EU and Turkey: A Sour Love Story

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.

48182242.cached

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

Handy Guide For Istanbul

After publishing “Handy Guide for Singapore” two weeks ago, I have been asked by many followers to publish an article on my native land, Istanbul.

Thanks to my wife, Dilek Haskan, we managed to bring out our wealth of experience in Istanbul.

Istanbul_panorama_and_skyline

SIGHTSEEING/NEIGHBOURHOODS

Historical peninsula: This neighbourhood should be your first stop in Istanbul. Hagia Sophia, Blue Mosque, Topkapi Palace, The Basilica Cistern and Museum of Turkish and Islamic Arts are the must-see sites.

For shopping and the ultimate eye indulgence, sample various spices from around the world in Spice Market and visit Grand Bazaar for a shopping experience unique to Turkey.

  • Grand Bazaar/Historical Peninsula Shopping:

Iznik Art and Iznik Works for Iznik pottery and tiles

Armaggan for jewellery, objects d’art and homeware. They also have a boutique hotel located in a ‘yali’ on Bosphorus.

Dhoku for great carpets – they even sell to my wife’s favourite stores Anthropologie and ABC Home in the US.

Taksim: Historical street with lots of cafes and restaurants. Visit Galata Tower here. You should also visit Serdar-i Ekrem Street for local designer stores.

Besiktas/Ortakoy/Bebek: You can take a boat from Besiktas and have a tour on Bosphorus, enjoy great views of both European and Anatolian side.

While you’re here, stock Turkish delights at Lokum Istanbul.

Nisantasi: Hip district for shopping, in-demand restaurants and cafes

EATING OUT

Traditional restaurants:

  • Mikla in Taksim district for modern Ottoman style cuisine
  • Hamdi in historical peninsula for Turkish meat dishes; you should try pistachio kebab here
  • Hunkar in Nisantasi
  • Pandeli Restaurant in Spice Market is dated back to 1901 and visited by historical figures and American actors such as Audrey Hepburn and Robert De Niro
  • Karakoy Lokantasi for traditional Ottoman cuisine; try Hunkar Begendi here
  • Ciya Sofrasi if you visit Anatolian side

Modern restaurants:

Turkey doesn’t have Michelin star restaurants yet but we definitely have some restaurants that deserves it such as Nicole and Alancha.

  • Nicole in Taksim
  • Alancha in Nisantasi
  • Colonie and Gaspar in Karakoy with a bar and restaurant
  • Munferit in Taksim (closed on Sundays)
  • Changa in Taksim; this is a very well decorated restaurant (Wallpaper Design Award in 2007) with good food
  • Sunset in Ulus; great food and an accompanying great view
  • While you’re here, you can stop by Ulus 29 which is nearby to have drinks over views

Seafood/Fish restaurant:

You should try one of these while you are in Istanbul

  • Rumelihisari Iskele Restaurant: This is my favourite fish restaurant..
  • Kandilli Suna’nin Yeri: Humble fish restaurant in Uskudar on Anatolian side; you can take the boat from Besiktas and go to Uskudar in 5 mins
  • Kiyi: in Tarabya

Night life (these bars/clubs have restaurants too)

  • Reina on Bosphorus; one of the usual suspects. Not always the best crowd but spectacular view
  • Anjelique on Bosphorus; I like this one better than Reina
  • Nuteras in Taksim overseeing old town
  • Su Ada: If  you are in Istanbul in summer. It’s an artificial island in the middle of the sea with bars and restaurants and a pool.
  • 360 Istanbul in Taksim; 360 degree views of the city

SHOPPING

  • Galata neighbourhood in Taksim is the area that has many Turkish designer shops on Serdar-I Ekrem Street

While you’re here, visit Dogan Apartmani – a spectacular building of Italian architecture built in 1800s and Georges Hotel (a design boutique hotel) for drinks over views

Visit Asli Tunca’s luxury interior boutique which is located in the residence that is decorated with a modernized Ottoman style

  • Nisantasi

Beymen is a very popular high end department store

Haremlique for high quality bed and bath products

Yastik by Rifat Ozbek for hand woven pillows with Ikats and Suzani embroideries

Machka and Yargici are ladies’ favourite Turkish stores, you can find both in Nisantasi. You can have lunch in Delicatessen or Beymen Brasserie while you are here.

