Regional inequalities in Turkey not easing

Mustafa Sönmez – Hürriyet Daily News, May/ 23 /2016

Major regional inequality is one of Turkey’s structural problems. Even though investment incentive measures were taken in 2012, this gap is not shrinking.
In terms of regional inequality, Turkey is second only to Chile in the Organization for Economic Co-operation and Development (OECD). Among OECD member countries, the best regional balance is seen in North European countries, led by Sweden and Holland.
The regional inequality issue in Turkey is also an important obstacle to Turkey’s EU membership. Turkey must lower its interregional differences to an acceptable level, which is one of the key conditions to joining the union.
There are significant historic, social and economic reasons for regional inequality in Turkey. Provinces in eastern and southeastern Anatolia have not been able to benefit adequately from the advantages of development. Not only them but also the easternBlack Sea region, certain parts of Central Anatolia, and even some parts of western Anatolia and the Mediterranean.
From the 1980s to the 2000s, when Turkey became more open to the global economy and market fluctuations and more distanced from central planning, regional inequality in the country was exacerbated in favor of strong regions and against underdeveloped regions.

In a 26-region categorization of Turkey, six sub-regions in eastern and southeastern Anatolia are in the bottom seven places. Istanbul’s share of the overall national population is 3 percentage points higher than the population of 21 provinces in the east, but its share of national income is over 20 percentage points higher at 28 percent. The lowest six sub-regions in southeast Anatolia have a share of 7.4 percent.

Incentive programs and results

The “New Investment Incentive Program” that went into effect in mid-2012 introduced different practices according to the type of the investment, its size, and the region. The program is made up of four different practices:

1-Regional Investment Incentive Practice

2-Large-scale Investment Incentive Practice

3-Strategic Investment Incentive Practice

4-General Incentive Practice

The program contains tools such as tax reductions, support for the employer’s insurance premiums, and support for interest rates. It separates Turkey into six different regions according to economic and social development levels, within the framework of a study conducted by the Ministry of Development in 2011.

Region 1 was granted the least advantageous incentives while Region 6 was granted the best incentives.

However, this program was not successful as it failed to be sufficiently selective in supporting a certain region or a certain sector. As a result of this inefficient program, the desired reduction in the regional gap was not reached. The results of the period from June 2012 to the end of 2015 prove this.

According to data from the Ministry of Economy, in that period investments worth a total of 309 billion Turkish Liras were supported with incentives. However, the regional distribution of investments does not seem to be good at lowering the imbalance as desired. In the same period, Region 1 – which included Istanbul – took the top slot in investments with a share of 35 percent. Regions 2 and 3, both of which lie in the west of the country, had a share of 31 percent of the investments. As a result, two thirds of the supported investments were made in already developed and relatively developed regions. The least developed Region 6, covering the eastern and southeastern Anatolia, took only a 5 percent share of the supported investments in the same period.

For a more effective policy

Even though the gap in the distribution of national income among regions is an issue going back many years, it grew further with the neoliberal policies after the 1980s put an end to public investments. Following the privatization and closure of many public enterprises, along with their investments, the gap between the regions grew wider.

What’s more, the new paradigm that has based economic growth on the inflow of foreign resources – because of inadequate domestic savings – preferred to attract hot money with low exchange rates and high interest rates. This made importing cheaper, and the destructive policy of encouraging imports has rapidly eroded industry in Anatolia, which should have been protected. When Anatolia could not save itself from the de-industrialization disease, the bleeding in the workforce and capital accelerated with domestic migration.

Although a regional perspective in supporting investments seemed to be developed in the AKP era, an effective incentive policy was not created. The public sector has persistently avoided making investments, especially in the industrial sector, exacerbating inequality between developed and underdeveloped regions.

Incentives have mainly been offered to the most profitable sectors in the short-term, including the construction sector, the energy sector (which develops many environmentally unfriendly projects), and other service sectors with no value in foreign trade. The limited number of manufacturing investments was made largely in Istanbul and its neighboring regions, rather than Turkey’s more underdeveloped regions.

In recent years, especially when industrial investments slowed down, a new growth approach required a fresh industrial perspective that would encourage new investments. A fresh public investment model, focused on the public good rather than profitability, will be crucial in resolving problems resulting from regional inequality.

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Ters Şeritteki Ak faşizmin Ömrü?

 

Dokunulmazlıkların kaldırılmasını öngören Anayasa değişikliğinin ardından, Türkiye’nin toplumsal satranç tahtasındaki taşlar yeniden şekil aldı. 4 mayıs’ta tam frekans tutturamadığı Ahmet Davutoğlu’nu “deviren” Kaçak saray mukimi, son hamlesi olan ağırlıkla HDP’li milletvekillerini hedefleyen dokunulmazlık yasa değişikliği ile bir adım daha ilerlemiş görünüyor. Üstelik bu muharebeyi-şimdilik- kazanmış görünürken CHP’yi yanına çekmiş olması ve CHP’de yarattığı iç çatışma da bonusu!..

CHP’li 20 kadar milletvekilinin referandum ringine çıkıp bir daha nakavt olmamak için sarıldıkları “Evet” oyu, CHP’yi referandum zahmetinden kurtarsa da Kaçak Saray’ı bir zevkten mahrum etmiş gibi görünüyor:Hezimet zevkinden(!)…

Oysa her hamle, her muharebe, gözüne uyku girmeyen kaçak sarayın , “Kanun kaçağı” durumunu biraz daha uzatmaktan ibaret, o kadar. Ulaşmak istediği Başkanlık zırhına, bagajındaki cesetlerle, girdiği ters şeritten olabildiği kadar yol almak için muhtaç. Ama ne kadar yol alınabilir ki, böyle bir bagajla, hem de ters şeritte? Günü kurtarmak. O kadar…

Kaçak sarayın “başkanlık” rejimi ile yasama-yürütme-yargıyı tek elinde ve inisiyatifi altında tutmak, yanı sıra başka bir rıza –denetleme- aracı olan medya üstünde hükümranlık kurmaktan başka oyun planı yok. Bütün bunları hayatta kalmak için, postu deldirmemek için yapmaya mecbur. Bunun önündeki her engeli, yıkıp gitmeye eli mecbur. Peki ne kadar manevra alanı var, ne kadar yol alıp ömrünü ne kadar uzatabilir?

Gezi, 17/25 ve 7 Haziran

Ak faşizm, hukuk tanımazlık, Anayasa ihlali ve suç üstüne suç biriktirmeyi, özellikle Gezi isyanı ile artırdı.Gezi, korkuttu; ezberlerini çok bozdu, iktidarı kaybetmelerine ramak kaldı ve her tür meşruiyet perdesini yırtmak pahasına isyanı polis şiddetiyle bastırmayı alışkanlık haline getirmeyi, 2013 ortalarında hızlandırdılar.

Ardından, eski ortak Cemaat’in karşı hamlesi olan 17/25 Aralık badiresini de hukuk, Anayasa ihlali ile  etkisizleştirdiler. Artık bagajda cesetler üst üsteydi ve bununla ilerlemek bir zorunluluktu.

Derken 7 haziran 2015 seçimleri geldi ve tek başlarına iktidar elden kaçar gibi oldu. En ufak bir iktidar paylaşımı anlamına gelen koalisyon ihtimalini bile kabullenecek hali yoktu kaçak sarayın ve tüm yolları dinamitleyip yeniden seçime mecbur bırakırken, seçim sonuç tablosunu yeniden lehine çevirmek için Kürt Savaşını başlattı.

