Category Archives: Economics

Economics, Life, Technology

Autonomous Cars: Are you ready?

I love technology and I hate driving. The inclusion of both love and hate presents a conflict, but the two can help each other in numerous ways.

Many news stories have recently emerged regarding autonomous cars, which makes me very excited. Having lived in Istanbul, London, and briefly in Zurich and Singapore, I know that the traffic can be annoying; in Istanbul, the commute can be trying.

Future-Car

According to CNN, commuters spend 125 hours per year stuck in traffic, which is not an acceptable way to live one’s life. Since, when driving, we are in front of a steering wheel, we cannot be effective during those hours: this is a perfect way of explaining the term “waste of time”.

At present, technology is evolving, will continue to ease our lives, and, most importantly, enable us to be more effective.

Autonomous cars are breaking into the market in a big way. In other words, driverless and fully robotic cars will soon be widely used.

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Silicon Valley has become recently one of the top destinations for car companies. An increasing number of conventional car companies are teaming up with technology companies to explore this market. If they do not make this transition, conventional car companies are at risk of having their market captured by companies like Google.

Google has been testing the driverless car technology for some time now, and Ford has just tested its own autonomous car in snow!

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The CEO of Tesla, a revolutionary car company, believes that fully autonomous cars will be hitting the market shortly. In fact, Tesla is preparing for an immense test drive: from one coast to the other in the US. “If you’re in New York and the car’s in Los Angeles, you can summon your car to you from your phone and tell the car to find you, and it’ll automatically charge itself along the journey,” Tesla’s CEO said on a conference call prior to the Detroit Auto show this week.

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Not only will the technology enable us to be effective in terms of our time, it will help us to be safer. Specialists believe that autonomous vehicles will be significantly safer than human-driven vehicles. Toyota is another car company that is exploring the options in this market.

It is scary, but whatever industry you are in may be swallowed by a tech company in the next decade. Thus, perhaps it is better to collaborate with them rather than trying to compete with them.

Consider an example: banks. Conventional retail banks are at risk of being swallowed by fin-tech companies if they lag behind the curve in the coming years.

Fiat Chrysler’s CEO, Sergio Marchionne, stated that carmakers risk losing proprietary control. He said, “Having initially manufactured all their own components, carmarkers currently retain primary control of making only vehicles power trains – their engines and transmissions. If we start losing any of that … we will not be able to hang on to any proprietary knowledge and control of that business.”

On the other side of the coin are drivers, whose responsibility will be overturned shortly. It will be difficult to reallocate workers in low-skill positions in the next decade. Governments should prepare training programmes for these people to ensure that they continue to have a place in the economy. Otherwise, while these improvements are positive, they may create conflicts.

The world is becoming a very competitive place, and survival for the weak is becoming difficult.

The Detroit Motor Show began this week, and it will be interesting to watch: not because I am interested in cars, but because I am interested in the current evolving technologies.

All the best from Singapore.

Sukru Haskan
Twitter: @sukru_haskan

Economics, Life, Personal Development

The Psychology of Excessive Luxury Brands Purchase

4 Comments

Why do people buy an excessive number of luxury brands and spend so much money on these items? Not only rich people, but amazingly poor people save money to buy a branded handbag or a pair of boats.

For instance, I happen to know a lady who earns $1,500 per month and bought a bag for $5,000. Why?

Woman sitting on sofa surrounded with shopping bags

Since I believe one of the biggest social problems this century is improper distribution of goods and services, I have observed the buying patterns of different nationalities for many years.

Many of us want to feel ourselves special. No matter whether you are rich, poor, young or old, you want to be treated as someone special. It is a basic psychological state of human beings. In addition, many people want to prove to the outside world that they are different and important.

This pattern of behaviour mainly occurs when an individual is not really fully satisfied with their friends, their work, their own intellectual capacity or even how they spend their life. On top of that, if that individual feels that they are lagging behind their peers, many could choose to reduce the gap by showing off through luxury brands, luxury holidays or material stuff such as cars.

Actually, much of our surroundings is just a sense of feeling, and everything is psychological.

Of course, there are reasons behind this pattern of behaviour.

