation. This is exactly why Turkey was one of the countries that were highly affected by the global crisis of 2008. I guess one does not need to know how rockets fly in order to claim this. If you are an integral part of the global economy, you will inevitably be affected by the global crisis at the highest degree. Turkey has been going through a rapid change since 2002 in terms of both quantitative and qualitative indicators. It is basically possible to add these up one after another to have a perfect picture of transformation. However, it is not quite so in practice [More]
    Cannot we make a reform without the sledgehammer?
    Güven Sak, PhD 28 January 2010
    Turkey is in need of a wide platform of political consensus not only to change the Constitution but also to found the public budget on solid grounds. Democratic political history of Turkey is like a parade of fiscal indiscipline. There is no single day that one does not offer a dime more than another did. We always suffer from this, but always do this anyway. Our current situation in need of a dime from the IMF is solely the fruit of fiscal indiscipline. So, have you taken a look at the public finance reforms? For instance, since the beginning of democratic regime Turkey failed to implement a comprehensive tax reform. Income Tax Law was enacted in 1947 and amended upon the 1960 coup and 1971 memorandum. 1980 coup d'état initiated a number of reformation efforts including VAT reform. So, to [More]
    What is the reasonable and rational story for the year 2010?
    Güven Sak, PhD 26 January 2010
    Have you ever considered? If your job was to tell foreign investors the virtues of investing in Turkey what would you tell them in 2010? If they were not already investing throughout the world, it would not be a big problem. You would say "Sir, Turkey was the country to recover most rapidly from the crisis" If he seemed surprised, you would add "We also have a freakish Medium Term Program, which is highly credible. We know in advance which steps the government will take." And if you have had a few, you would continue "You know, the global economic crisis did not hit Turkey. We were the almost not harmed." You could also go too far to say "We in fact do not need to settle with the IMF. However, they are so ready to settle with us that we might do so. But you cannot do these now. They know e [More]
    Turkey’s attempt might be nonsense; but how about US’s?
    Güven Sak, PhD 21 January 2010
    Last week we mentioned the "poll tax" argued to be implemented for banks. This week we want to continue with this subject. It is quite fruitful, let us clear the question marks in our minds. We believe we sufficiently emphasized that imposing an annual tax per branch from banks is not very smart in terms of design. Moreover, we also underlined that the discourse of the regulation seemed a bit pre- Magna Charta. You cannot just say "I have to finance that project" and invent new taxes whenever you get into trouble. The realm of tax policy is not suitable for coming up with new inventions overnight. If you let at the first time, they will do it again and again. As inventing new taxes once faced with a trouble will reduce foreseeability down to zero, it is quite bad considering the stability [More]
    Why did Eugene Fama cancelled his subscription to The Economist?
    Güven Sak, PhD 19 January 2010
    When defining the twenty first century, we will not be able to neglect the first global financial crisis of the world. Perspective of the world and life styles in the eyes of economists and us has been changing comprehensively along with the crisis. In fact, it has to be so. We are going through an unusual period. What will shape tomorrow will be today's discussions. Today's discussions, however, are quite ridiculous. Have you been following what the unyielding defends of the market economy talk about nowadays? Last week in US Congress, the first official global financial crisis investigation was launched. At the first phase, senior officials of four financial institutions were interrogated with. The interrogations proceed as a farce. Let us take a look at the recent developments. [More]
    What is the meaning of this poll tax?
    Güven Sak, PhD 16 January 2010
    A regulation for the collection of a certain amount of money per branch from banks will be initiated. State Minister Ali Babacan held a press meeting on Thursday. He insistently responded to questions as to how the extension of SSI premium support and the adjustment benefit provided for the retired will be financed as there is no allocation determined in the budget with this new tax. Radikal daily gave the news with the heading "Poll tax is introduced for banks." This was exactly what happened. So, was this a move in the right direction? Does this poll tax have any meaning? No, it does not. It only means witnessing the prevailing fiscal policy disaster. Period. Let us think on this issue and see what the new tax looks like. [More]