The ticking outflow time bomb for Turkey

November 21st, 2008 · No Comments Email This Post Print This Post
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Finance

by Taylan Bilgiç

The ticking outflow time bomb for TurkeyDiminishing global risk appetite bodes ill for developing nations, which, in varying degrees, are dependent on foreign capital inflows to stay afloat. Turkey, like its peers, is also worried foreign investment might dry up, but the latest data and research suggest that might be the least of our problems.

The Organization of Economic Cooperation and Development, or OECD, says the “outlook for foreign direct investment, or FDI, has darkened,” in its latest “Investment News” newsletter. Based on current trends, inflows will be down 13 percent and outflows by 6 percent in member countries.

There are two reasons for this decline. First, the OECD says, “the freezing of credit markets … have forced companies to rely largely on cash reserves to finance investment. “Many firms are facing severe internal liquidity constraints,” says the Paris-based organization. “Second, with global growth forecast for 2009 at 2.2 percent … the need for companies to invest in new capacity is considerably reduced.”

The data suggests Turkey might have much more to fear than just dried-up foreign inflows. In 1999, FDI inflows to developing countries constituted 87 percent of all foreign capital flows, World Bank data show. In contrast, portfolio flows - indirect investment that is relatively quicker to get in and out of countries - accounted for 5 percent. Total inflows that year stood at $204 billion, which means FDI flows stood at $177.5 billion, while portfolio flows were a mere $10.2 billion.

Upturned balance
The “golden years of globalization,” in which capital moved more freely than ever, deeply changed this balance. In 2007, portfolio flows rose to 14 percent while FDI flows shrunk to 46 percent. The overall figure, meanwhile, rose to a staggering $1,025 billion. This means developing countries received portfolio inflows of $143.5 billion last year.

As the global crisis unfolds, most of this money is moving back, largely seeking sanctuary in the greenback or U.S. Treasury bonds. But, according to Royal Bank of Scotland estimates - outlined in a note to investors by RBS analyst Timothy Ash - Turkey still has “upwards of $70 billion in foreign portfolio funds invested, which could potentially add to the external financing gap if the situation deteriorates quickly.”

And the situation does not seem bright. In the last three months to November, total foreign capital outflows from Turkey reached $16.5 billion, according to estimates by Fortis, outlined in the “Glokal Stratejist” newsletter. That amount includes $6.7 billion in “traditional investment instruments” such as bonds, equities or deposits, while short-term, “hot money” positions were unwound to the amount of $9.8 billion. The total amount of portfolio outflows stood at $5.4 billion just in October, and Fortis says this is “the biggest amount for one month in history.”

To put it simply, the question for Turkey is not how much foreign capital it will receive over the next period, but how much foreign capital it will be able to hold. The reluctance of the Central Bank to reduce its overnight borrowing rate - at 16.75 percent - or the silent devaluation of the national currency, seem all tied to this central problem. Thus, ironically, the billions of dollars Turkey has managed to attract in the past six years have become time-bombs now.

The possibility of a sudden outflow is why foreign analysts put he figure for Turkey’s external financing need at as high as $120 billion. In a worst-case scenario, such an amount may be barely enough to offset the outflow.

In light of this, the ‘negative outlook’ given by S&P to Turkey last week might be a first step in “pricing the Turkish risk” for foreigners. Thus, the pressure on the government to make an extensive deal with the International Monetary Fund increases.

20 Kasım 2008

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1 person out of 11 goes hungry in N.J.

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http://www.nj.com/news/ledger/index.ssf?/base/news-
14/122715831025100.xml&coll=1#

continue

U.S. figures include more than 764,000 here
Thursday, November 20, 2008
BY JUDY PEET
Star-Ledger Staff
Even in one of the wealthiest states in America, one of every 11 New
Jerseyans goes to bed without enough to eat, according to a report
released yesterday by the Food Research and Action Center in
Washington, D.C.

Nationwide, the number of Americans struggling against hunger rose to
36.2 million in 2007, up by more than 3 million since 2000, according
to the center’s State of the States report on poverty and food
insecurity issues. The number of people in the worst-off category –
the hungriest — rose by 40 percent since 2000, to nearly 12 million
people.