  • If a person suddenly gets rich and if they come from an underprivileged background, they may tend to exaggerate to get attention. All of a sudden, something (money) has become the only thing to get attention. Before, there was nothing to differentiate them, and they think now they have everything (money!) to get attention.
  • When they are not sure how long their wealth will hold out and they want to make the most of it by showing off. This happens mainly in emerging market economies, where governments choose some people to get rich. In other words, these people have not really achieved anything: they are simply chosen, and sadly they are unaware of it.
  • Everybody tries to establish a social status in their community. Whether you are rich or poor, you want to be respected. Here is my explanation as to why a poor person who should not buy that $5000 bag buys that bag—because they think they will be treated like rich people. They actually think that they are closing the gap between themselves and others! Actually, they are opening the gap even further by becoming poorer.
  • Last but not least, another reason is these people do not have anything better to do for themselves—and, more importantly, for their communities. Since intellectual capacity/ability is built over years, it takes time. As human beings, we take the easy route to earn respect.

I find distinct similarities between people who try to feel good and gain status through excessive buying of luxury goods and people who get married to very beautiful ladies with no education and proper life, or to fat ugly gentlemen with a lot of money.

In the end, the relationship is very artificial and does not survive in the long term.

Moreover, an institution such as marriage should create happiness, but in the end, this type of relationship only creates miserable and unhappy lives.

I personally adore those people who are respected in their communities for their knowledge and their own unique characteristics rather than for what they own. A family friend in London taught me several years ago that my wealth should not be my car and what I wear, but it should be my own intellectual capacity.

A Turkish foundation, Darussafaka, is currently running an excellent advertisement on Turkish TV channels. The title is “You can still survive without it”. A lady goes to a shop and likes a bag; a businessman goes to another shop and likes a pen; but they both say “I can still survive without it”. Then the ad continues that you can survive without many things, but not without the proper education of our children.

I want to make it clear that this article is not about criticizing any type of behaviour or a certain type of person. It is solely written according to my own personal observations. It is purely an attempt to produce an amateur socio-economic article.

In addition, I too occasionally enjoy buying some branded clothes and shoes—hopefully, though, not excessively.

I hope this article leads you to contemplate whether you overspend on luxury brands and perhaps encourages you to channel some of that spending into education or the other basic needs of the many.

All the best from Singapore.

Sukru Haskan
Twitter: @sukru_haskan

Economics, Politics

What to expect in 2016!

When I was a child and studying in primary school, the world population was estimated at 6 billion people.  That was 25 years ago. As we approach 2016, the estimated world population stands at 7.3 billion people.

What can 7.3 billion people expect in 2016?

Happy New Year 2016 replace 2015 concept on the sea beach

To start with, 2015 was not an easy year for the world. Conflicts in the Middle East have triggered the largest dislocation of people since World War II and we have witnessed major disagreements in the developed world regarding sensitive and humane issues.

We have seen the first interest rate hike from FED in the last eight years during the last days of 2015 and we experienced major government changes in Myanmar and South American countries including Argentina and Venezuela.

In 2016, we will witness the US presidential election taking place on 8 November 2016. The Obama administration will come to an end in 2016 and I hope a good leader will continue his legacy for the coming years. This will be the biggest major event in 2016 since the US can change the course of events substantially if there is a major policy shift. My own bet is on the Democrats continuing to run the presidency in the US.

According to The Economist, one percent of the world’s population will enjoy more wealth than 99% of the population for the first time in 2016. This worries me a lot since both World Wars began with disagreements regarding the division of resources. We have to solve this problem as soon as possible, otherwise we will all be dragged into this problem at some point and human history may talk about a third world war in the 21st century. I think the probability of a large scale war in the next 10-20 years is very high unless we do something fast.

Europe is expecting another 1.5 million refugees in 2016. The 1 million barrier has already been crossed in 2015 and more will follow in 2016. I believe developed countries in Western Europe cannot really manage this crisis properly and this is another big challenge we face.

The Olympics, Rio 2016, are just around the corner and the European Championship held in France will be another major event in 2016. I wish Turkey and England the best of luck in these tournaments.

We should prepare for another hectic year in the financial markets as well. A rate hike will very likely continue in the US and we will experience the effects of this new “normal” on the emerging markets. Europe will likely get better in 2016, but nothing really fantastic is expected from the European side.

