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Turkish Unemployment Jumps as Economic Crisis Worsens

Men sit at an open-air cafe in Istanbul, Turkey (File photo: Reuters)
Men sit at an open-air cafe in Istanbul, Turkey (File photo: Reuters)
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Turkish Unemployment Jumps as Economic Crisis Worsens

Men sit at an open-air cafe in Istanbul, Turkey (File photo: Reuters)
Men sit at an open-air cafe in Istanbul, Turkey (File photo: Reuters)

Turkey's unemployment rate reached 13.7 percent at the end of 2019, a 2.7 percent increase from the previous year, according to official figures.

Turkey’s Statistical Institute (TurkStat), announced that unemployment rate increased 13.7 percent between November and December of 2019, up 13.3 percent from October.

The faltering Turkish economy led to an increase in unemployment rates to the highest level in 10 years at 14.7 percent in the first quarter of 2019.

However, the Turkish opposition says the government does not issue the real figures or other economic indicators to avoid revealing the reality of the economic situation in the country.

In 2019, 4.4 million Turkish citizens were unemployed as the country witnessed a number of economic, financial, and monetary crises, from the devaluation of Turkish Lira, to the crisis in real estate, and the foreign investments decline in the stock market

Official statistics issued Tuesday revealed that agricultural employment rate decreased by 225,000 people during last December, compared to the same period in 2018. Employment in the construction sector declined by 119,000.

The total workforce, employed and unemployed, reached 32.05 million people, an increase of 95,000 people in December 2019 compared to the same month in 2018.

The unemployment rate for the 15-64 age group was about 14 percent, up 0.3 percentage year on year, while the unemployment rate in the 15-24 age group, reached 25 percent, a 0.5 increase year on year.

Since August 2018, Turkey has been suffering a severe financial and monetary crisis, which pushed the exchange rates of the Turkish lira to low levels, amid fluctuations in the abundance of foreign exchange in official markets.

The exchange rate of the Turkish lira fell in August 2018 to 7.24 against the dollar, compared to 4.8 lira for the dollar before the crisis, while the exchange rate currently stands at 6.50 to the dollar.

Meanwhile, Turkey’s Trade Ministry announced it has launched a legal challenge at the World Trade Organization (WTO) against EU tariffs on steel imports.

The EU launched an investigation and imposed curbs on steel imports in July 2018 in response to import duties applied by the US.

The Ministry said Turkey's steel exports were negatively affected by the EU measures and it has a started a lawsuit process at the WTO.

“While carrying out bilateral negotiations with EU in order to lessen the adverse impact of the measure against our country and to get the measures revised, we have decided to take additional steps to protect our rights at the WTO,” read the statement.

In Feb. 2019, EU announced a regulation imposing definitive safeguard measures on imports of steel products, saying that a sharp rise in steel imports was “seriously threatening” steelmakers in member countries.

The EU fixed quotas for the import of 26 steel product categories, with 25 percent duty applying on further imports, for a period of three years. Turkey is subjected to final curbs in 17 categories, as one of the main steel exporters to EU.

According to latest data from the World Steel Association, Turkey was the world’s 7th largest crude steel producer in January 2020, with production standing at 33.7 million tons.

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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.

Business

Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.

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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.