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Reforms in work life vital for sustainable recovery in markets
The results of the “Evaluation of Investment Opportunities in Turkey” report, jointly prepared by the Coordination Council for the Improvement of the Investment Environment (YOİKK) and the World Bank (WB), were announced by Turkish Treasury Undersecretary İbrahim Halil Çanakçı and the WB country director for Turkey, Ulrich Zachau, in Ankara on Friday. The report concentrated on the target of boosting growth in the economy with the help of private industry.
According to the report last year’s global financial crisis strongly affected employment in the Turkish domestic market, and improvement for the better in this area will define the speed and size of any genuine growth in the economy. Recalling that the Turkish economy contracted by 4.7 percent in 2009 over the previous year and unemployment jumped to 14 percent in the same period, the report said the government should accelerate its fight against unregistered employment -- where workers are deprived of social security benefits because they are not registered in the system. The government needs to introduce regulations which will help minimize factors that propel businesses to engage in underground economic activities, the report read, warning that prolonged registration procedures remain a burden on newly opened firms.
“Incentives for a qualified labor force in the markets will have a positive impact on increased productivity. The government should encourage businesses to engage in innovative projects. Another drawback is that companies, particularly small and medium-sized enterprises [SMEs], still face problems when looking for loans,” the report read.
The report notes three major targets that should be realized before a sustainable and comprehensive rebound from the 2009 crisis can be realized. The first of the priorities is that the government should extend enough support for Turkish SMEs to prevent businesses from losing their competitive power. The reports says the government could focus on supporting SMEs with relatively more competitive power in particular, adding that such a development will make the Turkish economy more resilient to external shocks than before.
The second of the priorities is that the government should improve the ability of SMEs to make use of the latest technological advancements, a major factor that will also help increase their competitive power. The third and last of the targets stated in the report is that the government increase its regulatory capacity through new reforms. “This could be maintained through a healthy coordination with private industry and the establishment of new development agencies,” the report said.
Also speaking at the conference, Zachau said improvement of the investment climate has become a critical task in global markets and that Turkey should also take initiatives in this regard. Noting that the country is slowly shaking off the adverse effects of the 2009 crisis, Zachau said the government should focus on SMEs, as stated in the report. The more the government minimizes the burdens faced by SMEs and encourages their integration with the external world, the more the Turkish economy will benefit, he said.
Making mention of the recently finalized Mamak Project in Ankara, Zachau said such examples could multiply if the government shows enough determination to support such initiatives. The Mamak garbage dump in Ankara, once one of the capital’s major problems, is now producing enough power to light 20,000 homes. Following the Ankara Solid Waste Project, aimed at using waste to create energy, the capital’s Mamak garbage dump is now producing both electricity and vegetables.
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