The Chinese slowdown will continue to be the main theme in 2016 and I personally see no real upside on the commodity prices. This will very likely stretch to Middle Eastern countries and taxation policies could be on the way for many zero tax countries in 2016.

I am quite optimistic about Latin America as they have already started dealing with their problems quickly and major government shifts will very likely improve these economies since they have hit the bottom. The only exception could be Venezuela.  A moratorium from Venezuela would not be a surprise for me in 2016.

India is very likely to do well in 2016 just like 2015! Turkey is not an easy bet. Of course since I am originally from Turkey, I want Turkey to do well but the political situation in the nearby countries such as Iraq and Syria will make 2016 difficult for Turkey. In addition, the outflow from the emerging markets will be another challenge. I believe long term investment in Turkey will still have higher yield than many markets.

It will be interesting to watch the EU referendum in the UK – I hope the UK chooses to stay in the EU.

New technological “disruptions” in the Fintech and Virtual Reality spaces will be themes to watch in order to not be left behind.

On a personal note, I hope to witness my child’s one year birthday. Improving and expanding my knowledge and experience will be my main focus this year as well. I want to continue to develop my French language skills along with expanding my personal and business network.

I hope that I can visit five new countries in 2016. My agenda is New Zealand, South Korea, China, Georgia and Brunei. I hope I can achieve this!

Taking this opportunity, I wish you a merry Christmas and a happy new year!

Thank you for your reading my blog in 2015.

All the best from Singapore.

Sukru Haskan
Twitter: @sukru_haskan

Economics

Is Declining Oil Price a good thing?

Absolutely, the declining oil price is a good thing!

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Not only oil, but a price plunge in all types of commodity is good in the long term…

In the short term, it may look dreadful. There may be difficulties in terms of keeping up with the debt repayments of oil rich countries and companies, expanding current account deficits and even bankruptcies.

All of this could be very painful—so why then is it a good thing?

Earning money from commodities is not like a having a proper manufacturing or service sector which you make money out of. A commodity is a natural resource and it is abundant there just out of pure luck.

In other words, there is no real hard work behind it.

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator - Wednesday December 3, 2014 Ontario benefits as oil prices plunge The steep drop in crude prices that continued Friday hurts oil-rich provinces like Alberta and Newfoundland, but Ontario comes out a winner thanks to increased demand for auto production and overall exports. ÒFor us, itÕs very good news, even if itÕs not so much for the rest of the country,Ó said Mike Moffatt, assistant professor at Western UniversityÕs Ivey School of Business. ÒWe are a net importer of oil. Obviously, we use oil in our day-to-day lives, but itÕs a big input for our manufacturers as well,Ó he said. ÒItÕs always a good thing when the stuff you buy becomes relatively cheaper,Ó Moffatt said. ÒAnd lower oil prices drive down the Canadian dollar, which helps our exporters.Ó According to the 2014 Ontario budget, every $10 drop in the price of a barrel of crude oil results in a 0.1 to 0.3 percentage point in economic growth for the provincial economy. ÒIf you put it in dollar figures, thatÕs between $1 billion and $2 billion for OntarioÕs economy,Ó Moffatt said. The impact is expected to be even greater here, given that the price of oil has plunged since OPEC decided Thursday to leave its production targets of 30 million barrels a day unchanged despite an oversupply and falling prices. Western Canada Select, the Canadian benchmark, has lost more than a third of its value since June, in step with declines for West Texas Intermediate and the international gauge Brent. WCS spot prices traded Friday at $48.40 a barrel, the lowest in the world. (Source: Toronto Star) http://www.thestar.com/business/2014/11/28/ontario_benefits_as_oil_prices_plunge.html Ontario, Alberta, Canada, Oil, Stephen Harper, Kathleen Wynne, manufacturing, economy

In order to set up a manufacturing company, you need a lot of things to be in place and, most importantly, it needs hard work. The same goes for the service sector. For instance, let’s take the example of the financial sector.

This requires a wealth of knowledge that people acquire not just through education, but also through valuable experience.

Can you imagine how many years it took to build the New York or London financial centres to where they are now?

