World

Can market veteran Simsek pull Turkey’s economy back from brink?

Published

2 years ago

June 4, 2023

Can market veteran Simsek pull Turkey’s economy back from brink?

Mehmet Simsek, a former Turkish finance chief popular among foreign investors, has taken the helm of the economy again, signalling a return to more orthodox economic policies.

The United Kingdom-educated Simsek, a former strategist at London-based Merrill Lynch, was appointed treasury and finance minister on Saturday as Turkish President Recep Tayyip Erdogan announced his new cabinet after winning the May 28 presidential run-off that extended his rule for five more years and into a third decade.

Turkey is in the midst of a cost-of-living crisis stemming from soaring inflation, which peaked at 85.5 percent in October compared with a year ago before easing to 43.7 percent in April with a favourable base effect.

Analysts largely blame the crisis on Erdogan’s unorthodox economic strategy of low interest rates and credit expansion with increasing state control on financial markets that the government says it pursued to push investments, production, exports and growth.

The Turkish lira has lost some 150 percent of its value in the last two years as the country’s $900bn economy came under immense pressure amid depleted foreign reserves, a swiftly increasing current account deficit, and a snowballing state-backed scheme of lira deposits protected against the currency’s depreciation.

The lira lost about 23 percent of its value since the beginning of this year and stood at a record low of nearly 21 against the United States dollar on Sunday.

‘Transparency, consistency, predictability’

Simsek, 56, who was finance minister between 2009 and 2015 and then deputy prime minister until July 2018, is a market-friendly figure known to foreign investors as an advocate of conventional economic policies, transparency and an independent central bank.

He said during a handover ceremony on Sunday that the country “has no other choice than to return to a rational ground” and that a “rules-based, predictable Turkish economy will be the key to achieving the desired prosperity”.

“Transparency, consistency, predictability and compliance with international norms will be our basic principles in achieving this goal,” he said, adding that among the main targets was “establishing fiscal discipline and ensuring price stability for sustainable high growth”.

Seref Oguz, a senior economist and columnist, said the negotiations between Simsek and Erdogan for the position took a long time because the former wanted to secure his conditions before accepting.

“Simsek put forward three conditions to get on board with the position,” Oguz told Al Jazeera.

The first condition, according to Oguz, was the authority to make his own decisions. The second was to be able to design the country’s economy teams, and the third was for him to be given adequate time to fix the economy’s problems.

Local and international media started reporting about talks over Simsek’s possible reappointment before the first round of the presidential elections on May 14.

After none of the candidates failed to secure more than 50 percent of votes for an outright victory, media close to the government intensified its reporting on a likely nod for Simsek provided Erdogan remained in power.

Addressing his supporters after his election victory on May 28, Erdogan said that he would have “internationally reputed finance management”, in an apparent reference to his former minister.

Hence, foreign investors already knew that Simsek’s appointment was highly probable before Saturday’s announcement.

Erdogan named Cevdet Yilmaz – another cabinet member who backs orthodox economic policies – as Turkey’s vice president.

Simsek said on Sunday that the government’s main purpose is to increase social welfare in Turkey.

Tackling inflation

Ceyhun Elgin, a professor of economics at Istanbul’s Bogazici University, said Simsek is expected to pursue a monetary policy aiming for low inflation rather than credit expansion and growth.

“This means there will be higher policy interest rates to fight inflation,” he told Al Jazeera.

Elgin added that the new minister would not abolish the lira deposits scheme protected against foreign currencies amid depleted foreign currency reserves, but that he might do so “after Turkey’s foreign reserves reach a certain level with the influence of increasing interest rates”.

The indirect state controls on the lira’s exchange rate against foreign reserve currencies are expected to be gradually lifted, Elgin said, leading to controlled depreciation of Turkey’s currency.

Erdogan is known for his belief that high interest rates are the cause of high inflation, not the cure for it.

