June 14th, 2013

Q&A in the Hurriyet on Turkey

Economics & Politics

Original article in the Hurriyet.

You wrote an article to Guardian about recent strength of Turkish economy. After protests against some Government projects, Turkish stock exchange sharply declined. How do you see after-protests Turkish economics?

The eruption of protests has definitely hurt, but so far not decisively. One sensitive indicator, the stock market, is down 16% from the peak, but still up 32% from a year ago. The longer-term effects of the protest will depend on the outcomes of the confrontations.


What do you recommend to government to manage this protests crisis?

I certainly recommend far more conciliatory actions by the government, notably ending the violence against protestors, listening to the protesters about the disputed park, and an emphasis on democratic approaches, including public participation in environmental decision-making. There can be modifications in the design of the specific disputed project in order to accommodate widespread public concerns.


You underlined Turkish banks avoided the boom-bust cycle of the past decade in your article. Despite great long term performance, Prime Minister Erdogan accused banks for late stock exchange crash and heavily criticized private banks to become puppet of so called “interest lobbies”. According to your observations how do you see Turkish banking system? Do you see any chance that PM is right about his reactions against private banks?

Certainly the banks are not to blame for the stock market decline. The protests, the government’s crackdown, and the soaring tensions have caused this.


Did you switch your “long” position to “short” about Turkey after protests and its economic effects? If not, what Turkish economic dynamics will play role to overcome this short term crisis according to you?

My view is not about the month-to-month or even year-to-year changes, nor about the strongly felt political divides. In the short term, the economy was already slowing down from last year’s rapid growth. The key to all good economic policy, I believe, is to maintain a time horizon of 3-5 years, not month to month.

I admire Turkey a great deal, and strongly hope for its economic progress and democratic governance. Many of my Turkish friends in the opposition took great offense that I wrote any words of praise for the government’s economic policies over the past 10 years. My words were about a decade of economic policies, not about specific policies and politics by the government. It’s not my place to enter the political divide in Turkey, other than to hope for conciliation and an adherence to peaceful problem solving and democratic institutions. My words about the government’s ten years of economic policy should not be taken as a political stand on my part.

Like other friends of Turkey, I am still hoping for a quick end to the standoff, and a reconfirmation by both sides of democratic values. Since the government of course has the upper hand in force, it also bears the principal responsibility for maintaining democratic norms.

Turkey has a very wide range of cultural and political views, with strong divides along the religious-secular spectrum. What has been hugely admirable and attractive has been the ability of Turkish society to accommodate both parts of society peacefully, democratically, and constructively. If this turns into an outright confrontation, either among political foes or cultural foes, everyone will be the loser. If democracy falters, so too will Turkey’s economic progress.


You also underlined in your article Turkey has great political and economic leadership during last decade. Which perspectives of Turkish government leaders impress you most for the future prospect of country?

I have long admired the moderation and pragmatism of the Turkish economic team. These are the features that have been successful. Moderation in Turkey in a region that lacks moderation is inspiring. I hope that Turkey can maintain it, respecting all parts of the political spectrum, religious and secular, within a democratic framework. It’s also clear that civil society is correct to emphasize the need to pay greater importance to environmental sustainability in Turkey’s overall economic strategy.


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