Bharat Rakshak

brihaspati wrote: thought I would ignore this comment. But then it was brought up again to notice because of a recent post.

So you found 5 named+1 unnamed+1 interesting persons only?

Here is an article you may just find interesting. http://www.ssig.kpkk.gov.my/ssig/kcent/ ... 0Swami.pdf

I chose his article for a reason - most Islamiphiles or or psecs will find it dificult to dub him "hindutvawadi" or "in the loony fringe". Actually as he tries to show: it all started with Turkey!

Brookings Institution Turkey Project Director Ömer Taspinar offers his thoughts on the recent wave of arrests of former and current military officials in Turkey.

Taspinar is among the most astute and objective analysts of Turkish politics in Washington and this quick snippet captures the essence of the political events unfolding there.

I helped organize a forum last week at which Taspinar spoke, and the most striking aspect of his presentation was his comment that many secular Turks from the bureaucracy and the military interpret the United States' support for the moderately Islamist Justice and Development Party (AKP) - as well as Washington's rhetoric that Turkey can serve as a "model" for other Muslim countries - as evidence that the United States is actively supporting Islamism in Turkey.

True or not, this perception contributes to the immense distrust of the United States that persists among broad swaths of the Turkish population.

Advanced but asymmetric trade integration
[...] As indicated by the increasing share of overall exports to GDP and the constant share of the EU in overall Turkish trade, the customs union with the EU did not lead to trade diversion but mainly to trade creation.3

Human capital endowment capable of development
Second, Turkey is endowed with a rather low degree human capital. In this respect, Turkey's scores in variables like total expenditure on education in percent of GDP, the percentage of adult population with upper secondary education (e.g., by age groups) deserve a closer look. In terms of investment in and output of education, Turkey's performance is certainly much worse than in the EU. However, according to the same criteria, the CEECs perform like the EU average. These deficits appear even larger in view of the exceptionally high share of the Turkish school age population and its high importance for Turkey's future growth prospects. Of course, such a lack of quality might have important negative consequences for Turkey's future growth path.4

Demographics giving leeway for more growth
Third, Turkey is characterised by demographic dynamism. Turkey's labour force will continue to experience growth rates of more than 1 percent per annum for at least one more generation. In contrast, it currently tends to shrink in many CEECs. This huge discrepancy gives Turkey much more dynamism and leeway for growth - not to forget a more founded right to say in different EU institutions. Moreover, Turkey's working age population is currently increasing by 1.5% more than the total population. This implies ample room for redistribution, pension payments etc. until Turkey will experience the same demographic transition to lower demographic dynamics as experienced by the EU countries some decades earlier.5

Modern and underdeveloped sectors coexist
Fourth, Turkey is a textbook example of a so-called dual economy. On average, Turkey's GDP per capita is comparable to the Bulgarian and the Romanian one. But an inspection of sectoral and regional data reveals that the Turkish economy is divided into a tiny, but exceptionally well-performing progressive sector outside agriculture (mainly industry and some services) in some Western regions which is more productive than even some of the new member countries and a large and poor rural sector covering approximately half of the labour force. In the emerging markets literature this is typically called a dual economy.

Crisis-prone domestic banking system on the road to recovery?
Fifth, the domestic banking system is significantly changing now and its development towards a supporting pillar for future growth is crucial. As is well-known, foreign banks dominate the banking system in most CEECs by now and, thus, tend to import financial stability. However, the structure
of the Turkish banking system has been more complex for some time with some very profitable private banks. However, macroeconomic instability and significant political influence on bank management and on the lending culture of public banks during the 1990s until recently contributed to the malfunctioning of this sector. The fifth and up to now last major macroeconomic instability crisis in Turkey since the late fifties happened in 2001.

Is Turkish government debt overstated? The role of capital flight
Sixth, external debt and capital flight has been a key feature of the Turkish financial performance for decades now. Turkey's foreign debt burden is higher than for most other new EU entrants or EU candidate countries. According to IMF figures, it amounts to around 80 to 100 billion EUR. Most
of it, around 70 percent, is government debt. Since cumulated current-account deficits since 1963 have been only slightly above 40 billion, one-half of Turkey's external debt appears to be the result of a significant capital flight, i.e. residents who do not trust their government anymore. This pattern even continued recently in spite of exceptionally high real interest rates. It again stands in sharp contrast with countries like Romania and Poland which have not experienced significant capital flight in spite of continuing current-account deficits.