“Interest and inflation are directly proportional. Interest is the cause, inflation is the effect. There may be people who do not believe this, but this is what I believe,” the president said earlier this year.

Simsek said that it was vital for Turkey “to reduce inflation to single digits again in the medium term … and to speed up the structural transformation which will reduce the current account deficit”.

Turkey’s central bank, the independence of which is seen to have eroded over time, has cut its policy rate to 8.5 percent from 19 percent since late 2021 because of Erdogan’s economic views.

The lira deposit scheme protected against the currency’s depreciation was launched in 2021 in an attempt to keep the lira valuable. It now holds the equivalent of about $125bn.

Erdogan has also followed a policy of credit expansion, at times utilising public banks to provide loans with extremely low borrowing costs, which skyrocketed purchases of properties and cars among other consumption in the last few years.

Oguz said Simsek’s name and appointment are important for Turkey to attract foreign investment, but that investors will want to see the autonomy and authority of the new finance chief.

“Therefore, the first 100 days of Simsek are crucial, in which we will see what authorities he will be able to use, and how he will oversee or change the economy-related positions, including the chief of the central bank,” Oguz said.

He added: “The investors will, in particular, watch the actions that will be taken on the interest rates and lira’s exchange rate, which was kept valuable up until now, but is slowly being released to depreciate against the dollar.”

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World

Consejos para disfrutar de las celebraciones de fin de año, sin estrés

Published

7 hours ago

December 25, 2024

Press Room

Consejos para disfrutar de las celebraciones de fin de año, sin estrés

NUEVA YORK (AP) — Todos conocemos los factores de estrés: obligaciones sociales, rencillas familiares, divisiones políticas, estrés financiero y el deseo de mantenerse alegre y generoso todo el tiempo.

Así que aquí va un recordatorio sobre cómo desterrar a tu perfeccionista interior y disfrutar verdaderamente de la temporada festiva:

“Realmente ayuda dejar de lado algunos de los ‘deberías’”, dice Lynn F. Bufka, jefa de práctica de la Asociación Estadounidense de Psicología. “Decide cuál es la cosa que más importa, y las cosas que te brindan más alegría, y suelta las demás”.

Las tradiciones pueden cambiar y evolucionar, y cuanto más flexibles sean las cosas, más fácil será para todos, dice Bufka.

“Concentra tu energía en crear un espacio cálido para que las personas que amas se reúnan y relajen, se pongan al día y celebren unos a otros. Eso es literalmente todo lo que importa”, concuerda Lauren Iannotti, editora en jefe de Real Simple.

Algunos consejos:

Concéntrate en lo que te hace feliz

Podrías decidir que la conversación es tu objetivo principal y no preocuparte en absoluto por la decoración, dice Bufka. O si la decoración de la mesa es lo que amas, invierte tu energía allí y no te preocupes tanto por otros aspectos.

“Idealmente, debería tratarse de enfocarse en el amor, y eso no significa lo mismo para todos”, dice Bufka.

Permite que otros hagan las cosas por ti.

“La gente quiere ayudar, ¡déjalos!”, dice Iannotti. “Si no te ENCANTA cocinar todas esas guarniciones, o tienes poco tiempo, no hay ninguna vergüenza en aceptar que tu hermana haga el relleno. O busca ayuda de los profesionales: apoya a un restaurante local haciendo un pedido de catering”.

Otra opción es que “cada uno traiga un plato distintivo”, dice Ianotti. “Ahorrarás tiempo y dinero en la preparación y la cocina y tus invitados podrán mostrar sus habilidades”.

Darte permiso para tomar atajos

“Está bien si la casa está un poco desordenada o si la cena se sirve unos minutos tarde”, dice Iannotti. “Si las personas que has invitado están más interesadas en evaluar tu desempeño que en pasar un buen rato, pueden discutirlo con su terapeuta”. (Por cierto, no lo están, añade ella).

