14 August  2001, Copyright Turkish Daily News
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  • Industrialists reel under crisis
  • Cement prices upped 8 pct
  • Reported unemployment rises 42 pct on year
  • Foreign investor sell-off in stock market continues
  • Automotive, iron and steel sectors to meet in Ankara

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    Industrialists reel under crisis

    • According to an ISO survey, production decreased by 62.5 percent, employment by 50.7 percent, domestic sales by 72 percent and new orders by 63.8 percent during the first six-months of 2001

    Guzin Yildizcan

    The results of the "Economic Situation Assessment" survey of the Istanbul Chamber of Industry (ISO), which represents 16 percent of Turkey's production sector, revealed serious drops in production, employment, domestic sales and international trade during the first six months of the year relative to the last six months of 2000. A large majority of ISO members worry that problems will deteriorate during the second half of the year.

    Survey data indicated a fall in production of 38 percent during the first six-monthly period of 2000, while the figure for 2001 has been 62.5. During the same period, the increase in unemployment has gone up from 30.6 percent to 50.7, while the fall in domestic sales went from 42.3 percent to 72, and the fall in new orders went from 39.9 percent to 63.8.

    All parties have to strike a compromise to resolve production problems, said ISO Chairman Husamettin Kavi in a press conference after the announcement of the survey results. Kavi said, "Working groups should be formed between relevant private sector representatives and the government to discuss issues about agriculture, industry, the fiscal sector, the European Union, employment, exports and taxes without wasting time."

    Kavi underlined the findings of the survey about unemployment: "At the beginning of 2000, there were 540,000 people employed at ISO-certified companies, of whom 4 percent, that is 21,600 people were sacked during the same year. During the first six months of 2001, 7.7 percent of the remaining 518,400 which means 39,900 people lost their jobs. A total of 61,500 employed at ISO-certified companies were fired in the last year. If we extrapolate, the number of the newly unemployed in the Turkish production sector is up to 384,000. These figures reflect only registered employment."

    The ISO chairman said while 29.8 percent of enterprises incurred losses in 2000, the figure went up to 57.6 percent for the first six months of 2001. Kavi noted that another 73 percent of companies had difficulty finding resources, saying, "Only 20.8 percent of the respondents said the floating currency regime spurred exports."

    Kavi said about the fall in production: "Some 58.2 percent of enterprises used less than half of their capacity during the first six months of 2001. This figure was 24 percent in 1999, 20 percent for 2000 and 34 percent for the second half of 2000. This suggests that the ratio of companies working at less than half their capacity is rather high compared to previous years."

    Kavi noted the survey revealed that small enterprises were hardest hit by Turkey's economic woes, saying: "Next come medium-sized enterprises. Large companies were least impacted."

    Kavi adds industrialists' expectations for the second half of 2001 are not high, with 29.5 percent of enterprises expecting to see falling production and 36 percent expecting to see lower domestic sales.

    'Everything gets smaller, state gets bigger'

    Stating that the government postpones finding solutions to problems, Kavi complained that whereas all institutions were getting smaller in Turkey, public expenditures did not go down.

    Kavi asked that all problems be discussed and radical measures be taken for a solution until the end of 2001. He made the following suggestion: "Measures such as reduction in taxes and VAT in particular are conceivable. These don't have to be permanent, but they are necessary for production. You don't take taxes for a while and the wheel of production starts turning. The wheel stops if the economy is stagnant."

    Noting that proposals such as snap elections and government reshuffling were linked to the demands of the society, Kavi said: "ISO does not propose a political solution, we propose economic solutions in the framework of the current political system. We have to discuss the economy separately from the political structure. We say what should be done in politics: the electoral and parties laws as well as the Constitution should be amended; afterwards, it will be up to society to determine a time frame for elections."

    TABLE 1

    Contraction in companies during the first half of 2001
    Indicators Firms (%)
    Fall in production 62.5
    Reduction in employment 50.7
    Decrease in domestic sales 72.0
    Decrease in new orders 63.8
    Decrease in capacity use 58.2
    Enterprises losing money 57.6

    TABLE 2

    Year-end estimates of ISO members
    Economic indicators Average (%)
    GNP rate - 4.0
    WPI 69.0
    CPI 68.2
    US dollar rate 1,605,316 TL.
    Istanbul - Turkish Daily News

    Cement prices upped 8 pct

    Cement prices were raised by an average 8 percent to TL 3 million per pack of 50 kilograms, the Anatolia news agency reported yesterday. The price per ton of packed cement rose to TL 46 million from TL 42.5 million. The increase in cement prices was attributed to a steady rise in costs of fuel, electricity and other inputs.

    Ankara - Turkish Daily News

    Reported unemployment rises 42 pct on year

    Approximately 700,000 people have been reported jobless by June this year, representing a 42 percent rise from the same month of 2000, Turkish Labor Agency figures showed.

    As of end-June 614,719 people have been reported as unemployed, compared to 488,294 in June 2000. In the first half of this year 177,911 people applied to the agency for recruitment.

    The southern city of Adana appeared to be accommodating the highest number of jobless with 28,173, followed by Istanbul with 18,858, and capital Ankara with 15,660.

    Of the total figure qualified workers numbered 534,358. The majority of the unemployed work force consists of office staff, heavy vehicle drivers, accountants, electricians and technicians. But it also includes architects, engineers, executives, doctors and veterinarians.

    Ankara - Turkish Daily News

    Foreign investor sell-off in stock market continues

    Foreign investors recorded a net sale of $128.2 million in the Istanbul Stock Exchange (IMKB) last month, the Anatolia news agency reported yesterday. That appeared as a result of $504.2 million share sell-off versus a buying of $376.0 million in July, according to data of the IMKB.

    As of July this year foreign investors were seen holding a nearly 30 month low of $3.9 billion worth of shares in the Turkish stock exchange. In January 1999 foreign investors were holding $3.4 billion worth of shares in the IMKB.

    Shares most heavily traded by foreigners included particularly banks, i.e. Yapi Kredi Bank, Garanti Bank, Akbank and Finansbank. Among the top 10 shares favored by foreign investors are also Turkcell, Tupras, Sabanci Holding, Vestel and Erdemir. Foreign investors were net buyers only on Tupras shares last month.

    Ankara - Turkish Daily News

    Automotive, iron and steel sectors to meet in Ankara

    Representatives from Turkey's automotive, automotive sub-industry, iron and steel sectors are scheduled to meet in Ankara on August 15 to discuss their problems with government officials, the Union of Turkish Union Chambers and Commodities Exchanges (TOBB) announced yesterday.

    Representing the government at the meetings will be State Ministers Kemal Dervis and Tunca Toskay, Finance Minister Sumer Oral, Industry and Trade Minister Kenan Tanrikulu and other senior bureaucrats, the TOBB statement said.

    Last week similar meetings were held focusing on the Turkish textile and contracting sectors.

    Ankara - Turkish Daily News

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