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Champion AKP
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There is absolutely one point in which the ruling Justice and Development Party, or AKP, government can rightfully boast of its outstanding success.
Perhaps there are times in Turkish history when unemployment might be higher than the February 2009 figure of 16.1 percent released by the Turkish Statistical Institution, or TÜİK, but even if so, as there is no written document to prove that, the title of absolute champion of unemployment must be presented to the AKP and Prime Minister Recep Tayyip Erdoğan.
Last month we were lamenting that thanks to the tangentially passing economic crisis more than one in every five young Turks have become unemployed. Among the below-25 age group unemployment was at 21.5 percent level in January. Now, the success of the AKP in that field has become even more demonstrative. About 28.6 percent of our young population was unemployed in February. That is about one in every four young Turks was without a job in February.
While the overall recorded unemployed population has reached 3.8 million, the fact that compared to the same month last year the increase in unemployment rate was more than 4 percentage points and compared to January 2009 there was an increase of almost 1.5 percentage points are indicators that the 16.1 percent unemployment rate in February this country is heading into some very difficult days this summer.
Small enterprises need support
Though the latest capacity utilization report indicated that there was some improvement in the Turkish industry for the first time since the international crisis started to have an impact on Turkey back in September 2008, statistics released by the Union of Turkish Chambers and Commodity Exchanges, or TOBB, about the opening and closing businesses underline clearly that small and medium-sized enterprises are waging an uphill fight for survival. The improvement in industrial capacity utilization was a direct product of a set of measures taken by the government, including decreasing value added tax and special consumption tax levels for a variety of industrial products ranging from cars to household appliances.
While interest rates for deposits with the banks were pulled down to around 11-13 percent levels, banks are still demanding incredibly high interest for credits they offer. Furthermore, the banking sector, which somehow has been recording record profits, maintains its reluctance to open fresh and easy credits to the real sector. Rightly, Prime Minister Erdoğan has been complaining about the not so positive attitudes of the banking sector and indeed has been demonstrating his anger against those who stop short of publicly criticizing what he considered "egoistic and self catering attitudes" of banks.
Obviously, if banks stand out as the sole sector in Turkey making record profits despite the crisis, there has to be some serious problems in the system. Perhaps as it has been adjusting with various tools the interest rates for deposits with the banks, the state must as well find ways of regulating a ceiling for interest rates on bank credits. By the way, the government should perhaps put as well a ceiling on credit card rates because at a time when banks are offering only 11-13 percent to deposits, in its gross injustice to see them charging as high as 76 percent interest on credit cards.
Credit card trap
The rates for bank credits as well as for credit cards have become vital for the small and medium sized enterprises. Businesses that cannot obtain fresh credits or face difficulties in finding some other ways of acquiring some soft loans (family or friend connections) are often resorting to borrowing money through their credit cards. Right, it is rather easy to withdraw 5, 10 or even 20 thousand liras, depending on the limit, through credit cards. But, with up to 76 percent interest rate applied on such credits indeed finding money through that method is no less than pulling the trigger and committing suicide.
Rather than complaining about banks, the government must realize its responsibility and act on the issue. Bare facts of today’s Turkey and the success of the provisional tax "incentives" provided to big industries demonstrate vividly the need for the government to step in with some concrete moves to ease the burden of economic-financial crisis on small and medium sized industries if it is interested at all not to score further unemployment rate records in the coming months.
Last month we were lamenting that thanks to the tangentially passing economic crisis more than one in every five young Turks have become unemployed. Among the below-25 age group unemployment was at 21.5 percent level in January. Now, the success of the AKP in that field has become even more demonstrative. About 28.6 percent of our young population was unemployed in February. That is about one in every four young Turks was without a job in February.
While the overall recorded unemployed population has reached 3.8 million, the fact that compared to the same month last year the increase in unemployment rate was more than 4 percentage points and compared to January 2009 there was an increase of almost 1.5 percentage points are indicators that the 16.1 percent unemployment rate in February this country is heading into some very difficult days this summer.
Small enterprises need support
Though the latest capacity utilization report indicated that there was some improvement in the Turkish industry for the first time since the international crisis started to have an impact on Turkey back in September 2008, statistics released by the Union of Turkish Chambers and Commodity Exchanges, or TOBB, about the opening and closing businesses underline clearly that small and medium-sized enterprises are waging an uphill fight for survival. The improvement in industrial capacity utilization was a direct product of a set of measures taken by the government, including decreasing value added tax and special consumption tax levels for a variety of industrial products ranging from cars to household appliances.
While interest rates for deposits with the banks were pulled down to around 11-13 percent levels, banks are still demanding incredibly high interest for credits they offer. Furthermore, the banking sector, which somehow has been recording record profits, maintains its reluctance to open fresh and easy credits to the real sector. Rightly, Prime Minister Erdoğan has been complaining about the not so positive attitudes of the banking sector and indeed has been demonstrating his anger against those who stop short of publicly criticizing what he considered "egoistic and self catering attitudes" of banks.
Obviously, if banks stand out as the sole sector in Turkey making record profits despite the crisis, there has to be some serious problems in the system. Perhaps as it has been adjusting with various tools the interest rates for deposits with the banks, the state must as well find ways of regulating a ceiling for interest rates on bank credits. By the way, the government should perhaps put as well a ceiling on credit card rates because at a time when banks are offering only 11-13 percent to deposits, in its gross injustice to see them charging as high as 76 percent interest on credit cards.
Credit card trap
The rates for bank credits as well as for credit cards have become vital for the small and medium sized enterprises. Businesses that cannot obtain fresh credits or face difficulties in finding some other ways of acquiring some soft loans (family or friend connections) are often resorting to borrowing money through their credit cards. Right, it is rather easy to withdraw 5, 10 or even 20 thousand liras, depending on the limit, through credit cards. But, with up to 76 percent interest rate applied on such credits indeed finding money through that method is no less than pulling the trigger and committing suicide.
Rather than complaining about banks, the government must realize its responsibility and act on the issue. Bare facts of today’s Turkey and the success of the provisional tax "incentives" provided to big industries demonstrate vividly the need for the government to step in with some concrete moves to ease the burden of economic-financial crisis on small and medium sized industries if it is interested at all not to score further unemployment rate records in the coming months.
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