TR Economy & Updates

[Xenon54]

Kind of beating a dead horse or two here on this thread....ppl either get it or they dont at this point.

Exports is half the picture of the current account.

Current account is half the picture of the Balance of Payments.

The BoP is only some portion of the economy.

Half of a half of a portion.....what % relevance its going to be in best case scenario?

There is basic reason increase in exports has caused large increase in imports too (i.e how much net value added actually goes on in Turkey)

CA deficit is relatively unchanged...and has marginal affect on the bludgeoning Turkey economy is taking from inflation at large....made worse by decreasing interest rate ...that too without fixing the structural issue.

Changing a dial setting to slightly benefit 10% of economy (at best) to huge detrimental cost of 90% is madness.

Investment is the only thing that helps to transmit an equitable lever.....and is precisely the thing turkey has largely missed out on (commensurate to its development and consumption levels) in the preceding decade.

Just search my posts in this thread...some people are still talking about exports as be all end all...when it is just one part of much bigger thing (in both time and space).

Imagine this is going for at least a decade like this, here a summary of the situation...

Mod Edit: Memes are not allowed in serious threads!

 

[CAN_TR]

dont even wanna talk about electronics at this point...

You should go to a MediaMarkt in Turkey and see for yourself in comparison to Austria for example it's slightly more expensive.

People here freaked out because the skyrocketing Petroleum prices just recently, in Turkey since a decade people are ripped off with Petroleum prices and the ridiculous taxes and nothing... i guess people are used to get ripped off so it doesn't bother them anymore.

 

[Fighter_35]

Stop with your childish tantrums people! No one suggested the current situation with economy is ok or something. No one suggested %40 value loss in a year or this soul-crushing inflation is good.

The points i made in my previous post are still valid. Get past this anger and provide some logical train of thought so i can learn. We had a god damn $100 billion dollars trade deficit in 2013. If FED didn't start tapering and hiking the interest rates in 2013 guess what would our trade deficit be by now.

I'm young and like everyone else I'm trying to understand the system. I'm sorry but I'm not convinced by your strong lira arguments. If you have non half-cooked ideas to how we can fix economy and be a prosperous nation, please do share. I, for one, don't believe the economic policies of AKP's first terms were right. It put us in a bubble where It created a false sense of wealth and induced a buying craze. It's not OK to buy a brand-new 200gram Iphone and pay for it with tons of tomatoes. We have to have high-value products to offset with the things we can't produce. And to me, it's clear as day that we can't get there with strong lira. How can we? Why bother even, when you can buy the cheap advanced stuff from abroad already? I'm here to learn. Tell me. I mean it.

I have to note here that I'm no supporter of Erdogan. The value loss of lira stems from his incompetence not from a solid economic policy. It feels redundant to write this paragraph but i see some of you equate my stance on lira with Erdogan fanboyism or something.

(by weak lira i mean loss of value between %10-15 a year not %40)

You still can talk and try to find excuses?? At least accept idiot comments and don't talk and don't make people angry at you anymore!!

 

[Huelague]

In order to increase your export , you need to increase your quality and you should create global brands!! If you can not do this, there is no reason for any one to be responsible from our economy and from our gowernment. Everyone can manage better than this!!
Main issue is improving life standarts by improving our quality, our production, our exports, everyone can increase export by devalueing currency and making people poorer!!

It’s not the job of any government to create global brands.

 

[Xenon54]

You should go to a MediaMarkt in Turkey and see for yourself in comparison to Austria for example it's slightly more expensive.

People here freaked out because the skyrocketing Petroleum prices just recently, in Turkey since a decade people are ripped off with Petroleum prices and the ridiculous taxes and nothing... i guess people are used to get ripped off so it doesn't bother them anymore.

I went to and it was 10 years ago when economy was supposedly good, i was shocked to see how many months people need to work to afford a Playstation 3.
Now the prices became ten fold, months became years but thats another story.
Bro a part of these who are ripped of are still defending the goverment, one woman says why should head of diyanet not drive a luxury car? Is she aware that she is paying for it? Thats the part i dont understand, why is a party/politician more important than your own well being?
And then they say others are worse, for some people there could be a politician who is crapping gold but he still would not be good enough, fanatisizm is like that unfortunately.

 

[Xenon54]

It’s not the job of any government to create global brands.

No but create an environment thats friendly for investment, have a stable justice system where you can trust your investment, reduce corruption etc. etc.
Fail any of these and you will only have brands that flee the country.

 

[Huelague]

We should make a list of pros and cons of a weak or strong Lira.

 

[what]

My mother has a spare room and took a relative in, she's here for an internship from Turkey for 6 months. Within 3 months she saved enough money to buy Airpods and an iPad. Not saying she's spending wisely, but just for a perspective. While doing that she travelled to Paris, Brussels, Prague and Amsterdam. Was robbed once in Paris and lost a bit of money and of her things. She had no rich parents, she has her internship salary (only working 3 days per week) and a small scholarship from Turkey.


Some articles that I read through today:

Bloomberg - Are you a robot?