Y no dudes en dejar que la gente se sirva por sí misma, cuando sea posible. “Si no tienes tiempo para jugar a ser el barman, crea una bebida insignia con anticipación que puedas servir a todos tus invitados. También puedes simplemente dejar algunos mezcladores para que los invitados se sirvan y hagan sus propias creaciones”, sugiere Caroline Utz, directora editorial y de estrategia en The Spruce.

Está bien tener tiempo a solas

Las cosas funcionarán lo suficientemente bien si no lo supervisas todo, así que cuídate. Tómate pausas o caminatas si eso te ayuda a mantenerte centrado.

“Aunque el mindfulness se está convirtiendo en un término demasiado utilizado en la sociedad actual, hay algo valioso que podemos tomar de esto y aplicar a la temporada de fin de año”, dice Brook Choulet, psiquiatra deportiva y de rendimiento de concierge y fundadora de Choulet Performance Psychiatry.

Ella recomienda “programar microdescansos intencionales” para hacer algo que disfrutes.

“Por ejemplo, podrías programar una llamada telefónica con un amigo de otro estado, tomar un paseo de 15 minutos al aire libre, o incluso ajustar el temporizador y tomar un baño de 15 minutos sin interrupciones”, dijo.

Espera algo de discordia y no te alarmes por ello

“Si te preocupa la polarización y entrar en conversaciones incómodas, intenta pensar en maneras en que puedas terminar una conversación o cambiarla de dirección”, dice Bufka.

Ella recomienda preparar algunas frases de antemano para ayudar a terminar la conversación o cambiarla de dirección.

En resumen, tener la intención de una temporada festiva menos perfecta puede ser justo lo que necesitas.

___

Katherine Roth cubre temas de vida y estilo y otros temas para The Associated Press desde Nueva York.

___

Esta historia fue traducida del inglés por un editor de AP con la ayuda de una herramienta de inteligencia artificial generativa.

World

Azerbaijan Airlines plane headed to Russia crashes hundreds of miles off course, dozens feared dead

Published

7 hours ago

December 25, 2024

Press Room

Azerbaijan Airlines plane headed to Russia crashes hundreds of miles off course, dozens feared dead

Dozens of passengers are feared dead after an Azerbaijan Airlines flight crashed near the city of Aktau in Kazakhstan on Wednesday, reports say.

The Embraer 190 passenger jet flying from Azerbaijan to Russia had 62 passengers and five crew on board, Kazakh authorities announced, saying 32 survivors had been rescued.

Flight J2-8243 had flown hundreds of miles off its scheduled route to crash on the opposite shore of the Caspian Sea. Officials did not immediately explain why it had crossed the sea, but the crash came shortly after drone strikes hit southern Russia. Drone activity has shut airports in the area in the past and the nearest Russian airport on the plane’s flight path was closed on Wednesday morning.

Russia’s aviation watchdog, meanwhile, said it was an emergency that may have been caused by a bird strike.

MORE THAN 30 DEAD IN BRAZIL BUS AND TRUCK COLLISION

In this photo taken from a video released by the administration of Mangystau region, the wreckage of Azerbaijan Airlines Embraer 190 lies on the ground near the airport of Aktau, Kazakhstan, Wednesday, Dec. 25, 2024. (The Administration of Mangystau Region/AP Photo)

Those aboard the plane included 42 Azerbaijani citizens, 16 Russian nationals, six Kazakhstani and three Kyrgyzstani citizens, according to Kazakhstani officials.

Russian news agency Interfax reported that both pilots died in the crash, citing a preliminary assessment by emergency workers at the scene. The news agency also quoted medical workers who stated that four bodies had been recovered from the crash so far.

A total of 29 survivors, including two children, have been hospitalized, the ministry told Russia’s state news agency, RIA Novosti, the Associated Press reported. Many passengers have yet to be accounted for.