Dominance of the agricultural sector
Seventh, the agricultural sector still is a big player in the Turkish economy. Turkey is strongly similar to other CEECs (above all Poland and Romania) in that a large part of the work force is officially employed in agriculture. One-third of the Turkish labour force is employed in this sector but accounts only for about 12 percent of GDP. Like in other EU countries, this indicates bad labour productivity performance of this sector and -to a certain extent- also some potential labour-shedding and emigration potential. However, a marked difference to other candidate countries consists of the fact that Turkey runs a significant trade surplus vis-à-vis the EU in agricultural goods. The main reason is that Turkey - due to a favourable climate - is one of the few countries which specialise in products for which the EU does not significantly hamper imports (i.e., fruits, vegetables and nuts). In addition, deviating from the CEEC case, some Turkish agricultural products have been protected even more heavily than by the EU. In case of Turkish EU
membership protection of this sector would be abolished and would, for instance, mean increasing farm sizes. Hence, human capital problems in these sectors will become even more virulent in the future. The dualistic structure of the Turkish economy becomes obvious again, this time in the
area of agriculture. A large amount of Turkish exports to the EU can be traced back to a minor but progressive sector. At the same time, the remaining sectors employ the vast majority of the labour force but are not competitive.

The outstanding importance of institutions and governance
However, Turkey's realisation of the 'rule of law' indicator is even below the level which would correspond with its low present GDP per capita. If one considers the change in the World Bank's composite quality of government indicator from 1996 to 2002, it even becomes clear that Turkey is one of the few among the current EU member countries experiencing a deteriorating
composite index of the quality of governance.

Pakistan and Turkey have agreed to proceed with the $20bn freight railway to link the two countries, trials of which were carried out in August last year.

The 6,566km of rail track is planned to run from Pakistan's capital of Islamabad to the Turkish city of Istanbul through the Iranian capital of Tehran.The five-year project is expected to cut the Islamabad-Istanbul time travel from 11 days to nearly four days, resulting in faster and cheaper cargo transportation from Pakistan to Turkey, and ultimately to the rest of Europe.

Of the total track length, 1,990km would be built in Pakistan, 2,570km in Iran and 2,006km in Turkey. The project is expected to increase Pakistan's trade with Turkey and Iran by 50% from an average of $1bn. The rail route has also been planned to run passenger services in the future to boost tourism.

prad wrote:^^^ perhaps, the first signs of Turkey extending its reach beyond its own immediate periphery.....if Turkey succeeds in creating some kind of prosperity in Pakistan and other Islamic states, Arabs + Persians + Afghans + Pakis will increasingly look to them as an anchor.

from American perspective, this is positive, at least until Turkey gathers enough power to openly challenge American hegemony in the region. US will be freed from Middle-East and withdraw its military commitments.

prad wrote:^^^ US will no longer be a hegemon in the Middle-East. so, yes, American power will become limited in the region. but the way i see it, a united Islamic Block will terrify Europe, Russia, and India, and to an extent even make China uncomfortable. countries like Japan and US are too far off and isolated by vast seas to directly feel any pain.

Acharya wrote: This Islamic confederation is the start of creation of an Islamic block to counter large blocks. This will be detrimental to the west including US. WWI was started to destroy the Ottoman empire and remove the Caliphate which united the Islamic world.

Carl_T wrote:

Acharya wrote: This Islamic confederation is the start of creation of an Islamic block to counter large blocks. This will be detrimental to the west including US. WWI was started to destroy the Ottoman empire and remove the Caliphate which united the Islamic world.

They have tried to put together an "Islamic Block" for the past thousand years. That has turned out really well them!

Per capita income is not a very good indicator in all sectors of the economy as far as international trade is concerned. Modern international trade, if not looking at government level or defence level transactions, also have to look at the consumer base for the products. If the consumer base for that item is not large enough then it may not be profitable enough to do business. Are you sure you have looked into the basics of international trade and financial flows?

