I don’t have the answer
Fatih Özatay, PhD
03 October 2013
Fighting against informality should be the first step of the reforms aimed to increase Turkey’s sustainable growth rate. We always hear and voice assertive statements such as “productivity level should be improved” “inflation should be reduced”, “sustainable growth rate should be increased” or “high-technology exports should grow.” Sure all of these and similar remarks are unquestionable facts, but it is nothing but hollow to come up with these unless you answer the question how.
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Would you embark on an investment with a return of forty years?
Güven Sak, PhD
01 October 2013
At this rate, the twenty-first century will not be Turkey’s century. There will be no Turkish miracle like the Korean miracle. Not by producing small fry and accepting a narrow mindset. All parents wish a better life and better qualifications for their children. The other day I asked, “Would you invest in a nice house or education for your children?” I meant to emphasize that there is something fundamentally wrong in Turkey. Today’s keyword is "quality." The quality of the skills set of the labor force is more important than ever, yet there is no action. Albeit the Baath-style, big talks rallying in the group meetings of political parties, the situation is clear for those who want to see and hear.
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Why do you hate us Aesop!
Fatih Özatay, PhD
01 October 2013
Nowadays the main cause of the tension originating from the US is in the second category, that is, the risk that things might jump the track. For your sanity, it is useful not to always see the glass half empty. Of course it is impossible not to feel sorry for the high unemployment rates in Spain and Greece, people losing their jobs or young men and women with university degrees but without a job. But we also need to admit that the European crisis also has fun sides. Or at least we have to say “it used to have” since we have not heard much of Europe lately.
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Condoning the rentier lobby and raising the nonexistent one instead
Fatih Özatay, PhD
28 September 2013
The systematic encouragement of profit-seeking and the absence of any taxes on land profits reinforce the possible risk of lowered potential growth rate for Turkey Land profit is easy to earn everywhere around Turkey. This is why industrialists shut down their production facilities and switch to the construction sector, not to mention allocating funds for research and development. The other day the mayor of an important city was painting in glowing colors a project on the construction of a controversial highway, arguing how it would increase the value of the land at the district the highway will pass through.
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There is something fundamentally wrong in Turkey
Güven Sak, PhD
28 September 2013
Turkey’s transformation is a success story no more. In 1980, Turkey was an economy exporting only $3 billion worth of goods, 90 percent of which were agricultural products. In 2012, we had an export level of 150 billion, 90 percent of which was made up of industrial products. This means that from 1980 until today, Turkey has switched from low-tech to mid-tech products. But we seem to be stuck there at the moment, and there is no sign yet of moving toward the hi-tech. Turkey is now a country where its own electronics giant, instead of pursuing innovation-based growth, is moving into the construction business. It is simply easier to earn money that way. Is there something fundamentally wrong in Turkey? I am afraid so. So what is wrong? Either our companies are doing something wron
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Not before the second era of the rentier economy is over
Güven Sak, PhD
27 September 2013
If you can guarantee profits without adding any value simply by building things, you won't risk investments in technology. PwC Consulting announced its list of global top 100 companies, ranked by market capitalization. Here are three observations for you concerning the list: first, there are no companies from Turkey on it. The 100th company on the list has a market capitalization of $70 billion, compared to the $20 billion of Turkey’s largest company. Second, between 2008 and 2013, newcomers constituted one third of the list, climbing up in market capitalization. There is no such dynamism in Turkey. The companies from Turkey on the Forbes 2000 list are predominatly holdings and banks from the 1950s. Third, from 2008 to 2013, manufacturing industry companies that concentrate on new technolo
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A series of oddities
Fatih Özatay, PhD
26 September 2013
In the first seven months of the year, gold imports were almost equal to machinery and equipment imports! Will Turkey grow via gold imports? Turkey is an increasingly odd economy. Today I will enumerate some of the striking oddities concerning Turkey’s economy. Please note that this is not an exhaustive list but just a preliminary one.
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Overpraising (n+1)
Fatih Özatay, PhD
24 September 2013
We have to stop overpraising Turkey’s economy and face the reality. This is the only way to solve the problem. Brace yourselves now. I will divide the post-1990 period into three sub-periods: 1990-2002, 2003-2007 and 2008-2012. Do you know when net foreign borrowing in proportion to the GDP was highest, that is, difference between new foreign borrowing and foreign debt repayment was largest? In the 2008-2012 period. This is also when the GDP per capita growth rate was relatively lower!
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A country with a narrow mindset cannot make it to the top ten of the world
Güven Sak, PhD
24 September 2013
Turkish companies do not have a global mindset. Public support mechanisms trail behind the global standards and fail to adapt to global developments. Turkey still has way to go in opening up to the world. Let’s admit that Turkey is an introverted country. Our Ottoman ancestors were not like that, however. They used to rule an empire that was open to the world. They kept a close eye on world developments, in an effort to make Istanbul the center of the earth. Because of this, even the fall of the empire lasted for a century. Turkey has yet to completely overcome the trauma of losing the empire. It has become introverted.
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Thus spoke the central authority…
Fatih Özatay, PhD
21 September 2013
Let’s say that there are 100 theology faculties in Turkey. YÖK asks their opinion on such a resolution and 99 of them votes for it. In the early 1980s, Robert Frank wanted to offer a new elective course at the Cornell University on behavioral economics, a newly sprouting field then that combines psychology with economics. Noting that undergraduate students did not know about this new field, he tried to come up with an appealing course title so that he could attract them to enroll.
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