İŞİD bulaşığı kitlesel katliamlar, Günaydoğu’da başlatılan , sivilleri de hedef alan amansız bir savaş ile 7 Haziran seçmen iradesine bir operasyondu başlatılan aslında. İkili hedef söz konusuydu: 1) 6 milyonu aşan HDP oylarını bu savaşla azaltabildiği kadar azaltmak, mümkünse HDP’yi baraj altına itmek, 2) Bunu savaş ile yaparken MHP’ye giden milliyetçi oyları AKP’ye çekmek…

İşe yaradı: savaş makinası sonuç getirdi ve 7 Haziran’da kaybedilen, 1 kasım’da  ele geçirildi;  tek başına iktidar şansı geri geldi. Kürt seçmenin bir kısmı sandığa gitmeden, bir kısmı korkup sinerek AKP’ye oy atarak azaldı, Batı’daki HDP destekçileri fire verdi. Ama daha önemlisi MHP’ye giden oylar savaşçı-milliyetçi çizgiye tav oldu ve AKP’ye aktı.

1 Kasım taktiği

Savaş taktiği işe yaramıştı. Hem HDP’ye giden Kürt oylarını aşındırıyor hem de MHP’ye giden milliyetçi oyları çekiyordu. Aynı çizgi, TSK ile uyum içinde sürdürüldü, hala sürdürülüyor…

İhtiyaç duyulan Başkanlık zırhı için  1 kasım meclis aritmetiği de yetmiyor: Barajı geçerek 59 milletvekili ile Meclis’te hala HDP var; 40 milletvekili de MHP’de duruyor. Kürt siyasetini baraj altına itmek, MHP’yi de likidite etmek için hamleler yoğunlaştırıldı.

Dokunulmazlığı kaldıracak Anayasa değişikliği bundan gündeme geldi; HDP milletvekillerini tasfiye etmek için… Kongre yapmak isteyen MHP’ye nifak bunun için sokuldu; MHP toparlanamasın diye…

Dokunulmazlık hamlesine tutarsız, ilkesiz CHP katkısı da sağlandı ve  Kürt siyasetinin Mecliste temsiline tırpan yolu açıldı. MHP üstünde operasyondan da geri durulmuyor. Bu hamleleri daha uyum içinde yapacağı Binali Yıldırım’ı da oturttu Başbakanlık koltuğuna. Bundan sonrasında , ters şeritte de olsa yol almanın daha kolay olacağını düşünüyor olmalı. Ters şerit sürücüsüne herkes sağa sola kaçışarak mecbur alan açacak, kendini sakınmak için saklanacak vs. Ama alınan yol, hepten yasa dışı, hepten kanun kaçağı icraatı…

Kuşatma…

Bagajda cesetlerle ters şerit sürücüsünün yol kat etmesi kolay değil. Kanun kaçağını henüz teslim alamasalar da ensesinde kovalayanlar var. Nefesini ensesinde en çok hissettikleri iç ve dış aktörler var…

Kaçak sarayın en büyük korkusu hala Cemaat. Dış aktör olarak da ABD…Dokunulmazlığı kaldıran düzenlemeyi onaylamayan ABD’nin anında eleştirisi , buna son örnek.

Kaçak saray, indirdiği her tür darbeye rağmen, Cemaatten en büyük entrikaları, Bizantizmi, pusuyu bekliyor. Onu ABD ile işbirliği içinde algılıyor…Hatta sık sık saray gazetelerinden Akşam’da Cemaat ile ABD’nin koordineli çalıştıkları yazılıyor.

Bu konuda ABD’de savcının elinde tuttuğu Rıza Zarrab, en önemli mengenelerden biri. Dokunulmazlık hamlesinin “zaferle” sonuçlandığı günün hemen ertesinde Zarrab soruşturmasıyla ilgili Türkiye’den  91 kişinın adı üstünde durulduğu haberi zamanlama olarak “manidar”…. Bunlardan 17/25 Aralık zanlısı bakanlar, Egemen Bağış ile Zafer Çağlayan’ın yanında BJK Başkanı Fikret Orman’ın adının geçmesi tesadüf olmasa gerek. Diğer isimleri de tahmin etmek zor değil…

Ters şeritteki kanun kaçağı için kullanılan ve kullanılacak mengene, Zarrab olacak. Ama bu kadar değil. Aldığı bütün darbelere rağmen, arkasında 6 milyonluk bir seçmen potansiyeli olan Kürt siyasetini  teslim almak da kolay değil. HDP, olabildiği kadar içeriden; ABD ve AB’den de alacağı demokratik dayanışma ile postu deldirmemeye çalışacak. Dokunulmazlığın kaldırılması, her şeyin sonu değil.

CHP, “Dokunulmazlık sınavı” karnesinin ışığında yeni bir hesaplaşmaya mecbur. Ya AKP safında görünecek ya HDP ile dayanaşacak. CHP’deki beşte bir Evetçi azınlığın Hayır tavrı koymuş beşte dörtlük omurgalı kesimin iradesine hükmetmek istemesi, iç çatışmayı artırır, belki hayırlı da olur. Bu kadar ilkesiz, perakende politika CHP’yi ilerletmiyor, aşağı çekiyor. Ak faşizme karşı, Kürt kimliğinin temsilini,  bir arada barış içinde yaşamayı, tüm özgürlüklerle beraber savunan ve bu konuda çatışmayı göze alan bir CHP daha saygın ve daha büyümeye açık bir parti olacaktır. Bunun tersi bir tutum, CHP’yi iyice etkisizleştirecektir.

Yeniden-üretim

Kanun kaçağı ters şerit sürücüsünün hayatını idame ettirebilmesi, politik, ekonomik, ideolojik yeniden üretim çarkını döndürebilmesine bağlı. Bu konuda adım adım hamleler kazanıyor görünse de etrafı kuşatılı ve şeridi dar.

Politik olarak etkisizleştirmeye çalıştığı Kürt siyasetinden direnç görecek; hem sivil sahada hem askeri sahada.  ABD, AB, Rusya, İran…bütün bu küresel ve bölgesel güçlerle arası şeker renk ve bunlardan yardım alacak durumda değil.

Elindeki tek koz, canlı kalkan haline getirdiği seçmen. Bu seçmen hakimiyetini daim tutmak için bütün enerjisini kullanıyor, her tür popülizmi, milliyetçi-dinci dili kullanıyor ve kullanmaya devam etmek isteyecek. Hem rıza ile hem de baskı ve korku yaymak için şiddet aygıtlarını daha çok donatıyor, yargıyı iyice kontrolü altında tutmak istiyor , bunu Binali Yıldırım’ın başbakanlığındaki hükümetle daha çok koyulaştıracak.

Seçmen desteğini daim tutmanın yolu, ekonomiden de geçiyor. İş-aş derdindeki seçmenin sızlanmasına yol açmayan bir ekonomik dümen tutuşu, ancak dışarıdan para girişinin devamlılığına bağlı. Bu ise , hem Türkiye’nin iç siyasi iklimine hem de dünya ekonomisinin durumuna bağlı. Risklerin önümüzdeki zaman diliminde yükselmesi, dolar fiyatını artırarak ekonomik dengeleri,bu da  seçmenin gündelik iş-aş dengesini bozabilir ve hoşnutsuzlukları artırabilir. Ama tersi de olabilir. Dünya ekonomisi bocaladıkça, geçici sıcak para girişleri, rejimin yelkenine rüzgar da taşıyabilir.

