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Thursday, April 03, 2014

Engineering Turkey’s middle class and Maslowian politics

Could it really be that in our little bourgeoisie circle of secularism, we might have overlooked Turkey’s saddening reality; that despite all the statistics Prime Minister (PM) Erdogan calls out in all his speeches about Turkey’s development under his rule and despite World Bank’s superficial classification of Turkey as an upper middle income country, could it really be that Turkey is in fact still poor? Could it really be that while we wine and dine and protest in defense of our ideals, there are people out there who have other unmet priorities such as food and shelter? Could it really be that while we continue to be polarized as a nation, pointing fingers at each other, the real enemy is not any one person but a simple idea that is exploited by one person?

In the past decade, there has been talk of an ‘emerging’ middle class in developing nations including Turkey. I suspect much of the talk was based on observations, not data. Based on Turkey’s household income data, it is difficult to argue there is a large middle class in Turkey. Only 10% of the households make above TRY75,000…that’s about USD35,000 a year net of taxes…a little less than USD3,600 a month. What can you do with USD3,600 a month? Not much if you are a household. Chances are you have three dependents; a wife and at least two kids. Rent, food, kids’ school, utility bills, phone bills and possibly a vacation to a beach resort every year with the family and the annoying in-laws. There is your average middle class life. Caveat; that was the richest 10% in Turkey.

The next wealthiest 10% makes about USD18,000 per household…that’s about USD1500 a month. You can still get by but not easily anymore. Still, when you look down, you have a lot to be grateful for.

Meet Turkey’s reality; more than 70% of the households live with less than USD1000 a month. More than 30% live with less than USD500 a month. That’s less than USD16 per day for an entire household. It gets worse; there is a trend that the poorer you are, the more kids you have (a paradox that haunts the entire world save the US)…so the less money you have per individual.  Nearly 20% of the population lives at or below Turkish Statistics Institute’s definition of poverty line.

Figure 1: Income by household groups in USD

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Source: Turkstat, author’s calculations, 2014.

Note: I used cost of living index to calculate 2012 purchasing power of 2002 incomes, which I believe is more accurate than inflation or GDP deflator for the purposes of this article.

The middle class illusion: one then wonders if all these economists that talk about a new middle class are wrong. Not really. There is the illusion of a middle class thanks to a modest rise in incomes but more importantly a significant increase in debt.

Beneficiaries of Turkey’s ‘impressive’ growth performance: it’s beyond doubt that incomes rose in the past decade but not equally. While household data suggests there was an inclusive rise in incomes (the poor got richer and the rich less richer), individual data suggests the reverse; the bottom 20% did not see any real rise in their incomes while the top 10% saw huge gains. From a purely economic point of view, this is normal; marginal productivity theory suggests that those who contribute most to growth should reap the benefit of their efforts through higher wages. It was the ‘educated’ crowd – the top 10% – that drove Turkey’s growth in the past decade and hence ended up with a bigger share in the pie. Majority of the population saw only modest gains in incomes; around 40% over a period of 10 years. That’s about 4% each year. Nothing to celebrate given where Turkey stands today, not enough to create a middle class.

Figure 2: Per capita disposable income

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Source: Turkstat, author’s calculations, 2014.

Note: In 2006, Turkstat stopped releasing per capita disposable income data. I have had to divide household income by average household size. The latter is my estimate based on city level data that might not correspond to income levels but given the sample size it should be fairly accurate.

 Figure 3: change in disposable income

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Source: Turkstat, author’s calculations, 2014.

Low income at home, middle class on the street: the middle class ‘feel’ in Turkey has been engineered through debt.  Massive increase in household borrowing particularly by the low income households made many Turks feel like they are middle class even though they had the wages of a low income group. Despite making minimum wage, tens of thousands of households were able to acquire nicer phones, better furniture, electronics etc…all thanks to bank loans and maxed out credit cards. Turkish banking sector acted like a financial Robin Hood; banks took in deposits from the rich (50% of deposits in Turkey are owned by 0.1% of depositors) and lent it to the poor – clearly not for altruistic purposes.  Here, I will let the figures speak for themselves.

Figure 4: household debt and interest payments

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Source: CBT, 2014.

Figure 5: wages vs household loans (2005 = 100)

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Source: Turkstat, CBT, 2014.

