Turkey: May Day Highlights Workers' Concerns about the Economy
The holiday in Turkey has often seen violent clashes between protesters and police, and this year was no different. Riot police used water cannon and tear gas on protesters in the vicinity of Taksim Square. One law-enforcement officer and one demonstrator were injured, and numerous arrests were made. Police have sealed off access to Istanbul's central square on May Day since a 1977 tragedy in which 37 people died and roughly 100 were wounded when a gunman opened fire, prompting a stampede. A suspect was never convicted in that case.
This year's protests were set against a background of economic gloom. Turkish businesses recorded a 10.5 percent drop-off in profits in 2008, as compared to the previous year's totals. Overall, exports were down 42 percent for the year. The first quarter of 2009 saw a sharp rise in unemployment, with 3.7 million individuals, or 15.5 percent of the labor force out of work. The unemployment rate is projected to rise to 18 percent in 2010.
At the same time that jobs are becoming scarcer, an increasing number of Turks are feeling squeezed by rising prices for utilities and basic necessities. The cost of electricity, for example, jumped 60 percent in 2008, and natural gas prices rose by 80 percent.
Turkey's economy contracted for the first time in seven years during the last quarter of 2008, registering a 6.2 percent decline. The Central Bank has reacted to the decline by cutting 7 percent off the overall borrowing rate during the last 6 months to 9.75 percent. Nevertheless, credit ratings agencies seem to be downbeat on Turkey's future. Moody's, for instance, is predicting that Turkey will experience a 4 percent decline in 2009.
"The growth outlook for 2009 has deteriorated even more steeply in recent months, with a further weakening of indicators, such as industrial production, capacity utilization and exports and a worrying rise in unemployment and jobless claims," the agency said.
Some companies have resorted to draconian cost-savings measures, instituting salary reductions of up to 40 percent. A few even suspended paying salaries altogether. One accountant at a food-service company complained about not being paid for the last two months. "I can't dare quit my job . . . as there is no better job around that would pay on time. I hope the crisis finishes soon and my payments are made."
Import-export entrepreneurs say the global financial crisis is stoking a massive cash-flow problem. "As we import from Europe, we have to pay our suppliers as the goods arrive at Turkish customs," explained one importer of raw materials, who spoke to EurasiaNet on condition of anonymity. "Our customers are refusing to pay us 60 or 90 days following delivery as they are contracted to do. . . . Instead we're not getting paid for 120 to 180 days." The breakdown in the system of payments has caused the importer's debt level to skyrocket, even though sales are off by upwards of 40 percent,
Should the current problems persist, it will be interesting to see what the political impact will be. In recent local elections, the governing Justice and Development Party experienced a significant decline in its share of the vote received. The longer the economic problems last, the more vulnerable the party will become to voter wrath.
Jonathan Lewis is a freelance reporter and photographer based in Istanbul.
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