If you are into Turkish style decoration items, one store to visit is Pasabahce. There is another great store you should visit called HirefThis store is not in Nisantasi but in a shopping mall called Istinye Park.

Midnight Express is another favourite boutique of my wife carrying a good selection of Turkish and foreign designers.

Fey: A vintage boutique highly coveted by my wife

Modern Museums: Both are on Bosphorus and have great exhibitions all year round.

  • Istanbul Modern
  • Sabanci Museum

WHERE TO STAY

If you want to be close to the old city and museums, you should stay at Sultanahmet and Hotel Amira is the best place to stay here.

They are currently number one on TripAdvisor and they treat their guests like family.

Alternatively, depending on your budget you may like to stay in Kempsinki Ciragan Palace. It used to be an Ottoman Palace and is situated on the Bosphorus.

All the best from Singapore,
Sukru Haskan
Twitter: @sukru_haskan

UK: Prime Minister’s Questions

Prime Minister’s Questions is the weekly session where Prime Minister answers questions of the opposition leader and the other MP’s in the House of Common.

For those you that are not familiar with the UK parliamentary system, House of Commons is the parliament where members of the parliament meet each other.

David Cameron speaks during PMQs

Although prime ministers have answered questions in parliament for centuries, until the 1880s questions to the prime minister were treated the same as questions to other Ministers asked without notice.

In 1881 fixed time-limits for questions were introduced and questions to the prime minister were moved to the last slot of the day as a courtesy to the 72-year-old prime minister at the time, William Gladstone, so he could come to the Commons later in the day. In 1953, when Winston Churchill was prime minister, it was agreed that questions would be submitted on fixed days (Tuesdays and Thursdays.

It is the year of 1961 when the PMQs were made permanent. Since then there has been some tweaks in the format, and it continues in the current format.

I have been following the PMQ in the last four years and there are many funny moments that I laughed out loud.

I think it is a great way to understand British politics and it is also great way to flourish your language skills.

David Cameron is my real star when it comes to PMQ as his performance is always a stellar.

Some of my favourite conservations from PMQ:

#1 David Cameron: “…. which we wouldn’t have, if we would listen the muttering idiot sitting idiot opposite to me”
Speaker: “Prime Minister, please withdraw the word ‘Idiot” as it is unparliamentary…”

#2 David Cameron:  “I do feel now that a big part of my life is trying to give pleasure to Mrs… ” and then he continues “I feel on this occasion, I can only go so far.”

#3 David Cameron: “There is a complete mug …..” to Ed Miliband.

#4 David Cameron: “The gentleman sitting right opposite, enjoys the game, Bingo as it is only time that he’s got close to Number 10”

5# David Cameron: “…. You do not need to be knowing it’s Christmas, when you sitting next to a turkey.”

#6 David Cameron: ” In 43 days time, I am plan to arrange his retirement plan…”

Speaker : “Orderrrr, Orderrrr…”

I do not want to imagine what could happen if these conversations with the noise in the background, would take place in some other countries.

That’s the beauty of advanced democracy in a develop country. I strongly advise you watch PMQs if you haven’t been familiar yet.

All the best from Istanbul before heading back to Singapore,

Sukru Haskan
Twitter: @sukru_haskan

Handy Guide for Singapore

Singapore is the food capital of Asia and it has many good restaurants.

I have been asked many times by travellers to Singapore which restaurants/bars I recommend, so I thought it would be nice to post this week’s article on this subject.

There are, of course, many good restaurants in Singapore and these are only my TOP restaurants.

I hope this article will be your small handy guide for restaurants/bars in Singapore.

1- Akashi

IMG_7317

Akashi is a Japanese restaurant located under Orchard Parade Hotel.

If you are a sushi lover, I think they are one of the world’s best.

In contrast to the restaurant’s simple design, the food is sophisticated and delicious.

