THAT DIFFERENCE WILL AUGMENT THE EXISTING TRADITIONAL GAP WHICH WILL CAUSE HARMFUL EFFECTS TO THE MACROECONOMIC ENVIRONMENT LATER ON.
THANKS FOR YOUR ATTENTION
HYGEIAINETE
A.CH.
(by clicking the title it redirects to eu page concerning turkey's membership)
Prospects for the Turkish economy in 2013
| Last week I analyzed the performance of the Turkish economy in my column. Today I want to focus on my projections for next year. | |
The Turkish economy grew by 8.9 percent during the 2010-2011 period, making it one of the world's fastest-growing economies. However, this was achieved at the expense of deteriorating inflation as well as a current account deficit (CAD). Inflation exceeded 10 percent and the CAD reached almost 10 percent of gross domestic product (GDP) in 2012. These developments prompted the Central Bank of Turkey to tighten its policy to rein in bank lending. It seems that Turkey has completed the process of normalizing the overall macroeconomic climate at the end of 2012. Growth has slowed markedly since mid-2011, with a deceleration in domestic demand only partly offset by surging exports. Growth decelerated to almost 3 percent this year. As a result, the large CAD has begun to narrow and might be recorded at a level of 7-8 percent of GDP at the end of 2012. Also it is expected that yearend inflation figures will be between 6-7 percent. For the year 2013, growth is projected to regain momentum on the back of recovering domestic demand that would be fostered by increased access to loans as long as fiscal and price developments allow it. Growth will rise to around 5 percent in 2013. However, inflation and the CAD are projected to remain well above comfort levels due to the recent process of rebalancing, not as a result of significant achievements on the structural front. Moreover, gains in competitiveness, mainly stemming from the nominal exchange rate depreciation in 2011, have since largely been eroded. Therefore, Turkey has to manage a number of developments in 2013. Obviously, the country has the capability to motivate growth in 2013 well above 5 percent by fostering domestic demand. However, as mentioned above, this process is limited by fiscal and price indicators. Therefore, as suggested by Organization for Economic Cooperation and Development (OECD) economist Rauf Gönenç, last month, “Monetary policy should continue to focus on disinflation. Fiscal policy could play a more active countercyclical role if international and domestic conditions worsen. However, this should be done without undermining fiscal credibility. Fiscal credibility would be bolstered by introducing a public spending ceiling and publishing quarterly consolidated general government accounts based on international standards.” Two recent developments should be taken into account in this regard. The Federal Reserve (the Fed) of the US announced new targets in the economy. To remind, the Fed announced that the currently near-zero interest rate level will be kept until unemployment falls closer to a normal level of 6.5 percent provided that inflation remains below its target of roughly 2 percent annually. In order to ensure this, it is expected that monetary easing will continue at least until the end of 2015. Also, the same aggressive monetary easing process started in Japan last week. Having considered that the same process has been under implementation in the eurozone, it can be expected that excess liquidity will flow into the emerging economies that have dynamic growth potential with relatively robust macroeconomic indicators. The address in 2013 is obviously Turkey. That is why credit rating agency Fitch Ratings improved Turkey's rate to an investible country category. Based on these developments, the central bank announced its 2013 monetary program last week. With this program, the central bank announced a new policy tool to limit risks of excessive debt in the banking system by placing higher reserve requirements on banks that fail to meet specified leverage ratios. It has a significant signaling effect on the market players that macro-prudential measures will be more active in 2013. Until Turkey accomplishes its painful and costly structural reforms with a dependable social compromise, the country will try to maintain its growth, CAD and inflation level at 5 percent, a level that is not satisfactory in the longer term. İBRAHİM ÖZTÜRK SOURCE http://www.todayszaman.com
Syria’s refugee crisis is getting worse – for those who flee and for those who take them in. Christopher Phillips reports
As Syria’s uprising descends into a increasingly
bloody civil war, the number of refugees fleeing the fighting has
rocketed. In August alone 100,000 Syrians headed for the relative safety
of neighbouring states, almost doubling the number seeking refuge since
the unrest began to 235,000, according to the UN’s refugee agency,
UNHCR. Unregistered refugees mean the numbers are far higher.