My point simply was, that the persistent meme of the Turkish Caliphate - in one form or other has remained within the theological trends in IM, and continues to do so. Given the possibility of a future Islamist Turkey, what stops the theme becoming a focus issue again once Pakis fail to become the "hope and future of Muslims"?

and what was the consequence of such close living accommodations with a Caliphate? if Turkey does take up its old mantle again, i see a future in which India will be more deeply divided than ever since its independence. no great power has ever emerged without setting its house in order. if India continues to bitterly divide itself, India can forget about any outward expansion of influence. creation of a Caliphate-like Islamic block will exacerbate the religious divide in the country. you can't just ignore the adoration and perhaps more, that a huge chunk of the population feels for a neighboring empire...

Somnath wrote
Brihaspati ji,
Your economic illogics are the most trivial - so lets first get that out of the way..

If GDP and percapita income (PCI) are not determinants of how "wealthy" (and therefore "consuming") a country is, what is?

Your confused "large consumer base" argument is (if I understand correctly what you are trying to say) measured by Gini coefficient. And I explained that in a previous post...

Turkey is an OECD country by PCI, the 17th largest economy in nominal GDP terms and has a trade-to-GDP ratio of 40%, higher than India's..Thats enough data for starters...

In case you have a theory that somehow disproves all the data and the basic theoretical construct behind them, you should seriously publish it..Who knows, in this day and age (of Obama getting the Nobel), you might impress the old men in Norway!! (BTW, I do analyse global financial trends and their impact quite closely - part of my day job!)

And please, lets not talk of "mafia" elements in business - there is a huge Russian mafia, there is an Italian one, for God's sake, there are enough shady Indian types in business!! So do we stop trading with all these countires?!!!!

Turkey has not intervened in regional/global affairs till now? Because it wasnt in its core national interests till recently...It was in a sweet spot - being allied with Israel, US and a bulwark against communism, at the same time a muslim nation...Suited it fine, allowed them to modernise their economy, and allwoed the Army to preserve its "ruling status" without too much Western moralising about democracy...Its coming out of its shadows now, and is increasingly asserting its regional importance - you just have to look towards the activities around A'stan...

Carl_T wrote:Turkey is a middle income country and as an emerging market probably a good destination for investment. I don't thing somnath is even suggesting that Turkey is a big player right now. If I understand him correctly, he's referring to a future status.


somnath - What benefit does Turkey gain from a relationship with India? I think that determines how our relationship in the future will be shaped. For India I only see a strategic benefit if Turkey is willing to argue our side in OIC. Do they have incentive to do so?

So finally we have acknowledgement that Turkey so far has had no influence - by choice or circumstances - in the Islamist framework. This was a claim from your side to start with. As you yourself, say, it has not had any reason so far. Which also means that we do not know how it will - in the future. The initial role in AFG affairs hinted at - was perhaps very very positive for India - what do you think

For trade data, the question was whether intra-country income distribution affected the overall inter-country trade or not

No, Gini coefficient on "income distribution" is not typically used as a principal indicator for international trade, but it is used for exploring sectoral concentrations.

As for IM, you were making blanket statements that found no Paki role models anywhere in IM, and you had proposed only 7 names (one unidentified) as their role models.

On the other hand, perhaps for the longer run - it is good that more and more countries in the Islamic bloc begin to have a presence in India - Turkey/KSA/Iran. We should go on adding Malaysia, and maybe even the East and Central African increasingly Islamizing nations to those presence lists.
......
More than Turley itself, its mere ascendancy and increased presence in the subcontinent can be used by section of Muslims and their organizations to carry forward their Islamist agenda.

somnath wrote
And you suddenly flipped on your point:
Quote:
For trade data, the question was whether intra-country income distribution affected the overall inter-country trade or not
from an earlier post
Quote:
No, Gini coefficient on "income distribution" is not typically used as a principal indicator for international trade, but it is used for exploring sectoral concentrations.
Make up your mind!

Of course the real grotesque assertion from you was the most revealing:

Quote:
Turkey has the potential to become an alternative ideal replacing TSP for the IM.