Kaçak sürücünün hayatını idame ettirebilmesi, ideolojik rızayı da gerektiriyor. Medya , eğitim, din kurumları bunun için , bugüne kadar olduğu gibi, bundan sonra da daha yoğun kullanılmak istenecek. Medyadan iyice biat istenecek, sosyal medya alanı daraltılacak, yargı silahı medya üstünde daha çok kullanılacak. Eğitim kurumları iyice anti-demokratikleştirilecek , Diyanet üstünden kitlelerin rejime biatı daha çok sağlanmak istenecek.

Mücadele…

Özetle, ters şeritten ilerlemeye çalışan bagajı cesetle dolu sürücünün işi hiç kolay değil. Belki, “kanun namına teslim ol” noktasına gelmedi kuşatma ama, bu dar yolda ters trafikte ilerlemek , hele ki menzile ulaşmak, hiç kolay değil. Herkesin faşizmle uykuları kaçıyor ama kaçak da rahat değil ve gözünü uyku tutmuyor.

Başkanlık muradına erse bile, eninde sonunda bir yerlere toslayacak, bir uçurum çıkacak karşısına, yol bitecek; içeriden çatlamalar olacak, bu kaçınılmaz.

O ana kadar insana, doğaya, her tür varlığa verdiği tahribatla kalacak.

Bu tahribatın daha fazla artmasını önlemek gerek.

Umutsuz değil, umutla, mücadele ederek, tüm hoşnutsuzlukları ve muhalefeti konsolide etmesini bilerek…

Canlı kalkan durumuna getirilmiş kitlelere ulaşıp , anlatarak, hoşnutsuzlukları örgütleyerek, demokrasiyi inşa edip faşizmi geriletmek hala mümkün.

Kaybedilmiş bir şey yok…

 

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May presenting trouble for Turkish economy

Mustafa Sönmez – Hürriyet Daily News  May/16/2016

 While the month of May is a joyful month for emerging countries that have been seeing the bright sun since February, fall winds have begun to blow in Turkey’s economy.

The reason for this is the disturbance in domestic politics. President Recep Tayyip Erdoğan, who is focused on the transition to the presidential system, suggested to Prime Minister Ahmet Davutoğlu that he quit amid differences. The markets subsequently fluctuated, and this course is expected to continue until and after a ruling Justice and Development Party (AKP) convention on May 22.

This turbulence has manifested itself in an increase in the dollar/Turkish Lira exchange rate, which had been decreasing since February. Turkey’s risk premium increased and, consequently, portfolio investments decreased amid occasional capital withdrawals. This fluctuation was reflected in the reports of international credit rating agencies and affected investment intentions. This autumn atmosphere was further affected by Erdoğan’s comments straining the refugee talks with the European Union.

The project to associate a visa-free travel for Turkish citizens with Turkey’s democratization charted a path for stormy waters with Erdoğan’s words, “You go your way; we’ll go ours.” The consequence of this was a distancing from the EU anchor, which discouraged investments in Turkey.

Political turmoil 

With Turkey’s political turmoil coinciding with the international sales wave, the Turkish markets encountered high turbulence in May. In the second week of May, the turbulence seemed to decrease but it inflicted a certain amount of damage.

The development that triggered the global turbulence was the devaluation of the dollar, which increased the prices of assets in a short time. Investors opted to sell to make profits.

As a result of a number of reasons, the main factor of which was the indecisiveness of the U.S. Central Bank Fed on rate hikes, the dollar index which was 99.000 in February went down to 91.000 on May 3. It recovered in the following three days and came close to 94.000. But the exchange rates of developing countries lost 19 percent of their value after gaining 10 percent against the dollar amid the latest turbulence.

The lira also picked up value, but with the effect of domestic political developments, it again lost value after May 4. In the last week of April, one dollar equaled a weekly average of 2.84 liras, but in the week of the political turmoil and afterward, it leaped to an average of 2.93 liras.

As one would expect, when foreign investors saw the increasing risk and started selling, the fall in the bourse increased.

Risk increase

The fluctuation in domestic politics negatively affected Turkey’s risk premium, the credit swap default (CDS), and the April average of 248 went up to 255 in the first week of May, increasing 3 percent. Meanwhile, Brazil’s risk decreased 4 percent in the first week of May. Also, Russia’s decreased 4.8 percent, almost reaching Turkey’s risk premium. One of the fragile five, Indonesia, saw its risk premium also decrease 5 percent during the same time frame. There was not much change either in South Africa.

How will May end and what will happen afterward? The answer to these questions will be determined by domestic and international factors. The non-agricultural employment data of the United States released on May 6 was weak, further decreasing the possibility of the Fed hiking rates in June. This new situation is at least expected to stop the increase in the climb of the dollar’s value.

The domestic political uncertainty peaked on the evening of May 4 when Prime Minister Ahmet Davutoğlu’s news of his resignation came, but the realization that this matter would not go all the way to a political fight and effect an inner-party split decreased the uncertainty. When the date of the party convention was moved to the closest date possible, the strength of the turbulence was lessened.

It is expected that a major section of this uncertainty will end on May 22. But you never quite know what the days will bring. The expectation is that only one candidate will run for office in the AKP convention and that one candidate will be elected as party chair. Will all developments happen as expected? This is unclear.

The future of the economic administration is also significant. However, once the prime ministerial candidate is known, the economic management will also become clear. The dose of political uncertainty is also dependent on whether the party convention of the Nationalist Movement Party (MHP) will be held or not. Any renewal in the MHP may be important for the AKP and for the date of any elections. This is at least how the financial markets perceive the situation.

Credit rating

It will be important to maintain the investable credit rating during this period of transformation and turbulence. International ratings agency Moody’s has maintained a negative outlook for Turkey for two years, while JP Morgan has advised a lowering of positions in Turkish assets. If Moody’s lowers its rating, then Turkey would be lacking an investible rating category from two of the three major agencies. It is not sufficient to secure the assent of only one of the major agencies to remain in the investable category.

Standard & Poor’s, which is known for its critical stance on Turkey and which has given a rating below investment level, provided hope with its evaluation last week. While Turkey’s credit note remained BB+, its outlook was changed from negative to stable. One notch above that is the “investable country” position.

S&P’s cited the resilience of the Turkish economy in the face of global and local threats to the country’s stability, saying the economy still faced challenges ranging from political turbulence to a Kurdish separatist conflict and geopolitical risks from the war in neighboring Syria. “The stable outlook reflects our expectation that Turkey’s economic growth prospects will remain resilient to external shocks and domestic political risks.”
In other words, while it was noted that the risk was increasing, it was not only this outlook that was rated but also the resilience to the risk – something on which Turkey has displayed positive indicators.

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Cinnetin sonu uçurum(*)

 

Sık sık başvurduğum bir benzetme var AKP rejimi, özellikle lideri RTE için: Ters yönde ilerlemeye çalışan, bagajı cesetlerle dolu sürücü…

Her gün yeni bir anayasa ihlalinin, yasa tanımazlığın örneğini veren Kaçak Saray ve rejimi, attıkları her adımda kendilerini Anayasa ve yasalarla ilişkili görmüyor, o günü kurtarmaları neyi gerektiriyorsa, öyle yapıyorlar. Tıpkı, ters yöne girmiş arabanın çarpa çarpa, vura kıra ilerlemesi gibi…İnsanlar ölüyor, masum insanlar; doğa tahrip ediliyor, ağaçlar kesiliyor, tarihi,kültürel varlıklar yok ediliyor…Hepsi ne için? Ters yöne girmiş arabanın bagajındaki suç delilleri ile yakalanmamak, tarafsız, bağımsız yargı önünde hesap vermemek için.

