Economies and businesses are always shaped by expectations, just as market expectations are important in economic forecasts themselves. Within our professional capacity, we have tried to outline a draft forecast for the upcoming days. While it may not necessarily foresee the future in all its detail, it is better to have one, rather than none. Here are our short term new year predictions.
Energy supply security is within our prime concerns. Our installed capacity has reached to 80 GWe, and peak demand at 44 GWe in August 2016. Our local lignite production was 50+ million metric tons in 2016. Hard coal was 2 million metric tons. Imported hard coal was 30 million metric tons.
First S&P and then Moody’s rating agencies have lowered our financial credibility to junk level, the other international rating agency (Fitch) is clever to postpone their Turkish ratings, however we all know that their late declaration is also meaning low rating for our investment environment. Rating agencies ask for transparency, rule of law, fair competition in our local market.
The European Union has frozen accession meetings completely for participation since all remedy requests have been returned with futile responses. Luxemburg, Germany, Austria, Sweden, Denmark have already voiced necessary applicable counter measures.
The recent tax $15 per ton imposed on imported coal could be a deterrent figure for future investments for imported coal firing thermal power plants. Anyhow the latest thermal power plants are exclusively built by Chinese companies due to their ultra low lump sum turnkey prices, covered by cheap PBoC project financing. However these plants have poor design, they have low spares, short life span. If you desperately need electricity generation, then price is not so important. The tax will be collected by our Treasury, and end price is also taxed so our Treasury will get all money from both ends, all other parties are intermediaries in the long run.
On the other hand, 6 US cents per kwh electricity purchase guarantee for local coal firing energy generation is a good booster for newcomer investors. However it is not so pleasing to place orders to Chinese contractors just because of their ultra cheap turnkey prices for new local coal firing thermal power plant investments. These plants do not meet national standard, norms, rules, regulations, laws. They have poor design which are not applicable for local coal, they have limited or almost no spares and high breakdown, low availability and low life span during operation.
New tenders for local coal firing thermal power plants are in Cayirhan-2, Eskişehir, Konya, Trakya. Soma and Çan thermal power plant investment projects are ongoing. There are still imported coal firing projects in Çanakkale, Aliağa, Amasra, Iskenderun bay although imported coal is not encouraged any more.
Nation could not yet recuperate from the unexpected events and after shocks of the last 15-July coup. National healing is continued in a slow pace. Mass demonstrations were a part of this healing process. We do not know nor estimate how long it will last. We are unable to put sound reasoning to the events that took place that night and thereafter. The army, air force and navy are minimized in size and so humiliated at proportions not ever seen before in the national history. Minimizing size of military forces are general tendency in modern times provided that increase in rapid and heavy strike capability are essential. That is acceptable. Humiliation is unacceptable. Closure of prestigious national heritage war schools are not acceptable. We always need strong army in our geography for our survival.
Remedial measures are necessary in the long run. Last but not least, commentators foresee that the last putsch may take place in the Parliament. New opposition may emerge from the ruling party itself. That may appear in the next working session of the Parliament which would start later this year. T
hat is also the time for ending second 3-month emergency period after 15-July coup attempt. This is why ruling party asks other two opposition parties to join public solidarity in democratic union in mass demonstrations. If the last coup would succeed then we could have faced with unprecedented bloodshed everywhere. So any undemocratic counter attempt must be stopped upfront by all means.
Common consensus as created by independent foreign military commentators openly and frankly say that USA (and Nato forces) should leave Incirlik air base for the long term and they should move to relatively more secure or tranquil place such as Southern Cyprus, Northern Iraq, wherever they would feel more comfortable, more independent, more free to maneuver in the Middle East. USA will follow their indifference policy towards international events due to transfer of power after US Presidential elections.
On August meetings which were held in St. Petersburg, Russians asked compensation upfront for downed SU-24 war plane for sure. On negotiation table behind closed doors, there were negotiations for new prices on natural gas sales, more concessions on 63 bcm capacity Turkish Stream underwater pipeline construction project and better terms for 4800 MWe nuclear contract etc. We should note that in the long term Mersin Akkuyu nuclear project may also serve as a new Russian military seaport on Mediterranean coast to reinforce Russian presence on hot seas.
The assassination of Russian Ambassador Hon. Andrei Karlov (RIP), in Ankara Modern Arts Gallery on 19th December, was another misfortunate and sad incident for Turkey. There will be important consequences in time.
Arab countries are completely ignorant of the events which took place at our environment since they have worse incidents they face every day. Their foreign ministries released copy paste declarations for support of ruling party one after another.
We have good deals with Iran due to our favorable gas purchase agreements. However due to their increased internal gas demand, they stopped sending gas to our system as of December. We have gas supply and energy generation drop in our energy markets.
National Security is to be reinforced since SouthEast insurgency may get worse. The people in SouthEast may look for their own solution after arrests of their members of parliament. As seen everywhere in the world, such as in Ireland, Scotland, Bask in Spain, if minorities are not fairly represented in the national parliament, then they may look for their alternative solutions.
Bankruptcy postponement epidemic in the local markets spreads to low capital- small companies. that will be a high impact on our economy despite of unrealistic pictures as pronounced by public officials. People has lost confidence to public declarations. Foreign exchange rates may dive low in time.
Amnesty under code name “prison reform” released large number of convicts, from overpopulated local prisons to make space for the accused of latest coup incident. We hope that courts work in time properly, rule of law is established, justice is ruled as in the books.
There is a wide range consensus for low profile public appearance. People deactivate their accounts in social media. They are not interested in any public expression. Newspaper columns are repetition of earlier articles. People are indifferent to every event since so many nasty things have happened in the near past with no reasoning no meaning we can name. Immigration applications among academics and young professionals are on high rise.
We believe that these are a few warning indicators, of which you will seldom read such candid forecast from a local source for our home environment anywhere else. We would be pleased to receive your comments and feedback over the course of the upcoming year.
Enjoy the article?
Did you find this article informative? Please consider contributing to Eurasia Review, as we are truly independent and do not receive financial support from any institution, corporation or organization.