Do as you’re told, or we’ll destroy your economy!

The Turkish Lira has been taking a battering in the “money markets” recently. Could there be a connection between that and Turkey’s defiance of US plans in Syria? (That’s a rhetorical question) And , surprise, surprise, the only currency doing worse is the Russian ruble! The sooner the world escapes from the hegemony of the Yankee dollar, the better for all of us!

Erdoğan blasts investors amid tumbling Turkish Lira

shadow bankers[Turkey’s] President Recep Tayyip Erdoğan hit out at international investors on April 12, saying “no one could bring Turkey to heel using exchange rates,” casting the recent sharp drop in the value of the Turkish Lira as a conspiracy by outside powers. 

“Don’t worry, Turkey is continuing on its path with determined steps. Nobody can bring us to heel using exchange rates,” Erdoğan said in a speech in Ankara.

“The rise in exchange rates has no reasonable, logical or regular explanation,” he added.

His comments came as the lira took a breather after plumbing record lows for five straight trading days. 

Jacob RothschildThe lira, which has been highly sensitive to developments in neighboring Syria, recovered slightly to trade at 4.1010 per dollar after hitting a record low of 4.1920 on April 11, with investors’ anxiety over a threatened clash between Western powers and Russia in Syria easing.

The lira is down 2 percent so far this week, also hit by concern about high inflation and the country’s current account deficit.

The lira was the second worst performing emergency currency over the last month after Russian ruble with a nearly 7 percent loss in its value.

http://www.hurriyetdailynews.com/erdogan-blasts-investors-amid-tumbling-turkish-lira-130212

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Lies, Damned Lies and Statistics (Part 2)

I’m not a hundred percent sure who said it first – Mark Twain, Benjamin Disraeli or the first Duke of Wellington. Whoever it was, they drew our attention to the sad truth that “facts and figures” can be manipulated, distorted and misinterpreted to prove just about anything.

I want to share three items I came across recently, all circulated by people with Turkish names, but seeking to present Turkey in an unfavourable light. Two of them were posted on the business network LinkedIn, and the other, in our local English language news site, Hürriyet Daily News.

Turkey & ChinaThe first item is a graph purporting to compare the “productivity” of Turkey and China over a 25-year period. The two countries were, allegedly, neck-and-neck in 1990. By 2014, China’s “productivity” had grown exponentially to ten times that of Turkey, which had clearly languished in a state of economic inertia.

Well, several questions arose in my mind as I studied the graph. First, what was the source? No sign of that, and the gentleman who posted it online was unable to provide an answer. Second, given that China’s population is twenty times that of Turkey, is it fair to compare their economies in absolute terms, rather than, say per capita GNP? Moreover, is it likely that their “productivity” was equal in 1990? A more serious question, however, is, what, exactly, does the y axis of this graph measure? 500,000 what? 2,000,000 what? Dollars? Automobiles? Chinese noodles?

bi_graphics_middleeast-3The second item is a graphic listing the fifteen most powerful militaries in the Middle East. Leaving aside the debatable matter of whether Turkey is in the Middle East, at least we know the source of this graphic: globalfirepower.com via Business Insider. The figures are not up-to-date (2014) but leave that aside too. What interested me was that Turkey is said to be Number One on the list despite the following:

  • Saudi Arabia’s military budget is three times that of Turkey – though admittedly the Sauds don’t seem to have got much for their money.
  • Israel has 80-200 nuclear warheads (its neighbours have none) and (which the table doesn’t show) an “Iron Dome” (provided at stupendous expense by the United States government) so that no other country can actually attack them.
  • Iran and Egypt both have more active personnel than Turkey, and Egypt also has more aircraft.
  • Syria has more tanks and Iran has more submarines.

Of course, Turkey’s military capabilities should not be underestimated, as Britain, France and Greece learned to their cost after the First World War. However, the figures suggest they wouldn’t be wise to start throwing their weight around in the region, even if they did have the inclination.