Though they might have escaped the civil war, when they cross the border refugees face a host of new challenges. Syria’s Arab neighbours – Jordan, Lebanon and Iraq – are poorly equipped to handle the crisis and most refugees find themselves in hastily put together camps, or with families struggling to support themselves. Even Turkey, wealthier and better equipped than most, has struggled. Resources, shelter and work are all scarce for the refugees, and the international community has been slow to respond. Yet the rapidly expanding crisis poses problems not only for refugees. The host states themselves are wary of the social, economic and political pressures their new guests have brought. Here we look at the effects on Jordan and Turkey. Jordan under strain Jordan has taken in Syrian refugees since the beginning of the uprising. Deraa, where protesters first clashed with the forces of President Bashar al-Assad in March 2011, is barely 6 kilometres from the border and shares familial and tribal links with the neighbouring Jordanian Houran region. The first refugees were mostly people from Deraa seeking refuge with extended family, but as the violence spread Syrians from further afield – Damascus, Homs and Hama – headed south. Most arrive with shocking stories of Assad’s brutality. Ahmed, a farmer from the Deraa coun-tryside, speaks of his reluctance to leave Syria. ‘They killed my son,’ he said. ‘He wasn’t involved in any demonstrations, just working the fields, when a sniper shot him in the head. Even then, though, I didn’t want to leave. But then we heard stories of Assad’s men, the shabbiha, raping women in Deraa, systematically using sexual violence as a weapon. I was scared for my daughters so we fled.’ Crossing the border is no easy task. The Jordanian army has clashed with Syrian troops to prevent them firing on fleeing refugees. ‘We hid in the forests for three months, preparing to cross,’ said Ahmed. ‘We managed to avoid any Syrian troops, and climbed over the border at night. Then we were stopped by a Jordanian soldier and I was scared he might send us back as we had no papers. He just said ‘alf ahla’ [a thousand welcomes]. I wept.’ Ahmed, his wife and their five children are being looked after by a charity in a private home in Turah, a few miles outside Ramtha in the Houran. While wealthier refugees find their own accommodation, these officially sanctioned charities have been essential over the past year in finding homes for poorer Syrians, given Jordan’s reluctance to build refugee camps. But things are rapidly changing with refugee numbers mushrooming this summer to more than 180,000, according to the Jordanian government. It opened a camp in Zaatari in late July 2012, and a new law declared that any future Syrian refugees would have to live in organized camps. Conditions in this tent city are grim. Located on windswept barren land, where temperatures have regularly been above 40C, Zaatari witnessed a riot by refugees complaining about living conditions within weeks of opening. By then, the camp’s population was already 25,000, forcing Jordan to plan new camps. Jordan is struggling to cope. Already a poor country relying heavily on money from the US and the Gulf to balance its budget, Jordan is worried about the economic impact of the refugee crisis. In August, together with the UNHCR, it made an urgent appeal for $429 million, revising this to $700 million within a week. While the US pledged $100 million, the international community as a whole has been slow to react. Many refugees, fearing the reach of Syria’s intelligence service even in exile, choose not to register for a camp and live outside, adding to Jordan’s financial burden. One such refugee from Homs, Mustafa, spoke of the medical treatment he was receiving. ‘My eardrums were blown out when a government shell exploded next to my furniture shop,’ he said, ‘Thankfully the [Jordanian] government paid for the hospital.’ His six-year-old son, was attending a course over the summer to catch up on missed school work. While this was paid for by the UNHCR, he will now join a Jordanian school that already packs more than 40 children into each class. Mustafa himself said he will look for casual work, but with unemployment in Jordan at 14 per cent, the economy cannot absorb him or the many more like him. So far Jordanians remain sympathetic to their Syrian guests. But there are worries that economic problems could mutate into political tension. Competition for resources such as jobs, education and health services may test the Jordanians’ hospitality, especially if refugee numbers continue to grow. Memories of the 1970 Black September civil war between militia drawn from Palestinian refugees and the Jordanian government will also make author-ities wary of any political activity among Syrian refugees. Already the government have reportedly denied entry to Syrians of Palestinian origin, fearing it may upset Jordan’s delicate political balance, although the government has denied this. Any link between Syrian refugees and Islamists will similarly worry Amman. The potential for the destabilization of Jordan grows with every refugee crossing its border. Spillover in Turkey Turkey’s response to the Syria crisis has been better organized than Jordan’s, being wealthier and better placed to cope with the 80,000 refugees that had arrived by late August. As in Jordan, Syrians are allowed to rent private accommodation, though they are denied the right to work. As most are from poor backgrounds, they live in official camps, unlike the dispersed refugees in Jordan. Turkey sought to control the situation early on, building four refugee camps in Hatay, Gaziantep, Kilis and Urfa. Until now, Turkey has largely been able to fund its response to the crisis itself; with the government controlled Turkish Red Crescent and AFAD disaster agency taking the lead rather than UNHCR. Foreign journalists are barred from entering the camps, although independent observers from Turkish charities attest to the good conditions inside. Some refugees, who are free to travel around Turkey and speak to foreigners outside the camps, are more ambivalent about camp life. ‘It is our prison!’ says Mohammad, a teenager from Aleppo outside Kilis camp, ‘The guards treat us badly and life is too expensive.’ The Turkish government gives each refugee 20 Turkish Lira (£7) a week but, says Mohammad, this is barely enough for food. A few of the younger refugees risk their lives crossing back into Syria to buy subsidized cigarettes to sell in Turkey, but most are unemployed. As in Jordan, these frustrations have led to rioting. Kilis camp residents spoke of a demonstration in late July when they demanded better conditions, prompting the Turkish guards to fire tear gas at the crowd. ‘Women and children were hurt and fell down,’ explains Nawar, another Kilis resident. ‘There may be some bad people in this camp, but they have been oppressed [in Syria] for a long time. They are desperate and need money and food. I think they just reached breaking point.’ Kilis is the only camp with solid container homes, the rest being tented cities. Older heads complain of youthful ingratitude. ‘This is by far the best camp in Turkey, the rioters are just trouble-makers,’ says Karim, a middle-aged teacher from Hama. ‘I was first in Urfa camp but it was far too hot, which was unhealthy for my baby daughter. My wife and I crossed back into Syria, risking attacks from the regime army, just to get to Kilis and have a container home.’ While Turkey has avoided the economic difficulties faced by Jordan, social and political costs are emerging. Worryingly, Syria’s sectarian problems could be exported. In Syria members of Assad’s Alawis sect, who have backed the president, are blamed by many from the Sunni Muslim majority for the regime’s violence. However, Antakya, the Turkish city in Hatay where many Syrian refugees have fled, is dominated by Turkish Alawis who are sympathetic to Assad and their co-religionists in Syria. There is little sympathy for the refugees. ‘They are all terrorists,’ said Mehmet, an Alawi businessman, ‘we hate them.’ Like many in the city, he equates all the refugees with the armed rebels given sanctuary by the Turkish government to fight Assad. Such rebels, many of whom are Islamist, have caused fear in this secular city. ‘They walk around with their long beards looking like al-Qaeda,’ said Olgun, an Alawi doctor, ‘I’ve heard they have told some Turkish Alawis, ‘after Bashar, you’re next!’’ Many Antakyan Sunnis agree that the refugees could destabilise the city. ‘Antakya has always been safe for all sects: Alawis, Christians, Sunnis,’ explains Ahmet, a Sunni business student, ‘Now I hear people are buying guns to protect themselves. This used to be unheard of.’ Despite Antakyans’ complaints, there are signs that the Turkish government is responding, trying in late August to move refugees out of Hatay. Similarly, new camps are being built further away from the border. Yet this may not undo the damage done, or ensure that Turkey’s different ethnic groups stay above the unfolding civil war in Syria. Already the dynamics of Kurdish politics in Turkey have been affected, with the secessionist Kurdish militants the PKK emboldened both by renewed support from Assad’s government and by recent gains by Syria’s Kurds. The Syrian crisis is hurting Turkey far more than expected and, as more refugees flood over the border, new solutions are being sought to take the pressure off Turkey’s resources and calm its own population. One option discussed by Ankara is to establish a safe zone inside Syria itself to house the refugees. This, however, would effectively require Turkey and Assad to go to war, a decision that will not be taken lightly. The surge of refugees fleeing Syria’s violence seems to have caught the Jordanian, Turkish and other neighbouring governments by surprise. In many ways it says a lot for the determination of the Syrian people that they, like Ahmed from Deraa, resisted fleeing for so long. At the same time, the sudden surge seen in the summer suggests a major increase in violence and a loss of hope that the war will be over soon. Their flight should not surprise us, however. Syria is in civil war and, as seen in Iraq and Lebanon in the 2000s and 1970s and 80s, that creates refugees. What is important now is that the refugee crisis does not become too great a burden on the host states, already under strain. Recent Jordanian, Pakistani and Rwandan history shows us the dangers for host societies of a highly politicized and desperate refugee community if handled badly. While the international community have been unable to prevent Assad’s brutality, they can cushion the fallout for the hosts and improve the lot of Syria’s refugees soon to face a long winter in tent cities. |
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