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Turkey’s youth unemployment compounds broader crisis

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Ozan Yilmaz had hoped a degree in logistics would provide a straightforward route into work, but more than a year after graduating the 23-year-old is still looking for a job.

“I am always applying. Sometimes I was called to interviews. But I never get anything,” he said, speaking from the Istanbul home that he shares with his mother. “They want experience but you need to start work somewhere to get that.”

Now the coronavirus pandemic has made the hunt even more difficult. “Unfortunately, many employers are very nervous,” Mr Yilmaz said.

Youth unemployment in Turkey stood at 24 per cent in September, the most recent available data, as young people between the ages of 15 and 24 found themselves at the sharp end of a broader employment crisis that has been compounded by the economic consequences of Covid-19.

Though the official nationwide unemployment rate was 12.7 per cent in September — down from 13.2 per cent in August — experts said the headline figures masked a rise in the number of people in the country of 83m who were falling out of the labour force completely, disheartened that they could not find work.

“The number of people who are actively looking for a job, so can be considered unemployed, is falling,” said Gunes Asik, an assistant professor of economics at TOBB university in Ankara. “People are dropping out of the labour force.”

Ozan Yilmaz says he would be prepared to work for free in order to gain experience
Young people while away the time in Eminonu square next to a ferry boat in Istanbul © Ozan Kose/AFP/Getty

The population not in the labour force reached 31.1m in September — up from 28.7m a year earlier, even though the working-age population grew by more than a million.

At the same time, a ban on firing workers during the pandemic means that the full impact of the coronavirus crisis on future employment levels is not reflected in current statistics.

“It’s difficult to calculate the real unemployment number,” said Murat Sagman, a lecturer in economics at Istanbul Bilgi University. “Companies might want to get rid of people but cannot.”

The government’s short-time work scheme, while helping to cushion the impact of the pandemic, had also made it hard to see the real picture, Mr Sagman said. “We don’t know how many people are really out of work.”

President Recep Tayyip Erdogan, who has ruled Turkey for the past 18 years, built much of his early success on the back of booming economic growth that created millions of jobs and provided the foundation for rising prosperity.

But a shift in the aftermath of the global financial crisis towards an economic model focused on consumption and construction, rather than high value-added sectors, combined with several recent periods of financial volatility, has caused that trend to stall, say analysts.

Even though the economy rebounded last year after exiting its first recession in a decade, the boom did not trigger a corresponding bounce in employment. The fallout from coronavirus, which caused a fresh plunge in growth last year, dealt a further blow to efforts to create jobs.

Economists are concerned that the number of people actively looking for a job is falling © Ozan Kose/AFP/Getty
Youth unemployment in Turkey stood at 24% in September © Ozan Kose/AFP/Getty

The slump has political implications for Mr Erdogan, who has seen his popularity slide and faced sharp criticism from opposition parties over the lack of jobs.

At a meeting of the rightwing IYI party last year, party leader Meral Aksener gave the stage to a 28-year-old university graduate who said his struggle to find work meant he could not “see a future, or dream”.

Tackling youth unemployment in Turkey, where the median age is 32, is one of the biggest challenges facing Mr Erdogan and his new economic team, overhauled in November following the resignation of his son-in-law as Treasury and finance minister and the appointment of a new central bank governor.

“We need structural reforms that try to lower the impact of construction and focus on other industries, especially new industries,” said Mr Sagman at Bilgi University. “We need a real shift in the Turkish economy but it will take time.”

Economists warn that failure to improve the employment rate among Turkey’s youth, in particular, could have long-term implications.

“These are young people who are supposed to stay in the labour market for long periods of time,” said Gokce Uysal, deputy director of the economic and social research centre at Istanbul’s Bahcesehir University. “Someone who is 20 years old today and is not looking for a job because unemployment is very high is going to stay in the labour market for 40 more years. We are wasting their new skills.”

But for Mr Yilmaz, like many others, structural reforms are a long-term solution while he has a short-term problem. “I feel like a burden on my family,” he said, adding that he would even work for free as an apprentice in exchange for the experience. “Seeing as I can’t earn my own money, I feel like someone who has no expectations from life.”



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Johnson set to unnerve allies with ‘Global Britain’ defence review

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Boris Johnson’s eagerly awaited new security strategy risks creating tensions with the UK’s closest allies if it spreads its armed forces too thinly and neglects key defence duties in pursuit of a “Global Britain” agenda, experts have warned.