Biriken suçlar…

Bütün bu bagajdaki cesetler yıllardır biriktiriliyor: Türk-islam sentezi rejimin inşasına başlanan 2002 Kasım ayından bu yana her icraat yılları bir dizi usulsüzlük ve yasa dışılık, anayasa tanımazlıkla geçti. “Dur bir yerimi yapayım, bak sana neler yapayım” deyişine uygun olarak, kendilerine alan açmak için, başlangıçta demokratik göründüler, kimliklere, özellikle Kürt kimliğine ve özgürleşme mücadelesine saygılı göründüler. Saf dışı etmek durumunda oldukları “vesayet  rejimi” vardı; Onlar için AKP-Cemaat ortaklığı , yuvalandıkları Emniyet, MİT, mülkiye makamlarında ağlarını yavaş yavaş ördüler. “Ergenekon, Balyoz, Sarıkız , casusluk” vb isimlerle kurdukları kumpaslarda, yanlarına liberal sol yedek lastikleri almakta da zorlanmadılar. Kendilerine alan açtıkça, cüretleri arttı .

Rejim inşası için katlar çıkıldıkça hedef büyüttüler. Herşeyin yelkenlerine rüzgar taşıdığı bir dönemden geçiliyordu. Dünya kapitalizmi bir para bolluğu döneminden geçiyordu 2003-2007 arası ve gidecek adres arayan bu para Türkiye’ye de park edince, ekonomi, sırtında ağır borç yükleri biriktirmek pahasına büyüdü. Büyüme, yeni istihdam, Hazineye vergi demekti. Hazineye vergi demek, “sağlık reformu, TOKİ inşaatı, kentsel altapı, duble yol,havalanları vb”  demekti. Bütün bunlar, rejimi, seçmen gözünde “Çalışkan, işbilir, işbitirir” yaptıkça her sandıktan büyüyerek çıktılar. Kaplarına sığmaz, kendilerini dev aynasında görür haldeydiler. Artık bölgesel güç, “Yeni Osmanlı” olarak özellikle Orta Doğu pazarlarına hükmedeceklerini düşündüler.

Cüretkârlık

Dünya kapitalizminin 2008-2009 krizi ile birlikte cüret daha büyüdü. Suriye’de gerilime benzinle gittiler, Mısır’da kraldan çok kralcı davrandılar, Irak’ta boylarından büyük işlere kalkıştılar ve bagajdaki cesetlere sadece yurt topraklarındakileri değil, komşu topraklarındaki cesetler de eklendi.

Samimiyetsiz, düzenbazdılar. Kürt sorununun çözümüne tarafmış gibi görünüp el altından savaş baltalarını bileyliyorlardı; Alevi kimliğine saygılı davranıyor görünürken “Sünni bir Orta Doğu” kurup başına geçmenin kanunsuz hazırlıklarını yapıyorlardı. Kadın kimliğine saygılı görünüp erkek egemenliğini iyice pekiştirecek  modeller inşa ediyorlardı. Doğa dostu görünürken ülkenin madenlerini, ormanlarını, akarsularını yandaş sermayedarlarına peşkeş çekiyorlar, iş cinayetlerinin arkası kesilmiyordu.

Rüşvet çarkı

Bütün bunları yasaya uydurmak için bir dizi uyduruk torba yasalar çıkarırken, hukuksuz bulunan icraatlardan geri adım atmaya zerre kadar yeltenmiyorlardı. İşi o raddeye vardırdılar ki, ülke milli gelirinin yüzde 40’ına yaklaşan vergi ve sigorta primi, kamu gelirini hesapsız kitapsız kullanmakta beis görmedikleri gibi, inşaat furyasından, taraflı devlet ihaleleri, özelleştirmelerden akan kanunsuz paralarla, İran’ın ABD ambargosu nedeniyle tahsil edemediği alacaklarına fedailik ve aracılık yaparak akan milyar dolarlarla  “paralel bütçeler” oluşturdular. O kaçak sarayın resmi kayıtlarda görülen paralarla yapılamayacağı ortada iken nasıl ve hangi kaynakla yapıldığının hesabını vermediler. Hesap soracak olanları anında “casusluk” , Cumhurbaşkanına hakaret vb. yaftaları ile bastırdılar.

Şimdi, bu geri dönülmez yolda her tür muhalefeti etkisiz kılmak için Başkanlık rejimine muhtaçlar. Haziran 2015 sonrası Kürt siyasetine karşı başlattıkları savaşın insafsızca sürdürülmesi bundan. Davutoğlu gibi kendi seçtiğine bile tahammülsüzlük bundan.

Ters yönde ilerleyen kural tanımaz yolcunun hali , cinnet halidir.

Vade veremeyiz ama akibeti biliyoruz.

Her cinnet uçuruma sürükler…

(*) 11 Mayıs 2016’da Özgür Gündem gazetesinde yayımlandı.

Araştırma - Haber kategorisine gönderildi | Cinnetin sonu uçurum(*) için yorumlar kapalı

Local currencies recovering while the Turkish Lira fluctuates

Mustafa Sönmez – Hürriyet Daily News, May/09/2016

Uncertainties, doubts and the “wait-and-see” attitudes in the global economy have caused the local currencies of “emerging countries,” which includes Turkey, to heave a sigh of relief. Global funds that re-parked in these countries relatively repaired and strengthened the local currencies against the dollar. This support ranged from 15 percent to 5 percent at the end of the first four months of the year. The Turkish Lira, on the other hand, fell apart with the political confusion of the past week after it had recovered.

While a harsh winter was expected for 2016, how was it that the weather cleared, particularly after January? In December 2015, China and the rate hike in the U.S. emerged as double negatives. This situation continued until the last week of January. In Turkey the dollar reached its second highest level of 3.06 liras on Jan. 20.

uuHowever, the wind changed and a new quantitative easing wave by central banks in coordinated action was implemented, plus, the back-pedaling of the U.S. from a rate hike caused a U-turn in the global and Turkish markets.

This situation continued from mid-February until the beginning of May. The appetite for global risk taking revived. Capital inflow to developing markets increased.

The climate is best reflected in the country risk premiums, the credit default swap (CDS). Brazil is the country with the highest risk premium with its economic and political vulnerabilities. Closing 2015 with a 446 risk premium, even though conditions did not improve, Brazil’s risk premium in 2016 had gone up to 492 at the end of January but declined in the following months and fell as low as 358 at the end of April. If the end of January is to be considered as a breaking point, the fall in the risk premium was 27 percent at the end of April. This is an extraordinary situation, even for Brazil. Other countries which saw their risk premiums drop were Russia and Indonesia. In Turkey also, the risk premium fell rapidly.

Flow of capital

The drop in risk premiums and the increase of portfolio investments in emerging countries advanced in a parallel manner. As of the end of January, following the U.S. Central Bank’s (Fed) hesitation in a rate decision, the inflow of global funds into emerging countries accelerated. With this inflow, the dollar lost 5.9 percent value against the currencies of developing countries; however, local currencies in certain emerging countries had a faster recovery against the dollar. For instance, the Brazilian real recovered at a rate of 15.5 percent against the dollar between the end of January and the beginning of May.

ufAmong local currencies, the second local currency, after the Brazilian real, that recovered against the dollar was the Russian ruble with a recovery of 14.4 percent.