The gap between rich and poor is widening, a lot of the current economic expansion is on the shoulders of the impoverishing workforce.

EU’s looming carbon tax nudged Turkey toward Paris climate accord, envoy says

Ankara’s COP26 negotiator says the planned levy was a ‘very big threat’ and was ‘one of the reasons’ for the decision.

www.politico.eu

We ratified the Paris Agreement and will introduce a Co2, which is a good step but as the article shows was not really something the government did because they wanted to but because they had too. The EU will start taxing imports from countries that do not have a fair Co2 pricing themselves.


And for good news:

EBRD President pledges €600 million in new financing for Turkish women-led firms

EBRD President pledges €600 million in new financing for Turkish women-led firms

www.ebrd.com

 

[Anastasius]

The points i made in my previous post are still valid. Get past this anger and provide some logical train of thought so i can learn. We had a god damn $100 billion dollars trade deficit in 2013. If FED didn't start tapering and hiking the interest rates in 2013 guess what would our trade deficit be by now.

The US had almost a $500 billion trade deficit in 2013 and is still hovering around $80-90 billion. Again, a trade surplus is not the be all and end all of good economics. I feel like some articles on how balance of trade works across a wider spectrum might be helpful for everyone here.

The Danger When Imports Exceed Imports

The balance of trade is a country's exports minus its imports. Learn about favorable and unfavorable trade balances and the balance of payments.

www.thebalance.com

Trade Deficit: Advantages and Disadvantages

Is a trade deficit beneficial or detrimental to a country's economy? A negative trade balance offers advantages and disadvantages.

www.investopedia.com

23.5 The Pros and Cons of Trade Deficits and Surpluses – Principles of Economics

opentextbc.ca

 

[Turko]

Oh my goodness. We are comparing our trade deficit with America's.

Aç tavuk kendini buğday ambarında sanarmış.

The hungry chicken supposes as if it were in a wheat barn.

 

[Tornadoss]

Bloomberg - Are you a robot?

Turkish patients are finding it increasingly difficult to access key drugs, with producers blaming the shortages on an inflexible pricing system for medicines that exposes them to losses from the lira’s swift decline.

Pharmacist associations are reporting supply problems with nearly 650 drugs, ranging from painkillers and cough syrups to treatments for asthma, influenza, and cancer.

The second bottleneck in supplies in as many years shows how this year’s steep drop in the value of the lira is taking a toll on critical imports in a heavily regulated marketplace. It’s a serious matter for unwell Turks and another headache for President Recep Tayyip Erdogan, whose ruling party lost support as prices spiraled.

The government each year sets an exchange rate that pharmaceutical companies must use when pricing their products, many of which are imported or made in Turkey using ingredients from overseas. In February, officials set the rate at 4.57 liras per euro, roughly 60% below the current 11.27 liras.

One of the negative effects of low TL valuation.

 

[Ravenman]

Yeah its all acting, the crisis doesnt even exist.

No Atakan was real. The CHP Avenger superkid.

 

[Fighter_35]

please be more specific. what's your suggestion? and what's idiotic exactly? If you could be more articulate, i'd learn something.

You better not try to learn. Just don't post your excuses here.

 

[Tornadoss]

No Atakan was real. The CHP Avenger superkid.

Even kids can see the reality. Your claims are really absurd and out of touch with reality.

 

[Fighter_35]

yeah. an empty tin can. That technique's been working on you quite well. Keep it up and you'll make more noise.

Don't post idiot excuses for bad economy management and try to find logical! Excuses. It is nonsense , noone other than you eat that shits!!
Turkish lira loses value, and it is a bad thing , period!!

 

[Xenon54]

Even kids can see the reality. Your claims are really absurd and out of touch with reality.

Like the rest of his party, their members suck money from state for them life is easy, there is no crisis.

 

[Nilgiri]

But when the TL gets strong it impedes our ability to develop those stuff. Because it turns the incentive structure upside down. If you have strong currency why would the companies take high risk of failure of developing the cutting-edge technology.

You are making a basic mistake in TL exchange rate being "strong" or "weak" being a cause lever.

Its not.

It is very much a result (that can prompt a few more results downstream too).

In fact in the end any country wants to trade as little of its resources (esp labour time) to gain as much resources in a trade with another (their resources like labour time).

i.e A strong Lira (backed by strong terms of trade) is actually the final objective. Why a transient "weak lira" might be optimal in some space of years is a deeper thing to look at during transition of an economy....but its not black and white picture of copying another....since its not a base underlying phenomenon to do so.

That is where you must look first. The underlying strength of the labour time and how it can be utilised to gain more of what it cannot do yet in enough amount (compared to others that are ahead).

How do you improve that underlying strength? It has to do with productivity which has to do with investment.

How do you make the average person able to use his time and resources more effectively (to then fetch a good trade for that with anyone else for what they can offer)?

It is same thing with a country (a collection of people).

Currency strength/weakness is a tip of tip of iceberg....nowhere close to base.