Figure 6: household loans by income group

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Source: Banking Association, 2014.

Figure 7: credit to GPD and loan to deposit ratio

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Source: Turkstat, BRSA, 2014.

Maslowian politics:

Abraham Maslow – a 20th century psychologist – theorized that our ultimate goal of self-actualization can only be achieved through needs. Our needs start with our physiological needs; food, water, shelter, reproduction etc. Once one attains these needs, he seeks safety; safety of resources, of employment, of health etc..then love and friendship and all else as portrayed in the pyramid.

Figure 8: Maslow’s pyramid

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Source: Wikipedia, 2014.

For an economist, the most striking aspect of the Maslow’s pyramid is the monetary nature of our primary needs. Maslow unconsciously assumed the social hierarchy of capitalism in coming up with his theory (for more on this please refer to an earlier post – ‘Love in a time of capitalism’ http://wp.me/p44ZHA-1a). In capitalist societies, our physiological needs as well as our security needs can be fulfilled exclusively with money except for breathing (though even clean air has become a commodity lately). Once we secure a basic level of income, the upper levels of the pyramid of need satisfaction gets detached from economics and attached to the individual’s psychology.

For the bottom two levels of the pyramid, money matters more than ideology. Those that have high risk of not being able to meet their primary needs are likely to be indifferent to ideology. While this sounds most elitist, data seems to confirm it. Of the 27 countries that have GDP per capita below USD1,000, only one is rated free by the Freedom House. Conversely, of the 39 countries that have GDP per captain above USD15,000, only one is not rated free. There is a clear trend that higher the GDP per capita, more likely it is for any country to be free. When the majority of the population live at the poverty line, they are either indifferent to politics or vote for those who only do well on the economy. For them, money is what matters…not freedom and democracy and all those other bourgeoisie inventions.

Figure 9: % countries rated Free, Partly-free or Not free vs GDP per capita

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Source: IMF, Freedom House, 2014.

Note: I excluded natural resource rich countries from the analysis for obvious reasons.

But after the second level of needs, money takes the back seat and ideology comes to the fore. Maslow suggests that once the security of resources is achieved, people start looking things less mundane such as love and friendship. As John and Paul will tell you, ‘money can’t buy you love’. These people are most likely to be more educated and have already secured a job (will not be involuntarily unemployed for extended periods) but have higher needs. They are also likely to be staunch believers in democracy thanks to their western style education.

Turkish politics according to Maslow: using subjective judgment, I tried to classify where people stand in the pyramid based on their incomes in Figure 9. I would claim that people that live close to poverty either do not vote or do not vote for AKP. They are largely indifferent to politics or have seen their incomes shrink while witnessing others get rich. An AKP voter is most likely to be in the bottom second level. This is almost 50% of the population in Turkey that has seen a modest rise in their income but more importantly borrowed significantly hence boosting their living standards. Finally, those in the upper levels are less likely to be AKP voters. Since these people have secured vital needs, they are likely to be more interested in ideology than economics.

Figure 10: Disposable income per capita vs population

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Source: Turkstat, author’s calculations, 2014.

Income inequality is a lethal political weapon. Is it not interesting that we never hear PM Erdogan speak about income inequality? For a populist politician, it is the perfect tool. Still, even though his government devised scores of economic policies, none focused on income inequality which stands at embarrassingly high levels. Even his likes (President Putin in Russia and PM Orban in Hungary) have made numerous statements about it (despite it being low in the latter).

Income inequality is AKP’s bread and butter. It masks everything. It makes Turkey look like a high middle income economy. Even though a large percentage of the population is poor, thanks to those billionaires, Turkey’s GDP per capita fits World Bank’s superficial definition of an upper middle income country (what an efficient way to use world’s most brilliant economists). More importantly, income inequality is what keeps that 40-50% bound to AKP. Having seen their incomes grow and seen what the top 10% can buy, AKP is their only shot at becoming like them. AKP is the way up the pyramid (to read more on this please refer to an earlier post – ‘Why do we drink?’ http://wp.me/p44ZHA-c). For these people, AKP’s infrastructure developments are more important than freedom of speech. The latter has no utility for them, the former does.

