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    It is not in our culture, what can we do?
    Fatih Özatay, PhD 23 July 2009
    We lack an important skill. We do not know how to tackle recession under normal conditions. We do not have that feature in our culture. Until now, all recessions were encountered in the face of a problematic economic structure. And therefore, the economic policies we tried to implement to tackle the recession were naturally designed in accordance with the problematic initial conditions. However, the contractionary period we entered in the last quarter of 2008 has a fundamental difference: Initial economic conditions were not 'fatal'. This positive aspect, unfortunately be a misfortune for us and we did not know what to do. And we ignored for a long time those who knew what to do and made recommendations one after another. [More]
    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 [More]
    I hope I am wrong
    Fatih Özatay, PhD 20 July 2009
    Krize karşı ekonomi politikası tasarımında ve uygulamasında çok önemli hatalar yaptık. Şimdi bu hatalar, büyüme hızımızı artırıcı politikalar uygulamamızın önüne önemli engeller çıkarıyor. "Bütçe açığı çok arttı, bundan sonra iç talebi artırıcı politikalar uygulayamayız" deniliyor. Ama bunu diyenler o bütçe açığının artmasının tohumlarını 2007 ve 2008'de, üstelik ekonomi dışı nedenlerle ekenlermiş, ne gam. [More]
    Do we deserve these?
    Fatih Özatay, PhD 19 July 2009
    First of all I have to apologize. I do not remember exactly how many columns I have written on the senselessness of automotive sector tax cuts. I argued that it will not have effect on domestic production and will increase imports. I maintained that through domestic production increases at a certain level, this will happen temporarily as people will backdate automobile consumption to benefit from price advantage. I said that rather than using budget resources in this area, budget resources would rather be transferred to poor sectors that will by domestically produced goods, for instance to unemployed. This way, I said, social justice would also be protected. [More]
    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 [More]
    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. [More]
    Possibility of spinning rises
    Fatih Özatay, PhD 16 July 2009
    Unemployment data for April were announced yesterday. In the recent months it became a tradition to say 'as expected' each time new data is announced. There is still no difference; unemployment rate rose 'as expected'. It went up from 9.9 percent in April 2008 to 14.9 percent in April 2009. In other words, unemployment rate increased by 5 points. Non-agricultural unemployment rate is, no surprisingly higher: It increased by 5.9 points than the same period last year and reached 18.2 percent. What is more and again as expected is the high unemployment rate among 15-24 age group (26.5 percent) and the rise in the rate over the last year (8.9 points). [More]
    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? [More]
    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. [More]
    Seventeenth biggest
    Fatih Özatay, PhD 13 July 2009
    Automotive sector market data for June was announced. Now it is time for intellectual monitoring. Tax cat was implemented for the automotive sector effective as of the mid March. It is obvious that the mentioned sector is important for Turkey in particular when considered together with its sub-industry. A slack in the sector affects the economy as a whole. Despite the importance of the sector, however, I argued immediately after the implementation of the tax cut that the decision is wrong. Because, we exported a large proportion of the automobiles we produced. The decision however had no effect on export prices. On the other hand, a significant proportion of the automobiles sold within the country were imported. The decision led to a reduction in the prices of imported cars as well. In tha [More]