Another currency among the emerging markets that rapidly recovered against the dollar was the South African rand. Its recovery was 11 percent. The lira, Polish zloty and local currencies of South Korea, Mexico and Hungary also strengthened against the dollar.
Recovery of the lira

The recovery of the lira against the dollar in 2016 has also attracted attention. The price of the dollar reached 3.06 liras in January. This was due to global effects as well as domestic effects. The strengthening or the recovery against the dollar between the end of January and the beginning of May reached 6.6 percent. The lira was testing below 2.80 as it entered the month of May. Thus, it went down to the August 2015 level.

The acceleration of portfolio investments that started in February and accelerated in the following weeks were effective in the recovery of the lira against the dollar. The portfolio investments of foreigners, free from the effects of the exchange rate and market prices, rapidly increased. In the February to April period a net capital inflow of $4.5 billion was observed. The inflow at mid-April especially reached remarkable dimensions.

The course of the dollar vs. lira before the spring winds started to blow sent chills down the spines of the private sector segment, which had loans in dollars. Moreover, to protect companies from going bankrupt, it was even suggested that while the dollar was over 3 liras, the Central Bank should sell foreign currency at the rate of 2.75 liras.

Turkish lira falling apart

At the start of past week, the value of the lira against the dollar had gone lower than 2.80 liras. This price was due to international causes more than domestic causes. However, with the political crisis erupting mid-week, the price of the dollar moved toward 3 liras.

untitledThe disharmony crisis Prime Minister Ahmet Davutoğlu experienced with President Recep Tayyip Erdoğan and the decision reached by the ruling Justice and Development Party (AKP) to convene an extraordinary congress at the end of May suddenly brought the withdrawal of foreign investors and later the rise in the dollar. While it was seen that the price of the dollar was determined by international dynamics, the winds turned and a climate started where domestic dynamics were more effective, with a possibility that they would continue to be effective over the remaining months of the year. Now eyes are monitoring the Fed rates on one hand and on the other turned to who will become the new prime minister of Turkey. Moreover, there is a possibility that an early election could be held in the fall.

In this climate change of domestic politics, foreign capital movements become more important. If the inflow leaves its place to a withdrawal then the dollar may go up.

Internationally, the macro indicators of the U.S., especially the employment data of April, will affect the Fed’s June decision. The U.K. referendum, often called the Brexit, over withdrawing from the EU, which will be held on June 23, is also important. As the referendum nears, a certain effect over the markets can be expected. The European Central Bank’s meeting is on June 2. There is no magic wand in the hand of Maio Draghi, the president of the European Central Bank, to stop the valuation of the euro.

The Fed’s decision, which is scheduled for the mid-June meeting, will be more important. The probability of a rate hike is low for the time being. If data released before that time is very good, only then the rate hike may be an issue on the agenda. However, the main dynamic that will affect the process, for now, is the domestic political climate.

 

 

Araştırma - Haber, English kategorisine gönderildi | Local currencies recovering while the Turkish Lira fluctuates için yorumlar kapalı

Differences and similarities between the economies of Brazil and Turkey

Mustafa Sönmez – Hürriyet Daily News, May/02/2016

Despite the differences that have emerged in the past two years, Brazil and Turkey are two countries that are economically comparable. Recently, efforts have intensified to predict the trends in Turkey by observing what is happening in Brazil.
Brazil is the seventh country in the world in terms of national income, which actually corresponds to three Turkeys. It has a population of 190 million. In 2012, its growth was 1.8 percent and in 2013, it was 2.7 percent; however, in 2014 its growth fell to 0.1 percent. In 2015, it plummeted and shrank 3.8 percent. A drop with a similar tempo is expected for 2016.

The country risk premiums, or Credit Default Swaps (CDS), are particularly for guiding investors. When CDSs are taken into consideration, it can be seen that during the 2005-2014 period, there was not a big difference between Brazil and Turkey. However, as of 2015, both economic circumstances and the political climate in Brazil worsened, constituting a major variance from Turkey. At the end of 2015, Brazil, with its 446 risk premium left being behind Russia and peaked among emerging countries. At the same date, Turkey’s risk premium was 274. At the end of April 2016, Brazil was still at the top with 361 while Turkey had 251. The difference is clear.

The 14 years of AKP and PT

It is possible to say that during the governance of the Justice and Development Party (AKP) in Turkey and the Labor Party (PT) in Brazil that have exceeded 13 years, world conjuncture and international trends have played major roles. The AKP started its governance venture with the November 2002 elections by taking over a Turkey that had gone  through the 2001 crisis and after tasting the bitter pill of the IMF, it was about to recover.

The PT came to power with the 2003 elections. The PT was one of the biggest parties of the rising left populist wave in Latin America in the 1980s. It had large working class grassroots, union support, a socialist wing and a former labor leader, Luiz Inácio de Silva (Lula).

When Lula lost the 1989 presidential elections to “neo-liberal” Cardoso, the PT started shifting to the right. Its left wing was removed. The effect of the unions and social movements over the party decreased. Lula entered the 2003 elections with a “growth plan with neoliberal principles” and he won.

Both the AKP of Turkey and PT of Brazil enjoyed the wheel of a “growing” economy until the 2008-2009 global crisis. The generosity of the global markets of the time and the abundance of liquidity had lifted the anchor of both countries. Both grew with foreign direct investments, inflowing hot money and generous international loans causing unprecedented foreign resource inflows.

During the period of 2003-2007, while Turkey’s growth rate neared 7 percent, Brazil’s remained around 4 percent. This “dolce vita” period provided the opportunity of the governments in both countries to strengthen their positions.

The crisis year of 2008 did not immediately affect Brazil; Turkey grew less than 1 percent. However, both countries later experienced a negative growth, with Turkey living through a more severe one… In 2010 and 2011, foreign resource inflow came again to both countries. Brazil benefited from China’s growth as its supplier. Even though economies grew, both countries had current account deficit problem and in 2012, the strain of this caused their economies to shrink.

Just like Turkey’s capitalism, Brazil also experienced the outflow of foreign hot money with the emerging of the possibility of a Fed rate hike mid-2013. From that day on, the Brazilian real is losing value against the dollar. The loss of 2015 was the peak, with 45 percent.

In Turkey, the factors of political risk and geopolitical risk are important in foreign capital withdrawal. In Brazil, the withdrawal of foreign capital is more related to the increase in economic risks. Some 20 percent of Brazil’s raw-material-dominated exports are toChina and thus, with the drop in foreign demand and prices, its economy started shrinking, its foreign currency income dropped and its foreign currency balance developed a deficit. Nevertheless, its current account deficits have reached only 4 percent of its national income, while Turkey’s was nearing 8 percent in 2013; in the following low-growth years, it went down to the 4 percent corridor.

Brazil’s political risk

Many analysts consider “a coup attempt” is happening in Brazil as several corrupt parliament members are trying to remove President Dilma Youssef. The circumstances that kept the PT in power for 14 years have changed rapidly after 2010. After 2003, government programs were shaped according to international capital’s demands as well as the local entrepreneurs’.

Brazil took its share from the stagnation following the global crisis. The social support and the welfare perception among the segments the PT almost “bought” rapidly vanished when resources started to dry up. As the crisis deepened, the dominant capital and its international partners focused on efforts to access state resources. When Dilma gave in to neoliberal austerity policies, the popularity of PT crashed.

Analysts express that organizational and/or organic ties have not been established between the PT and the masses it was based on but that the relationship was built based upon interests. When resources dried up, the social support of the populist party vanished. Economy shrank 4 percent, unemployment reached 7 percent, inflation became 11 percent and its currency lost 45 percent in 2015. This is expected to continue throughout 2016.