“The nation’s economic crisis brings with it rising rates of hunger.
However, we also have an excellent opportunity to resolutely address
the hunger problem with a new president and a new Congress,” said Jim
Weill, president of the FRAC, a national nonprofit policy
organization.

The report, based on United States Department of Agriculture figures,
analyzed poverty, hunger and access to federal nutrition programs by
state. Among its findings:

* The 36.2 million hungry people in the U.S. include 23.8 million
adults and 12.4 million children.

* Black (22.2 percent) and Hispanic (20.1 percent) households
experienced hunger at far higher rates than the national average.

* The five states with the highest rates of hunger were Mississippi,
New Mexico, Texas, Arkansas and Maine.

New Jersey has one of the lowest poverty rates in the nation, and the
hunger rate here is 8.8. percent, nearly half that of Mississippi.
Yet even here, more than 764,000 people go hungry, and New Jersey has
one of the lowest participation rates in both free school breakfast
and food stamp programs of any state, the report said.

The state ranked in the bottom 10 for food stamp participation, with
less than 60 percent of those eligible actually receiving assistance.
It ranked in the bottom six with a 65 percent participation rate for
free and reduced-price school breakfasts.

Discouraging as the figures are, they were based on 2007 federal
statistics. Hunger experts in New Jersey, and across the country,
predict that 2008 will be even more dismal.

“Emergency pantries are reporting a 30 percent increase in the
numbers of people seeking food assistance (this year), compared with
2007 numbers,” said Meara Nigro at Community FoodBank in Hillside,
the state’s largest food bank. “Clearly the level of hunger resulting
from this economic crisis is bigger than charities alone can handle.”

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LECTURE- Rebiya Kadeer, Human Rights in Xinjiang, MSU, East Lansing, Nov. 20

November 20th, 2008 · No Comments Email This Post Print This Post
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Talk Announcement:

Human Rights in Xinjiang and the Plight of Uyghurs

A talk by Rebiya Kadeer, president of the World Uyghur Congress and a
Nobel Peace Prize candidate

Time: 3:30 pm
Date: Thursday, November 20, 2008
Place: 201 International Center
Michigan State University

East Lansing, Michigan

Sponsored by the Michigan State University (MSU)
Center for European, Russian and Eurasian Studies
and the Muslim Studies Program

For more information contact:
Timur Kocaoglu, office phone: 517-884-2169
E-mail: timur@msu.edu

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The Sarah Palin affair: World should breathe a sigh of relief

November 19th, 2008 · No Comments Email This Post Print This Post
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By Ferruh Demirmen 

Anyone who thought that the U.S. 2008 Republican National Convention held in Saint Paul, Minnesota last September would be a dull event, got a big jolt of surprise when the Republican Vice-Presidential candidate Sarah Palin walked onto the stage and delivered a rousing speech to a frenzied crowd. With gusto, a shrilly voice and an ever-present smile, amid catch phrases such as pit bull, lipstick, and hockey mom, she charmed and galvanized the Republican base – who had hardly heard of her, let alone know her. 

It was the start of a political soap opera that lasted until the elections on November 4. It was quite entertaining to watch. 

But beneath it all, lay the frightening possibility that this newly discovered political cheer leader, coming from nowhere, as it were, could one day be the President the United States, in effect the leader of the free world.  After all, the Presidential candidate Senator John McCain was 72 years old, and if he won the race and died or became incapacitated while in office, Palin was next in line to assume the presidency. 

The fact that the elections, as they turned out, removed the possibility of Palin becoming the President, is something the world should feel very relieved about. 

Who was Sarah Palin? A 45-year old governor of Alaska (population 670,000), ex-mayor of Wasilla (pop. 6,700), one-time runner-up for Miss Alaska, nicknamed “Sarah Barracuda,” with 5 children, married to a husband she calls “First Dude,” an ultra- conservative Republican, in fact an evangelist, and a shopaholic with a keen eye for expensive clothes and jewelry she could not afford. She was a moose hunter and a lifetime member of NRA (National Rifle Association). 

She talked lavishly of love of country and family values (never mind that her unmarried teenage daughter was 5 months pregnant), who had put her life in “God’s hand,” called Iraq war “God’s plan,” the Alaska gas pipeline “God’s will,” and the eventuality of her moving to a higher office “God’s calling.” 

