“One thing that has always surprised me about the Turkish economy is that it has ended up with accumulating wealth at the end of all periods of imbalance.”

The Turkish economy grew by 9.6 percent in the first nine months of 2011. Over the same period, the Chinese and Indian economies grew by 9.4 percent and 7.4 percent, respectively. Among the top ten of the fast growth list, eight of them are China, India, and their suppliers. The remaining two are the only ones of their kind: Turkey and Israel. Let me pose the first question in my mind without belaboring: Is it a good thing that Turkey grew by 9.6 percent in the first nine months of 2011? The answer: Any form of growth is definitely good. Any form of growth contributes to the accumulation of wealth and resources. Here is the second question: Does rapid growth in 2011 imply a positive growth outlook for 2012? The answer is no. Question three: what should Turkey do with the wealth and resources accumulated via rapid growth in 2011? The answer is, it should save for the winter of 2012. It will be useful to keep assets liquid as much as possible instead of investing it. Making good out of bad is a personal responsibility. All we expect from the public administration must be mistakes. This is the first rule for 2012.

Years ago, during the 2001 crisis, I learned an important thing from my beloved professor Melih Celasun, now deceased, during one of the tens of meetings held during that period. He told me, “Do not ever talk around ‘This crisis is extremely deep; turning around will be difficult.’ One thing that has always surprised me about the Turkish economy is that it has ended up with accumulating wealth at the end of all periods of imbalance. Yesterday, the economy suffered from a series of imbalances. But today, all sections of the society have accumulated wealth, purchasing houses, automobiles, summer vacation homes or opening bank accounts. What you have to focus on now is how that wealth is affected by the crisis.” I keep his remarks in mind when listening to the “wealth effect” debates. They still are applicable. So, please read the situation like this: The Turkish economy has the opportunity to provide against the challenges of 2012 with the help of the 2011 growth. Of course, if property owners can keep calm. We are at the outset of a period of preservation, not accumulation. Please avoid the remarks of some ministers when assessing the indicators. This is the second rule for 2012.

Here goes the third rule: During 2012, always keep in mind the warning John Maynard Keynes once made. Master Keynes compiled the notes he had taken during the Versailles Conference in 1919 and published them as a book in The Economic Consequences of the Peace. His notes foresaw not only that the World War One would cause World War Two. His remarks in the introduction were in fact a memorable warning about mankind: “The power to become habituated to his surroundings is a marked characteristic of mankind. Very few of us realized with conviction the intensely unusual, unstable, complicated, unreliable, temporary nature of the economic organization by which Western Europe has lived for the last half century. We assume some of the most peculiar and temporary of our late advantages as natural, permanent, and to be depended on, and we lay our plans accordingly.”

This is what today’s challenge is related to. The key challenge about protecting what is at hand today is this characteristic of mankind “to become habituated to his surroundings.” This characteristic makes it difficult to question the present imbalances. It makes the abnormal seem normal. In reality, 9.6 percent growth is a policy failure and is unsustainable. This is the third rule for 2012.

Question four: what message does the 9.6 percent growth in 2011 convey? The message is that, an economy which has a real interest rate at minus 2 percent can break growth records. Then, monetary tightening cannot be accomplished by cutting the interest rate.

Question five: Could the Turkish economy have been more prepared for 2012? The answer would be yes. Too little, too late. There is no point in crying over spilled milk. From now on, please keep in mind that every man is the architect of his own fate. Please note down and bear in mind Maynard’s warning so that you can avoid mistakes.

Nasrettin Hodja once went to a wedding feast, knowing that it had nothing to do with him personally and everything to do with his furs. He sat at the main table, being careful not to let the wonderful foods and compliments with which he was surrounded be confused with reality, and ate his soup, saying, “Here, eat my furs.” Following his example, please repeat, “The unsustainable cannot be sustained.”

This commentary was published in Radikal daily on 16.12.2011