The integrated defence and foreign policy review — which has been repeatedly delayed as Downing Street battles to control the coronavirus pandemic — will be published next week as a statement of the prime minister’s post-Brexit vision for the country.

But the document, grandly titled “Global Britain in a Competitive Age”, is likely to be controversial with foreign defence partners. Core defence capabilities will be retired to pay for digital warfare technology and the UK’s promised focus on the Indo-Pacific risks detracting from its responsibilities in the north Atlantic. It also remains unclear how a post-Brexit UK will co-operate with EU countries on security.

“I’m sure the review will be a powerful essay about Britain’s role in the world,” said Lord Peter Ricketts, the UK’s former national security adviser. But he added: “Will our ambitious plans actually feed through into something which makes sense?”

‘Troop numbers still matter’

The most contentious decision is on the size of the army, which is widely expected to be cut from a notional force of around 82,000 to something closer to 72,000. Even though the Ministry of Defence secured an unexpected £16.5bn spending boost from the Treasury in the autumn, the department is still seeking savings to reduce a £17bn budget black hole and fund better cyber defences and new military capabilities in space. 

US military officials say privately that while they value UK special forces and are impressed by Britain’s growing cyber expertise, troop numbers still matter. Washington has traditionally relied on the UK to field a heavy division, which means an army of roughly 100,000 personnel. Michael Shurkin, a security expert at the Rand Corporation, insisted that the US’s historical default to military co-operation with the British is based on a recognition of its quality, rather than troop strength. “It’s not just that we expect the British to show up when we call — we really want the British to show up when we call, because they’re good,” he said.

However, he made clear that “it becomes a real problem” if suddenly a trusted ally can no longer provide the troop numbers it once could.

The challenge for ministers is how to present cuts to the army without causing alarm in Washington and Nato headquarters. “How well it goes down with our allies depends very much on how honest we are about what we’re doing,” said Jack Watling, a land warfare specialist at the Royal United Services Institute think-tank.

He argued that if the UK offers to provide attack helicopters, long-range precision rocket artillery and reconnaissance troops to assist other nations, this could help compensate for a reduction in overall personnel. “If we set out a credible roadmap that admits it’s going to be rough for the next decade but by 2030 we will deliver something that is clearly defined, then the US will probably respond positively,” Watling said.

Countering China

Another potential flashpoint will be the review’s focus on the Indo-Pacific, as the UK pursues deeper defence ties with Asian allies such as Japan, India and South Korea in an effort to counter China’s growing military assertiveness. China now has the world’s largest navy and is honing its long-range ballistic missile capabilities. Beijing’s $12bn boost to its 2020 defence budget ($193bn) was greater than the combined defence budget increases in all other Asian states combined, according to the International Institute for Strategic Studies.

The Royal Navy’s flagship aircraft carrier will deploy later in the spring on her maiden voyage to East Asia, and is due to carry out joint exercises with Japan, among others. But some experts have questioned whether the UK’s commitments are real or merely symbolic — especially since Britain does not have enough of its own fighter jets to equip the carrier, and is relying on the US Marine Corps supplying F-35B Lightning aircraft.

The UK’s HMS Queen Elizabeth aircraft carrier is to be deployed on its maiden voyage to East Asia this spring © Dan Rosenbaum/MoD

“For Australians, Blighty showing up in the old neighbourhood is very easily seen through the lens of imperial nostalgia or post-Brexit hubris,” said Euan Graham, an Asian defence expert at the IISS, based in Singapore. “The Brits should be judged on their consistency of presence, not a once-in-a-generation deployment of a carrier group, that’s not really of much use.” 

There are suggestions from some analysts that the US — which is refocusing its own military efforts against China — might prefer Britain to strengthen its presence in the north Atlantic, the Gulf and the Mediterranean, allowing American forces to concentrate on Pacific defence themselves. “Maybe strategically speaking, the better way to [counter Beijing],” Shurkin suggested. 

‘A tilt away from Europe’

The UK’s European allies may also be wary of British ambitions in Asia. Ricketts — a former British ambassador to France — described Johnson’s enthusiasm for a return to the seas east of Suez as “a tilt away from Europe as much as a tilt towards the Indo-Pacific”. He said the French will be keen to see the integrated review acknowledge the EU’s contribution to European security. But he noted: “I think they’ll be disappointed.”

