Foreign Trade News from Turkey

Turkey’s real unemployment rate 20 pct when all jobless considered.
There are over 6 million real unemployed people in Turkey, creating a jobless rate of 20 percent, almost doubling the official figures. Higher unemployment, officially or unofficially, appears set to be the biggest nightmare for Turkey in the coming years

 The accuracy of an official unemployment rate is open to discussion in almost all countries, not just in Turkey. There is generally some discrepancy between official numbers and real numbers. The official unemployment rate is based on different assumptions and defined in varied ways. A person over 15 years old is not included in the workforce unless s/he applies for a job. For instance, over 11.4 million women are not included in the workforce as they are grouped as “housewives.” Therefore, they are not seen as unemployed. If even one-fourth of them had been included in the main group of the workforce, Turkey would be one of the countries with the highest unemployment rate, leaving Spain, Portugal and South Africa behind. While three-fourths of the male population over 15 years old are included in the workforce, only 31 percent of Turkish women over 15 years old are part of the workforce. There are other issues.  The Turkish Statistical Institute (TÜİK) reveals “official unemployment rates” in the middle of each month for the prior two months. The agency announced the rate for August 2013 as  9.8 percent, which is one point higher than the same period of the previous year.  Official unemployment The number of unemployed people increased to 2.8 million this August from 2.4 million last August. This means around 400,000 people became a part of “officially” jobless people. This rate is one point lower than the EU average and very close to the figures in Hungary, Slovenia and Poland. The unemployment rates of more than 27-28 percent in Spain and Greece are extremely high,  to be sure.  Here, the main problem is semi-workers. The ILO asks from its member countries to declare their “flexible employment” or “discouraged jobless” rate covering people who are jobless, but do not even bother seeking jobs because they don’t believe they’ll be able to find work, in a separate group from the “official employment” rate. In this vein, people who “believe there is no job post in the region where they live or believe there is no job for themselves or do not know how to seek jobs, but say they are ready to work” are not seen as “officially jobless.”  These people are called the “discouraged ones.” They are actually unemployed, but are tired of seeking jobs with so few prospects. Some 2.1 million people live like that in Turkey, around three-fourths of the official jobless rate. If they are included in the equation, the number of jobless people surpasses 4.9 million in Turkey. There is more.  In addition to official jobless people and uncounted unemployed people, there is another group: “underemployed people” who are “barely working.” The number of people who work fewer than 40 hours a week, but would work more if they could find jobs increased to 595,000 in August from around 400,000 compared to the same month of 2012.  Underemployment This means the number of people who could find jobs requiring less than 40 hours a week almost doubled in one year. There is also another group: “Temporary workers,” who work temporarily, but seek a permanent job as they cannot afford to live their lives with temporary jobs. The number of all these underemployed people surpassed 1.076 million in August, increasing by 44 percent from the same month in 2012. They should also be counted as real unemployed people.  The number of officially unemployed people, discouraged workers and temporary workers exceeds 6 million in Turkey. This means there are over 6 million real unemployed people, creating an unemployment rate of 20 percent. The official jobless rate is around 10 percent in the EU, the same as Turkey’s official rate. The real rate of unemployment is also over 18-20 percent in the EU as well.   Seasonal job opportunities in agricultural, tourism and construction sectors begin to decrease at the beginning of every August, pushing unemployment rates up in the following months. This year will not be an exception.  The official unemployment rate will be over 10 percent in the September figures, which will be announced soon. Economic conditions, however, do not promise more jobs. Although the Turkish government is trying to create more jobs just before elections at the cost of extra budget expenses, it can’t create more than 80,000-90,000 new positions in the public sector. This figure is so much lower compared to the 3 million officially unemployed people.  Growth is the recipe, but Turkey hasn’t been able to grow at more than 2-3 percent for the last two years at the expense of pushing its current account deficit much higher. Turkey might also attract less foreign capital in 2014, making it even more difficult for employed people to keep their jobs. Higher unemployment, officially or unofficially, appears set to be the biggest nightmare for both Turkey and the EU in the next years.

Turkish Daily News/Mustafa Sönmez

US-EU Trade Talks “Back on Track,” Officials Say.

Bridges Weekly Trade News Digest • Volume 17 • Number 39 • 21st November 2013 

Negotiators for the planned US-EU trade agreement concluded their second round of talks last week in Brussels, with officials from both sides reporting “good and steady progress.” With the discussions reportedly back on their original timetable after a brief delay in October, both parties are now aiming to make enough headway in the talks to hold a political review in early 2014.

“I am glad to see that we are now fully back on track with the EU-US trade talks,” said EU Trade Commissioner Karel De Gucht on Friday, with his US counterpart, Michael Froman, similarly noting that the discussions were both “successful and productive.”

This week’s discussions focused primarily on regulations and investment, as well as services, energy, and raw materials. Due to scheduling difficulties, some meetings have also been occurring over videoconference, touching on issues such as intellectual property rights, small and medium enterprises, and competition policy. Future videoconferences are expected to tackle issues such as tariffs, labour, and environment.

Upcoming rounds, officials said, are likely to feature text-based discussions - underscoring the interest on both sides to move the talks forward quickly. Since the talks were first announced, officials from both sides have said that they want to achieve an ambitious agreement while following a rapid timetable.

The first round was held in Washington in July, just a month after the negotiations were launched, and dealt primarily with how the talks should be structured, as well as isolating any potential areas of convergence. (See Bridges Weekly, 18 July 2013) This second round - held in Brussels - had originally been scheduled for 7-11 October, before the partial US government shutdown forced them to be rescheduled. A third round of talks is already planned for the week of 16 December in Washington.

