EREN GÖÇÜK - FINANSGUNDEM.COM FOREIGN NEWS DESK

Maya Senussi, Turkey analyst of Roubini Global Economics, answered the questions of Finans Gündem. What does she think about Turkish economy?

Ayça Karaca, writer of the Finansgundem.com, who did mba at Colombia University and also working as secreter in Civil Economy and Social Researches Center, is one of the best writer who follows EU in Turkish media. She is not just analysing the actors in EU and discussing the decisions of European Central Bank, but also seizing the agenda’s soul by her researcher personality. One of her last columns, named as “Does Turkey exist in winner club while oil prices are going down” took place on Finansgundem.com last month. At this article, which aroused the interest of Turkish written, visual and internet media, Ayça Karaca shared important study prepared by Maya Senussi, who worked in Roubini Global Economics…

Senussi is one of the member of worldwide known economist Nouriel Roubini’s team and responsible analyst of Turkey, Middle East and Africa. She is a graduate of King’s College London, where she earned a master’s degree in international peace and security, with a focus on contemporary security issues in the Middle East. She also holds a bachelor’s degree with honors in Arabic and politics from the School of Oriental and African Studies, University of London. Before  joinin Roubini Global economics, she worked as risk analyst in AKE Group and able to speak English, Frech, Deutsch, Polish, Arabic. Even if she does not speak Turkish, she knows Turkey well. As a matter of fact, her analysises indicate her knowledge and experience.

After Ayça Karaca’s article, we reached Maya Senussi after she aroused interest of Turkish readers. She accepted our e-mail interview request. We asked 7 questions and got striking answers.

Senussi is asserting the change in Turkey’s risk perception as a result of wars on our borderlines and underlining the decline of Turkey’s ability to attract investers. According to her, Turkey has two main ills, wide current account deficit, driven primarily by energy, and high inflation. She gave optimist message on Ali Babacan and said “He might still continue to have a senior policy role after the presidential and legislative elections”. And she is so pessimistic about Turkey’s memebership in EU.

The impact of war in Iraq and Syria on Turkish economy, oil prices, FED’s interset rate policy’s impact on Turkish equity market in near future and Turkey’s export potential… They all will be asked and discussed…

Here you can read Maya Senussi’s answers for Finansgundem.com…           
 
What will be the effect of war in the area of Syria and Iraq on Turkey and Turkish economy?
 
In addition to export losses to Iraq, Turkey’s involvement in the region’s inconclusive crises exposes the country to cross-border spillovers and retaliation, entrenching Turkey’s high political risk perception and undermining security. This hinders business climate and Turkey’s ability to attract investment (FDI), leaving external financing position weak and growth volatile.
 
Additionally, the regional crisis will likely play into internal political and policy dynamics. I’d say the Kurdish peace process is particularly susceptible to developments abroad, due to the myriad of relationships between Turkey and various Kurdish groups in the region.
 
What will be the advantage of Turkey as a result of decline on oil prices and will it be sustainable advantage or not?
 
Lower oil prices are tempering some concerns over Turkey’s two main ills, wide current account deficit, driven primarily by energy, and high inflation. However, they are not a game changer, as they do not remedy Turkey’s structural energy dependence. Additionally, recovering domestic demand should push up non-energy imports, preventing a more significant adjustment in the external deficit, particularly as exports suffer.  Even with oil at $80 through 2015, the current account deficit would remain above 5% of GDP. As other things equal, inflation could ease to around the 7% mark.
 
What is your future projection on Turkish economy and Turkish equity market after FED start raisinig interest rates?
 
My baseline scenario is for Turkey continuing to operate below potential (struggling to regain a 4% growth path), with policy being micromanaged. The lack of structural reforms will keep Turkey over-reliant on consumption and vulnerable to boom and bust cycles.
 
What is your opinion on Turkey’s export rate to middle east (especially Iraq) after new balance conflicts in middle east stabilized?
 
 My view is that the conflict will continue to simmer, delaying normalization of trade ties between Turkey, Iraq and the broader Middle East. Export growth to the EU has to some extent offset the drop in exports to Iraq (MENA) year to date but the weakness that we see in the EU implies export growth is unlikely to maintain pace going forward.
 
What is you point of view on Deputy Prime Minister Ali Babacan? International community has trust on Ali Babacan as reasonable governor. However, he will presumedly not be a member of government after elections. What will be the reaction of international community on Turkish economy without Ali Babacan?
 
I share the universal view and consider Ali Babacan (as well as Finance Minister, Mehmet Simsek) as defenders of economic orthodoxy. Babacan is affected by the three-term limit, so he will not be part of cabinet after the legislative elections. He might still continue to have a senior policy role after the presidential and legislative elections. Of course it is important who will be in charge of economic policy making, but it is the most important that there is no significant shift in an unorthodox direction.
 
What do you think about Turkey’s tendency to create strong business connections in Africa?
 
I think Turkey’s involvement in Africa is a win-win for both, it’s a good avenue for Turkey to diversify its trade relations and benefit from Africa’s consumption growth, while African countries stand to benefit from Turkey’s investments and experience. The relationship is much stronger with North Africa than the rest of Africa, but the Turkey’s aggregate exports to the region have grown about fourfold between 2005 and 2013 (from $3.6 billion to $14.1 billion).
 
What is the possibility of Turkey’s memebership in EU according to you? And what is your future projection about eurozone as politicly and economically?
 
I see the prospects of Turkey joining the EU as low, there is little appetite on either side and there has been little progress for a while.