It seems 2012 will be a year dominated by political debates and lingering economic reforms; one we will look forward to having finished.

Am I getting old? I expect 2012 to be more exhausting than 2011. It seems we will waste all of our energy once again and our actions will not bear fruit. It seems 2012 will be a year dominated by political debates and lingering economic reforms; one we will look forward to having finished. We are on the eve of a year during which huge successes will be less likely and our horizon will shorten. This is what I think. I hope I am way out in left field. Let me first state my main observation: 2012 will be a year during which preservation will be more important than advancement. Let me tell you why. Maybe I’m wrong.

I have five points to state with respect to 2012. First, the year will be shaped by the deepening European crisis. The countries of the European Union eventually will initiate the delayed banking reform to strengthen their capital structure. In 2012, Central European banks will make sure that the implications of the crisis will be understood better in the Balkans, Poland and Turkey. Turkey will feel more clearly the capital restructuring operation for the European banks, in terms of the rising cost of finance and decreasing fund flows, of course.  You might say, “Interest rates in US$ terms increased by almost 100 percent in 2011 in comparison with 2010, for instance. How can it get worse?” But it will. Interest rates will rise further in 2012.

Second, during  late 2010 and early 2011, we were trying to understand  the goals of the Central Bank. But now we all know that, instead of striving to slow down economic recovery beginning from mid-2010, the bank, due to the upcoming elections in 2011, chose to stall and then completely lost control. So, I think we are all aware that starting the new year with a Central Bank that has lost credibility automatically will equal one dollar to two liras. And I am not feeling hopeful about what will happen later on. Also, I think that we need take note of the tweets lately which comment, “the number of researchers at the Central Bank with market experience increased whereas that of market experts decreased” as a factor that will mark the gravity of circumstances in 2012.

The third point I consider important for 2012: Recently, Iraq has been added to the group of chaotic countries alongside Syria. Syria represented the Arab Awakening pressing in upon our borders. It has been moving on the path of Libyanization for some time now. Lately, the implications of the Arab Awakening and the US withdrawal from Iraq have started to intermingle. Both Iraq and Syria are one side of a tripartite structure. The first impact of this must be visible: Syria imposed additional costs for trucks with Turkish plates and additional requirements for goods made in Turkey. Reaching Jordan passing through Iraq became the second best alternative, but it is no longer an option. Doors to Turkey’s exports to the south have been shutting down. This is bad news especially for cities that recently had increased trade with southern regions. In 2012, not only will trade with Europe not remain afloat, but also the doors to new markets will be closed. Genuinely bad.

The fourth issue, linked with the third one, is related directly to the Kurdish issue. Like it or not, these developments taking place next to our borders increase the significance of this issue regardless of the terrorism aspect. It hinders Turkey’s mobility in the region and makes internal issues more vulnerable to external developments. Turkey immediately has to start taking steps to make peace with its history and geography. Nowadays, however, it seems more difficult than ever to do this. Fifth, the health problems of prime minister Erdoğan must be addressed in the light of this overall picture. This bodes ill given the current environment, which requires quick decisions.

I expect 2012 to be exhausting. Am I getting old? This much action is too much for me. Those who are expected to make sure that action proves fruitful have a lot to do. But any problem comes with a solution. Let’s wait and see what 2012 will bring.

This commentary was published in Radikal daily on 27.12.2011