Turkey: long short - FT.com The arguments for selling Turkey have been strong this year. A mix of social unrest, an intractable current account deficit, the threat of central bank "tapering" and a government lurching between authoritarianism and populism (perhaps they are the same thing) does not scream "strong buy." Istanbul's stock market has shed 20 per cent since May. That is not the worst performance in emerging markets (Brazilian stocks did much worse). And yet the risk is that Turkey is undersold. It has particular difficulties that make it stand out from other emerging markets. Events in 2013 illuminated these problems. With presidential and local elections next year, political tension rising markedly and a slowing economy, the worry is that 2014 exacerbates them. Too much can be made of Turkey's current account deficit. It was 6 per cent of gross domestic product in 2012. But that is better than 2011. In any case it has been around for a decade without causing the end of the world. The country has bigger problems. Exhibit A is its low savings rate - 15 per cent of GDP in 2012 against over 35 per cent in Indonesia, according to Moody's. This is one reason Turkey is so dependent on short term flows. To attract the long term capital it needs, Turkey must become a more attractive place in which to invest. The Istanbul market is a symptom of the limits of Turkey's attractions. Nearly half the capitalisation of the 100-share index is financial services. Family-controlled conglomerates also feature: they led the economy's modernisation, but have become sprawling power centres with, sometimes, little regard for minority investors. The energy and industrial sectors comprise just 20 per cent. Turkish companies continue to benefit from a decade of economic reform. Citi estimates that earnings growth will hit 18 per cent in 2015, compared with 10 per cent in other emerging markets. Who would not want to own some? But without reforms to the corporate landscape that would reinforce structural reforms, Turkey remains a market where insiders trump outsiders.