Just remember the wealth of experience and intellectual capacity that these financial centres are sitting on—like JP Morgan, the Rothschild family, the Warburg family, the Rockefellers, and many more…

When something is given and you know how to extract the natural resource, you are like a third generation rich kid whose parents had a lot of real estate which you inherited. You continue to receive the rent payments from your tenants, but how many of you will really think about how to improve or develop new skills?

There are always outliers who can take things further, but mainly it is fair to say that this is not the case.

Then, what happens most of the time to third generation companies/wealth?

Nearly 60% of the time, a family’s money is exhausted by the children of the person who created the wealth, according to Roy Williams, president of wealth consultancy The Williams Group. In 90% of cases, it’s gone by the time the grandchildren die.

Source: http://money.cnn.com/2014/06/25/luxury/family-wealth/

A commodity price plunge will push countries and companies to reform themselves. More importantly, countries will need to adapt to the current environment to survive, and companies will try to be more innovative to survive.

The oil price decline will mean more reform, more innovation, more democracy and a better future!

Last but not least, there is a very nice article on Chatham House regarding commodity rich countries. The article talks about the resource curse. You can look at:

https://www.chathamhouse.org/publication/resource-curse-revisited

p.s: This week will be a very important week for me and for my family. I will be a father for the first time! Wish me good luck!

All the best from Singapore.

Sukru Haskan
Twitter: @sukru_haskan

Economics, Life, Personal Development, Singapore

Social Mobility

 

If you are born in the Western world rather than Africa today, it is likely that you will not suffer famine in your lifetime. If you are born in England, your life expectancy will be higher than someone born in Mali. If you are born into a family where both your parents have university degrees, it is very likely that you will have access to higher education as well.

Small differences in life such as your place of birth, nationality, your name and your family make huge differences to how your life is lived.

It is very clear that not everybody is born with the same kind of opportunities and prospects. It is the balance of nature—and it is not very fair.

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Social mobility is a big challenge for every country today. A book written by Richard Wilkinson and Kate Pickett concludes that more equal societies almost always do better than others. Their study discovers that there is an inverse relationship between income inequality and intergenerational mobility. Countries with less income inequality, such as Denmark, Sweden and Finland, have some of the greatest mobility, whereas countries with high income inequality, such as Chile and Brazil, have some of the lowest social mobility.

So much talent is wasted because they haven’t been given enough opportunity to show what they can achieve.

For example, George Soros would have been one of the wasted talents, but he was lucky enough to receive an education at LSE.

He subsequently tried his luck in securing employment in England, but was offered only simple jobs rather than his dream investment banking job. Because he did not come from a certain family or circle, he could not establish his dream in England, and so flew to the US to accomplish his dreams.

Today he is one of the greatest philanthropists.

Given that we cannot completely eliminate these inequalities, how can we help the underprivileged to move up the ladder?

No matter what, we have to subsidise education. Children who come from poor families have to make it to good schools if they have the right attitude and skills. Without allowing underprivileged kids access to education, it is almost impossible to speak about social mobility.

I think Singapore is a very good example. Everyone can go to a public school and the monthly fee varies from free to six Singapore dollars if you are a Singaporean citizen. More importantly, Singapore is one of the best countries for your child to be educated, according to the latest PISA results.

There is no guarantee that all kids can make it—but the probability of climbing the ladder significantly increases with a good education.

The legendary investor, Jim Rogers, lives in Singapore with his family and he chose for his daughter to study at a public school rather than a private school.

Social mobility is not only something that helps people climb the ladder, but it is also an insurance against rises in crime and is a bodyguard for a peaceful world.

It is not easy to subsidise a good level of education for everyone and it is very costly, but it is not more costly than the cost of rising crime, of unhappy communities and of pessimistic futures.

Finally, no matter how smart you are, if you are financially well off, it is very likely that you will take it easy. Social mobility is also good for innovation, competition and the promotion of growth.

Hamdi Ulukaya, owner of Chobani yoghurts, is a recent good example of social mobility. A Turkish citizen of Kurdish descent, he was lucky enough to study at Ankara University and lucky enough to go to the US for his English studies. He took a major risk in acquiring a large, defunct yoghurt factory in New York.

Ulukaya’s net worth is USD 1.4 billion as of 2014 and he has pledged USD 700 million to refugees of the Syrian civil war.