All this foreshadowed the possibility that another anti-science, anti-progress, anti-environment president with a faith-based agenda could soon occupy the White House. It would be quite a trip from igloo to White House. 

Amid slogans “Drill baby, drill,” she talked of “energy independence” ad nauseam as though she is the all-time visionary on energy. A compulsive talker, she had a habit of giving long-winded, often irrelevant answers to questions from the media. When things did not go her way, she blamed the media, and post-election, called McCain aides “jerks.” 

What was most striking about her utterances were that they contained lots of sound bites but little substance. 

Such idiosyncrasies are not too unusual for politicians, even for those running for high office. Politicians do not always come from the cream of the crowd. But there was something uniquely special about Governor Palin: She had no foreign policy experience, and this did not seem to bother her.  Her scant knowledge of the world made President George W. Bush look like a guru in international relations. 

Palin was utterly unprepared to be Vice President, let alone President. She had never met a head of state, and she barely left her native Alaska. First time she got a passport was in 2007 when she visited US troops (Alaskan National Guard) in Kuwait and Germany. Her spokesperson said that she also visited Ireland. It was later discovered that the Ireland “trip” was a short refueling stop at the Shannon airport on return from Germany. 

To boost her foreign policy credentials, Palin cited Alaska’s proximity to Canada and Russia. During a televised interview on CBS, she told a bewildered Katie Couric: “We have trade missions back and forth. We — we do — it’s very important when you consider even national security issues with Russia as Putin rears his head and comes into the air space of the United States of America, where — where do they go? It’s Alaska. It’s just right over the border.” 

It was a shocking performannce.

To repair the damage, McCain’s staff gave her crash courses on foreign affairs and arranged a whirlwind tour of New York City and the UN to meet Henry Kissinger and a few world leaders. There were plenty of photo-ops. Incredulously, Kissinger endorsed her candidacy for the VP position. But her image did not recover.

Lawrence Eagleburger, an ex-Secretary of State who strongly endorsed McCain’s candidacy, when asked during a radio interview whether Palin was prepared to assume presidency, his spontaneous response was: “Of course not.” It was a frank and bleak assessment. Realizing that he was talking about McCain’s running mate, Eagleburger subsequently qualified his assessment.

Rumors, which she denied, circulated toward the end of the campaign that Palin thought Africa was a country, not a continent. Someone suggested jokingly that she move to southern France so she can gaze southward and learn about Africa.

In every humor there is an element of truth.

Only McCain, a maverick himself, knows why, after meeting her only once, chose Palin as his Vice-Presidential mate. One would think that picking a VP running mate would require thorough vetting. Evidently what he though he needed was a cheer leader. McCain never admitted that he had made a big mistake. 

Now that the presidential race is over, the world can breathe a sigh of relief that Sarah Palin will not be one heartbeat away from the presidency. The consequences of a wayward or dangerous U.S. foreign policy and its impact on world peace under her leadership, if it were to be, are discomforting to imagine. Considering her huge ego and high ambition, of course, Palin may return to the national stage in 2012 with a vengeance. Still, that is four years from now, and a lot can happen during that time. 

But imagine for a moment, if the McCain-Palin ticket had won and by some accident Palin had moved to the White House in 2010, the following tete-a-tete conversation on world affairs taking place between Palin-the-President and Vladimir Putin, by that time the president of Russia again: 

Putin: “Madam President, we in Russia took matters very seriously when two years ago the U.S. encouraged Georgia to send military troops to …” 

Palin, interrupting: “No, Mr. President, Georgia would never do that. O.K., Georgia fought in our Civil War, hmm, in 18 …, well, whatever …, but that is all over now. Georgia now is a very peace-loving state in our great nation. I have never visited Georgia, but I know they grow delicious peaches there, and my First Dude and I sometimes have peach pie a-la-mode after moose chili. Also, …” 

Putin, interrupting: “Madam President, when I said Georgia, I meant The Caucuses.” 

Palin: “Well, of course, caucuses. We have no problem with caucuses. When the Republican Iowa caucuses were held in January 2008, you know I was not included in the selection process, but, like, God wanted me to serve my country and asked me to plow through the campaign, and … God knows, we never wanted to make trouble for Russia, you are our neighbor to our great state of Alaska.” 