Graph 1Finally, there was a graphic in our local daily showing the world’s “Top 15 Manufacturing Countries”. The writer’s main focus was on “Turkey’s relative performance [which] says a lot about Turkey’s transformation. Turkey entered [the list] in 1990, hung on until 2000, but dropped out afterwards. Today, we are muddling around between number 16 and 17.” (My highlights)

The first thing that struck me is, the global economy is a competitive market, and to be ranked in the top 20 out of 200 is not a bad achievement for a country that was an economic basket-case less than a century ago. Then, once again, the unit of measurement puzzles me. What exactly is “global nominal manufacturing gross value added”?

Moreover, let’s take a look at the other economic powerhouses. The United States has lost its Number One ranking, and anyway I’d be interested to know how much of their manufacturing actually takes place on home turf? Australia, the Netherlands and Argentina, in the Top 15 in 1980, had all “dropped out” by 2013. The United Kingdom, Spain and Canada had fallen from fourth, ninth and tenth, to eleventh, fourteenth and fifteenth respectively. On the other hand, South Korea, Russia and Indonesia, out of the running in 1980, had powered up to fifth, ninth and thirteenth places by 2013.

So what do we understand from this? One thing is certain, it’s a dog-eat-dog world out there. Do these figures take any account of the proportion of a country’s population living in abject poverty, eg China and India? From a purely subjective point-of-view, the situation in Turkey doesn’t look too bad to me. Without getting into detailed comparisons, levels of air pollution are far below those of China. Destruction of the natural environment by rapacious business interests is nowhere near as bad as in Brazil or Indonesia.

In the final analysis, comparisons are odious (not sure who originated that one either) but one other thing is certain, we should treat statistical evidence with caution.


PS – For Part 1 click here

Human Development in Turkey

More sad news for Turkey. The United Nations Development Programme released its latest global report last week, placing Turkey 71st out of 188 countries on its Human Development Index. “71st! How bad is that!” I thought.

But then I looked a little closer. The first thing I noticed was that Turkey had actually moved up one place from the previous year. In fact, from 1990 to 2015, the country’s HDI value had increased by more than 33%.

The UN uses three factors to determine its HDI value: Life expectancy at birth; expected years of schooling and mean (average) years of schooling; and per capita Gross National Product. Over that period since 1990, life expectancy had increased by 11.2 years. Average years of schooling had increased by 3.7 years. Per capita GNP increased by 78.2%.

slaves_of_dubia_coverIt is also important to recognise that, as a country moves higher up the rankings, it becomes increasingly difficult to overtake those ahead on the list. The top five countries are Norway, Australia, Switzerland, Germany and Denmark. The USA ranks 11th, and the United Kingdom, 16th; Japan is in 17th place, and Finland, 23rd. Even if Turkey’s standards improve markedly, how is it possible to overtake countries that have such a head start? Turkey is, however, well placed in the second category of countries, labelled as having “High Human Development”, its HDI index placing it in the upper half of this group.

Then there are other countries ahead of Turkey on the list whose high rankings are open to question. How does Greece, for example, with its economy in tatters, manage to slot in at number 29? Saudi Arabia and the United Arab Emirates have healthy rankings of 39 and 42 respectively, yet many of their residents are poorly-paid migrant workers, without the benefits of citizenship and, one assumes, not counted for statistical purposes.

Kazakhstan (57), Cuba (68) and Iran (69) all have higher rankings than Turkey – which makes me wonder how much credence I can give to the UN report.

I suspect that few people will actually read the report’s 288 pages. Most likely, those in countries at the higher end of the list will wallow in unjustified complacency. One point the report writers make is that average figures can hide wide discrepancies in internal standards. This is a concern in developed countries,” they say, “where poverty and exclusion are also a challenge, with over 300 million people – including more than one-third of all children – living in relative poverty.” This is undoubtedly true in New Zealand, despite its HDI ranking of 13.

one+percent_vectorized“Legal and political institutions can be used and abused to perpetuate group divisions,” the report says. It cites the LGBTI demographic as an example – but what about the broader situation in the United States, where Wall Street financiers buy political influence with professional lobbyists, and 45% of eligible voters do not even bother to participate in presidential elections?

“The top 1 percent of the global wealth distribution holds 46 percent of the world’s wealth.” Well, we knew that. So what does that mean in reality? Those Western First World countries may have high per capita GNPs, but clearly the average figure is distorted by a small number of multi-billionaires. Far more than half of their population exists well below that per capita average GNP.

