Fitch Ratings cut Turkey’s outlook from positive to stable which means that Turkey no longer as attractive for investment in the short term despite its successful record and bright future.

Don’t you feel that the world is like a watch with a broken driving spring lately? I think so. When the spring of my grandfather’s old mechanical watch broke, the hour and minute hands would start to spin like crazy. I felt like time rushed and that I was being left behind. In fact, the time is not rushing. Then, where does this “one trouble at a time, please” feeling stem from? I call this “the syndrome of a student who has not done his homework.” The world has been changing and we are postponing our responsibilities to catch up with it. Then comes the syndrome. It is like the exam questions have been selected intentionally from among the chapters you had not studied. Not everyone feels like this; it is just you because you are not prepared. This is the case with the economy and politics, as well. Today, let me address the recent developments and Turkey’s unpreparedness.

I do not think I was exaggerating when I said, “We have seen no major structural reforms since 2007 except the ban on smoking.” We continue to put all of the major reforms at the end of the queue. Also, we fail to seize the opportunities that time has brought. The homework we postponed doing when things were all right now makes us feel “one trouble at a time, please” in hard times. It appears that in our neighborhood, reforms are initiated only after we hit the wall.

Let’s start with the economy: The European Central Bank has escalated its funding of European banks. What does this mean? It means that European banks hesitate to lend to each other in the interbank market. The markets are not working since no one is sure of the repayment capacity of others. Everyone is sure that balance sheets involve assets that do not reflect the price risk, like sewage water seeping into the drinking water system, but no one shows who holds what assets.  Then, what happens? An atmosphere of insecurity surrounds the markets. Everyone ceases to lend money. I remember Trichet, former president of the European Central Bank, explaining in a private conversation the difference between Europe and the US: “There, the Fed finances banks. Here, the interbank market works.” Today, however, it is the moment of truth for Europe.

Meanwhile, Fitch Ratings has cut Turkey’s outlook from positive to stable. What does this mean? It means that Turkey is no longer as attractive for investment in the short term despite its successful record and bright future. At the same time, this means a vote of no-confidence regarding the monetary policy in the face of vulnerabilities like the high current account deficit. It means a reiteration that in 2012 Turkey will be affected by the crisis more severely than it was in 2008. Since we have not done our homework, we once again have the “one trouble at a time, please” feeling in response to the deepening crisis in Europe.

Today’s hot development in politics is definitely Prime Minister Erdoğan’s apology for the massacres in Dersim in the late 1930s. I believe that this is an important step in Turkey’s efforts to make peace with its history and geography. Turkey can become a regional power only by taking such steps. I also think that we have to congratulate Erdoğan for his remarks. But in today’s world, the spring of which is broken, apologizing is prevaricating. If we could have done our homework in time and continued the democratic opening process skillfully and courageously, we would have been feeling better now.

Right now, we are in a process in which the risk of Libyanization is higher for Syria. What does this implies? This implies the risk of rising ethnic and denominational conflict. Wait for Iran, too. Turkey first has to solve its ethnic and denominational issues before playing the mediator and taking part in ethnic and denominational conflicts. Otherwise, escalating insecurity throughout the countries of the region will sever their ties. By saying “I apologize for Dersim” and opening a formal investigation into the issue, Turkey will be affected less severely not only by the conflicts throughout the region but also will be able to step in to ease the conflicts with inner peace. This is what will prevent meaningless and purposeless international interventions into the region.

What prevents us from enjoying the exam is that we have not done our homework in time. Is there any point in crying over split milk? We will wait and see.

This commentary was published in Radikal daily on 25.11.2011