Observers believe that investments deferred amidst the uncertain climate of the global economic crisis will follow thanks to heightened hopes of a recovery, also bringing in a rise in the number of jobs created.Turkey had managed to maintain a growth rate for 27 consecutive quarters after the 2001 economic crisis, but this extraordinary situation failed to create a corresponding level of employment. But it seems to be different this time, given the recent changes in the country’s unemployment figures.
Turkish Statistics Institute (TurkStat) data show the unemployment rate dropped 2.1 percentage points in March to 13.7 percent, down from 15.8 percent in March 2009. This was the second consecutive month the rate had edged downward, registering a 0.7 percent drop, or 126,000 people, from February to March.
Although everyone was already expecting a two-digit figure for the first quarter growth rate, 11.7 percent was still a source of joy for many. Denizli Chamber of Commerce (DTO) Chairman Necdet Özer, for example, maintained that the spurt in economic growth will boost morale and definitely have a positive impact on the markets in the coming days. “I believe these figures will contribute to employment. Businesses can be fully rejuvenated should the growth rate for the year exceed 5 percent,” he said in an interview with the Anatolia news agency last week, stressing that the recently announced growth figures are a sign of positive developments in the near future. The unemployment problem also seems to have eased with a nearly 13 percent drop compared to a year earlier, Özer remarked, predicting an increase in trade and production to revitalize the economy.
Fatma Şahin, a Gaziantep Justice and Development Party (AK Party) deputy and the head of the party’s women’s branch, asserted that the unemployment nightmare has started to wane with the recovery in the economy. With the new national employment strategy the government is currently working on, the participation of women, the unemployed and youth in the labor market will be boosted further, Şahin said.
Growth: a panacea
“Economic growth is the cure to the unemployment problem,” TOBB President Rifat Hisarcıklıoğlu noted, adding that the positive impact of growth on employment is clear. He stressed that registered employment in the TOBB member companies increased by 726,000 in the span of a year. Investment from the private sector is also on the rise, he said. “Turkey is again enjoying private-sector-driven growth with a stunning performance. Even though we cannot neglect the impact of the base effect on this high growth rate, it is also clear that the Turkish economy has the capacity to recover from the crisis rapidly,” he said.
Although the acceleration in economic activities is stirring hopes for the recovery, there are still some people warning of complacency. Boydak Holding CEO Memduh Boydak is calling on the government to introduce its employment package as soon as possible. “It seems we are currently undergoing a period of contraction. If we do not exert all our efforts immediately, business figures might fall below our expectations. Incentives to boost employment also pave the way for further economic growth. The new package will increase the morale of industrialists and help Turkey to develop as an important country internationally.”
Government happy again
There is growing confidence among members of the government that the decline will continue steadily in the coming months. Like Prime Minister Recep Tayyip Erdoğan, Economy Minister Ali Babacan also predicted that the rate would reach 10 percent during the summer season. Speaking to the press on the same day as the TurkStat figures were released, the minister did not hesitate to claim that the improvement was a product of the recuperation in the economy. “Employment rose by 1.59 million in Turkey in a single year, and there are no figures to match this anywhere across Europe,” he said.
Indeed, the government is not simply waiting for the economy to take off to ease the pain of this serious situation; it has been busy for months hammering out a document titled the “National Employment Strategy” to fight the jobless rates more effectively. The government has announced several times that the plan will not be disclosed earlier than mid-July, but this is just around the corner. Some analysts believe the euphoria that came about with the excitement of the high growth rates needs to be fueled by an all-encompassing plan, and they want the government to announce the strategy document as soon as possible, before the elation fades.
However, some argue that the expectations about the strategy document must not be kept too high since it will be lacking tax incentives. In addition, Babacan had already asserted that the strategy would bring about a “middle-term perspective with only a few steps to be taken in the short run.”
Despite the business world’s aspirations, the labor unions are not so happy with the step that the government is poised to take. The Confederation of Turkish Labor Unions (Türk-İş) submitted a report to the government to inform them of their concerns that the strategy will include bitter pills that will be hard for the workers to swallow. The report said the measures will likely include such thorny issues as flexible employment, the institution of a severance payment fund, overtime work, special employment offices, temporary work and a regional minimum wage, adding that the confederation is highly sensitive to these issues and will not accept negative developments about them.
Employment strategy: A silver bullet solution?
The government is carrying out multifaceted attempts to rein in unemployment, with periodically repeated calls to arms to the private sector in the battle against unemployment. Prime Minister Erdoğan, for instance, urged each member of the Turkish Union of Chambers and Commodity Exchanges (TOBB) to hire one additional employee in May. Initially falling on deaf ears, the invitation later received positive responses from several business organizations and companies. For example, leading Turkish furniture manufacturer Alfemo’s general manager, Ramazan Davulcuoğlu, said last week they had acted on Erdoğan’s request by hiring 101 workers in June instead of just one. “We were able to hire that many workers thanks to the stability that exists in the country, and due to the fact that Turkey has managed to turn the economic crisis into an opportunity for itself,” he said.
Indeed, not everyone seems to be jubilant about the high growth rate, which was the second best globally after China, and its potential repercussions on the labor market.
According to Seyfettin Gürsel from Bahçeşehir University, employment is likely to return to 2008 levels during the spring in nonagricultural employment. However, Gürsel recalled, the number of unemployed surged from about 2.3 million at the onset of the crisis to its current level of 3.56 million, a staggering increase of 1.27 million in the span of one-and-a-half years. “It will take many years to reduce the number of unemployed to pre-crisis levels,” he predicted.
The deputy chairman of the Democratic Left Party (DSP), Hasan Macit, was incredulous in his assessment of the economic growth, which he thought didn’t reflect people’s real income, which is apparent from the 3.8 percent contraction experienced in the agriculture sector during this period. “A total of 26.7 percent of workers in Turkey are employed in agriculture, and people who earn a living indirectly from the sector account for the majority in the country. But the share of the agriculture sector in GDP is even less than the first quarter of 2009 and even 2008,” he said. To address the problem, Macit called on the government to encourage investments in the agricultural sector to boost the employment of a qualified labor force, while also promoting cooperation between industry and agriculture.
Sinan Aygün, chairman of the Ankara Chamber of Commerce (ATO), warns that too much euphoria may poison the mind and cause complacency. He says there is no need to get overexcited and states that the Turkish economy has yet to regain 2008 levels despite the surge in growth achieved in comparison to the first quarter of 2009. This situation makes additional measures obligatory, he said, expressing hope that the government’s employment package will address this problem.
National