The report goes on to make a number of recommendations which, sad to say, are unlikely to receive much serious consideration in the corridors of global power:

“Measures are needed to strengthen strategies that protect the rights of and promote the opportunities for migrants, to establish a global mechanism to coordinate economic (voluntary) migration and to facilitate guaranteed asylum for forcibly displaced people.” Can you see the Saudi royals or those United Arab emirs taking much interest in rights and opportunities for those indentured labourers from Asia and Africa who do most of the unskilled work? As for rich countries in Europe “facilitating guaranteed asylum for forcibly displaced people” from Syria, for example – Dream on!

“Accountability is central to ensuring that human development reaches everyone, especially in protecting the rights of those excluded. One major instrument for ensuring accountability of social institutions is the right to information.” The people at Wikileaks are doing their best here – but it’s also clear that Western governments have little interest in transparency, and deal harshly with whistleblowers who challenge their right to withhold information.

whos-the-one-percent-look-in-the-mirror__1500x670_q85_crop_subsampling-2

Work harder, and you too can have one of these 😉

Sustainable development activities at the national level must be complemented with global actions. Curbing global warming is possible. Continuing advocacy and communication on the need to address climate change and protect the environment are essential.” It may be possible – but to me it seems that the forces of conservative capitalism are working to undo most of the progress that had been made in protecting the fragile ecosystem of Planet Earth.

“Reforms should focus on regulating currency transactions and capital flows and coordinating macroeconomic policies and regulations. One option is a multilateral tax on cross-border transactions; another is the use of capital controls by individual countries. To move towards a fairer global system, the agenda for global institutional reforms should focus on global markets and their regulation, on the governance of multilateral institutions and on the strengthening of global civil society.” Don’t hold your breath waiting for Wall Street and the puppeteers of global finance to “regulate currency transactions and capital flows” and “move towards a fairer global system”.

Once again we see the need to view all published statistics with a healthy measure of scepticism.

Turkish contractors rank second in world for ninth straight year

In amongst all the bad news for Turkey, it’s encouraging to see some things are going well. Thanks to Mark for spotting the article and passing it on.

Turkey again took the second place after China in terms of the number of contracting companies building the largest volume of projects across the world outside their home countries for the ninth year in a row, according to the latest list of the world’s “top 250 contractors” by Engineering News Record (ENR) magazine, with 40 companies on the list.

n_103260_1Turkey came just after China, which topped the list with 65 companies. The United States followed Turkey with 39 companies on the list, which ranks the 250 largest world construction contractors, both publicly- and privately-held, based on general construction contracting export revenue generated from projects outside each firm’s respective home country.

Turkey’s Polimeks was the top Turkish company ranking 40th in the list, followed by Rönesans, which ranked 44th, and Enka, which ranked 79th. TAV, Ant Yapı Industry, Yapı Merkezi, NATA, Çalık, Tekfen and Yüksel followed the top three.

“It is a great honor for us to mark the ENR list, which is the leading reference point in our sector, with 40 companies, 35 of which are TMB members, and to rank in second place in the world after China for nine years in a row,” said TMB President Mithat Yenigün.

“Despite a number of negative developments in our largest markets and all uncertainties in the global conjuncture, our companies also achieved increasing their share of global revenue,” he added. Read the article

A Modest Proposal – With an acknowledgement to Jonathan Swift

I just came across this fascinating news item in The Guardian:

Child survivors of Nepal earthquake ‘being sold’ in the UK

Theresa May urges police investigation after the Sun reports that Nepalese and Indian children are being sold to British families as domestic slaves

nepal-children-story_647_040416054440

Nepalese children en route to a better life in Europe

The home secretary Theresa May has urged police to investigate claims that child survivors of the Nepal earthquake and other vulnerable children are being sold to British families to work as domestic slaves.

An investigation by the Sun newspaper suggests that boys and girls as young as 10 are being sold for just £5,300 by black market gangs operating in India’s state of Punjab.

The paper says the gangs are preying on the children of Nepalese refugees, as well as destitute Indian families.

May called child trafficking a “truly abhorrent crime” and urged the National Crime Agency to investigate the newspaper’s findings. She said the paper should “share its disturbing findings” with the agency, “so that appropriate action can be taken against the vile criminals who profit from this trade”.

