Ozay Mehmet

The management of risk: Informal trade in Indonesia

Abstract Small traders face risk and uncertainty in carrying out their business activities. On the basis of a large-scale survey on informal sector trade in Central Java, Indonesia, the economic conditions of the informal trade sector and risk avoidance strategies of traders are analyzed. In particular, petty traders have to solve “the traders dilemma” by extracting themselves from the moral obligations of sharing and redistribution to relatives and neighbors. Inventory minimization by daily replenishment of stocks, avoidance of long-term credit, and formalization of relations with government agencies are among the risk-reduction strategies. Policy measures to aid petty traders in their endeavor to reduce risk and maintain their businesses are outlined.

Employment creation and green development strategy

Employment creation has received surprisingly little attention in the literature on environmental economics. This paper argues for closer ties between sustainable development and employment-creating development at both the global and the national levels of planning and policy. The paper briefly reports on the employment challenge confronting Indonesia to highlight the jobs-versus-environment dilemma facing a developing country that is rich in natural resources but densely populated. It is argued that the high-income countries of the North should take the initiative in raising funds through ecotaxes, levies on international trade and other appropriate income policies in order to increase investment flows for job-creating development in the South to make sustainability a practical reality.

Al‐Ghazzali on social justice

States that Abu Hamid Muhammad Al‐Ghazzali (ad1058‐1111) is generally regarded as the Islamic equivalent of Kant. Reveals that he was a prolific and influential scholar, and that a central objective of Ghazzali in all his writings was the unity of knowledge, rooted in the Oneness of God, and reason (i.e. intellect plus free will) as the path for all moral concepts ultimately leading to the belief in God. Argues that Ghazzali’s ideas of good government, Dawlat, based on social justice, ad’l, penned 1,000 years ago, are still refreshing and relevant today. For, as humanity approaches a new millennium and globalization is slowly integrating peoples and cultures of the world, demands for global equity and good governance are at the top of the international reform agenda. Concludes that, in this context, Ghazzali’s ideas are especially relevant for a critical analysis of a discipline, i.e. economic development, which has for too long been Eurocentric.

The bounds-test approach for co-integration between international tourist arrivals, per capita income and cost of living: the case of All Cyprus.

Tourism is a major income earner for Cyprus, but the market is a divided destination. Since 1974 the country has been divided into the North and the South, each competing with one another in the same tourism market. For the first time, this empirical study investigates an island-wide tourism demand. Extending earlier work (Yorucu, 2001), All Cyprus tourism time series data covering 1980–2006 has been used in this article to estimate demand applying standard bounds-test approach for co-integration within a disaggregated framework. The results confirm a special long-run equilibrium relationship between Turkey/North Cyprus and Greece/South Cyprus. Thus, per capita tourist arrivals from Greece to South Cyprus and those from Turkey to North Cyprus are statistically significant with cost of living and per capita income variables. So long as incomes per capita increase in Turkey and Greece, a reunited All Cyprus will gain as one destination as Turkish and Greek citizens will become mobile island-wide.

Social Capital Formation in Large-Scale Development Projects

ABSTRACT Project design, implementation and evaluation are undergoing major change in line with new concepts and practices of community participation, consultation and stakeholder analysis. Social capital is the key in this change process. This paper surveys recent literature on social capital and derives guidelines for development projects, especially large-scale projects. The paper offers a micro-economic method for measuring social capital derived from interdependent utility functions.

Modeling Energy Consumption for Growth in an Open Economy: ARDL and Causality Analysis for Turkey

In a growing open economy, energy consumption plays a critical role. Insufficient energy may constrain output, while exogenous factors, such as shocks in world price, may limit the aggregate growth rate of the economy. This study investigates the long-run equilibrium of energy consumption in Turkey from a unique perspective, taking tourism expansion as a proxy for exogenous growth. The paper uses the Autoregressive Distributed Lag (ARDL) model to determine an econometric relationship between electricity consumption, foreign tourist arrivals, and the economic growth using data during 1960–2010. Granger causality test determines the direction of causality among these variables under conditional error correction model (CECM) supplemented, whenever required, by the Bounds test. Results reveal that foreign tourist arrivals and real gross domestic product (GDP) are significant determinants of a long-run equilibrium relationship with electricity consumption for Turkey. A positive significant relationship has been found between electricity consumption, foreign tourist arrivals, and economic growth in the long run. The estimated ARDL elasticity coefficients indicate that a 1% increase in the number of foreign tourist arrivals and GDP growth cause 0.045% and 0.74% increase in the total electricity consumption of Turkey, respectively, after adjustments consistent with standard procedures.

AFTA‐NAFTA links: Canada as a catalyst?

The gradual and informal movement of the Association of South East Asian Nations (ASEAN) toward an ASEAN Free Trade Area (AFTA) stands in stark contrast to the rapid formalization of procedures and institutions that have characterized the Canada‐U.S. Free Trade Agreement and the North American Free Trade Agreement (NAFTA). In order to mitigate trade‐related conflicts between the ASEAN states and what they perceive as a developing NAFTA trading bloc, this article argues that Canada has the opportunity to take an intermediary or catalytic role between American unilateralism, with its emphasis on quick action, and the incremental, consensual approach characteristic of the “Asian way.”

Turkish energy market: Transformation, privatization and diversification

Turkish economy is highly dependent on fossil energy imports. With limited domestic production of energy and rapid industrialization, urbanization and population growth, Turkish vulnerability to costly energy imports poses a serious threat to the country’s comparative advantage while generating rising current account deficit in the short-term. To date, Turkey has managed to obtain its imported natural gas through long-term contracts, typically 15–20 years, with relatively favourable import prices.

Turkey as a Hub in the Southern Energy Corridor

Turkey is not an energy producer, but it sits next door to the world’s greatest proven energy reserves. By location, it dominates access to hydrocarbon fields. It links energy sources to consuming markets. As a geographic bridge connecting Europe to the Middle East and Asia, will suffice to demonstrate that country as the natural key on the Southern Energy Corridor. Market forces strongly favour Turkey as the corner-stone of a Regional Energy Model, proposed in this study.

A Summing up

This study has used a ‘level of risk’ analysis to examine a Turkey-centric Regional Energy Model in order to secure European energy supplies along the SEC.