Single digit GDS interest rate is not a good sign
Güven Sak, PhD
06 August 2009
Write down the fourth of August. On the fourth of August, indicative GDS (government debt securities) was traded at 9.92 in secondary market. GDS interest rate fell to a single digit level. A development that would be a good sign under normal conditions is not so now. Under the current conditions, single digit GDS interest is an indicator that the economy is in depression. What the single-digit GDS interest on the fourth of August is not the beginning of economic recovery but of economic recession by all means. It is wise not to confuse indicators.
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How does the fall in import demand lead to the appreciation of Turkish lira
Güven Sak, PhD
04 August 2009
These are weird days. These are the days where there is a high possibility that it is not logical to say what comes to your mind first. These are the days where the possibility that nothing is as it seems must be considered; because these are not some of the days we are accustomed to. In such days, there is no option other than starting over. It is necessary to develop bit by bit a new approach pertaining to how things work. This is what must be done for economics as well. We have never seen such an economic crisis before. Treatment starts when the patient accepts that he is sick. In economics, the starting point for acknowledging what is new is accepting that we are in a period the dynamics of which we are not accustomed to. Starting point for finding the remedy is seeking a new remedy. F
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Valuable Turkish Lira pushes up unemployment further
Güven Sak, PhD
30 July 2009
We started the week saying "Cause of valuable Turkish Lira is the rise in unemployment". Today, let us proceed saying "Valuable Turkish lira pushes up unemployment further". Let us try to understand the dynamics of the economic recession period we are faced with considering Turkey and similar countries so that we can implement measures.
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Cause of valuable Turkish Lira is the rise in unemployment
Güven Sak, PhD
28 July 2009
We are not accustomed to recessionary periods. No one has yet completely acknowledged that nothing will be the same. Everyone is waiting with hope to say "it was a storm and it ended. We are just soaked a little bit". But, they fail to notice the changes happening in the meanwhile. See, for instance, Turkish lira is appreciating nowadays. Turkish lira used to appreciate as a result of the confidence in Turkey's economy. As the credibility of government policies increased, Turkish lira appreciated against foreign currencies. Nowadays, Turkish lira is also appreciating. So, what happens now? Is the confidence in the policies implemented by the government rises? No, from where did you get that impression? This would only be an oxymoron. Can we talk about the credibility of a policy that is no
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If the IMF is involved; savings problem changes its characteristics
Güven Sak, PhD
23 July 2009
Do you follow the "We need to save more" discussion? Lately, Kemal Derviş brought the issue forward. Hasan Ersel drew a good frame about the issue at his column in Referans daily. This discussion is of importance considering our near future. IMF's recent statement about providing support for developing countries also matches up with this exact issue. A transition period solution is offered for a transition period problem. Let us admit that there is a highly pessimistic discussion going around. However, it seems wise to think about the dynamics of the transition period and the new global architecture to be shaped henceforth separately. If we do not make such differentiation, we have to get prepared for a period where Turkey will encounter growth-related problems for long. Or, we will learn
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Can compulsory military service be an opportunity for tackling unemployment?
Güven Sak, PhD
18 July 2009
Two developments have marked last week. First was the statement by Turkish Statistics Institute proving that unemployment figures go on climbing up. Since the beginning of the year, unemployment rate is rising increasingly when compared to the same period last year. Do not be deceived by the newspaper titles reading "unemployment has decreased this month"; they do not reflect the reality. Second striking development was the results of the Student Selection Examination manifesting the situation and interpretation of the high school education in Turkey. Examination results proved one more time that the Higher Education Board (YOK) does not have much interest in the education reality of Turkey. YOK focused on increasing university quotes this year as a key issue; but the results of the examin
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These tax hikes pushes up unemployment and down growth
Güven Sak, PhD
17 July 2009
Price raise decisions made in Ankara the day before at best represents panic. Private consumption tax for fuel was raised. Similarly, Value Added Tax imposed on food and beverages served in hotels were raised. This creates a "Where did I see this film before" feeling. It is like someone took a look at gradually worsening public budget figures and asked "What did we used to do in such situations" and immediately got the answer: "We raised the taxes on fuel, Sir". And so, it is what they did. However, the times we pursued this policy option are not at all similar to the current times. The difference is larger than the oceans.
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Rising household savings rate in the USA is boding
Güven Sak, PhD
16 July 2009
And another country heard from. Household savings of Americans reached a record high level in May 2009. While everyone was expecting them to spend more, increase domestic consumption for the American economy to grow, Americans, who have forgotten how to save in the early 1980s, stated to save. Here in Turkey, we go buying an automobile as soon as we hear of a two-day tax cut. Americans, however, sit at home and save. What is this? This is at utmost an indicator that recovery will be way to slow in the upcoming period. But what is that Americans see and we miss?
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What does the signature of the Nabucco Project mean?
Güven Sak, PhD
14 July 2009
First signatures for Nabucco Project were put down in Ankara. Representatives of the European Union (EU), Austria, Turkey, Bulgaria, Romania and Hungary came together in the ceremony in Ankara. Nabucco seems as an interesting project. And it is a definitely good thing that Turkey is associated with it. So, how can these developments be assessed? At the first glance, it is possible to think "there is no commodity to transport and no plan on how to finance the pipeline to carry the commodity" and say "we need the horse and three horseshoes to go". However, you must note that the signing of this agreement will facilitate the search for the horse and horseshoes. Is this agreement enough alone? If you say 'why not', please go on reading.
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Everyone learns his own lesson
Güven Sak, PhD
11 July 2009
Turkey is in a rapid transformation process. The point to be emphasized considering the change is: Changes does not happen under military discipline designing each step in advance. The process must certainly contain a flavor of surprise. Unfortunately, it is impossible to go through a change without encountering undesired outcomes. In social sciences, it is not possible to see the past and the future simultaneously and say "Now we entered the fourth phase of the plan". When human is involved in the picture, a small mistake in initial conditions can push the system off the track. So, what do we have to do? It is quite simple: We have to not follow each detail second by second. We had better to make the assessment considering the process as a whole. Today, let us discuss how Turkey can eva
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