Having maintained a speedy economic growth accompanied by a series of reforms in labor markets to strongly reflect a boom in gross domestic product on employment, Turkey has put its long time fight against unemployment on the right track since a 2009 global financial bottleneck and is expected to maintain this success in the years to follow.
An old adage says "A good scare is worth more than good advice." This can be applied in practice for Turkey's experience looking back at the two most recent crises the country went through. The latest of these was the 2009 turbulence that arrived as an external shock. The earlier punch, however, came from inside with the 2001 domestic banking crisis. Considering the Turkish economy's journey through both these crises different in type of origin and size of impact it is not wrong to state that both were actually useful scares that eventually turned into benefits for the country.
Since the impact that led to the collapse of 11 banks in the country, Turkey has implemented strict reforms in its banking industry. In fact, the reason Turkish banks weathered the storm during the 2009 global financial crisis was basically due to strict fiscal reforms implemented following 2001.
Here it is important to note that maintaining a healthily operating banking system and lowering unemployment are two key achievements Turkey has reached simultaneously. Albeit slowly, this recovery showed itself following reforms implemented step by step by the government and unemployment growth in Turkey is more likely to be controlled than it has been before.
Turkey's unemployment reared its ugly head, exceeding 15% during the worst period of the 2009 crisis. The country's unemployment dropped to 8.8% in September, the lowest level since the third quarter of 2001. Turkey inches one step closer to eliminating or at least minimizing unemployment as a major threat and a structural problem for the country's economy. Observers argue this can only be possible through strong and stable growth.
Turkey's economic growth rate for the first three quarters of this year was 9.6%, the fastest in the world. The year end economic growth for 2011 is estimated at around 8%. Apart from being the fastest in the world, Turkey’s economic rebound, particularly following the 2009 crisis, is unique in the sense that economic growth was strongly reflected in employment figures. Turkey was the only country that grew by more than 5% and that, at the same time, reduced unemployment by between 2 and 5 percentage points following the 2009 crisis, according to the International Labor Organization's "Global Employment Trends 2011: The challenge of a jobs recovery" report.
As stated above, Turkey owes its success in boosting employment to employment friendly measures taken in the private and public sectors, unlike many developed countries, including the EU. Overall euro zone unemployment hit 9.8% in October 2011, while the union's youth unemployment jumped to 22% in the same month from 16% in 2007, data provided by the European Commission show. Turkish labor market reforms involved such critical steps as increasing the role of the state in covering social security premium payments for troubled businesses and extending short term unemployment payments.
In 2012 and subsequent years, Turkey is expected to gain more success in minimizing unemployment. The government expects to stabilize unemployment at around 5% in the next decade and will likely tighten its stance with new measures in this regard.
Data show more than 1.7 million people joined the pool of the employed in Turkey in the past 12 months to reach 24.75 million. These latest figures are also proof the government’s fight against core factors that ignite growth in unemployment such as high inflation along with efforts by the private sector to employ more people paid off. Here one should not overlook the role of the private sector in helping Turkish job markets improve.
In contrast to most developed markets where large global corporations laid off employees, the Turkish private sector has provided employment to around 1 million people this year; the public sector’s contribution was around 120,000 people, unofficial data indicate. The encouraging fact in the latest employment survey was that Turkey’s non agricultural employment, particularly in industry and construction, was increasing.
Services and agriculture traditionally make the highest contribution to employment. Their share in employment in September 2011 was 47.2% and 26.2%, respectively. Industry and construction combined employed 26.6% of total workers in the same period.
The industry and construction sectors are expected to maintain their strategic role in making substantial strides in Turkey’s fight against unemployment thanks to new foreign and local investments in industry along with an anticipated country wide urban transformation project in construction markets.
(Sourced from www.todayszaman.com)