A nation of oppressed underdogs: Turkey is stuck. Political tensions that we are witnessing today are but a result of Turkey’s non-workable growth model. Reforms pushed growth higher from 2002 to 2007, external borrowing pushed growth higher from 2008-2012 but come 2013 Turkey was out of fuel. With more than a decade in power, PM Erdogan ran out of enemies to blame. Today, the middle class drunkenness is slowly turning into a dreadful hangover as banks begin to cut off on lending and interest payments are eating away an ever-increasing share of meager incomes. Turkey needs to wake up. She needs to wake up now. We need to understand why AKP is still so successful; we need to stop marginalizing AKP’s voter base and treating them like traitors for their understandable trade-off between hard infrastructure and freedom. We need to understand that through income and opportunity inequality, AKP is feeding an illusion of middle class to people, hence buying out their votes.

To do all this, the liberals need to first stop acting the like oppressed underdogs, a political strategy invented by PM Erdogan and that plagues a whole nation. It seems, in Turkey, everyone is an underdog; the liberals, the Gulenists, the Erdoganists. We all want to get rid of our respective oppressors but do not want to move a finger for it. We think our duty to the nation is fulfilled if we protest virtually. Yes, we sometimes go out to the streets and protest but how many of us tried to hear an AKP voter out? How many of us organized public discussion sessions between opposing political views? As Erdogan tries to polarize a whole nation for his personal ambitions, we must stand together against it, not fall victim to it. Only then can we claim victory.

A Flowchart for Choosing Your Religion

A Flowchart for Choosing Your Religion

Looking for a JOB - How to Be the Next Hire

Making You the Most Viable Next Hire
Being flexible, creative and adaptable in today’s economy is the cornerstone to survival. The job search is no different and, with unemployment rising, requires just as much vigilance. One way you can keep your options open and make yourself even more marketable is by considering Consulting in addition to your quest for full-time employment. Often perceived as an “either-or” scenario, Consulting offers you just as many benefits as it does your “would be” employer:

Track record of Fixing Problems?
Career wise, people typically fall into one of two categories: those who thrive on problem solving and the prospect of a new challenge –or- someone who is exceptionally good at steering the ship once it is on course. If the thought of fixing something that is broken appeals to you (versus has you thinking about reaching for the Tylenol), then Consulting might be an avenue to explore.

A More Flexible Interview
Quite often, what a company needs is someone to tackle a specific problem, not a new full-time employee. Identifying this in the interview and being able to present yourself as the solution to their problem (at a lower cost), can ultimately create a job tailor made for you and your skill set. No one can compete against that.

Dating Before Marriage
A consulting engagement can give you the opportunity to see if this company is a nice place to visit or a great place to live. The only thing worse than a prolonged job search, is ending up in a position that results in you being unemployed again in 6-12 months. Consulting lets you do more due diligence than you could ever accomplish in an interview.

“Consulting” on Your Resume
To many recruiters, seeing “consulting” as your current role without any clients/engagements is just a way to dress up being out of work. But, with a list of key accomplishments at those engagements, you show that you are in demand, have more control over your search and are broadening your experience. The latter is extremely important if you are looking to transition industries.

Change Agent
For companies looking to make some sort of change internally (and you should like this if you have a track record of fixing problems), consulting is a more preferred approach versus hiring a permanent employee. It is much easier to come in as a consultant, effect the course correction and then hand it off to the internal leadership.

Money
Besides the obvious benefit of having income during your search, it also gives you breathing room to be more objective in selecting your next job.

It’s Easier to Find a Job When You Already Have One
So much of what makes this true is that fact that when you are employed, you tend to be a bit more objective because you have a “bird in hand.” Consulting (in addition to easing that financial strain, which helps here) can provide the self-assurance that comes along with being employed, which can get whittled away while unemployed.

Presenting yourself as a viable consultant or full time employee isn’t mutually exclusive. Rather, they are simply two sides to the same coin. For the companies where you interview, this will only make you more viable and versatile in your eyes. For you, there is nothing to lose. The worst thing that happens here is you generate some income to inevitable financial strain of your job search. On the other hand, you might just find through this process that you discover your next career move.