One solution to the MoD’s financial shortfalls would be to find savings through collaboration. Nicolas Baverez, a defence expert at the Paris-based Institut Montaigne, argued Britain and France share a challenge in funding new hypersonics, robotics, and space capabilities. “It will be very difficult for each of our countries alone to finance all these fields of research,” he said. “The answer will be to make bets and choices, and maybe to co-operate, to mutualise certain costs.” 

However, the integrated review is more likely to seek alliances further afield. In a speech to the Munich Security Conference last month, Johnson boasted that in leaving the EU, the UK had “restored sovereign control over vital levers of foreign policy”. Johnson added optimistically that European leaders were increasingly looking to American allies “to rediscover that far-sighted leadership and the spirit of adventure and transatlantic unity that made our two continents great in the first place”.

Lord David Richards, former chief of the defence staff, suggested Britain should not forget threats such as Russia in its own backyard.

“We could have a very useful role closer to home which is logistically possible, militarily feasible, and we could have real clout within Nato,” he said. “But the risk is that we fritter it all away by going all around the globe and don’t achieve any real strategic influence anywhere.”



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Germany’s CDU rocked by pandemic procurement scandal

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German chancellor Angela Merkel’s centre-right bloc has been rocked by scandal after two of its MPs announced they were resigning following disclosures that they had personally profited from government deals to procure coronavirus face masks.

The announcements risk damaging the party ahead of two important regional elections next Sunday in the western states of Baden-Württemberg and Rhineland-Palatinate.

The polls are seen as a critical test for Armin Laschet, the new leader of Merkel’s party, the Christian Democratic Union, who was only elected in January and is still seeking to stamp his authority on the party.

Nikolas Löbel, a CDU MP, announced on Sunday that he was retiring from politics after it emerged that a company he owned had earned a €250,000 commission by acting as a middleman between a mask supplier in Baden-Württemberg and two private companies in the state.

The MP, who is also managing director of a company in the south German town of Mannheim called Löbel Projektmanagement, said he was resigning his membership of the CDU/CSU parliamentary group with immediate effect. He also said he would step down from the Bundestag at the end of August, and not run again for parliament in elections in September.

“To be a member of the German Bundestag and be able to represent my home town Mannheim is a great honour and an especially moral obligation,” he wrote in a statement. “With my actions I have failed to live up to these standards. For that I would like to apologise to everyone in this country.”

But that didn’t go far enough for party leader Laschet, who said Löbel should quit parliament immediately.

“All of us — politicians on the federal, regional and municipal level — are doing all we can at the moment to bring this country through the crisis and protect people,” he said in a statement.

“And whoever does business with this protection, and who personally enriches himself from that, is no representative of the people. And he must leave parliament at once.”

A similar call came from Markus Söder, the powerful prime minister of Bavaria and leader of the CDU’s sister party, the CSU. “All those involved should wipe the slate clean and draw the fundamental consequences,” he tweeted. “Anything else harms people’s trust in politics.”

Löbel’s resignation came just two days after the CSU MP Georg Nüßlein was forced to resign as deputy leader of the CDU/CSU parliamentary group in a similar scandal. Nüßlein, who is now being investigated for corruption, also said he was retiring from politics, though like Löbel, he intends to remain an MP until September’s election.

Nüßlein earned a large commission after his consulting firm helped to negotiate a big delivery of face-masks from a Chinese supplier during the first wave of the coronavirus pandemic.

Police investigators searched premises in Germany and Liechtenstein last week, including Nüßlein’s office in the Bundestag and his constituency office in the southern state of Bavaria, in connection with the case. Nüßlein himself has denied the allegation of corruption.

Opposition politicians reacted with fury to the mask scandals. “It makes no sense to people when MPs from government parties use their contacts to gain a financial advantage from an emergency,” said Volker Wissing, general secretary of the liberal Free Democrats.



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Mario Draghi makes his mark with vaccine embargo

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It did not take Mario Draghi long to make a mark in Europe as Italian prime minister.

At his first EU summit as premier at the end of last month, the former head of the European Central Bank made a forceful intervention about the slow pace of Europe’s vaccination drive and the need to get tough with pharmaceutical companies over their failure to deliver promised vaccine supplies.

Seven days later, the Italian government confirmed that, with Brussels’ approval, it had blocked a consignment of doses of the Oxford/AstraZeneca vaccine destined for Australia under an EU-wide export authorisation scheme that has been criticised by other countries. The company has fallen far short of its promised deliveries to the EU in the first three months of 2021.