So Indian muslims today have Pak as their ideal? Which Indian muslim are we referring to? APJ Abdul Kalam? Or Sania Mirza? Or Zaheer Khan? Or maybe AR Rahman? Or Azim Premji? these are well known public figures...So what about my friend Sxxxx - ex fund manager, now a derivatives structurer in a large bank (surprise, surprise on Indian equities!!)..He finds Pak as the ideal? A couple of years back, MJ Akbar wrote very perceptibly - "every muslim in India must thank Allah every day for one benediction, that he was left in 1947 on this side of the border, not in Pakistan" - I am paraphrasing, but the gist is that - it was made in a lecture in Jamia Millia, and was greeted by spontaeneous applause..Most Indians feel simlarly, Muslims or non-muslims..We do not need to have any country to be an exemplar for muslims in India - not Pak, not turkey, they have enough role models internally..

In fact there is still no evidence of even a lare section of muslims having extra-territorial loyalties.

brihaspati wrote:I think you repeatedly make these remarks because you are not aware of research trends in the area. Just because Gini-coefficient on income distribution does not typically appear as indicator in international trade literature, does not imply that intra-country income distribution patterns are not factored in models or mechanisms that look beyond the Linder type assumptions. Gini-coefficient is not only used to macro-summarize income inequalities, but also used as measures of concentration within sectors. Examples abound - for example studies of the fishing export industry in SA. (not KSA).

In cities such as Moradabad, Meerut, Aligarh, Sahranpur, Deoband, Ahemadabad, Hassan, Hyderabad, Ajamgarh millions of Muslims live in areas like kidwainagar, Khairnagar, Islamabad, Gulshaheed, Mughalpura etc. Please visit some of these cities and some of these areas and live there for at least a month. I am sure it will be a good first hand experience. My experience in these cities and these areas tells me that there is not just a fifth column but multiple fifth columns.

Prem wrote:Lets wait for few more years when 20% BG has moved into all corners of India and the birth rate caluclations, hopes, conclusions etc go to the wind.

• Economic indicators from the third quarter of 2009 strongly suggest that the decline in
the Turkish economy is slowing. Although economists are predicting growth in the
fourth quarter, overall the economy is expected to have contracted by 6% in 2009
• Current estimates for 2010 suggest that the Turkish economy might achieve 3.5%
growth, a “sluggish” rate, barring any unforeseen events. The economy could still be
affected “badly” if there were to be political turmoil.
• There has been a “major decline” in both exports and imports in 2009. This contributed
to an 80% reduction in the current account deficit compared to last year.
• Over the course of 2009, the Consumer Price Index increased by 6.5%
• There is a strong potential for further price index increases in 2010 accompanied by
higher interest rates and inflation.
• The budget deficit has grown significantly in 2009 with an approximately 20% increase
in spending and virtually no increase in government revenues.
• Unemployment figures remain very high. In August 2009 the unemployment rate was
13.4%, a significant increase over August 2008 when the figure was 10%. The final figure
for 2009 was estimated to be around 16-17% because seasonal workers hired for the
summer months were laid off. If underemployment is also factored in, the figures look
quite grim.
Dr. Tuncer then gave a broader overview of Turkey’s economic performance during the past
decade:
• On average the Turkish economy only grew 3.3% annually from January 2000 to
December 2009. This is not “exceptional” considering that the growth rate averaged
3.8% in 1990’s and 4% in the 1980’s.
• The “boom years” of the 2000’s have been exaggerated. While growth was indeed high
during the middle of the decade, the Turkish economy had “lost its energy” by 2007,
before the global recession began.
• Turkish firms became more efficient and more competitive in international markets.
• The public sector’s share of the economy was significantly reduced through government
cost-cutting and the privatization of publicly owned firms.
• The banking sector was strengthened through regulation and reforms.
• The inflation rate, which had long been very high in Turkey, was lowered.
• The government introduced measures to instill greater discipline in the national budget.

