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    2009 will be the year of easy decisions for the economy

    Güven Sak, PhD01 January 2009 - Okunma Sayısı: 1556


    Happy New Year! I wish that 2009 brings richness and happiness for everyone living on this beautiful blue planet. In fact, a year in which we will need patience the most has come; not only for the residents of this country, but for everyone living on this planet. Our destinies have never been this interlocked before. We have never encountered such synchronized disasters. For the first time, the world is starting a year with common grieves and concerns. This is as well valid for Turkey. Then, what shall we expect from the year 2009? 2009 will be the year of easy decisions for the economy. Do not get me wrong, naturally hard decisions will also be made. This year will be a hard one for the Turkish economy. However, those hard decisions will be made easily without constantly postponing the issues. Let us see why.


    2009 will be a year where economic decisions will be prominent albeit politics. Since 2005, Turkey has been going under a process where political discussions have transcended the discussions on economic priorities. But, it will not be so in 2009. Decisions will be made easily as they will rapidly dictate themselves. With this respect, 2009 will directly resemble 2001.


    The priority in 2001 was the economy. The priority in 2002 was also the economy. Then, Turkey lived away the years 2003 and 2004 where the European Union reform process was vital. In the meanwhile, the reform fever started to slacken and the Turkish economy entered in a process of rapid normalization. As the economy started to be normalized, the priorities for the future of the economy began to be neglected. Back then, we had initiated the industrial policy discussions and then published the report "The Priorities of the Second Generation Reform Process" at TEPAV. But, no one had paid attention.


    Thus, Turkey entered the period of years where the political issues were priorities. We described 2006 in this way in this column; the date was January 2, 2006. Then, 2007 arrived. We asked: "Are you ready for the year of infinite exhaustion?" 2007 did not make us mistaken; we got completely exhausted. We were so exhausted that the victory in the 2007 elections was not able to refresh the energy of the ruling party of Turkey. For 2008, we had said on January 1, 2008 Referans daily: "Due to the absence of a government program, rising lack of confidence in Turkey along with the contribution of the international banking crisis, the tendency for slowdown in growth will continue to gain prominence. Though there will be positive growth, employment problem will become more evident. The slowdown in growth will not facilitate a decrease in (political) tensions." We are still standing on the same spot. However, now we are entering a year where decisions pertaining to economy will be prominent, just as in 2001.


    How does 2008 look like when this column is reviewed? Let me give a couple of statistics: This year, we have written around 120 columns. One out of two columns mentions "crisis" and "economic growth". One fourth of the columns say "banking crisis" and "economic slowdown". One fifth of the columns include the phrase "damage on balance sheets". The year had passed just in the way we welcomed it. For instance, in the same period, the term "political crisis" has been used in one eleventh of the columns. Please note that the year 2007 was different than 2008. In 2007, the only thing this column commented on was the "political crisis". In 2008 however, there happened an agenda shift. The economic become more important than the political as there were steps to take to reduce the impact of the economic crisis on our daily lives. 2009 will be such a year where we will feel the impact of the economic crisis on our daily lives to the highest extent. And this is exactly why 2009 will be remembered as a year where rapid and easy decisions for the economy will be made. This is going to happen, regardless of whether it is desired or not.


    The situation is exactly same with that in the expression "The squeaking wheel gets the grease". Nowadays, the wheel will squeak so load that no one will be able to ignore. Political arena has to focus on the economy as factories are temporarily suspending their activities, temporary workers are getting fired, export figures are falling down and domestic market is contracting. The best example for this is the President Bush. The market did not wait for the Republicans who tried to get along with the crisis and get over the elections. This is exactly what will happen in Turkey's case. Market discipline works in an asymmetric way. It is too effective when things are unfavorable and too ineffective when things are favorable. It is never moderate. If there exists a serious economic problem, market always gives harm a big time. If the economy is in the normalization process, market discipline loosens disproportionately, leaving the agenda to the political issues. With this respect, the market is not a good guide for normal course of affairs. Now, we are entering a period which will remind us again the iron discipline of the market. We are right at the beginning of an obsessive disciplinary period rigidly coupled with the proverb "Chickens have come home to roost". This is what goes around in the world as well as in Turkey.


    Are you complaining about being unable to predict your future? Do not worry; your problems will be solved soon. Economic conditions have fulfilled the requirements to get the attention of the political arena. Really soon, we will have a solid economic program. You wonder how? Just look at the countries resembling Turkey up and down. The IMF agreement will in a short while provide Turkey with the facilities similar to what it provided for Hungary. Please take a look at the evaluation note by the TEPAV Global Crisis Working Group and see what Hungary does.


    2009 implies a period where we have to be more creative with respect to the economy. The measures to be introduced will affect not only today but also tomorrow. We have to decide the position we have to assume on the world. I believe that 2009 will be determinant with this respect. I guess that the countries coming to forefront in the coordination for tackling the global crisis will attain higher importance in the upcoming period. In this period where cards are reshuffled, the ones knowing what they want to do on the world will easily get what they want. Or, this is just what we believe. The opportunity provided by this crisis lies here. Only the ones noticing, i.e. getting prepared for the opportunity will be able to grab it. We have to keep in mind that missed opportunities cannot be grabbed anymore.


    The world as a whole enters the year 2009 with common grieves and concerns. The trick here is to turn 2009 into a year where the world also has common pride. Let us see whether we will accomplish. We will accomplish that eventually, but will 2009 be the beginning of that period?

    We have hope. We are at the beginning of a year where it is possible to make a difference.

    Have a nice year.


    This commentary was published in Referans daily on 01.01.2009