I would order ikura sushi, tako sushi, spider maki, reserve California roll, sliced beef and gyoza.

Akashi’s wine menu is rich. Wine lovers will like the variety of the choice.

Your bill will show value for money, unless you order a bottle of Dom Perignon or Petrus.

2- Jim Thompson

Jim Thompson is a Thai restaurant located near Dempsey Hill.

Dempsey Hill used to be military barracks: after soldiers left the area, they were converted into a restaurant neighbourhood.

Jim Thompson restaurant is located in an exotic traditional building.

Jim Thompson also has an interesting story. He was an American businessman who help to revitalise the Thai silk industry in the 1950s and 1960s. He disappeared during a trip to the Cameroon Highlands in Malaysia, and has been never found.

Initially, Thompson was in Thailand due to his duty as a CIA agent in the region. I would highly recommend that you visit his house in Bangkok, Thailand.

Coming back to food, I would order pattaya set for starter, pomelo or green mango salad, beef green curry, Thai style rib-eye steak and stir-fried morning glory.

I am not a big dessert fan, but you should try Thai coconut ice cream here.

Singha beer or one of their nice cocktails can complement your delicious food at Jim Thompson.

3- Blu Kouzina

This is a great, real Greek restaurant on Bukit Timah Road.

It is run by Greeks and the food is authentically very Greek, and delicious.

You can order anything that you would order in a Greek restaurant and enjoy it.

It is a bit pricey, but given that you do not have much choice in Greek food in Singapore, it is fortunate to have such a great restaurant.

4- Pasta Brava

Past Brava is an Italian restaurant established by an Italian gentleman in 1993.

It may sound absurd to go to an Italian restaurant when you travel all the way down to Singapore, but you won’t be disappointed.

The great variety of pastas, along with the rich wine menu, make it one of my top five restaurants in Singapore.

5- Chang Korean BBQ

Chang Korean BBQ is located at the heart of Dempsey Hill.

If you like meat and if you like to cook your own meal, it is a great place.

Every table has its own BBQ and you can sizzle your chosen dish your own way.

Indoor BBQs are fuelled by coal, while outdoors they run on gas. It is up to you which you choose.

Wagyu rib-eye and Wagyu galbi are a must to try!

Drinks:

The Lantern Bar, a rooftop bar at the Fullerton Bay Hotel, is a good choice if you like posh places. It has a perfect view of the Singapore marina and a great range of drinks.

Club Street is a street dedicated to bars and restaurants in Singapore. While there are a great many bars and restaurants on it, I would recommend La Terrazza Rooftop bar. It is a cosy, small, local rooftop bar.

It is important to mention that Singapore is all about Hawker Centres and you should try one of the Hawker Centres, according to its proximity to where you stay.

This week, I am travelling and I am sharing this post from my beloved London!

All the best from London.

Sukru Haskan
Twitter: @sukru_haskan

 

Are you passionate enough?

The Oxford dictionary defines the word passion as ‘strong and barely controllable emotion’ and passionate as ‘having, showing or caused by strong feelings or beliefs‘ .

What great definitions!

To succeed, be meaningful and happy, you need to be passionate about something.

Untitled-1

If you want to stay an average person, you may not bother at all, but then you will have a dull life.

I strongly believe that we are all living on this planet to change things.

Changing things is easier said than done.

You can be passionate about anything: a football team, your family, friends, food, business, travelling and so on.

But there has to be something in your life that you are really passionate about.

What are you passionate about? 

200309-omag-beck-passion-600x411

Going back to the Oxford dictionary definition of passion, it is a strong and barely controllable emotion.

It is really important that you can control it, but only barely. It should be such a strong feeling.

If it is not controllable, it is not your friend any more.

Making things worse, it is actually your enemy.

There is a very fine line between being passionate and obsessive.

The Oxford dictionary defines obsession as ‘an idea or thought that continually preoccupies or intrudes on a person’s mind’ and obsessive as ‘of the nature of an obsession’ .

When you are obsessed with something, you cannot control your emotion. In other words, you are not your own boss any more.

That feeling/emotion starts controlling you and can potentially destroy you.