 

[Fighter_35]

this is the exactly what I say about exports.Smae is true for tourism incomes, you host more tourists but your revenue per eac tourists decreases . it is not adding anything to country actually. You are turning to another 3rd world countries by decreasing your gdp!!! by decreasing value of your currency.

https://twitter.com/i/web/status/1458414066859450371

 

[Rodeo]

You are making a basic mistake in TL exchange rate being "strong" or "weak" being a cause lever.

Its not.

It is very much a result (that can prompt a few more results downstream too).

In fact in the end any country wants to trade as little of its resources (esp labour time) to gain as much resources in a trade with another (their resources like labour time).

i.e A strong Lira (backed by strong terms of trade) is actually the final objective. Why a transient "weak lira" might be optimal in some space of years is a deeper thing to look at during transition of an economy....but its not black and white picture of copying another....since its not a base underlying phenomenon to do so.

That is where you must look first. The underlying strength of the labour time and how it can be utilised to gain more of what it cannot do yet in enough amount (compared to others that are ahead).

How do you improve that underlying strength? It has to do with productivity which has to do with investment.

How do you make the average person able to use his time and resources more effectively (to then fetch a good trade for that with anyone else for what they can offer)?

It is same thing with a country (a collection of people).

Currency strength/weakness is a tip of tip of iceberg....nowhere close to base.

I agree completely. The strong lira is the ultimate purpose. Why wouldn't i want to travel whatever country i want with just a one month of salary like the Europeans do. I would very much like to buy high-end graphics cards for very demanding games or for machine learning research, too. I, of course, want those stuff.

But getting there is a long hard-earned work that requires blood,sweat and innovation not by being injected with dollars for three straight years. What that does is to create a false sense of wealth. I'm very much for the foreign(or all kinds of) investment. But the way, we Turks use that money is not all for investments. What i'm trying to say is, we should be more wary of it. Use it intelligently. We should keep it under control. Because we had that sir. Just look at the wiki page of trade deficit of Turkey. https://tr.m.wikipedia.org/wiki/Türkiye'nin_dış_ticareti
We had a whopping $106billion dollars deficit in 2011. I'm afraid, in the end, we'll end up like the crisis of Asian countries in 1997. And be forced to do very unfavorable concessions to end it. But no one adddresses this issue in their posts. Like there can be no harm in it.

I wanna reiterate here again that by weak lira i don't mean it as weak as we have it now. This is beyond madness. It squeezes the middle class and widen the gap between the rich and the poor. The strong lira argument for post-election. I would, ofc, be very glad if TL rose now. But dollar shouldn't go under, say, 7. That would throw us in the loop again.

 

[Nilgiri]

I agree completely. The strong lira is the ultimate purpose. Why wouldn't i want to travel whatever country i want with just a one month of salary like the Europeans do. I would very much like to buy high-end graphics cards for very demanding games or for machine learning research, too. I, of course, want those stuff.

But getting there is a long hard-earned work that requires blood,sweat and innovation not by being injected with dollars for three straight years. What that does is to create a false sense of wealth. I'm very much for the foreign(or all kinds of) investment. But the way, we Turks use that money is not all for investments. What i'm trying to say is, we should be more wary of it. Use it intelligently. We should keep it under control. Because we had that sir. Just look at the wiki page of trade deficit of Turkey. https://tr.m.wikipedia.org/wiki/Türkiye'nin_dış_ticareti
We had a whopping $106billion dollars deficit in 2011. I'm afraid, in the end, we'll end up like the crisis of Asian countries in 1997. And be forced to do very unfavorable concessions to end it. But no one adddresses this issue in their posts. Like there can be no harm in it.

I wanna reiterate here again that by weak lira i don't mean it as weak as we have it now. This is beyond madness. It squeezes the middle class and widen the gap between the rich and the poor. The strong lira argument for post-election. I would, ofc, be very glad if TL rose now. But dollar shouldn't go under, say, 7. That would throw us in the loop again.

In the end its about doing more things that are in (good productive) demand with the time you have (either with respect to each other within a population.....or with respect to outside populations for the larger country's population).

Give a man a fish, feed him a day......teach a man to fish, feed him for life etc...

The more you invest in people to make them able to do things in the now and also be flexible to do more (newer things if required) later....the more you have the robust core.

Because it is the underlying reason all across world you see some people trade 100 hours of their time for just 1 hour of anothers...

....the latter guy is doing something much much more in demand and can dictate that term of trade from the other (who is crowded by far more people doing the same thing as him).

This is the basic process of industrialisation ( i.e productivity improvement).

Improving your bargaining power by improving your productivity (output valuation per hour) is only way out.

That productivity is sometimes education-based (to push/mature capability later for the same person)...... other times its bringing in a machine for the worker (to use his existing capability better)...and everything in between.

Generally you need good law and order, good institutions (and relative low micromanagement from govt on everything else so there is as transparent price and productivity signalling by the profit motive as possible)....so that this productivity ecosystem is always improving from decade to next decade.

If it stagnates....the bargaining power of the society as a whole is affected relative to the world.

Weakening Lira, inflation....they are all symptoms now stuck with turkey for a while....till the bedrock is stabilised again and improved upon sustainably to improve that bargaining power of the population as a whole.