MALAYSIA AGREES TO RESUME ‘NO FIND, NO FEE’ HUNT FOR FLIGHT MH370, 10 YEARS AFTER PLANE DISAPPEARED

More than 30 are feared dead following the crash near the Kazakhstani city of Aktau. (Azamat Sarsenbayev/AP Photo)

Video of the crash showed the plane descending rapidly before bursting into flames as it hit the seashore, and thick black smoke then rising, Reuters reported. Bloodied and bruised passengers could be seen stumbling from a piece of the fuselage that had remained intact.

Azerbaijani President Ilham Aliyev, who had been traveling to Russia, returned to Azerbaijan upon hearing news of the crash, the president’s press service said. Aliyev was due to attend an informal meeting of leaders of the Commonwealth of Independent States, a bloc of former Soviet countries founded after the collapse of the Soviet Union, in St. Petersburg.

Emergency crews at the site of the Azerbaijani airliner crash on Dec. 25, 2024. (Azamat Sarsenbayev/AP Photo)

Aliyev expressed his condolences to the families of the victims in a statement on social media.

“It is with deep sadness that I express my condolences to the families of the victims and wish a speedy recovery to those injured,” he wrote.

He also signed a decree declaring Dec. 26 a day of mourning in Azerbaijan.

The plane was en route from the Azerbaijani capital of Baku to the Russian city of Grozny in the North Caucasus, the Associated Press reports. (The Administration of Mangystau Region/AP Photo)

In a statement, Azerbaijan Airlines said it would keep members of the public updated and changed its social media banners to solid black.

“We ask God for mercy on the passengers and crew members who lost their lives,” a translated statement on X said. “Their pain is our pain. We wish a speedy recovery to those injured.”

Reuters and the Associated Press contributed to this report.

World

Who is Europe's top investor in space in 2023?

Published

8 hours ago

December 25, 2024

Press Room

Who is Europe's top investor in space in 2023?

Luxembourg remains Europe’s top investor in space in a year when defence spending on space exceeded civil space budgets for the first time since the 1990s.

Global public investment in space hit a record high of €106 billion in 2023, an 11% increase compared to 2022.

In Europe, the total funding was €11.9 billion, showing a modest 1% rise in its share of global space investment.

According to the European Space Agency, defence spending on space exceeded civil space budgets last year for the first time since the 1990s. Defence expenditures in space are projected to grow faster than civil spending, making up 53% of the budget in 2024.

The US continues to dominate global space investment, accounting for 64% of the total budget, while China holds a strong second place, growing its share from an estimated 2% in 2000 to 12% in 2023 through long-term programmes in both civil and defence.

Europe ranks third, contributing 11% of the global space budget in 2023.

What share of their GDP do EU countries spend on public space budgets?

Luxembourg remains Europe’s leading investor in space, dedicating 0.135% of its Gross Domestic Product (GDP) to the sector.

Globally, the country ranks third behind the US (0.262%) and Russia (0.169%).

In Europe, Luxembourg is followed by France, which invests 0.167% of its GDP, Italy at 0.103%, and Belgium at 0.095%.

On the other hand, private investment in space has continued to decline in 2023, dropping by 32% compared to 2022.

Europe also saw a 14% decrease in 2023 compared to the year before, with private space ventures receiving just below €980 million.

Although the US accounts for most of the global decline in 2023, its space sector continues to attract the largest share of investments at 60%, followed by Europe with 16% and China with 9%.

What was the state of space activity in 2023?

There were 221 orbital launches in 2023, an 18% increase compared to 2022.

Yet, a total of 212 launches were successful.

The US carried out more than half of the launches, with 96 of them conducted by SpaceX.

China accounted for 30% with 67 launches, a 5% increase from 2022, and Russia completed 19 launches.

The European launch service provider conducted three launches in 2023, including Europe’s first mission to Jupiter, which aimed to explore whether the planet’s three moons — Callisto, Europa, and Ganymede — could support life in their oceans.

Video editor • Mert Can Yilmaz