Turkey began the decade with a major economic crisis, which was one of the main reasons why,
the coalition government lost the 2002 elections. After coming into power, the Justice and
Development Party (JDP) government initially hesitated about continuing Turkey’s relationship
with the IMF but “wisdom prevailed” and the government ultimately decided to proceed with a
new agreement with the IMF, thus helping to ensure substantial economic growth.
Answering the question “what was behind that growth during the second half of the decade?”
Dr. Tuncer noted that “everyone else was also growing.” Turkey’s growth owed a great deal to
the abundance of liquidity in the global financial markets. In this environment of easy capital,
Turkey became an important destination for both short and long term investment. The JDP
government made “high interest rate and low exchange rates” its slogan in order to attract
more capital into the Turkish economy. However the profits from these investments were
eventually transferred abroad. Turkey also began to import a “great deal more” and, for a
period, the government, the treasury and the general public agreed on this policy without
focusing on the consequences for the Turkish economy in the medium to long run.

The negative effect of Turkey’s easy access to foreign capital in these years was that instead of
capital being invested in relatively risky but strategically vital sectors of the “real economy” such
as manufacturing and agriculture, it was diverted to high-yield sectors like construction, real
estate and finance. However, the abundance of capital flowing into Turkey was sufficient to
cover both the trade deficit and the current account deficit.
The 2008-2009 global financial crisis exposed the weaknesses of the Turkish economy. Contrary
to assertions by the government, Turkey was “one of the three to five countries most affected.”
If the banking sector had not “stood firm”, Turkey would have had even greater problems.
Regarding the potential for Turkey to achieve medium and long-term success, Dr. Tuncer made
the following points:
• Turkey has a savings rate of approximately 8%. In order to be successful, it needs to
follow the model put forth by other developing countries like India and China, which
have maintained high growth rates along with high savings rates.
• Turkey needs to increase productivity.
• The government needs to reexamine its taxation and spending policies.
• If Turkey is to have any hope of alleviating unemployment, it cannot afford anything less
than 6% growth in the near term. This is especially crucial because of Turkey’s
demographic profile. While Turkey’s large, young, and fast growing population was once
seen and touted as an asset, this is no longer the case. The country’s underemployed
youth, once viewed opportunity, is now becoming a burden on the economy.
• If the right measures are taken, sustained growth of 6-7% is not beyond Turkey’s reach.
Dr. Tuncer lamented the lack of strategic, long-term thinking about the Turkish economy on the
part of the government, columnists, academe, and think tanks. Many economists prefer to be
optimistic and have unrealistic projections. They tend to focus on statistics such as the exchange
rate and stock market indices.

Dr. Tuncer believes that 2010 will not be an easy year for Turkey. The government’s revenue
projections for the coming year are overly optimistic while its budget includes spending
increases it cannot finance. There is a real fear of larger budget deficits returning. Recent taxes
imposed on goods such as alcohol and cigarettes will only raise enough revenue to cover the
costs of the latest pension increase, thus having at best a neutral affect on the budget deficit.
Turkish leaders are now much less optimistic about 2010 than they were just a few months ago.
It seems that the government has finally realized that the efforts made to increase the revenue
will not be sufficient in 2010, thus forcing it to find other sources of capital to make up for the
budget deficit. The dilemma for the government is that the fastest way to get the necessary
capital is to reach an agreement with the IMF. However, this would tie the government’s hands
with tax reforms and other IMF-mandated measures that would be attached to a new
agreement. Such restrictions look particularly unattractive with only sixteen months to go
before parliamentary elections in Turkey.

We conclude from these observations that in Turkey the deepest, or “depression like” part of the recent crisis is left behind, but negative growth still continues and, as evidenced by the confidence index, the future looks uncertain indeed.
We explained above that, given the insufficiency of domestic savings, capital inflows were among the most significant determinants of growth in Turkey. Thus, under the present structure of the economy, there is dependency on capital flows for higher growth. The critical question here is; will capital inflows continue in the future?