What Turkey lacks

The risks of Turkey and Brazil were parallel until 2013. Due to different conditions of the two countries, Turkey’s economy was not as shaken as Brazil after 2013; it was able to manage low growth rates. The domestic market somehow continues to contribute 3 to 4 percent to the growth. Even though the political tension and geopolitical risks have not declined, the instability of the world conjuncture keeps the up and down interest of hot money. Construction-based growth helps maintain the support of the masses. Mostly, the propaganda works to suggest that the political stability is under domestic and international threat.

But, beyond all these, there is no climate in Turkey to organize the discontent and turn it into an effective opposition. The opposition in Turkey does not have a free hand as in Brazil: Organizational activities have been weakened and even the freedom of expression is under huge pressure.

The most important thing that Brazil has and Turkey does not have is this…

dış ekonomik, English kategorisine gönderildi | Differences and similarities between the economies of Brazil and Turkey için yorumlar kapalı

Industrial investments continue to stagnate

Mustafa Sönmez -Hürriyet Daily News, 25/4/2016

The loss of appetite in the Turkish economy since 2012 continues to be a problem, even if there was a slight recovery in 2015. The slippage especially in industrial investments is remarkable and, simultaneously, a warning.

Why is industry more important? The reason is that the share of industry in gross domestic product is relatively small at 16 percent but industry constitutes the bulk of exports. The intermediate goods in imports and investment goods are also linked to industrial production. Thus, all the service sectors associated with foreign trade feed on industry. In short, because the manufacturing industry is a sector that has a small share in production but a big role in sustainability, the decline of investments in this sector means a decline in the economy.

Data on 2015 national income that was released at the end of March shows that the contribution of investments in growth that was declared as 4 percent was nearer to one fourth of this figure. In other words, in the growth of 4 points, the contribution of investments was around 1 point (0.9). 2015 was comforting because in 2014, the contribution of investments in the 2014 growth figures of 3 percent was negative. In 2013, just like in 2015, it was around one-fourth. In 2012, it was again negative. Overcoming a period in which growth is unable to take advantage of investments, especially when industry investments slip, and reaccelerating again remain two of the most important issues for Turkey’s economy.

The 2012-2015 period can be described as the “low growth” period. In this period, while growth fell to the 3 to 4 percent band, the situation was created because of a deceleration of investments. In these four years, private-sector investments particularly fell concretely, but in 2015, there was a slight recovery.

In the 2012-2015 period, the average growth was 3.5 percent. It can be seen that the contribution of investments in this period fell to 5 percent. In other words, the contribution from investments to the 3.5 percent growth in this period remained at 0.3 points. Turkey is passing through a period in which investments have fallen considerably compared to previous years.

Stagnation in industry investments

The issue of a slowdown in investments, particularly in the manufacturing industry, has caused more damage. This is because, as said before, the manufacturing industry is a leader. While industry constitutes the body of exports, the intermediate goods and investment goods of imports also depend on industrial production. Thus, all service sectors associated with foreign trade are also nurtured in industry. In short, even though the manufacturing industry has around a 15 percent share in production, because it is a sector that has a huge leading role, any stagnation in this sector actually entails a stagnation in the economy.

When the share of sectors in investments between 2006 and 2015 is examined, it can be seen that the share of the manufacturing industry dropped 6 points from 35 to 29 percent. This drop is mostly due to the private sector refraining from investing in the manufacturing sector. In the same period, there have been increases in the shares of tourism, mining, education and transportation while the share of the other notable investment field, the housing sector, remained at a band of 14 percent and 15 percent. The decline in investments in past years stems from the lack of appetite mostly in manufacturing sector investments rather than the lack of appetite of the private sector.

According to Development Ministry data, in private investments, the share of the manufacturing sector in 2006 was 46 percent. In the following years, both the rate of private sector investments to national income declined, as did the share of the manufacturing industry in private investments. In other words, the lack of appetite in investments in the manufacturing sector caused a fall in all private-sector investments. Total private sector investments declined in real terms in the period between 2012 and 2014, but increased by 6 percent in 2015. While private-sector investments declined in general, the share of manufacturing in 2006 was 46 percent, which then decreased 10 points to 35 percent, the average of the 2012-2015 period.


Incentives

The stagnation of investments in industry can also be observed through the incentives issued regarding the quantity and composition of investments. The incentive system was explained in the 2016 program: “It is the main aim to increase private-sector investments that are necessary for a high growth, by making the investment environment more attractive and encouraging investments. The aim of the practice is [to ensure] investments with added value and a high R&D content, increase employment, exports and production, improve international competitive power and enable the regional potentials to join the economy. ”

In this context, the balance sheets of the past three years of investment incentives demonstrate the lack of appetite once more in the investment in the manufacturing industry.

While incentives were issued for investments worth 96 billion Turkish Liras in 2013, this dropped to 64 billion liras in 2014 before rising to 103 billion liras the following year. The recovery in 2015 is noteworthy; however, when analyzed closely, this increase in the amount of investments was due to one incentive issued to TANAP Doğalgaz İletim A.Ş. worth 23.2 billion liras.

When the sector breakdown of investments are reviewed, it can be seen that only one third of the supported investments of 264 billion liras at current prices in the 2013-2015 period belongs to the manufacturing industry. Services and energy investments seem to have taken similar shares with the manufacturing industry. The intentions to invest in the manufacturing industry were worth 36 billion liras in 2013 but declined to 25 billion liras each in 2014 and 2015. This is another indicator of the lack of appetite related to manufacturing.

The investment environment

If the public sector is excluded, it is up to the political and geopolitical risks as well as the economic risks that determine the investments decisions of both local and international private actors. The international hot money that started withdrawing in mid-2013 with the American Central Bank Fed’s rate hike signal that has rapidly increased the dollar/lira exchange rate made the investor enter a “wait and see” phase. When the increase in the dollar price was followed by the increase in interest rates, domestic consumption which is the main pillar of growth rapidly shrank. This was the most influential factor in the suspension of new investments, particularly investments in manufacturing industry.

Besides economic fragility, the election calendar in Turkey, in which there were three elections in 2014 and 2015, has been another factor resulting in a suspension of investment intentions. In addition to these, the tensions in the Middle East and their ramifications in Turkey, the tensions experienced in neighboring countries have constantly postponed decisions for both domestic and international investors.

Araştırma - Haber, English kategorisine gönderildi | Industrial investments continue to stagnate için yorumlar kapalı

Political shadow over the football industry

Mustafa Sönmez – Hürriyet Daily News, April/18/2016

The popular Simon Kuper book, “Football Against the Enemy,” was an analysis of the football-politics relationship and published in the U.K. in 1994. This study became a “cult book” in a short time and was translated into Turkish in 1996 and has been reprinted several times.

Football has rapidly commercialized and become an industry but it is the Mediterranean basin and Latin American countries where politics have intertwined with football.

Particularly in Turkey… Last week a new stadium, Vodafone Arena İnönü, a football shrine, the new stadium of the football club Beşiktaş was inaugurated. One of world’s most important derbies, the game between Fenerbahçe-Galatasaray, was also played last week.

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Regardless of whether we like it or not, Turkey’s football industry constitutes one of the important pillars of global football.

To make a comparison, the market value of players in the country’s premier league is added to find the market value of the league. For instance, in the English Premier league, there are 544 professionals and their market value is $4.4 billion. The English first league teams are worth $4.4 billion. Spain comes second with their $3.3 billion worth of players. Germany and Italy have $2.6 billion worth of players. France has $1.6 billion worth of professional first league players. Turkey has $1.1 billion while Russia is close to Turkey. Portugal, Belgium and the Netherlands have an asset of football players worth less than $1 billion but they are in the top 10 of Europe.

