II- GENERAL ECONOMIC INDICATORS 2002-2012

a. Growth

Turkey, between years 1990-2002, had spent time struggling with the low economic growth,

high debt amounts, unfair income distribution and high inflation. After the 2001 economic

crisis, the Justice and Development Party came to power, gave importance to democratic and

economic reform program. Within the scope of liberalization of economy, macro stability

began to occur through Turkey gave priority to applications such as; EU membership process,

strengthening of the financial sector, supporting private sector and restructuring of the social

security system.

Declining interest rates in the economy to low levels enabled overcoming the barriers on the

investments. Decline in interest rates have a positive effect on private consumption. In

addition, strengthening the market mechanism efforts have increased, reduction of the state

share in the economy even more increased private sector role, financial sector improved for

meeting the needs of real sector, upgraded (ykseltmek) the quality of labor and enhanced the

efficiency in public services, prevented resources waste and withdrawn from (ekilmesi)

production in some areas of the public sector strengthened its regulatory and supervisory role

in the market. (1) (page 3-5)

Also expanding liquidity facilities in global markets after the 2001 crisis, combined with high

real interest rates in the economy of Turkey , country's economy became attractive in terms of

world market. And with the impact of the economic crisis in 2001, economy; which

contracted(daralan) by 5.7 percent, recovered (toparlanmak) in 2002 and realised 6.2 percent

growth. (Figure 1) Turkeys economy growth rate ,that increased 5.3 percent in 2003, 9.4

percent in 2004, 8.4 percent in 2005, 6.9 percent in 2006, derived from both performancing in

export of goods and services and also domestic demand. (2. A.g.e) (page 5-8)
Economy gained competitiveness, tight monetary policy (sk para politikas) depressed on

(drc etki yapma) inflation, tight fiscal policy improved fiscal balances (kamu dengesi)

and advanced future expectations, risk premium had fallen. After implemented (uygulanan)

tight fiscal policies, public consumption and investment expenditures (harcamalar) contracted

(daralm), and contributing of the private sector on production had increased in the

economy. During this period, increasing in foreign investment contributed a significant

amount on production. Burden of discharging (bor deme) reduced and this increased

investment and capital accumulation (birikimlerini) also economic graphics of this period

underlied the burden of discharging that defined by EU.

The global economic crises in 2008 narrowed to economic growth in 2009 at the rate of 4.8

percent (orannda). With the restructuring and revitalization (canlandrlmas) of the real

sector, that all sectors contributed to economic growth, growth rate in 2010-2011 increased.

During this period Turkeys economy with 8.5 percent growth rate in 2011 become the

worlds second fastest growing economy after China (9.2 percent). The countrys economy

performed annual average 5.2 percent real GDP between the period 2002-2012 (Figure 2). (3.

Karagl) (page 27-29)

Due to the ongoing debt crisis in EU countries, constriction in the global economy, current

account deficit in 2011; Turkey's 2012 economic growth target has been relatively low

(nispeten dk oranla) compared to 2011. First three quarters period of 2012, soft landing

process started in the economy for keeping current account deficit under control and for

providing balance in domestic and external demand improved alternative markets and exports

rate slightly increased. According to OECD estimations, Turkey will be the fastest growing

country among OECD countries with Turkey's annually growth rate 6.7 percent in the period

2011-2017. (Figure 3) -(4 .A.g.e)-(page 29-30)

b. Employment Trends
While calculating the unemployment rate, the International Labour Organization (ILO)

standards are used in calculation methods. To calculate the unemployment rate:

Unemployment rate (%) = (amount of unemployed / total labor force) x 100. (5.

Demirkol,2013)

Rising unemployment rates with 2001 crisis revealed (aa karmak) that, Turkeys growth

structure did not have create employment (istihdam yaratmak). Thus, despite sustaining

economic growth occurred since the 2001, same stability could not be attained (elde etmek) in

reducing unemployment. Low level of agricultural sector share (pay) in employment area ,

every year participation of approximately 800 thousand people to labor force, emerging

current account deficit due to the growing character that based on import, affected

unemployment and unemployment rate average between 2002-2007 has been around 10

percent. Justice and Development Party, in this sense, for reducing unemployment or drop it

to a certain level put a long-term goals. In the direction of implemented incentive system

begun to creation of new business areas and increasing employment . In 2009, due to the

global economic crisis, the unemployment rate increased to 14.8 percent (Figure 4).

(6.Karagl page 52)

With the number of applications, such as; reducing labor costs and insurance premiums to

employers, tax reductions to sectors that affected by the crisis, improvement was achieved in

2010. (6. National Employment Strategy, 2012-2023)

In 2011 declined to 9.8 percent and in the first 9 months of 2012 declined to 9.1 percent.

During this period, increasing export rates had played important role on one of the main

sources of this decline. Finally, when we examine the Turkeys unemployment and growth

increase / decrease rates between 2002-2012, during this period, increasing in the

unemployment rate is more than growth rate, unemployment and growth rate gap reached

minimum level in 2004 and reached maximum level in 2009 and when the growth rate below

5 percent; large increasing occured in unemployment rate and also determined that the last ten

years unemployment rate did not drop below 9.5 percent. (7. OECD Economic Outlook)