It is hard to prove, but I believe people whom you help to move up social ladder tend to help other people as well—just like George Soros and Hamdi Ulukaya.

All the best from Singapore.

Sukru Haskan
Twitter: @sukru_haskan

Economics, Europe, Politics

Education, Social Entrepreneurs and Condolences

When I woke up on Saturday morning (November 14th) in Singapore, I had so many notifications on my phone from BBC, CNN, Le Point, France 24, Strait Times, etc.

While I was trying to open up my eyes, I managed to read one of these notifications and I was shocked.

Unfortunately, all the notifications that morning were related to the attacks in Paris on Friday night.

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First I tried to think which of my friends were in Paris and then, thanks to the Facebook safety check-in option, I figured out who was in Paris and luckily they were all safe—but not the poor 129 people who were killed so cowardly that night.

After absorbing the initial shock, I, like many of you, I am sure, started thinking of what could lead these people to act like this.

Most people came up with the answer of radical beliefs, but the answer is much deeper than that.

From my experience, when people genuinely get richer, that does not turn them into intellectual human beings, but they have an option to buy some level of comfort. Over time, the ability to buy comfort gradually makes them open to further adaptation and modernization, if they are not already.

With the right education in place, they can even be leading intellectuals in their community, too.

So I think the key here is how we can get these people in the very low pillars of society to higher pillars.

Education is key here; but education costs a lot—and for people who cannot meet their basic needs such as security and food especially, education is something of a luxury.

The government may provide education services up to a certain level, but this will always be limited and the kid from the poor family will still lack if he is not supported.

Social philanthropists can play a crucial role here.

For instance, I had a chance this week to meet a social entrepreneur, Alexandre Mars, in Singapore. People like him are quite important, because it is impossible and naive to believe that the state will reach every corner of the world to find disadvantaged people. On top of that, ageing and a broken insurance system in the developed world makes it even harder for governments to bring about solutions.

Alexandre Mars is one of the top twenty philanthropists under 40 in New York. His foundation is called the Epic Foundation and it was initially funded by his personal funds. His foundation currently funds 20 new NGOs every single year to help youths in five different continents. You can find more information on Epic Foundation here.

But of course, we need more Alexandre Mars, and it is easier said than done.

Alexandre mentioned that it was his dream to help the youth and it took 15 years to create enough wealth to pursue his real dream.

Thomas Piketty, a reputable French economist and author of Capital in the Twenty-First Century, argues that the income inequality will continue to rise in the future as the return rate of capital is higher than the rate of economic growth. More importantly, he believes that the inequality level is now around the pre-war era.

I do not believe the utopic idea that everyone should be equal—on the contrary, I believe it is important that people are recognized for their achievement; but the redistribution of wealth is key to funding necessary education for the masses.

G20 in Antalya, Turkey, had been a good chance for leaders to discuss these issues. Since politicians are not entrepreneurs and they move much more slowly than entrepreneurs, I still believe entrepreneurs are the key to the solution.

The world is becoming a very polarized place to live and this is contrary to globalization and trade. We must eliminate illiteracy and poverty to secure a liveable world for ourselves and for our kids.

Expecting my first child next month, these events are very discouraging and lead me to wonder what kind of world we are really leaving for them. I sincerely worry about a world war within my life span.

By taking this opportunity, I would to like to offer my most sincere condolences to the families who lost their loved ones in the Paris, Beirut and Ankara attacks.

All the best from Singapore.

Sukru Haskan
Twitter: @sukru_haskan

Asia, Economics, Europe, United Kingdom

New Silk Road: One Belt, One Road

Chinese President, Mr. Xi Jinping, made a four day official visit to the UK last week. This was the first visit since 2005 and the UK was definitely well prepared to ensure that the Chinese President left the UK with a good impression and, more importantly, that he left with many infrastructure and trade projects signed.

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As we all well know, China is becoming more powerful and China has a lot of ambitions. One of the most important is its ambition to revitalize the Silk Road under the One Belt, One Road project.

The Silk Road is an ancient route facilitating trade and cultural exchange from east to west. The Great Wall of China was built to protect this route—in a way, to protect the continuation of trade between the east and the west. The development of this route enabled China, Persia, India and many countries in the past to benefit from cultural and economic development.