Bağdat Caddesi

Gel de parmaklara hakim ol, yapma bir Caddebostan, Bağdat Caddesi nostaljisi şimdi!...diğer bir deyişle 'Karşı taraf' . Cok uzun seneler yazları gittiğim, son yıllarda ise her Türkiye'ye gittiğimde kaldığım Istanbul'un bir başka eşşiz köşesi.
1960'lı 70'li yıllarda köşkleriyle, bahçelerinden salkım salkım sarkan ortancalarıyla, billur gibi denizliyle, 'sayfiye' yeri olmasıyla meşhur Erenköy, Suadiye, Caddebostan.

Dükkanların az, ağaçların çok olduğu, bunca yıl geçmesine rağmen hala güzelliğini koruyan Bağdat Caddesi. On, onbir yaşımdan itibaren yazlarım geçti oralarda. Sokaklarda oynanırdı o zamanlar, öyle pek araba filan geçmezdi. Doyasıya bisiklete binilir, el birakarak gitmek büyük marifet sayılır Erenköy, Saskınbakkal, Göztepe bisikletle rahat rahat gidilir dönülürdü. Deniz için bazı sokakların denize vardıkları noktalarda bulunan kayıkhanelerden saatlik ücretle kayık kiralanır, kadın erkek kürek çekmeyi bilir, kayıktan denize girilirdi. Bazı gençler dalıp iskele ayaklarından midye toplar bazıları ise sığ kumda zıpkınla vatos avlarlardı. Sokaklardan dondurmacılar geçerdi o zamanlar. Simdiki gibi binbir çeşit ne gezer 'Dondurma, Kaymaaak' diye bağıran dondurmacının küçücük arabasında sadece kaymaklı ve limonlu dondurma olur, bazen ise çeşit olsun diye vişneli bulunurdu.

Caddebostan Plajı'nın yanı sıra bir de üyelikle girilebilen klüpler vardı. Marmara Yelken Klubü başta olmak üzere, Balıkadamlar, Caddebostan Yat Klübü ve İstanbul Yelken. Eğer bunlardan birine üyeyseniz veya üye bir arkadaşınız varsa bazı sporları yapma veya izleme olanağınız olur, voleybol, ping pong oynar, kıyıdan yelkenlilerin yarışlarını izlerdiniz. Denizin ortasında ise köfteciler vardı. Bunlardan aklımda kalanı ise mayomuzun kenarına sıkıştırdığımız parayla yüzdüğümüz, veya kayıkla yanaştığımız 'Fıştak'tı. Dönerken yüzülüyorsa demirlemiş kayıklara tutuna tutuna, dinlene dinlene yüzülürdü.

Akşamüstüne doğru herkesi bir 'piyasa' heyecanı alırdı. Saçlar yıkanır, bildiğımız ütüyle ütülenerek düzeltilir, ve (Bağdat) Cadde'ye binbir tur atmaya çıkılırdı. Bir aşağı, bir yukarı. Parkur ise genellikle Santral Durağı'ndan Saşkınbakkala kadardı. O zaman 'cafe' adeti bir elin parmaklarını geçmez, 'Borsa'da yer bulabilmek için hızlı davranmak gerekir, 'Divan' ise gençlere çok pahalı geldiğinden ancak hafif 'yaşı geçmiş'lerin duraklama mekanı olurdu. Hali varaba sahiakti oldukça yerinde olan birkaç genç ise bir aşağı bir yukarı arabayla giderek Mustang veya Corvette'leriyle gelene geçene hava atarlardı.

Geceleri ise açık hava sinemalarının keyfine doyulmazdı. Caddebostan'daki Ozan Sineması'nda genellikle Türk filmleri oynar, çıkınca biraz aşağıda, Caddebostan Maksim Gazino'sunun (MIGROS)yakınındaki büfe'de 'zümküfül' yenirdi (Bir çeşit sosisli sandoviç ) Yabancı filmlerin mekanı ise Budak Sineması'ydı (Şimdiki CKM). Yastıgını kapıp tahta iskemlelere yerleştirdikten sonra, çekirdeğini çıtlatarak izlenirdi filmler. Bazen bu sinemalarda Cem Karaca gibi o zamanın ünlü sesleri konserler verir, bazıları ağaç tepelerinden konser izlerdi.

