Can we expect a WTO 2.0?
Güven Sak, PhD
07 October 2018
2015 was not a bad year for global governance. The Paris Climate Accord was signed, giving us hope for the future balance of the environment. The Iran nuclear deal, also inked that year, was a relief for our good old Middle East. It was also the year Turkey was leading the G20, and world leaders met on the beaches of Antalya. The optimism of 2015 is now totally replaced by something else. It seems like a long time ago when the world could seriously talk about big things like climate change and global economic governance in a constructive way. Should we be totally pessimistic? I don’t think so. I think even more than 2015, this is the kind of environment when big changes can take place. And trade is one area where that looks likely.
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A German-Turkish Revolution
Güven Sak, PhD
29 September 2018
Rapprochement is in the air. I think this newly developing partnership is inevitable. Why? It’s almost like that 1969 hit by Thunderclap Newman, the old British rock band: Call out the instigator
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Clueless in Crisis
Güven Sak, PhD
15 September 2018
It was around 2001. I was at the American University of Beirut, and the discussion was on Turkey’s efforts to stabilize its economy. The currency crisis at the time led Turkey to freely float the lira. Someone asked me how to determine the right time to float a currency. Timing a float? It still strikes me as a strange concept. You can’t plan a time to float your currency, it just happens. No one in their right mind could plan something that big and be responsible for the losses of so many people. But it does happen.
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No UNRWA, no Nakba?
Güven Sak, PhD
08 September 2018
The Trump administration has decided to cut all US funding to the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). This is the second such step after the contentious decision to move the US embassy to Jerusalem. UNRWA was created in 1949 to resettle the 700,000 Palestinians who had been displaced to establish an independent state of Israel. Palestinians see May 15, 1948, when modern Israel was founded as “nakba,” the day of catastrophe. Does that mean that when there is no UNRWA, there is no Nakba at all? Is the issue of Palestinian refugees and the return to their homeland now eternally off the table? I don’t think so.
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Turkey is no Egypt
Güven Sak, PhD
25 August 2018
Just before Turkey’s holiday week, the Emir of Qatar was in Ankara for a short visit. The news eagerly reported that at the hour of Turkey’s need, the Emir pledged to invest $15 billion into the Turkish economy. Turkey’s international investors might have been happy to hear this, but I am deeply saddened that it has come to this. It gives the impression that Turkey is like Egypt, a country that is frivolous with its money and, then travels around the neighborhood, hat in hand. But why Turkey now?
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With a friend like Trump, who needs enemies
Güven Sak, PhD
18 August 2018
There are two types of countries in the world. Countries that have current account surpluses and countries that have current account deficits. The former lend money to the latter. Both and Turkey and the States are in the second category. But Turkey has periodic currency crises, as happened in 2001 and is happening again this week, while the US looks safe. Much of it is because Turks are not able to borrow money in Turkish liras, while the Americans borrow in their own currency. When Turks borrow in dollars and their currency devalues, they have to pay more. This should not be news to anyone. The advantages of having the global reserve currency is referred to as “exorbitant privilege,” a term first used by the French in the 1960s, at the dawn of the Bretton Woods system.
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Turkey is part of Europe
Güven Sak, PhD
11 August 2018
What surprised me most this week was not the depreciation of the Turkish lira against the US dollar. That was to be expected. What surprised me was the simultaneous depreciation of the Euro against the US dollar. The Euro-USD rate was at 1.16 on Thursday, and declined to 1.14 on Friday. Why did this happen?
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Eat that frog now
Güven Sak, PhD
04 August 2018
Mark Twain once said “if it's your job to eat a frog, it's best to do it first thing in the morning.” Why? Because then you can go through the day knowing that the worst thing that can possibly happen to you has already in the past. It’s a perfect way to start a new era. That’s the wisdom to follow in dealing with Turkey’s mounting economic problems. Turkey has procrastinated enough in a rapidly changing world. Now is the time to stop delaying any further.
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Something wicked this way comes
Güven Sak, PhD
29 July 2018
Remember Act 4 Scene 1 of Macbeth, by William Shakespeare? That’s where the witches gather round a smoky black cauldron. “By the pricking of my thumbs/something wicked this way comes” says one. That’s how I feel these days in Ankara. Though we tend not to “open locks, whoever knocks.” We all know that Turkey needs to be ready for what is coming. This week has been about that anticipation.
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Desperately looking for positive signs
Güven Sak, PhD
22 July 2018
“Tell me something positive” said a western friend entering my office, “so that I may tell it to my superiors, for them to make a more informed decision about Turkey.” I have to confess that it is not getting any easier. Our friends in western capitals are now desperately looking for some positive signs. Why? Just have a look at the events.
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