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To hell with this world, and end this dream

(To hell with this world so that we can build the New World...)

A nice hotel built on a green hill, in the suburbs of Frankfurt… I am one of the speakers at a seminar called "Reasons to be Cheerful? From Crisis Management to New Challenges" organized by BCG (Boston Consulting Group). As the representative of a company in Turkey, one of the emerging economies, I have been invited to “give hope” to the leaders of organizations in developed economies that are going through a stagnant period!

While I was waiting among mostly German senior executives for my turn to speak, and listening to the introductory presentation by a BCG executive essentially giving the message “The debts of developed countries is virtually quicksand… They might even collapse in an instance like a Ponzi Scheme*. But there still is hope (?!)”, I suddenly had the image of the Turkish musician Orhan Gencebay along with his band in my mind, singing to me, “To hell with this world, and end this dream, shame on those who laugh when they make you cry…” That was surely something – he wouldn’t stop; although I’m not into arabesque music, the lyrics of this song by the legendary Orhan Gencebay had left their mark in my memory!


At that meeting last month, a concern that preoccupies me time and again suddenly crept up into my consciousness. It is as if we were all living a lie since the global financial crisis in 2008; like there was still an unfaced cost/perhaps bankruptcy, an unsustainable situation, but people just think, “let’s wait and see, we’ll recover soon”. Maybe these feelings are familiar to you?

Nevertheless, inspired by the “German discipline of rational thinking” at the meeting, I would like to briefly share with you without further pessimism the views of the BCG executive on “the global economic deadlock, things-to-do at national and corporate level”, and my reflections on them.


Developed countries cannot escape high levels of sovereign debt, and have to keep the debt cycle running, otherwise there is a risk of them going bankrupt just like in a Ponzi Scheme*! While they need to repay that debt by growing, they are struggling with conditions that make it quite hard to reduce the debt:

i. Shrinking working-age population, and increasing social obligations;

ii. The impact of the end of the super cycle of “rapid growth” around the world in the last three decades; 

iii. The end of the cycle of “falling raw material costs” that had been continuing for more than a century (not to mention the environmental cost we haven’t faced yet!);

If you couple these with income inequality, i.e. the divide between the “super-rich” and the general population whose wages are under constant pressure, and the indecisiveness of politicians in the face of challenges (The Economist calls it “sleepwalking”), you have a “perfect storm”.


The following exit roadmap summarized in 10 items is recommended for developed economies:

1) Writing off debts “that can’t be paid back”: Though no one would even want to imagine that, the process that has been very painful even for a small country like Greece would be bitter and witness many losers in a bigger country. The alternative to that, that is high inflation (the Turkey of the 80s-90s) and/or tax increases have a negative effect on growth. Although they seem plausible, they are almost impossible in practice!

2) Reducing social obligations: Delaying retirement, decreasing payments, and restricting healthcare services… All of these are on the list of decisions that politicians are avoiding like the plague, and will have to take when push comes to shove.

3) Increasing the efficiency of the state: More effective and productive work with fewer employees… This is pretty obvious – the fact that it hasn’t been done so far, makes it one of the top items.

4) Finding a solution for declining labor force: Who, then, is going to work in these countries in 10-20 years’ time? Naturally, older people (compulsory delayed retirement) and women, whose participation has to increase (I wish that was the emphasis of the discourse in our country rather than women having three kids!)… Encouraging childbearing is one of the solutions, however, it is true for countries with negative population growth; beware of counterfeits! This item, too, sends shivers down the spines of politicians.

5) Rational migration policies: Particularly economies such as Germany and Japan need to implement policies that encourage immigrants with higher education, and develop programs to retain them. Having said that, it is risky in social terms, and I would tip my hat to the politician who displays the courage it takes.

6) Investment in education: Highlights under this item include raising the average level of quality in education (impact of teachers and technology), a stronger focus on entrepreneurship/innovation, and targeting education in critical sciences/engineering. Probably the most effective item for growth is “investment in education”, something all politicians can easily do, but ignore since they think that the impact on the electorate can only be seen in the long term! Perhaps, countries that have managed to separate investments in education from the electoral cycle should be examined for success in execution.