Sonra sonra o köşkler birer birer yıkılmaya, yerlerin uzun uzun binalar dikilmeye, Cadde'deki evlerin yerlerini dükkanlar almaya, arabalar çoğalmaya, faytonlar yok olmaya, tekerlekli dondurmacıların yerini Algida'cılar almaya başladı. Ama ne mutlu ki tüm büyümeler, kalabalıklaşmalar rağmen 'Cadde'yi bozmayı başaramadı! O hala 'Cadde', İstanbul'un ,Türkiye'nin en güzide caddesi hala boydan boya yürümekten zevk aldığım, bir yerde oturup geleni geçeni izlemenin keyfini her yıl bir iki hafta yaşayabildiğim bir yer.

Galata' ya dogru...

Galata' ya dogru...

The best way to improve health care requires physicians and other stakeholders

My honest approach for how to improve the care is to support a methodology such as being self-serving. I would like to start a program to introduce a software-based point-of-care tool for obtaining patient feedback. This real time information can be used with clients to positively impact the patient experience, nurse engagement, physician (soft skills) competence and overall quality. In my perspective the criteria for fulfilling the demand for finding the best way to improve healthcare is that it need be simple to implement, impactful and cost effective. The most impact to healthcare improvement will come from process improvement and healthcare provider recruitment AND retention. The by-products will be reduced cost of care and improved patient satisfaction. This applies to hospitals and private practices. Based on current studies and the economy, supplying adequate healthcare to the community is already tough and is going to get more challenging. Recruiting sufficient healthcare coverage will boost revenue and provide some improvement to patient satisfaction (wait time and access). However, failure to retain the medical staff will significantly hurt the outcome. With high demand and low supply, it will be well worth the time and money to present "we have the greenest pastures here". The method mentioned above may be called such as point-of-care through successful implementations that may turn in to popular key parts of process improvement. You need to have some feedback from the patients and the physicians in order to measure the processes that should be or are currently being improved. In order to achieve this you have to create the acronym HOSPITAL to help those in Healthcare recall the numbers of different types of inefficiencies in any medical facility. Those who have been exposed to Six Sigma and Lean have an appreciation for improvement opportunities and generally view things through differently trained eyes that can see within all those facilities. Publishing the results of the similar programs online may offer a transparent access to the consumers to monitor these inefficiencies. Welcoming any feedback relative to this and encourage your staff to consider this method or similar training methods for their teams will be highly critical for the outcome. We have to understand that it is impossible to solve a problem that we are unaware of. By providing even the most basic tools at the lowest level possible, these problems have a way of surfacing. While everyone recognizes that healthcare systems and organizations need to improve, I think not enough time is spent on firstly identifying the key stakeholders, and secondly properly ENGAGING them. I strongly believe that not enough time is spent trying to engage physicians in this process. In my experience too many of these "improvement strategies" are top-down decisions by non-clinical managers who failed to conduct any research into what physicians might want or what stumbling blocks there are/were to get them to adopt the new technologies. EMR/EHR/CPOE are prime examples - all of these require a breakdown in the normal activity flow of providers, as it requires them to either find and log on to a terminal or carry a bulky instrument. Almost all clients and colleagues I have worked with resent and resist those methods. And look how few MDs are part of Healthcare consulting firm teams. IMHO, I believe more energy should be spent engaging rather than alienating MDs as a first step, then doing the same for patients in order to get buy in from the two key stakeholders as I see it. I've always found that engaging these stakeholders on projects from the beginning results in more buy-in and most importantly, better recommendations/outcomes (a better product).

ULTIMATE RESULTS

ULTIMATE RESULTS

Ilhan Arsel

Ilhan Arsel

BJK FOREVER

BJK FOREVER
Karga kartalların sırtına oturur ve boynunu ısırır. Kartal cevap vermez, kargayla savaşmaz; kargaya zaman veya enerji harcamaz, bunun yerine sadece kanatlarını açar ve göklerde yükselmeye başlar. Uçuş ne kadar yüksek olursa, karganın nefes alması o kadar zor olur ve sonunda karga oksijen eksikliği nedeniyle düşer. Kartaldan öğrenin ve kargalarla savaşmayın, sadece yükselmeye devam edin. Yolculuk için gelebilirler ama yakında düşecekler. Dikkat dağıtıcı şeylere yenik düşmenize izin vermeyin....yukarıdaki şeylere odaklanmaya devam edin ve yükselmeye devam edin!! Kartal ve Karga dersi