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    A sensitive story

    Fatih Özatay, PhD28 May 2009 - Okunma Sayısı: 1071


    We were living in Erzincan province. I and my elder sister were going to elementary school.  After the school, my mother used to take us to day session of a movie from time to time. I remember watching Turkish films in general. And without a doubt, three of us used to cry during the movie.

    I guess my 'sensitive' side was inherited from those years. But as the saying suggests, "Everything comes to man who waits". In other words, "cry a lot be touched; in the future you will be able to feel". I guess today is the day. I feel that, there is a high risk Turkish economy skids in the upcoming years. For instance, there is a significant risk that Turkish economy grows at a quite slow pace or does not grow at all in 2010. I guess that 2010 will not go well, under current data we have, is a statement that a lot of people will agree on. To put it differently, it is not necessary to shed a lot of tears in old Turkish movies to bring forward this statement. If it were so, productivity of the process of getting touched would be quite low: getting highly touchy versus feeling less in the future.

    However, this is not the case. My 'sensitivity' pertains rather to forthcoming years. There are a couple of reasons behind this. First, the global financial system which was run over by a cylinder cannot throw around money as much as it used to. However, domestic savings of Turkey is not sufficient to increase the pace of growth. In periods of high growth, Turkey has high current account deficits. Therefore, we need savings of other economies; i.e. fund inflows from the global financial system, to ensure rapid growth. On top of it, there are more candidates willing to take a piece from the funds amount of which are lower than the past.

    Second, countries which have been affected by the crisis most are those with export 'dependent' economies. The phenomenon (high export volume), which is positive and favorable from one angle, turns into a 'dependency' from another angle. In the upcoming periods, export-oriented growth models will be revised. As you remember, two days ago Krugman's words "We can't all export our way to recovery. There is no other planet to trade with" was all in the media.

    Exporting will now be harder than before. Read the two reasons given above together. What conclusion can be drawn? Even before we start to achieve the pace of growth in good old days, current account balance will alarm the danger. In short, in the forthcoming period has the potential to be a new 'lost' period with slow growth.

    Of course, this is just a possibility. We have to minimize this danger. And here, the third reason behind the aforementioned 'sensitivity' comes forth. The feature mentioned several times above; the disease of failing to identify the problems correctly and design a consistent economic program devoted to solve those accordingly.


    This commentary was published in Radikal daily on 28.05.2009