The length of the route is 6,000 km. The name Silk Road comes from the famous Chinese silk, which was a major attraction in building this route. Nowadays, thanks to the development of technology and fast transportation options, this route can be utilized more efficiently.

Following the global financial crisis in 2008, we are still not out of the woods. More importantly, we are losing our patience and our hopes for the future. When under 25 unemployment hits 50% in some developed countries, that is not only telling us about a single problem. It is signalling a much bigger problem: a lost generation.

The New Silk Road is being worked on in such an environment, and it excites everyone as it did in the past. And obviously everybody wants to get their share.

In the EU, the UK is lagging behind Germany with its trade volume with China. Obviously, Germany sells its cars and manufactured goods whereas the UK is not very competitive, actually not producing many exportation goods at all.

However, the UK is the leading country in the service sector in the EU. That’s where the internationalization of RMB could play an important role, as London can be the main clearing centre for renminbi.

In addition, the UK is where ideas of the future are turning into reality. It is the country where you can freely discuss with intellectuals and implement your ideas. Most importantly, the UK has a global talent pool which may only be compared with the USA.

Of course, it is not only Germany and the UK that are competing for a share in this big cake. Japanese president, Mr. Abe, has been travelling in Central Asia this week to secure better relationships with Central Asian countries. Given that Central Asia is the main connecting point, it is the main artery for the New Silk Road, pumping blood into its heart.

In my opinion, this visit is too late for Japan. Chinese companies, with the support of the Chinese Exim Bank, have been working on this region for many years now.

The power shift has already begun. The UK decided to sign for the foundation of the Asian Infrastructure Investment Bank, where many hesitant countries followed the UK. This should be a warning bell for the US.

I think we have to give credit to Cameron’s chancellor, George Osborne, for this courageous move.

The UK media criticized David Cameron for not discussing in detail China’s human rights track record and its steel pricing policy. On top of that, it was unfortunate timing that the UK steel industry announced job cuts during the visit of the Chinese president to the UK.

I believe David Cameron is following the right strategy with China.

How would it be possible to cooperate with someone on social issues without establishing the right relationship?

History might be bloody between the UK and China, but the future definitely looks bright.

All the best from Singapore.

Sukru Haskan
Twitter: @sukru_haskan

Economics, Europe, Politics, Turkey

EU and Turkey: A Sour Love Story

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The migrant crisis has been ongoing without a proper solution for some time now, and this week Chancellor Merkel visited Istanbul to cooperate with Turkey to address the issue.

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One may ask: “How come Turkey became an important source for a solution?”

I am trying to find these answers in my article this week. Or simply: “Is Turkey really an important variable in the solution equation?”

I personally respect Chancellor Merkel, as every single leader in the biggest EU economies has changed since the global financial crisis, except Angela Merkel.

For instance, Gordon Brown was replaced by David Cameron in the UK, Nicolas Sarkozy by Francois Hollande in France, Jose Zapatero by Mariano Rajoy in Spain, Silvio Berlusconi by Mario Monti and then Enrico Letta and Matteo Renzi in Italy.

There is no doubt that Chancellor Merkel is a strong leader. Even though I do not like her treatment of and attitude towards Greece in the last couple of years, I do believe that she has done a magnificent job in keeping Germany growing and increasing German influence in these very difficult times.

My French readers and friends may dislike this statement, but she is the sole de facto EU president today.

Unfortunately, relations between the EU and Turkey have been sour from the beginning.

Turkey’s application for EU membership dates back to 1987 and accession talks began only in 2005. Only one chapter out of 35 is currently closed, and many member states are opposed to opening new chapters. In other words, there is no accession progression at all right now.

Chancellor Merkel came up with ‘great’ incentives for Turkey to help the EU with the migrant crisis in her visit to Turkey. I will term these incentives something like “bribes” for Turkey:

  • Visa liberalisations for Turkish citizens
  • Revitalisation of talks between the EU and Turkey
  • Three billion euros in aid

In exchange, the EU demands that Turkey issues work permits for Syrian refugees so that they can be included in the Turkish work force and that it cooperates fully with Frontex to make sure the refugees are not trespassing to EU borders.