Balance sheets

Football clubs that have become a large holding need to take into account players’ returns when investing in them. Those that trust in the domestic market can make more sensational investments. When Turkey is viewed from this angle, roughly calculated, $1.1 billion worth of football player investments are remarkable for a national income of $750-800 billion.

This investment is due to the country’s football passion and also the confidence in spending associated with this passion. In Turkey where the minimum wage is 1,300 Turkish Liras ($456), young workers save their week’s pay trying to buy a ticket. This is how big the passion is…

When this is so, football player investments in the country, local and international, reach $1.1 billion.

Unequal power

Industrial football disrupts the balance of power among football clubs in favor of the powerful more every year and this takes the fun out of it. For instance, 58 percent of the $1.1 billion worth of the football player asset belongs to the first four clubs.

Fenerbahçe, with its $174 million, Galatasaray with $150 million, Beşiktaş with 140 million and Trabzonspor with $121 million investments on football players are the top football clubs that have invested in the strongest players for years. The fifth in line is Bursaspor, which has a team worth $71 million; whereas one of the poorest teams, Akhisar, has a team worth $25 million, merely 14 percent of Fenerbahçe’s.

This inequality exists in other countries also. For instance, the top four in the Premier League, Chelsea, Arsenal, Manchester City and Manchester United, constitute 40 percent of the whole league’s assets. In Spain, Read Madrid and Barcelona football players alone are worth 40 percent of the Spanish league. PSG represents 30 percent of the Frenchleague. When the situation is like this, the other 10 to 15 teams are like wall flowers playing in the pitch. The more football clubs are commercialized, the more political actors influence them.
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The new stadium of one of Turkey’s top three clubs, Beşiktaş, started construction in 2013. Its recent opening ceremony attended by President Recep Tayyip Erdoğan and only by Justice and Development Party (AKP) member politicians once more drew attention to the football-politics relationship.

The new stadium is named Vodafone Arena İnönü because communication giant Vodafone is the sponsor. Its inauguration on April 10 was done with a limited invite-only audience while spectators were not allowed in. The Beşiktaş community, especially its most active group, çArŞı, is not on good terms with the AKP. çArŞı, one of the main actors in the 2013 Gezi incidents, was even taken to court on charges of “organizing illegal demonstrations and [an] attempt to topple the government.”

Beşiktaş Chair Fikret Orman said they have spent $100 million for the stadium, all of which they financed themselves. He said they have sold seasonal boxes and that Vodafone did not directly contribute to the construction but according to the sponsorship agreement will make an annual payment. Orman said the income difference between them and the top two clubs Fenerbahçe and Galatasaray has now become 100 million euros, stating that Galatasaray has an income of 157 million euros, Fenerbahçe127 and Beşiktaş 50 million.

Despite inadequate resources and limited means, investments such as transfers of foreign players, constructions of stadiums have multiplied the debts of clubs, creating trouble especially before European football authorities. For instance, behemothGalatasaray has been banned from European cups for one year by UEFA because it failed to meet the criteria. At the beginning of 2016, debts of clubs in the Super league totaled 3.5 billion Turkish Liras. The burden of debt forces clubs to ask assistance from the government, thus obliging them to the shadow of politics.

A project being developed dictates that three state banks will undertake the debts of football clubs and restructure them with low rates for 10 years. According to this project, the debts of clubs to private banks amounting 2.5 billion liras will be undertaken by Ziraat Bank, Halkbank and Vakıfbank. Political steps involving football come in the form of offering infrastructure to club fans. 00
The ruling AKP has especially concentrated on building stadiums in Anatolian cities to lure the masses passionate about football. The Mass Housing Authority (TOKİ) the main aim of which is building cheap houses, has been engaged in stadium constructions.

English, Genel kategorisine gönderildi | Political shadow over the football industry için yorumlar kapalı

Lack of appetite in investments persists in Turkey

Mustafa Sönmez – Hürriyet Daily News, April/11/2016

 Turkey’s economy has been slowing down for the last four years, although there was some recovery in 2015.
The 2015 GDP data, which was announced at the end of March, has shown that the contribution of investments to the economic growth of 4 percent was around one-fourth, equaling 0.9 percent. This figure is comparatively welcome as the 2014 figure was negative. While the contribution of investments was again one-fourth of GDP growth in 2013, the figure was again negative in 2012. How the economic growth can be accelerated again will be one of the main issues challenging the Turkish economy in the near future.


Source:TÜİK database

Growth and investments

Household consumption spending and investments constitute the two pillars of economic growth. In Turkey, the former now plays a bigger role, although the latter was the main source of GDP growth between 2003 and 2007, when Turkey welcomed a huge influx of foreign capital. In those years, a massive foreign capital inflow in the form of FDI, stock exchange investments and foreign loans boosted domestic demand, and Turkey’s economic growth duly hit 7 percent.

This investment spending provided 3 percentage points to the 7 percent in GDP growth during this “dolce vita” period. It means that almost 43 percent of the growth was fueled by investments.

During the 2008-2009 global economic crisis, the Turkish economy shrank, and the country saw an outflow of foreign capital, just like many other countries. Both the foreign exchange rates and interest rates skyrocketed, cooling down investments and loosening expectations.

Source:TÜİK database

By the end of 2009, foreign investors had started to return to Turkey’s stock exchanges, lowering the forex and interest rates. This enabled domestic demand and investments to boom again. The share of investments in the 9 percent of GDP growth hit 60 percent between 2010 and 2011.

The anomaly of the skyrocketing growth in those years was the dangerously rising current account deficit. The share of the current account gap almost totaled 10 percent of the national income. As this was not sustainable, the economy’s administrators announced 2012 as the “year of cooling down,” and the economy closed that year with around just 2 percent growth.

The economic growth declined to an average of 3.5 percent between 2012 and 2015, dramatically pushing down investments, especially by the private sector, although there was some slight recovery in 2015.

Investments by public, private sectors

With the effect of neoliberal economic policies after the 1980s, the share of the public sector started to decrease in total investments, especially in the industrial and energy sectors.

The share of total investments in the national income was 17 percent in 2003. While the private sector made almost 14 percent, the public sector was responsible for just 3 percent of this total.

The share of investments in the national income was around 20 percent, but only 4.5 percent was made by the public sector. Namely, just one-fifth of the investments were made by the public sector.

Investment by sectors

Investments in the manufacturing sector ranked highest, although the share of the sector has been decreasing in recent years. This industry is followed by the transport and communications and housing sectors’ which among them conducted around two-thirds of all investments.

As a result of a massive privatization program, the share of the state in investments in the manufacturing sector has contracted dramatically. For instance, 95 percent of the investments in the sector were made by the private sector.

The share of state investments in the transport and communications sector has been much higher than in others. While some 41 percent of investments in this sector were made by the public sector, the remaining 59 percent was by the private sector.

Housing investments, which are of great importance for the country’s construction-based growth model, have taken around 20 percent of the share in total investments with the private sector making around 99 percent of these construction investments. The private sector has also had the lion’s share in tourism investments, which constitute around 6 percent of total investments.

The health sector and the education sector used to be dominated by the public sector in Turkey. The private sector has, however, started to increase its share in health and educational investments as well. These two sectors had around a 10.5 percent of share in total investments in 2015. While almost half of educational investments were made by the private sector, around three quarters of health investments were made by private companies rather than the state.

