Economic policy mistakes (5)
Fatih Özatay, PhD
13 February 2014
Can a country home to the ‘Hello Fatih’ scandal achieve the income level of rich countries? First of all, I have nothing in common with my namesake in the media manipulation scandal, known as the “Hello Fatih” scandal. Hoping that I have averted possible misunderstandings let me raise today’s question: Can a country home to the ‘Hello Fatih’ incident achieve the income level of rich countries? More clearly, can a country where no one believes that reliable and fair investigation and judgment will be carried out to clamp down on the alleged cases of corruption catch up with rich countries in income?
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Economic policy mistakes (4)
Fatih Özatay, PhD
11 February 2014
Expected rates float above the targets. So do realizations. This is a critical mistake Number four on the policy mistakes lists is the policy to curb lira depreciation. In football, the goal keeper is caught on the wrong foot when he or she cannot prevent an attack as he or she cannot reverse the move already started to one end of the goal while the attack comes to the other. Similarly, given the extraordinary conditions across financial markets, that is, the risk that the volume of capital flows to Turkey changes sharply and suddenly, it was highly probable that the lira depreciation policy catches Turkey on the wrong foot.
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Why doesn’t Turkey act as it talks?
Güven Sak, PhD
11 February 2014
If Turkey wants to be an important actor, it should just maintain a solid economy and strong democracy, that’s it. A foreign diplomat asked me this question the other day. We were having a conversation about Turkey and he, completely naturally, asked “Why do you think Turkey does not act as it talks?” I responded immediately: “Pardon me, what do you mean?” He continued, “Turkey talks about being one of the key actors in its region, and I agree with that. But Turkey does not act as it talks.” Actually, I have been thinking the same lately: Turkey talks about things, but somehow does not or cannot do what is necessary.
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The current state of doing business in Turkey
Güven Sak, PhD
08 February 2014
Looking for a positive figure on the Turkish economy? Foreign Direct Investment (FDI) figures might help. They were around $1 billion per year in the last decade of the 20th century and improved to around 10 billion per year in the first 12 years of the 21st. Not bad, you may say. But Ernst&Young’s Attractiveness Survey for 2013 shows a different country, one with low skills, bribery and influence peddling. Want to get a clear picture of the domestic political debate in Turkey? Let me help.First, why is FDI coming in? The survey first points to the size of the domestic market and the geographic location of the country. Both features are being praised by more than 80 percent of the respondents as being very and fairly important features shaping investment decisions regarding
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Why have exporters become hotel keepers?
Güven Sak, PhD
07 February 2014
If you are wondering what has happened in Turkey over the last five years, take a look at the employment statistics. Turkey’s labor force is employed as manual workers in construction. When I was born in the early 1960s, 30 percent of Turkey’s population lived in cities and ten percent had refrigerators in their homes. My dad told me that they had bought a refrigerator after I was born, to keep milk fresh. The brand was AEG. I used it as a student in Ankara in the 1990s. Arçelik had opened its first factory only a couple of years before. Turkey’s industry was newly emerging.
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Economic policy mistakes (2)
Fatih Özatay, PhD
06 February 2014
GDP growth will be a meager 4 percent in 2013. Turkey has suffered a “high current account deficit-low GDP growth” challenge in the last two years. It’s time for the second piece in the “economic policy mistakes” series. The first one rewound the scene and enumerated some important developments concerning the Turkish economy. I think it would be wise to discuss policy mistakes on that perspective. The first blow came on late May 22nd from Federal Reserve (FED) chair Bernanke as the declared that the FED might initiate tapering. This was planned to be followed by steps to raise the federal bond rate. After Bernanke’s statements, Turkey faced exchange and interest rate hikes and came to be cited in an increasing number of reports as one of the two countries which will be hit the hardest by t
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Why is the Ministry of Family not interested in women’s issues?
Güven Sak, PhD
04 February 2014
I think it is time to separate women’s affairs from the Ministry of Family and Social Policy. Women’s issues exist in Turkey. I don’t know if you have noticed this amid the senseless everyday political polemics, but I am sure the administration hasn’t. The present hustle will eventually end, but the women’s issue will remain as a source of dishonor for Turkey. The reason is quite simple: Turkey does not give the women’s issue adequate consideration. The Ministry of Family and Social Policies, which pretends to take care of women’s issues, does not count. The issue cannot be solved by the Ministry’s “we are sincerely sorry for women who are exposed to violence” shows produced just for the sake of appearance. Not without specific policies. Not without the Ministry dealing with Turkey’s indus
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Economic policy mistakes (1)
Fatih Özatay, PhD
01 February 2014
Turkey has made critical economic policy mistakes over the last couple of years, which increased the risk perception. Let’s start from the moment and go back in time. Turkey has made critical economic policy mistakes over the last couple of years, which unfortunately made the Turkish economy riskier. I want to discuss these mistakes in a series of commentaries. Let’s start from the moment and go back in time. 1) The drastic upwards trend in the exchange rate was replaced by a rather moderate upwards move at a higher exchange rate after the Central Bank (CB) decided during its interim meeting on Tuesday night to increase the policy rate (average funding cost) from 7.75 to 10 percent (weekly repurchase rate). 2) The CB’s interest rate decision in its stated meeting last Tuesday was “highly
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Why Turkey is no Botswana when it comes to corruption
Güven Sak, PhD
01 February 2014
Remember the famous mathematical formula for corruption? You have three major variables: sum up monopoly power in decision making and discretionary powers. The higher that number, the lower the limit on the government and higher the corruption in the country. From there, you have to subtract the accountability of the government. The higher the latter, the lower the probability of corruption in the country. It is essentially an attempt at quantifying the authority of a government. First of all, the formula works. Second, let me tell you about the issue of limited powers in Turkey’s government today. Spoiler: They are not very limited at all. When it comes to limiting the powers of the administration, Turkey ranks 68th among 97 countries. Of all countries on the list, Botswana cat
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High school kids are trading bitcoins online
Güven Sak, PhD
31 January 2014
Turkey, lacking perspective, puts a stamp on history as the country with the most expensive and restricted Internet. I hate watching news programs lately. There is always a politician talking about something that amounts to a hill of beans. The political class sounds like kids making sand castles at the beach, having their fun. But they are not from the twenty-first century, for sure; because the kids of the present century do not waste time making sand castles. I just learned that my nephew, Mert, has been writing algorithms to earn bitcoins. I remember his infancy! The kids of the twenty-first century are having their fun in front of their computers. Mert, for instance, has opened his computer to foreign companies. He writes algorithms for American and Chinese companies for dat
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