Draghi, a man who earned impeccable internationalist credentials as ECB president, became the first leader to trigger an EU mechanism that critics see as vaccine nationalism that risks undermining the global fight against the pandemic.

“Imagine what would have happened if [former PM Giuseppe] Conte or [Matteo] Salvini had taken such a stance,” said an official with the Democratic party, part of the governing coalition.

Salvini, leader of the nationalist League which is also in the coalition, said on Twitter that he was “proud Italy was the first European country to block exports outside the EU”.

Draghi was installed as prime minister last month to break Italy’s political paralysis and revamp plans to spend up to €200bn in EU funds to support an economic recovery and faster long-term growth. But an alarming resurgence of infections in recent weeks means fighting the pandemic is his overriding priority.

Vials of the AstraZeneca Covid vaccine © Remo Casilli/Reuters

His robust stance on export controls was an expression of “strong restlessness” about the EU’s handling of the vaccination campaign, said Giovanni Orsina, director of the LUISS school of government in Rome. 

“The current situation shows a strong fragility in Brussels’ negotiating position towards the big pharmaceutical companies,” Orsina added. “Draghi is using his political clout to redress the balance in this regard, clearly also in Italy’s favour. Absurdly, having a person of extraordinary international prestige allows for a much stronger approach to national protection than a pure sovereigntist as prime minister.”

At the EU summit Draghi asked why the bloc had not imposed stricter vaccine export controls for companies that failed to meet their contractual commitments. Speaking to Ursula von der Leyen, European Commission president, by phone this week, he stressed “the priority goal of a more rapid European health response to Covid-19, especially on vaccines”, according to his office.

Meanwhile he has set out to reboot Italy’s vaccination programme which is run, with varying degrees of success, by regional governments. As of March 5, Italy had administered only 5.2m doses, or 8.6 per 100 people, below the EU average. More ambitious vaccination targets are expected within days.

Draghi has also replaced the coronavirus commissioner with an army logistics general who has experience in Afghanistan and Kosovo and who will work alongside a new head of the civil protection agency. The aim is to speed up vaccination across the country. The government is also weighing up whether to extend the interval between doses in order to increase coverage, as in the UK. 

Drive-through testing centres and other sites are being converted into vaccination facilities, and a €500m investment in a new manufacturing plant is planned.

“The Italian pharmaceutical industry is a sector to be proud of, and it is capable of ensuring the production of vaccines at all stages,” Giancarlo Giorgetti, economic development minister and League politician, said earlier this week.

The Democratic party official said replacing the Covid commissioner with a general was “concerning”, but Draghi’s efforts have otherwise drawn broad support.

Raffaele Trano, a former Five Star MP now in opposition, said “the muscular approach and the logistical revolution seem to be paying off, even against the big pharmaceutical companies who are not being reliable at all and whose priority is clearly to put profit before the health of citizens”.

“There is a need to act promptly, and Draghi is doing what he was called to do: speeding up the process as much as possible,” said Paola Boldrini, a centre-left member of the senate who sits on its health committee.

“Europe has acted as best it could, but Italy is in an emergency situation, which is the reason why the current government was formed,” Boldrini added. “Unfortunately, despite the great co-ordination in disbursing recovery funds, with vaccines the EU was not as efficient, the contracts that were signed [with pharmaceutical companies] underestimated the real production capacity of vaccines and Brussels found itself unprepared.”

Italian officials stress that the decision to block the vaccine consignment from Catalent, a Lazio-based fill-and-finish contractor, was taken jointly with the commission in accordance with the export transparency mechanism introduced in January.

“I would not interpret Draghi’s move, co-ordinated with the commission, through the lens of vaccine nationalism but rather of the EU’s willingness and ability to stand up to big pharma to protect its citizens,” said Nathalie Tocci, director of the Institute for International Affairs in Rome. The doses were intended for Australia, a country with few new infections and where the vaccination programme is still in its early stages.

“I don’t think that Italy would have taken this initiative if the country in question was either a developing country or one living through an emergency to the same extent EU member states are.”

“Recently the intra-EU controversy has been between institutions and big pharma, where the accusation is that the EU has not been able to stand up to companies, thus gambling on the lives of citizens,” Tocci added. “Seen through this lens, Draghi’s move, far from being an act of nationalism, could be read as the necessary step to prevent reigniting dangerous Euroscepticism.”

Additional reporting by Silvia Sciorilli Borrelli in Milan



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