Turkish citizens have waited for a long time to be able to travel freely within the EU and Turkish citizens are not really interested any more in revitalising talks with the EU. The EU has lost its ground among the Turkish population with its insincere politics over decades. In addition, even its member states are questioning its survival probability over the next ten years, and, more importantly, its functionality.

Chancellor Merkel is taking a calculated risk by granting some minor concessions to Turkey and this approach proves that the EU is not after a long term solution.

The EU wants Turkey to create a permanent living space for most of the Syrian refugees in a single country rather than sharing this burden. In return, the EU grants Turkey small and possibly temporary concessions.

Is this just another insincere EU policy towards Turkey? Indeed, it is!

Has the EU analysed the probable consequences in terms of unemployability, further economic and political instability, crime rate, etc. on Turkey after accepting 2.5 million refugees? Would granting visa liberalisation, one-off aid of three billion euros and opening up some chapters justify any possible long term consequences on Turkish politics and economics?

That’s where the problem begins. I would like to share a paragraph from my article, “Would you like to be in the same boat?” published in August about how I would like to see Europe.

“Europe is the birthplace of the Renaissance: it brought humanism, art, development in science and policy, reform in education and self-awareness. I would expect the same Europe to bring intelligence, know-how, education, sanitation, water, healthcare and other basic human needs to these countries. Instead, politicians are proudly talking of extra fencing, dogs and police officers. Unfortunately, these measures were not really helpful and I’m afraid that they will not be helpful going forward either.”

Unfortunately Europe’s great ideology, its vision of the desired unity, has been non-existent for some years now. Of course, Turkey will grant some work permits and will help these migrants.

But it is not just the duty of Turkey. It is the duty of humanity.

Granting work permits to over 2.5 million people in a single country is not a solution. The EU wants to sweep the problem under the rug and very likely, as Turkey is a leading hand-made rug producer, Turkey has been chosen to replace the duty of the rug here!

Another insincerity from Europe has been the delay in the publication of a European Union report on Turkey until after the November election. This report is about Turkey’s human rights and free speech.

The European Union has been losing its influence for some time now and the UK is preparing for a referendum on whether or not to stay in the union.

I personally would like to see the EU stronger, more sincere and, more importantly, a true representative of its ancestors, where the Renaissance attributes of humanism, art, and development in science and policy are manifested.

I hope Turkey rejects these unnecessary and insincere proposals, not to secure a better deal, but to get some much wanted respect in the world arena, along with a fair solution to the whole Syrian migrant population.

All the best from Singapore.

Sukru Haskan
Twitter:@sukru_haskan

Economics, Europe, Singapore, Travel, Turkey

A Decade Away from Istanbul

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The date of 15 September 2015 marks the completion of a decade away from Istanbul in my native land, Turkey.

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It is always good to look back and analyse your challenges, mistakes and successes to improve yourself.

I am still young but a completely different person from who I used to be.

What has been my experience in the last 10 years?

I would definitely rate my experience as 10 out of 10.

Here are the reasons why.

Once I was out of my comfort zone, I realized what a spoiled upbringing I had had.

Your parents want to give you everything and that’s not really good.

I was living in central London and I had some of my old friends from Turkey and new friends from my courses.

Initially, it was too much fun!

But then I realized that I had to wash my clothes, change my bed linen and even sometimes cook!

I truly wasn’t aware of all these tasks being done by somebody else all those years!

Lesson #1: The first few weeks in London taught me that I had good intellectual capacity, but I was not at all prepared for everyday life.

Even paying the bills on time and keeping track of what I spent was a totally new concept for me.

Once I started to get going with the basics, I was fine but I was not aware that life was about to get tough.

Without being immodest, I can say that my graduate course on international business economics was going very well. I was very confident that I would be one of the very few students who would get a distinction at the year’s end and I did!

In the meantime, I started liking the challenges and most importantly London! And I made the decision to stay there.

So I needed to find a proper job.

Istanbul was my playground and I could reach anybody through my network but London was something new. I did not know anybody except a few friends who were also students.

Lesson #2: I learned that I had to rely on myself to get things done. Nobody would give me a job here as I have no contacts in London.

So I started networking and applying !

This was a great challenge.

