What does Russia have that Turkey does not?
Güven Sak, PhD
20 November 2010
Turkey cannot become the tenth biggest economy of the world wound dressing measures; structural reforms are needed. Yesterday I addressed the possibility for Turkey to become the tenth biggest economy of the world. And I argued that this cannot be accomplished with empty talks. Today let me continue with this subject and let me explain why empty talk is not enough to accomplish this target. On last Monday, a press meeting on remission of calculated taxes. We are to add a new one to some twenty tax remission regulations. And I am sure this will be adopted, too. Watching the meeting, I noticed no emphasis on an amendment of laws or the restructuring of administration. Let us hope such issue will come to the agenda alongside a new remission regulation proposal. We should expect to witness a n
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This target cannot be accomplished with empty talks
Güven Sak, PhD
19 November 2010
Calculations suggest that Turkey can possibly have a bigger economy. Honorable Prime Minister of Turkey Abdullah Gul said in his trip to London "It would not be surprising if we start talking about BRIC plus T." BRIC is the acronym referring to Brazil, Russia, India and China which rose in the eyes of investors. And in that respect, T stands for Turkey. Newsweek magazine, in the last issue, made a short story on this issue and underlined that President Gul's statement reflected not the existing power of the Turkish economy but the geopolitical ambitions of Turkey. When bringing this argument up, the magazine also talked down on Turkey saying "Turkey's GDP is only half of Russia's; the poorest BRIC nation." And this reminded me of the 'which size is it' issue I started to talk about the w
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Harder, the better
Fatih Özatay, PhD
18 November 2010
In this milieu where the wounds of the crisis are not yet completely relieved, countries taking series of boosting measures will come out ahead. It is clear that Turkey is not in the first league in terms of its economic prosperity level. Furthermore, the gap between countries in the first league and Turkey does not narrow down no matter what. On the bright side, the gap does not widen, either. There appears a strange form of stability when Turkey's economic status is concerned.
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What does Venice without gondolas imply?
Güven Sak, PhD
16 November 2010
The New York Times reports that sea level is likely to rise three feet by 2100. I wish you all a happy holiday. Holidays should be days for reflection. Here is a commentary on the state of humanity then: Have you ever thought what Venice without gondolas could mean?
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Pointless BRSA – CBRT conflict
Fatih Özatay, PhD
15 November 2010
Views can be different; but we should note that cooperation on risks is crucial. There is a series of indicators used to compare at the international scale the level of development of Turkey's banking sector: size of the balance sheet, total deposits and total credits as a ratio to GDP, etc. Such indicators does not only show how deep the banking sector is but only give an opinion on the size of savings in Turkey. Credits are critical for small enterprises Volume of credits extended by banks as a ratio to GDP is an important indicator. We seek to improve this ratio. Because as this volume rises, investment and consumption expenditures also rise pushing up the growth rate of the economy. I guess the significance of investment credits is apparent. Besides, we seek an increase also in the
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BRSA-CBRT conflict
Fatih Özatay, PhD
14 November 2010
Macroeconomic problems are a concern for BRSA as much as they are for CBRT. Title of Sefer Levent's Saturday commentary in Radikal was 'Laughs in London, conflict in Istanbul'. The commentary begins with the following sentence: "Central Bank of the Republic of Turkey (CBRT) President Durmuş Yılmaz and Banking Regulation and Supervision Agency (BRSA) President Tevfik Bilgin are in conflict for the second time on required reserve ratio."
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US should not perpetuate the Iraq attitude at the G20
Güven Sak, PhD
13 November 2010
Fund flows complicate national economic policy targets. The crisis started to turn the suggested measures considered heterodox in the past into a piece of the economic orthodoxy. What used to be extraordinary became normal: "Reining became unable to control the horse." Now is the time to take new measures. For the time being the new normal has been hindering fund inflows towards developing countries like Turkey. And the decision Central Bank of the Republic of Turkey (CBRT) took the day before is in harmony with this 'new normal'. The CBRT has taken the right action. So, those following the debates at the G20 summit, please join me down the article. This is how I see the events.
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Turkey’s Growth Depends on the Normalization of SMEs
12 November 2010
The answer to the question "Why small and medium sized enterprises fail to grow?" might be more complicated than we expect. Medium Term Plan does not present the story Turkey needs for rapid growth. How this story should be, then? I believe a program that focuses on the growth problems of small and medium term enterprises has to be the backbone of Turkey's growth story. SMEs in Turkey operate exposed to abnormal conditions. It is not likely to ensure rapid growth rates without overcoming the abnormality.
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Which size is it?
Güven Sak, PhD
12 November 2010
Here in Turkey, we are obsessed with size. 'Mine beats yours' style has always been popular in this territory. Here in Turkey, we are obsessed with size. 'Mine beats yours' style has always been popular in this territory. And size of Turkey's economy is also a matter for similar debate. According to this, there is a numeral target to make Turkey the tenth biggest economy of the world. Are you aware of this debate or have you ever assessed its possibility? Do you think Turkey could be the tenth biggest economy of the world? Who are the rivals in this competition? If the target is that assertive, why does the medium term plan not have an enthusing perspective on this matter? Or is it the opposition again that prevents the setting of such perspective? Today let me get the obsession on 'Which
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Working order and structural reforms
Fatih Özatay, PhD
11 November 2010
The risk argued by State Minister Ali Babacan made me nearly jump out of my skin. On Tuesday, Honorable Minister Ali Babacan held an assessment meeting with the columnists writing on the economy. Such meetings are being held for a long time and if I am not wrong, I have participated in all except one. The meetings are also attended by senior officials from the Treasury and the Central Bank of the Republic of Turkey (CBRT). I used to attend these meetings as an official at the CBRT. I now participate in such meetings as a columnist. But this is not the only thing that has changed; the venue is also different now. Meetings were moved first from Beykoz to Dolmabahce, and than to Florya.
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