7) Investments in infrastructure: This is the most popular and frequently implemented item of this recipe – most countries are focused on investments in infrastructure, be it in the public or private sector. The classic risk element here is that limited capital is wasted on low value added projects. (You might have thought of some ambitious projects on our national agenda – but I didn’t say so, you came up with them:))

8) Raw material efficiency: The downward trend and volatility of raw material sources requires incentivizing both the development of alternative energy, and raw material-efficient products/production. Countries that have been able to make long-term, smart plans have already started improving slowly but surely!

9) Removing the barriers in front of innovation/entrepreneurship: Most of the time, protectionist practices in existing sectors cut off innovation. It seems major opportunities here lie in lifting these barriers; encouraging entrepreneurship at an early age (university education); and increasing social acceptance for new technologies (such as biotechnology) to be tried.

10) Global cooperation: This is the most critical item because a world where each country tries to increase its exports, attract more qualified workforce, and guarantee its raw material resources is not sustainable. Therefore, it looks as though this unrestrained competition has to be replaced by cooperation. While addressing the shortcomings of existing cooperation platforms, we also need to set up new, strong and focused ones.

One could argue that unless countries make progress using this long recipe, which is both bitter and quite hard to implement, the market economy (due to protectionist practices), and even democracy (because of a young, unemployed population) are in danger.


Although this title deserves an entry of its own, I think it is worth mentioning briefly here to see the big picture. One thing is for certain: current profitability levels will decrease because of rising taxes and the saving state/consumers. In that case, I can summarize the “must-happens” for organizations as follows:

Burada da formül basit, uygulması kolay değil. Keza yükselen ülkelerin çoğunda, genç ve yaşam şartlarını/gelirini arttırmayı bekleyen birçok altyapı ve demokratikleşme eksikliğiyle boğuşan yönetimler var.

Aslında hangimiz daha zor durumdayız; karar vermek zor!


Bu başlı başına ayrı bir yazı konusu olsa da, konunu bütünlüğü açısından kısaca değinmekte fayda görüyorum. Kesin olan şu ki artan vergiler ve tasarruf eden devlet /tüketiciler nedeniyle, mevcut iş karlılıkların azalacağı.... Bu durumda şirketleri için "Olmasza olmazlar"ı şöyle özetleyebilirim;

1) Cost efficiency: In this day and age of export mobilization and increasing competition, a clear focus on costs is an issue to be revisited even by those organizations that claim “to be good at this”.

2) Price management: Future scenarios reveal two extreme expectations of either very low or very high inflation rates. Therefore, organizations need to reinforce and manage their pricing process.

3) A flexible business model that is braced for big risks: This is not about being “ready for everything”, but rather being an organization “that has assessed possible scenarios in its industry, and has prepared its options for the most critical ones, and is investing in the main scenario it has picked.”

I'm not even mentioning innovation, that's a prerequisite anyway!!!

THE MOMENT OF TRUTH: "To hell with this World so that it can be replaced by a new one!"

Turkey's recent history is full of uncertainties and crises; maybe that is why Turkish organizations are quite capable of coping with challenges. For the "global cooperation" item I mentioned above, there is the following very clear opportunity for cooperation between Turkey as an emerging market economy, and developed economies:

Our country's strength is its market growth potential, and our primary need is investment in technology/efficiency for added value… In developed countries, though, the opposite holds true: they need a growing market, and their strength lies in technology/efficiency – that is a perfect foundation for cooperation!

We started off by saying "to hell with this world" – let's end with the new one. The New World means slower growth, less consumption, and an older population, and because of the sheer size of these challenges, requires novel types of cooperation (between the state, business world, and NGOs).

The keywords are "coping and cooperating". Easier said than done. But not doing anything comes with a considerable price tag, like in a Ponzi Scheme. So, I will ask you:

"Are you ready friends? For a better, more just [New] World filled with love… To Hell with This World!"

Kind regards,

Mehmet N. Pekarun

*In a "Ponzi Scheme" investors who, without really knowing how, believe they will earn a lot, join the scheme in increasing numbers, thus increasing the money flowing into the system. That capital is then paid to former investors as “high returns”. That there is no end to this scheme becomes obvious when the number of participants drops, and the scheme collapses rapidly