From my experience, educated and self-confident people are more likely to control their emotions.

Emotions help them to succeed and be happy in their lives.

Someone with a high ego very likely means someone with less knowledge and less self-confidence who tries to overcome these problems by increasing their own self-importance.

When you hear ‘I am important’ type of statements from someone, just walk away…

I am personally very passionate about Besiktas (a Turkish football team), reading, travelling, technology and meeting new people.

I am passionate about Besiktas, not because Besiktas is a good sports club, but more importantly because it has a unique type of supporter who is quite sensitive to domestic and global issues. Besiktas is a very good platform for good companionship, to channel your knowledge and, if necessary, help those who need them.

I am passionate about reading; as I read more, I develop my thinking, how I see the world, what has shaped the world and the people. More importantly, each book makes me so curious that I want to jump into any different book.

To give you an example, last year I read The World Order by Henry Kissinger, which made me read Hillary Clinton’s recent book, Hard Choices. After reading Hillary Clinton’s book, I wanted to learn more about the Saudis and it made me read Inside the Kingdom by Robert Lacey.

I am passionate about travelling because the more I travel, the more I understand people with different backgrounds. So far, I have been to only 51 countries and knowing there are many more to go keeps me very motivated. In addition, I know that even if I visit every single country one day, I will need to go to those countries again.

Why? Nothing stands still and I have to be updated!

I am passionate about people because everybody has a unique life story. I am quite privileged to work in the banking profession as it is part of my job to meet new people, understand them and bring unique solutions to each of them.

Am I obsessed with something?

I hope I am not. People who know me should answer this rather than me.

If you cannot find something that you are passionate about in your life, you should start searching for it.

If you can connect your passion with your job, success is inevitable, then! Instead of looking for a living or an extra earning, do not sell your passion for temporary means!

It should wake you up early, always have that in mind and get excited and think positively about the future.

More importantly, it should help you to be meaningful and happy in our limited time on this planet!

All the best from Singapore.

Sukru Haskan
Twitter: @sukru_haskan

 

A Decade Away from Istanbul

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

DSC03071

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

Hike the Interest Rate, Please!

101940203-janet-yellen.530x298

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

Tell me your CODE HALOS!

Soci_01

The world is changing rapidly and we have been living two types of lives for some time now; physical and digital.

Our physical lives are simple and also complicated. Simple because we follow our basic needs and wants such as sleeping and drinking. These are our instincts. Complicated because we interact with many individuals during our lives and we have motivations, emotions and egos.

Our digital lives are complicated and also simple. Complicated because it is new and many of us are not really aware of it. Simple because everything is accessible, trackable and fast.

Our digital lives are becoming important as they start overcoming our physical lives and this transformation has a huge impact not only on human beings but also on the corporate world.

What are your Code Halos?

In our digital lives like our physical lives, we are leaving traces behind us.

These traces in the digital world are our CODE HALOS! It is the meaningful version of BIG DATA!

Since human brain is programmed to forget, we simply forget things but computers DO NOT!

So Code Halos are our digital lives’ track record that is analyzed and made ready for us to make our lives easier.

Nowadays Code Halos are being used by many companies such as Amazon, Google and Facebook. It is the DNA of what you like, who you like and what inspires you.

Thanks to Google Analytics, even I am tracking your behavior on this blog…. e.g: How many minutes you spend on each page, which countries and cities you are from, your keyboard default language, etc.

This valuable information will determine my future articles to get more traction from you.

Whilst these are all happening at full throttle, there are people resisting change.

So what will happen to those status quo keepers? 

  1. If it is a person, they will be unemployed.
    Just like what happened to blue collars in late 1900s, digital world will get many people out of the workforce. The difference is; it will hit white collar employees this time. 
  2. If it is a company, it will simply not survive.
    Companies that are not building their own clients’ code halos are losing out today. Just like Kodak, Nokia or CompuServe did…

Like anything, Code Halos also bring its own challenges. Recently Ashley Madison clients’ data has been stolen and very private information is now public and most recently a HIV clinic in the UK released its list of their patients by mistake. Data safety and using it for genuine purposes is crucial.