The energy sector has received 4 percent of total investments. Although the share of the public sector in energy witnessed a gradual decline, its share has increased to 31 percent with planned nuclear power plant investments.

The state’s share in agricultural investments is around 60 percent with huge irrigation investments as part of the Southeast Anatolia Project as well as in the Konya plains.

The public sector has made investments mainly in transportation, education, agriculture and partly in energy. On the other hand, the private sector has taken the lion’s share in investments in manufacturing, transportation and communications, housing, tourism, health, energy and mining.

Deceleration in investments

The slowdown in investments in the last five years has not been due to the deceleration in public investments but in private investments. The state has continued making mainly infrastructure, energy and irrigation investments, preserving its 20 percent share in total investments in a bid to reach growth targets in line with budget limits. The state is expected to keep investing to realize its target of 4.5 percent annual growth in 2016.

The private sector, however, has apparently cooled down its investments, mainly in the manufacturing sector, in light of the slowdown in domestic and foreign demand. While the share of the private sector in manufacturing investments was 40 percent in 2008, this figure regressed to 35 percent in 2015.

Investment climate 

Both local and foreign businesses make their investment decisions by reviewing economic conditions and calculating political and geopolitical risks. Investors have adopted a “wait and see” tendency after the U.S. Federal Reserve started to signal a rate hike in 2013, precipitating an outflow of hot money and a rapid increase in U.S. dollar-Turkish Lira parity. The rise in the U.S. dollar’s value has pushed up interest rates, shrinking domestic consumption, which is the main constituent of economic growth. This has been the main reason why the private sector cooled down its investments, mainly in the manufacturing sector.

In addition to the rising economic fragilities, an intensive election cycle in Turkey in 2014 and 2015 was also responsible for more cautious behavior by investors.

The escalating tensions in the Middle East and their reflections in Turkey as well as the country’s rising problems with some of its neighbors have also restrained local and foreign investment decisions.

It will be possible for Turkey to decrease its unemployment rate to around 10 percent only through new investments. If Turkey wishes to revive its investment climate once more, it must undertake critical economic, political and diplomatic reforms.

April/11/2016

Turkey’s economy has been slowing down for the last four years, although there was some recovery in 2015.

The 2015 GDP data, which was announced at the end of March, has shown that the contribution of investments to the economic growth of 4 percent was around one-fourth, equaling 0.9 percent. This figure is comparatively welcome as the 2014 figure was negative. While the contribution of investments was again one-fourth of GDP growth in 2013, the figure was again negative in 2012. How the economic growth can be accelerated again will be one of the main issues challenging the Turkish economy in the near future.

Growth and investments

Household consumption spending and investments constitute the two pillars of economic growth. In Turkey, the former now plays a bigger role, although the latter was the main source of GDP growth between 2003 and 2007, when Turkey welcomed a huge influx of foreign capital. In those years, a massive foreign capital inflow in the form of FDI, stock exchange investments and foreign loans boosted domestic demand, and Turkey’s economic growth duly hit 7 percent.

This investment spending provided 3 percentage points to the 7 percent in GDP growth during this “dolce vita” period. It means that almost 43 percent of the growth was fueled by investments.

During the 2008-2009 global economic crisis, the Turkish economy shrank, and the country saw an outflow of foreign capital, just like many other countries. Both the foreign exchange rates and interest rates skyrocketed, cooling down investments and loosening expectations.

By the end of 2009, foreign investors had started to return to Turkey’s stock exchanges, lowering the forex and interest rates. This enabled domestic demand and investments to boom again. The share of investments in the 9 percent of GDP growth hit 60 percent between 2010 and 2011.

The anomaly of the skyrocketing growth in those years was the dangerously rising current account deficit. The share of the current account gap almost totaled 10 percent of the national income. As this was not sustainable, the economy’s administrators announced 2012 as the “year of cooling down,” and the economy closed that year with around just 2 percent growth.

The economic growth declined to an average of 3.5 percent between 2012 and 2015, dramatically pushing down investments, especially by the private sector, although there was some slight recovery in 2015.

Investments by public, private sectors

With the effect of neoliberal economic policies after the 1980s, the share of the public sector started to decrease in total investments, especially in the industrial and energy sectors.

The share of total investments in the national income was 17 percent in 2003. While the private sector made almost 14 percent, the public sector was responsible for just 3 percent of this total.

The share of investments in the national income was around 20 percent, but only 4.5 percent was made by the public sector. Namely, just one-fifth of the investments were made by the public sector.

Investment by sectors

Investments in the manufacturing sector ranked highest, although the share of the sector has been decreasing in recent years. This industry is followed by the transport and communications and housing sectors’ which among them conducted around two-thirds of all investments.

As a result of a massive privatization program, the share of the state in investments in the manufacturing sector has contracted dramatically. For instance, 95 percent of the investments in the sector were made by the private sector.

The share of state investments in the transport and communications sector has been much higher than in others. While some 41 percent of investments in this sector were made by the public sector, the remaining 59 percent was by the private sector.

Housing investments, which are of great importance for the country’s construction-based growth model, have taken around 20 percent of the share in total investments with the private sector making around 99 percent of these construction investments. The private sector has also had the lion’s share in tourism investments, which constitute around 6 percent of total investments.

The health sector and the education sector used to be dominated by the public sector in Turkey. The private sector has, however, started to increase its share in health and educational investments as well. These two sectors had around a 10.5 percent of share in total investments in 2015. While almost half of educational investments were made by the private sector, around three quarters of health investments were made by private companies rather than the state.

The energy sector has received 4 percent of total investments. Although the share of the public sector in energy witnessed a gradual decline, its share has increased to 31 percent with planned nuclear power plant investments.

The state’s share in agricultural investments is around 60 percent with huge irrigation investments as part of the Southeast Anatolia Project as well as in the Konya plains.

The public sector has made investments mainly in transportation, education, agriculture and partly in energy. On the other hand, the private sector has taken the lion’s share in investments in manufacturing, transportation and communications, housing, tourism, health, energy and mining.

Deceleration in investments

The slowdown in investments in the last five years has not been due to the deceleration in public investments but in private investments. The state has continued making mainly infrastructure, energy and irrigation investments, preserving its 20 percent share in total investments in a bid to reach growth targets in line with budget limits. The state is expected to keep investing to realize its target of 4.5 percent annual growth in 2016.

The private sector, however, has apparently cooled down its investments, mainly in the manufacturing sector, in light of the slowdown in domestic and foreign demand. While the share of the private sector in manufacturing investments was 40 percent in 2008, this figure regressed to 35 percent in 2015.

Investment climate

Both local and foreign businesses make their investment decisions by reviewing economic conditions and calculating political and geopolitical risks. Investors have adopted a “wait and see” tendency after the U.S. Federal Reserve started to signal a rate hike in 2013, precipitating an outflow of hot money and a rapid increase in U.S. dollar-Turkish Lira parity. The rise in the U.S. dollar’s value has pushed up interest rates, shrinking domestic consumption, which is the main constituent of economic growth. This has been the main reason why the private sector cooled down its investments, mainly in the manufacturing sector.

In addition to the rising economic fragilities, an intensive election cycle in Turkey in 2014 and 2015 was also responsible for more cautious behavior by investors.

The escalating tensions in the Middle East and their reflections in Turkey as well as the country’s rising problems with some of its neighbors have also restrained local and foreign investment decisions.

It will be possible for Turkey to decrease its unemployment rate to around 10 percent only through new investments. If Turkey wishes to revive its investment climate once more, it must undertake critical economic, political and diplomatic reforms.

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