Turkey’s current unemployment rates could look heavenly soon
Figures released Oct. 16 show a rising trend in unemployment, suggesting that the ongoing expansion of Turkey’s economy is not being reflected on the labor front.
It is clear that the economic expansion is based to a large degree on the construction sector. Considering that hot money flows from abroad are keeping the construction sector’s wheels spinning, an optimistic future for the unemployment rate seems unlikely.
Besides economic risks, domestic and foreign policy developments also pose a threat to the sustainability of Turkey’s growth rates.
Following the July period’s unemployment rates, which were announced on Oct. 16, one colleague summarized the situation under the headings: 3.43 million people are currently unemployed, making the unemployment rate 10.7 percent. One-third of Turkey’s female population is both unemployed and uneducated. Around 35 percent of the labor force is unregistered.
Faik Öztrak, former Treasury Undersecretary and a deputy from the main opposition Republican People’s Party (CHP), said that around 119,000 people were added to the unemployment wagon compared to the same month last year. Even worse, while male unemployment figures fell by 35,000, almost 154,000 more women have become unemployed.
CHP deputy Çetin Osman Budak has been saying that despite the government’s incentive, subsidy deferral and credit boom policies, unemployment figures remain at double digits and have even worsened in recent months.
Considering Turkey’s current economic status and the fact that the country is dependent on foreign resources, the correlation between rising unemployment figures and economic growth is curious.
Such a structure makes the country even more dependent on foreign sources in terms of both production and capital. That is why even if the labor force expands, unemployment rates continue to increase.
It is clear that the government’s recent suggestions - including considerable animosity toward foreign companies or formulas that look like import substitution - are not going to be beneficial. Unfortunately, we have recently been observing the administration leaning toward such a mistaken understanding, despite the slump in both the hot money inflows as well as the unemployment figures.
The steps that need to be taken are also clear. Sectors that are expansion-friendly and those that use advanced technology must be developed and supported. Also, considering productivity and the labor force, capital should be spent on industries that feed off of research and development, rather than the construction industry, which has very few long-term benefits. The economy should thus be restructured.
To solve our capital problem, there is no remedy other than creating more employment opportunities and decreasing the current account deficit. If we can manage to achieve this, we can be free of our dependency on foreign sources. But in order to secure the foreign capital that is currently necessary we need education, universities, and a free climate of research - as well as freedom of expression and steps forward to advance our democracy.
Despite this fact, the government on Oct. 16 opted to extend the state of emergency for yet another three month period. It did this even though some members of the ruling Justice and Development Party (AKP) have started to voice how the state of emergency is damaging Turkey’s economy and making the path forward more difficult.
Fixing unemployment is not easy, but lifting the state of emergency is one thing that can help. A normalization of Turkey’s troubled domestic and foreign relations is also urgent for the good of the economy.
If not, the current unemployment figures may one day look heavenly to us.