As a banker, I am aware that banking will also change completely. It has already started with retail banking initially and it will follow with other segments of banking slowly.

There will be no need for physical branches. This will create huge opportunities for every bank and internet companies that are allowed to collect deposit/give loans to compete in geographically large countries such as India, Australia and Russia.

Alibaba has started collecting deposits in China and Apple has introduced Apple Pay to facilitate payments. You do not really have to be genius to predict that these companies may kick some banks and financial intermediaries like Visa and Mastercard out of the game in the coming years.

We all have revenue production pressures and results do not always come very quickly. Patience and willingness to adapt will be the key factors that will determine if traditional banks and financial intermediaries will stay in this game.

18698133

Book recommendation: This article is largely inspired after reading the book, Code Halos written by Malcolm Frank, Paul Roehrig and Ben Pring.

Best from Singapore,
Sukru Haskan
Twitter: @sukru_haskan

Women in work force MATTER!

professional-women

We absolutely need more women in the labour participation…

It is not only because of diversity benefits but also for economical growth of the nation and raising well-rounded children.

Diversity benefits of increasing women in the labour participation is well known and well discussed. I would like to focus more on the economical benefits and its positive effects on the children development.

women-economic-index

Let’s begin with analyzing where women are given economic opportunities.

It is not a big surprise that Scandinavian countries are giving more opportunities to women so that they are top of the list above. It is not also a surprise that Middle Eastern and African countries are well at the bottom.

France and Britain are lagging behind many developed countries but they are showing good progress.

According to an article published in Financial Times this week, after years of lagging, Britain and France has almost caught up in terms of female participation in the labour force, with 54% of working age women in employment with 43% in 1990.

20150822_AMC954

Coincidentally The Economist published a piece on “Society in Latin America” and there is a graph above published in the article which is showing the progress on the women labour force participation along with women CEOs of the public listed companies and women in the parliament.

There is definitely a progress on the women labour participation except East Asia & the Pacific. We see the huge jump in Latin America which is encouraging as these countries are developing countries and this jump is necessary for them to catch up with the developed world.

Even though there is a progress in Middle East, it is not enough at all…

Number of women in the workforce strongly influences women’s parliamentary representation as illustrated in the same graph.

As Rae Blumberg concluded in her paper ‘A General Theory of Gender Satisfaction‘ in 1984, economic power in the form visibility in the professional world is an important variable in women’s status and access to political power. There is no wonder why women in the Latin America & Europe held the most seats compared to rest of their peers.

In other words, being active in work force makes females more visible in the political arena as well.

Another study by Daniel Stockemer and Maeve Byrne in 2011 shows that Jordan has the lowest participation in the workforce (only 13.6% than that of men.) Same paper concludes every 10 points women narrow the gap in how much they contribute to a country’s GDP per capita, women’s representation increases by 2 percentage points. Given that on a world average, women only contribute approximately half than men to countries’ GDP per capita, increases in women’s labour force participation can have a strong positive impact on further development.

The Economist mentioned in its article that if the gap in the participation rate between men and women were closed, Latin America’s GDP per person would be 16% higher, estimate David Cuberes of Clark University in Massachusetts and Marc Teignier of the University of Barcelona.

Another interesting point is that; woman increased employment earnings provide her with greater bargaining power within her household which leads to greater savings and economic growth.

Moreover, there is an inverse correlation between women in the parliament and increase in corruption.

More importantly, a study data from rural China by Phil Brown (2006) concluded that the education of mothers – compared to that of fathers – has a higher effect on the investment on the education for their children.

I do not have much empirical evidence to prove this point but I believe this is the most important point and it is valid world wide rather than only in rural China.

Education of a child is being influenced by their mother rather than the father and the messages conveyed from the mother is the key for raising well-rounded children.

An article by Claire Cain Miller published last May in New York Times mentions that 69 studies over 50 years found that in general, children whose mothers worked when they were young had no major learning, behavior or social problems, and tended to be high achievers in school and have less depression and anxiety.

Conclusion is very clear; we need more mothers in the labour force to have successful, happy, mentally healthy and richer generations ahead.