According to the Sun’s report, which appears on the front of Monday’s print edition, the desperate children are being sold to wealthy British families to be used as unpaid domestic servants.

It reports that a trader it names as Makkhan Singh lined up children for its undercover reporter to pick from and said: “We have supplied lads who have gone on to the UK.

“Most of the ones who are taken to England are Nepalese.

“For the supply of a boy, minimum 500,000 rupees [£5,300]. Then you will have other costs associated with taking him to the UK, but that’s your responsibility extra to what you pay us.

“Take a Nepalese to England. They are good people. They are good at doing all the housework and they’re very good cooks. No one is going to come after you.”

A 7.8 magnitude earthquake struck Nepal on 25 April last year, killing almost 9,000 people and leaving millions in need of aid.

In the light of this report, it may be that Turkey is going about dealing with its refugee crisis in entirely the wrong way. Clearly appealing to the better nature of Europeans is not working. The fact is, they are not interested in sharing their wealth with displaced persons from Syria and elsewhere in the Middle East. In fact European Union authorities have begun sending back to Turkey asylum-seekers who had already managed to reach Greece.

It does seem, however, that there is a ready demand in wealthy European homes for unpaid servants to do work that their own citizens expect a living wage for. And they are prepared to pay at least £5,000 per head.

Well, Turkey is currently suffering economically on a number of fronts, and prospects are not good, with another tourist season approaching. On the other hand, there are now reportedly 2.6 million Syrian refugees severely stretching the country’s resources.

Obviously they would need to be careful not to flood the market, which would have a depressing effect on prices – but a government-sponsored programme to provide a regulated flow of Syrian servants to the United Kingdom’s moneyed classes could be just what Turkey needs to make up a shortfall in its current account deficit. 200 Syrians at £5,000 each means an income of £1,000,000 – not to be sneezed at! And who’s to say that wealthy Germans, Scandinavians, Luxemburgians and whatnot wouldn’t follow the English lead?

I expect President Erdoğan will be looking into it as soon as he gets back from his American trip.

Turkish firm wins contract to build Moscow airport terminal

I’m passing on this news item without comment:

Reuters, 18 March 2016

MOSCOW (Reuters) – Turkey’s Renaissance Construction has won a tender to build a terminal and tunnel at Moscow’s Sheremetyevo airport, Mikhail Vasilenko, Sheremetyevo’s chief executive, said on Friday.

international-airport-sheremetyevo.main

Sheremetyevo International Airport

The choice of a Turkish firm is unusual because Moscow imposed sanctions on Ankara after Turkey downed a Russian warplane near the Turkish-Syrian border in November.

Vasilenko did not disclose the price or any other details, but Sheremetyevo said in January that the construction of a passenger terminal and a tunnel by 2018 would cost $630 million.

Building a cargo terminal, for which a separate tender is expected, would cost an additional $70 million, it said.

Turkish companies were banished from Russia’s construction, tourism and hotel business from Jan. 1.

However, Renaissance Construction and Limak, the other Turkish firm which tendered, had submitted their bids from their Russian-registered subsidiaries, state-controlled Sheremetyevo said previously.

(Reporting by Gleb Stolyarov; Writing by Polina Devitt; Editing by Alexander Smith)

Queuing for One Scoop of Food

The following brief article appeared in our local Turkish newspaper today. I couldn’t find it in Hürriyet’s English edition, so I’m supplying a translation:
Izmir’s Basmane  neighbourhood has long been a sanctuary for fugitives from countries like Iraq, Afghanistan, and Somalia seeking refuge from civil war. They have now been joined by Syrians hoping to escape from poverty in their own land.
Living in unsanitary conditions, the only hope for these Syrians desperate to put food in their stomachs is aid from humanitarian organisations operating in the area. Women with children, and men, wait in separate lines with empty yoghurt containers for the arrival, every day at 12.00, of a minibus with İnsan Der[1]written on the side. Every day the numbers of people waiting for food increases and the amount available for each is less. The food distributed with a little bread is their sole hope of sustenance. Families of five or six return home with one ladleful of food and a portion of bread.


[1] A voluntary group offering food, clothing, education opportunities to destitute people