Putin: “Madam President, I was also going to raise our concern about the missile issue, but…” 

Palin, interrupting, with a big smile: “Let’s talk about missiles, I mean, auw, mistletoes, at Christmas.” 

ferruh@demirmen.com

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Azerbaijan to join 1st Conference of Parliamentary Assembly of Turkic-speaking countries

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Baku. Elnur Mammadli–APA. Delegation of Azerbaijani Parliament will leave for Turkey on Thursday to participate at the 1st Conference of the Parliamentary Assembly of Turkic-speaking countries. The Azerbaijani delegation will be headed by Speaker Ogtay Asadov, Spokesman for the Parliament Akif Nasirov told journalists, APA reports. The conference will take place on November 20-22. Delegations of Azerbaijani, Turkish, Kazakhstan and Kyrgyzstan parliaments will sign agreement to found Parliamentary Assembly of the Turkic-speaking countries.

http://en.apa.az/news.php?id=92258

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8000 years in 48 hours..1 mad weekend in Istanbul

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“Welcome, my friends, welcome to Istanbul!”

These were the first words that I heard as I lugged my overstuffed holdall through Sabiha Gokcen airport (taking full advantage of Easy Jet´s “no weight limit on hand luggage” policy) and was loaded into the waiting minibus that would take us to Istanbul. The third largest city in the world, Istanbul is spread over two continents and as we clung onto our safety belt free seats we gazed out on a thoroughly modern looking Asia (the airport itself is named after the first female combat pilot in the world, and Turkeys first female aviator - a sure sign of a nation looking firmly forward).

Crossing the massive expansion bridge that links Asia to Europe across the mighty Bosphorous River we watched in awe as the streets became smaller and more maze like, the crowds denser and the buildings that clung precariously to the sloping cobbled roads older and more colourful.

American Chronicle | 8000 years in 48 hours..1 mad weekend in Istanbul.

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Poor Richard’s Report

November 19th, 2008 · No Comments Email This Post Print This Post
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Strategic Forecasting logo  

Middle East: How the Region Views the SOFA

Iraqi Foreign Minister Hoshiyar Zebari at signing of U.S.-Iraqi security pact
Iraqi Foreign Minister Hoshyar Zebari (3rd-R) shaking hands with U.S. Ambassador to Iraq Ryan Crocker (2nd-R) at the Nov. 17 signing of the SOFA
Summary

The Status of Forces Agreement signed by the United States and Iraq on Nov. 17 still has a few hurdles to surmount, but it has a good chance of being ratified by Iraq’s parliament. In all likelihood, most if not all U.S. forces will be out of Iraq by the end of 2011. As this inevitability sinks in, the main regional players — Israel, Saudi Arabia, Turkey and Syria — are already starting to envision and prepare for a new reality in the region.

Analysis

So far it has been a productive week in Baghdad after months of political stagnation. On Nov. 18, a date was set (Jan. 31, 2009) for provincial elections. The day before, the Iraqi Cabinet approved the Status of Forces Agreement (SOFA) between the United States and Iraq, setting a hard deadline for U.S. forces to withdraw from Iraq by the end of 2011. The agreement is now on its way to the Iraqi parliament, where a vote will be held Nov. 24 for final ratification.

The SOFA breakthrough did not come about spontaneously. Iran’s informal endorsement of the deal on Nov. 17 was a signal that a behind-the-scenes diplomatic exchange had likely occurred in which Iran was given sufficient security guarantees to sign off on the agreement and use its influence over Iraq’s main Shiite parties to see the SOFA through parliament. Iran knew it wasn’t about to get its wish of having U.S. forces immediately withdraw from Iraq and leave the door open for Tehran to fill the power vacuum in Baghdad. If an agreement was going to be signed setting a deadline for withdrawing U.S. forces from Iraq, Iran had to do everything in its power to di ctate the terms.

All in all, Iran came out with a decent deal. Iran leaned heavily on its political allies in Baghdad to drive a hard bargain on the SOFA until they came out with an agreement that substantially circumscribed U.S. military power in Iraq. The revised draft of the SOFA not only sets a hard deadline for the complete withdrawal of U.S. troops by the end of 2011, it also bans cross-border att