Best from Singapore,
Sukru Haskan
Twitter: @sukru_haskan

China: What’s next?

david-sapsted-08-d2-2015-chinas-one-off-devaluation-is-quickly-followed-by-another_5069_t12

It is all started when China had released its exports numbers on August, 7th.

Chinese exports were tumbled by 8.3% in July and China was registering its worst export decline in the last four months.

Most importantly, the market was not expecting these figures to be that bad!

Along with the release of the figures, Chinese central bank (People’s Bank of China) published a report warning of further economic weakness.

The following week, People’s Bank of China shocked the market by changing the way the yuan’s trading band is calculated. This led to 1.9% depreciation in the first day (August, 11th).

When yuan opened down a further 1.6% on Wednesday (August, 12th) and then rose 1% at the end of the same day trading. Another fall in the following day’s opening was quickly intervened by People’s Bank of China. (August, 13th)

The week between August, 10th and August, 17th, the global markets had shaken up substantially all across the board.

European equity markets were almost down 5%, commodities had fallen through the roof and volatility picked up dramatically.

image1

History repeats itself?: On 1 January 1994, China announced a reformed system of foreign exchange and devalued yuan to 8.7 to the dollar. This move had happened after a series of six devaluations over ten years and by 1993, the yuan was trading 5.32 to the dollar.

As a result of this action, U.S labelled China as a “currency manipulator.”

So Why China is doing this again? 

  • China has an ambition to include the yuan in the select group of currencies that IMF uses to calculate the SDR, its unit of account. Inclusion to basket of SDR means yuan to become a global reserve currency. To achieve this, China needs to allow free float of its currency and by allowing market makers to submit prices for the reference rate based on the previous day’s closing spot rate is one way.
    – By the way, IMF “cautiously” welcomed this move!
  • More importantly, strong yuan makes Chinese goods less competitive!It is not a secret that China will not grow over 7% from now on and its export oriented economy becomes less competitive with strong yuan.
    In fact, the recent IMF report forecasts 6.8% GDP growth in 2015 and 6.3% in 2016.

The real question to ask is whether China would allow depreciation of their currency if its GDP growth would not falter and export growth was in place.

sg2015081958979

What shall we expect going forward? 

I expect a lot more of volatility ahead for all markets for the rest of the year.

According to the Economist, the devaluation only undid the previous ten days’ worth of appreciation in trade-weighted terms. The yuan remains more than 10% stronger against the currencies of China’s trading partners than it was a year ago.

It is very likely that we will see a continuation of gradual depreciation of yuan which is unlikely to help the slowing Chinese GDP and its exports.

The spill over effect has already felt quite substantially on commodity prices along with commodity export oriented economies such as Australia and Indonesia. This pressure is very likely to remain for the rest of the year.

As many economists call it as a “currency war”, we will continue to see “at all time lows or highs” in many pairs.

A very possible FED interest hike in September will make things even more complicated.

Finally, I believe yuan will be added to basket of SDR in a relatively short period of time. Otherwise IMF may become irrelevant.

Book recommendation: The author of Currency Wars and Death Of Money, James Rickards, has been talking about the ongoing play for sometime now. Some quotes from his book “Currency Wars” are as per below.

“The U.S view that everyone -Europe, North America and Latin America -would gain exports and growth if China revalued the yuan and increased domestic consumption.” 

“The stimulus spending would increase the deficit and waste valuable resources, but not do much else.”

“As of April 2011, the FED had a net worth of approximately $60 billion and assets approaching $3 trillion. If the FED’s assets declined in value by 2 percent, a fairly small event in the volatile markets, the 2 percent decline applied to $3 trillion in assets produces a $60 billion loss – enough to wipe out FED’s capital. The FED would then be insolvent. Could this happen? It has happened already, but the FED does not report it because it is not required to revalue its assets to market value.”

“From its creation in 1913, the most important FED mandate has been to maintain the purchasing power of the dollar; however, since 1913 the dollar has lost over 95 percent of its value.” 

images

Best from Singapore,
Sukru Haskan
Twitter: @sukru_haskan