We have serious doubts here. Actually, there is a dilemma that needs to be stressed. One major adjustment that is required for the global crisis to end is the elimination of global imbalances. Yet, global imbalances have been the driving force behind capital flows. Countries like Turkey benefited from spillover effects of these flows. Countries with low-savings and deficits, such as the USA, received capital from countries with high-savings and surpluses, such as China. The adjustment suggested implies more saving for low-savers and more consumption for high savers.
If this adjustment takes place, like any adjustment it will have a cost, in the sense that global capital flows will have to slow down. That would mean that countries like Turkey would receive much less capital compared to the 2002-07 period.
If the above adjustment does not materialize and global imbalances continue, there is a serious risk of currencies like the dollar and the pound sterling to tumble down, taking the world payments system into a chaos. Such a chaos would have a retarding effect not only on capital flows but also on international trade. That might mean an even lower growth for the global economy in the medium term. We tend to think that the above adjustment will take place, but may be at a slow pace.

In either case, we predict a much lower growth for the global economy in the medium term. Obviously, this is not a novel prediction and is in line with forecasts of the multilateral institutions including the IMF. The World Economic Outlook (WEO) of the IMF forecasts a significantly lower global growth and lower capital flows in the coming three years; world average GDP growth was 4.4% in 2002-07, but is forecasted to be 2.7% in 2009-12. See below row (3) of Table 19. There is a similar lower growth forecast for developing countries, that can be seen in row (4).

Turning now to Turkey, we refer to forecasts of the recently published Medium Term Programme (MTP) of Turkey and of the WEO of the IMF for the period 2009-2012 in Table 19. Rows that start with a * contain IMF forecasts.
The MTP presumably assumed lower global growth and smaller capital flows in arriving at forecasts for Turkey. The MTP and the IMF forecasts agree that average Turkish growth over the 2009-12 period will decline sharply as compared to the 2002-07 period. What is more, the IMF forecasts that Turkish average growth will fall not only below the average growth of the developing countries, but also below that of the world. In the 2002-07 period, average growth of Turkey was close to the average growth of the developing countries and considerably higher than that of the world.
There are other pessimistic forecasts for Turkey. Investment is forecasted to grow at about half the rate recorded in the 2002-07 period. Investment/GDP ratio is forecasted to stay at about 20% in Turkey during 2009-10. IMF forecasts an investment/GDP ratio for

the developing countries at 30.6% in both of these years. According to the MTP, unemployment stays at over 14% on average during 2009-12. IMF forecasts that CA deficits/GDP ratio will rise again in spite of the much lower average growth.
These forecasts imply that, according to the IMF and the MTP, there will not be an adjustment in Turkey on the lines we explained above. Turkey is therefore assumed to try to pursue a growth strategy that is known to be unsustainable in the medium term. That strategy may succeed for some time, only if there is not a global adjustment.
We note here that we expect small positive year-on-year growth rates in industrial output in November–December 2009. However, a lasting recovery will not start unless investment spending starts to rise.

On the inflation front, IMF assumes that on average global inflation will be lower in the coming years, at about half of the average rate during 2002-07. Inflation in Turkey is forecasted to be just over 5% in the 2009-12 period by both the IMF and the MTP. It seems that the optimistic global inflation forecasts are extended to Turkish inflation. Yet, there is a significant probability of inflation rising globally and in Turkey.

At the global level, a lot depends on (i) when and how fiscal and monetary adjustments are made, or to put it with a fashionable term, on exit strategies, and (ii) on the path of commodity prices. If rising petroleum and gold prices incorporate higher inflation expectations, then IMF forecasts look optimistic and a mild form of stagflation is a real possibility. In the case of Turkish inflation, global inflation is an important determinant, but the coming election is an equally important element and it might mean continuation of expansionary fiscal and monetary policies for a year and a half.

• Turkish firms became more efficient and more competitive in international markets.
• The public sector’s share of the economy was significantly reduced through government
cost-cutting and the privatization of publicly owned firms.
• The banking sector was strengthened through regulation and reforms.
• The inflation rate, which had long been very high in Turkey, was lowered.
• The government introduced measures to instill greater discipline in the national budget.

As for the third point, the radicalization of the IM based on active as well as passive involvement of Turkey has happened in the past. The memes of Caliphate has been shown to be surviving among sections of the IM even in the present as evidenced in the ideological pronouncements from the platform of the SIMI. You will dismiss them as exceptions - 25,000 present in its meeting is nothing for you, you will continue denying evidence