And I did it!

Now I had a job and I stayed in London.

New challenges lay ahead.

I enrolled on a graduate programme for new employees from all over the world: Brazil, Greece, Sweden, Denmark, Norway, the UK, Germany, Iran…

While I was a student, I chose whom to spend time with.  A new episode in my life was about to start…

Lesson #3: I understood how important it is to interact with everybody, not only with loved ones!

More importantly, I learned that I have to build relationships with those I don’t like as well!

Having been in London for some years, I had friends now from all over the globe.

Time was ticking by and I was exposed to many different cultures, which fostered my curiosity and confused me as well, sometimes.

Lesson #4: This encouraged me to travel to different countries to understand my friends’ cultures and I also read a lot about them.

I should know the history of people with whom I am dealing and more importantly I should understand their background and what influences their decisions.

And then I discovered that I don’t even know my own background properly. Unfortunately, history lessons in Turkish high schools are not wide-ranging.

I am still learning…

Lesson #5: As Richard Branson famously says, “The more you travel, the more you read and the more you read, the more you travel”. I am in a learning circle right now which I doubt I will ever want to leave.

A Danish gentleman, Peter Klein, was my first CEO and I remember what he told me during my first days of employment.

“University does not teach you much but it does teach one main thing and that is the ability to update yourself continuously”.

Maybe university did not do that but living abroad in the last decade definitely did !

To sum up, I had a really fantastic decade living outside my comfort zone. It became so addictive that I am not sure I want to step into my comfort zone again.

I encourage you all, especially new graduates, to get out of your comfort zone and work abroad.

Unfortunately, the world is not so rosy and the best way to learn is to get out of your comfort zone and mix with different types of people.

All the best from Singapore

Sukru Haskan
Twitter: @sukru_haskan

Economics

Hike the Interest Rate, Please!

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There is a FOMC meeting scheduled for next week and September, 17th is the date when Janet Yellen will hold a press conference. Everybody is waiting for that date in the financial sector as Janet Yellen will convey the decision on whether they will hike the interest rate or not.

For those of you without a finance background, FOMC stands for Federal Open Market Committee.

FOMC consists of 12 members and it holds eight meetings per year. September is one of the last three meeting dates for this year.

This invaluable group of people are responsible for designing the United States’ monetary policy.

The last FED interest rate hike was in 2006.

Yellen, FED chairwoman, has indicated many times that they are data driven and not market driven.

The data are good. Unfortunately, the markets are not.

There has been huge volatility since early June. It started with Greece and now continues with China.

If Yellen delays the rate hike decision, it will once more contradict FED previous statements.

What happens when you contradict your statements continually?

You lose your credibility. 

And it is not good when you have competitors willing to replace you in the system.

Many will discuss that FED has a global role to stabilize the markets, I do not really agree with this point.

The fundamentals of different economies have recently changed dramatically.

The US is growing and its unemployment level is now back to pre-2008 levels.

In my opinion, we will continue to see divergent policies rather than convergent policies among central banks.

And it creates problems…

Why?

Because we got used to seeing convergent policies after 2008 and now that policies around the globe will be mixed, it will be harder to predict future moves in many markets.

There are many valuable economists and bankers that do not share my view.

A reputable columnist in FT, Martin Wolf, wrote an article this week entitled ‘Keep rates low – the world is abnormal’.

Andy Haldane of the Bank of England said “The act of raising the yield curve would itself increase the probability of recession”.

The World Bank has warned FED not to increase the rate as the world is not out of the woods yet.

Emerging markets will be affected dramatically by a rate hike. The rate hike will accelerate the outflows from emerging markets and it will create further turbulence.

This is an inevitable fact…

But some, surprisingly, are in favour of a rate hike.

Indonesian central banker, Mirza Adityaswara, is one of them. Another is Peru’s central banker.

Unsurprisingly, Swiss National Bank is praying for a rate hike. They want to abolish their negative interest policy as soon as possible. They know that it is unsustainable.

No matter what the decision is, the time for a rate hike is coming closer and closer…

There is no escape!

We will shortly experience the end of the cheap money era.

And I think it will start on September, 17th…

Good luck!

Best from Singapore,
Sukru Haskan
Twitter: @sukru_haskan