De Gucht: Keep “eye on the prize”

The pact has been touted as having major potential for creating new jobs and driving growth on both sides of the Atlantic, particularly given the continued struggles each party has faced in getting back on their feet following the financial crisis.

Just this week, the Paris-based Organisation for Economic Co-operation and Development (OECD) cut its previous global growth forecasts for next year, due partly to the “lagging and uneven recovery” in the eurozone and to how close the US came to breaching its debt ceiling in October, along with the slowdown being seen in some emerging economies.

A European Commission study has suggested that the deal, once completed, could add €119 billion and €95 billion annually to the EU and US economies, respectively, with much of these gains coming from removing non-tariff barriers - particularly in the areas of regulations and standards. The US and EU already have the world’s largest trade relationship, with bilateral trade in goods and services hitting €2 billion daily, according to 2012 estimates.

“Let’s keep our eye on the prize: more jobs for people in Europe, more growth for the European economy,” De Gucht said on Friday.

Regulations, investment

Consumer protection advocates on both sides of the Atlantic have questioned what the pact’s focus on regulations and standards - the trickiest part of the negotiations, and arguably where some of the big financial gains will come from - will mean for food and product safety.

Officials tried to assuage those concerns after this week’s meetings, with US chief negotiator Dan Mullaney telling reporters on Friday that nothing in the pact will “undermine the high standards of public health and safety, environmental protection, and consumer protection that citizens on both sides of the Atlantic expect and enjoy.”

Regulatory topics that were discussed during last week’s meetings included regulatory coherence, and a so-called “TBT-plus” chapter - which would include elements on technical barriers to trade that go beyond those in the related WTO agreement. Sectors where both sides wish to reach regulatory compatibility include, among others, automobiles, pharmaceuticals, information and communication technologies, and medical devices.

The US-EU pact is also set to include investment-related provisions, with both sides now reviewing their respective approaches to the subject. “There was a good degree of agreement on getting an ambitious deal while confirming the Parties’ regulatory freedom to legislate in the public interest,” the European Commission confirmed in a press release.

Financial services?

Officials are also expected to hold discussions on financial services in the weeks ahead - a surprising development for some trade observers, given that the topic is a thorny one for Washington.

While the US has said that the topic is best addressed in other contexts, such as the G-20, the EU has strongly pushed for including the issue in the trans-Atlantic pact. De Gucht said in an October speech that cooperating on this issue is essential for ensuring the financial resilience of both trading partners. (See Bridges Weekly, 17 October 2013)

Meetings to deal specifically with financial services regulation will occur before the third negotiating round, with officials set to meet in Brussels on 27 November to discuss the subject.

“The EU side has made clear that they want to have conversations in this area, and we are engaging in those conversations,” Mullaney told reporters last week.

The US and EU together account for 70 percent of world trade in financial services.

Both sides have also begun comparing their respective approaches on cross-border services, telecommunications, and e-commerce, officials said last week, and have begun outlining their respective market access interests in certain services sectors.

Source:ICTSD

Moody\'s upgrades Greece\'s bonds two notches on better outlook.. Credit ratings agency Moody\'s raised Greece\'s government bond ratings.

 Credit ratings agency Moody\'s raised Greece\'s government bond ratings by two notches Nov. 29, citing improved public finances and a better economic outlook. Moody\'s action lifts Greece\'s ratings from "C," the lowest possible level, to "Caa3," which is still in sub-prime status. The outlook for the rating is "stable." The higher rating was warranted, according to Moody\'s, after Greecetook steps to improve its fiscal condition, reducing its headline deficit 74 percent since 2009 and targeting a primary surplus of close to 1.5 percent of GDP in 2014.  Moody\'s also said there was evidence the Greek economy was "bottoming out after nearly six years of recession" and that the medium-term prospects have also improved. Finally, Moody\'s cited a much-reduced interest burden following a restructuring of the country\'s debt. On Friday, Greek Finance Minister Yannis Stournaras told reporters that Greece hoped to reach an agreement on a deal to unlock a $1.4 billion in financial bailout aid by the end of this year. The negotiations are with the so-called creditor troika - the European Union, International Monetary Fund and European Central Bank. Athens disagrees with creditors on the level of a forecasted financing gap for 2014 and on the measures needed to cover it.

Source:Hurriyet Daily News

The Eighth Meeting of the Investment Advisory Council was Held ( October 31,2013 ).

The International Advisory Council which was founded to strengthen Turkey’s global investment position and to bring an international point of view to the efforts towards improving Turkey’s investment climate, held its eighth meeting on October 31, 2013 under the chairmanship of Prime Minister HE Recep Tayyip Erdoğan, in İstanbul. President of the World Bank as well as high level executives from a number of multinational companies attended the meeting held at the Prime Minister’s offices at Dolmabahçe Palace. Council members expressed that Turkey’s policies towards sustaining economic stability has inspired a number of countries, strengthened Turkey’s position among developing economies and this was reflected by the FDI inflow figures. The President of the World Bank Mr. Jim Yong KIM, 16 top tier multinational company executives from 10 countries and 12 sectors and presidents of the private sector representatives of YOİKK, namely TOBB, TİM TÜSİAD and YASED attended the meeting.  Throughout, the council members made important recommendations to enhance Turkey’s investment climate. In the press conference held after the meeting, The Minister of Economy HE Zafer Çağlayan stated that the meeting was productive and the issues raised by the Council members will be considered with priority in shaping the future investment policies. Made public at the press conference, The Declaration of the Eighth International Advisory Council Meeting included the recommendations of the Council members and outlined future areas of study.

The Declaration of Outcomes List of Participants  

Source: Republic of Turkey Ministry of Economy