Deconstructed by the media

I gave a talk yesterday in Istanbul at the Economic Research Forum of Koc University (sponsored jointly by TUSIAD, the premier business association in Turkey). The talk was on industrial policy, and the presentation can be found here for those of you who can read Turkish.

Knowing it was a sensitive subject and not wanting to detract attention from the topic at hand, I said nothing about the exchange rate. But one of the questions at the end directly asked me what I thought about the role of currency policy in Turkey. So I formulated what I thought was a moderate and diplomatic answer. "A more competitive currency would make an important contribution to industrial policies in Turkey," I said. "But," I added, "in view of Turkey's recent macroeconomic history, manipulating the value of the currency is a very risky strategy at the moment."

I was surprised to see this morning that the newspapers, without exception, had found the comment about the exchange rate the most newsworthy part of my presentation. The headlines were all about my comments about the currency. (Well almost all. The only remaining left-wing newspaper in the country used as its headline my negative comments on neo-liberal policies.)

Second surprise: Half the newspapers reported only the first part of my comments, while the other half reported only the second part. So if you were to read one newspaper, you would learn that I argued for a more competitive currency and that I had send a "thinly veiled message" to that effect to the monetary authorities. If you bought another newspaper instead, you would read that I had argued against any changes in the current exchange-rate policy and against "currency manipulation." If you read both, you would justifiably conclude that I was just downright confused...

Comments

[Hafiz]

Well, at least, there's free press. In Malaysia, you would get only one side of the story.

[Per Kurowski]

It sounds like a sort of media collusion that forces you to buy two papers and average them out so as to get something that resembles the truth.

[Barkley Rosser]

Clearly the Turkish press exhibits rational expectations, always wrong, right on average.

[Ian Lamont]

It would have been very interesting to see how television news reports -- which generally convey far fewer words than a newspaper article -- covered your talk.

And people wonder why the mainstream media has such a bad reputation ...

[cuneyd yasin]

"The only remaining left-wing newspaper" hangisi oluyor sayın hocam? Cumhuriyet mi?

[ussal]

Dear Professor Rodrik,

As the one who asked that provocative question and a member of your "fan club" in Turkey, I personally believe that current "overvalued" exchange rate in Turkey might also be regarded as an industrial policy instrument. Reading your papers on this issue, I understand that undervalued exchange rate is an incentive for diversification towards manufacturing in tradables. But Turkey already has a well-diversified (both in terms of products and export markets) industrial structure with an increasing volume of exports. Given this structure, what Turkey has to do, is to provide incentive to improve the strategic positioning of its products, particularly focusing on products with more value-added. This requires new investments, most of which would probably be in high-tech machinery. An overvalued Turkish lira will make this investment cheaper for Turkish manufacturers. Moreover, it will be a disincentive for Turkish businessmen to invest more in traditional sectors (textile, leather, etc.) which are competing on low labor cost basis, and of course facing an inevitable threat from much lower cost competitors from East Asia.

Given Turkish media's obsession on the exchange rate, before asking that question, I foresaw that any comment by you on this issue could be misunderstood and may shorten the coverage of other important material in your presentation. It seems that both happened. I’m truly sorry for that!

Ussal Sahbaz

[bersi]

Other than reliability of mainstream media this is an indicator of the political polarization of media in Turkey. The more polarized the political scene and the more media outlets identify with political attitudes, the more similar events shall we observe. I speak from the experience from two countries at completely different stages of development, but astonishingly with the same level of political polarization: Italy and Albania. In both countries often even a sentence is broken into parts and reported separately. I am sorry for Dani to have found himself in this position as well as for anybody wishing to express a honest professional opinion under these circumstances.

[Per Kurowski]

bersi says: “I speak from the experience from two countries at completely different stages of development, but astonishingly with the same level of political polarization: Italy and Albania. In both countries often even a sentence is broken into parts and reported separately.”

And it is not only the media. I write weekly in Venezuela, in green, but most of my readers can only read me in blue or in yellow.

[dan]

Expect the same question (regarding the use of a competitive exchange rate) if you go to Argentina

[Oyku Ulucay]

It is interesting to see from your presentation that the period that was the most politically turbulent in Turkish history (1960-1980) is also a period when the only meaningful total labor productivity and efficiency gains were made. I am currently reading an edited book called "Political and Economic Interactions in Economic Policy Reform" by Bates and Krueger and the chapter on Turkey makes the following remarks: " During the period prior to September 1980, industrial wages of union workers had risen rapidly while labor productivity had been falling." Turan and Krueger attribute this to worker union activism. Well today one out of two workers are in the informal sector in Turkey and you really have to look hard to see any activism at all and look what the productivity figures say, 1960-80 period is even better than the long praised Ozal period where Turkey became export oriented. I hope the listeners were attentive to this fact and I hope your audience also included some politicians.
On the point about public-private partnerships, I really think that the educational divide is an important issue. While some top ranking universities in Istanbul are training undergraduates for private sector and more specifically for multinationals, other universities, mostly in Ankara, are giving a totally different university education to students who want to be bureaucrats. There is no common ground between these two groups.

[Cemil Turun]

Sayin Hocam,

Aralik ayinda Tusiad'in duzenledigi toplantida yaptiginiz sunumu okudum.Ben Istanbul'da oturan bir girisimciyim.

Bu cok onemli ve zamanlamasi mukemmel cagriniz, bir Sanayi Politikasi olusturmamiz gerekliligi ve bununla ilgili dikkat edilecek hususlar insallah adreslerine ulasmistir.

Sahsen bundan supheliyim, o yuzden insallah dedim: Ulkemiz gundeminde bir sanayi politikasi olusturulmasi geregi epey asagilarda gorunuyor. Sizin de belirttiginiz gibi konusmanizin bu tarafi hic basina yansimadi, bu cagri hic konusulmadi. Oysa ki sabah aksam (maclardan arta kalan saatlerde) bu konuyu konusuyor olmaliydik :)

Size cagrinizdan oturu ve degerli surenizi bu konuya vakfettiginiz icin sahsi tesekkurlerimi sunuyorum.

Bilginiz icin ekleyeyim, su anda ar-ge ve dinamik sanayi kurumlari (ozgun teknoloji/inovasyon uretenleri kastediyorum) icin var olan yegane tesvikler Tubitak tarafindan KOBİ'lere ve sanayi kuruluslarina verilen destekler ve universite kampuslerindeki Teknopark'lardir. Bunlardan birincisini Tubitak baskani Nuket Yetis'in gayretlerine ikincisini ise milletvekili/yazilimci Emrehan Halici'ya borcluyuz.

Benim firmam her ikisinden de yararlanmakta. Tabii ki bunlar kapsamli bir sanayi politikasi olusturmaktan cok uzak girisimler, arkalarindaki hukumet destegi de pek saglam degil. Ayrica bankalarin bizimki gibi kucuk capli ama buyume potansiyeli yuksek sirketlere tamamen kor olduklarini da eklemeliyim. Yani sunumunuzda belirttiginiz gibi, "kurumsal yapılar" henuz olusmamis durumda.

Acaba sizin bu kurumsal yapilara ornek gosterebileceginiz ornekler var mi? Mesela Japon'larin MITI'si gibi bir seyi mi kastediyorsunuz?

Saygilarimla,
Cemil Turun
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