The prospect of unemployment due to the return of migrants should frighten the Central Asian governments
By Vestnik Kavkaza
The London magazine the Economist writes about the Turkish economy in an article "Saved by welfare." "The opposition parties in Turkey are so weak that they consider the economic crisis as the only hope of expelling the government of the conservative Justice and Development Party, the article says. In the summer of 2013 the Turkish economy was in stagnation, and investors withdrew assets from developing countries, including Turkey, which is largely dependent on foreign capital. The increase of inflation during the crisis in Iraq (the second-largest export market for Turkey after Germany,) affected the Turkish economy. Nevertheless, the recent decline in oil prices eased the pressure on inflation. Most bankers say that the economy will grow by about 3.5% this year, the government says by more than 4%.
"In a situation when Russia and Brazil are stagnating, Turkey is becoming a more desirable direction for inserting money. The author wonders whether Turkey uses this financial opportunity for structural reforms in the country. The IMF would like to see Turkey "liberalizing its rigid labor market," the education system also needs to be reformed. The article quotes Celine Sayek-Bocca, who calls President Erdogan "the economic risk."
"The biggest threat to the economy is undermining the rule of law," the article quotes Sayek- Bocca.
"Still, Mr. Erdogan understands better than anyone that the increasing standard of living helps to keep the Justice and Development Party in power. The president can be persuaded that changes are necessary," concludes the Economist.
"The economic crisis in Russia and the fall of the ruble as a consequence, compounded by adverse economic decisions and the sharp drop in world oil prices are causing concern to millions of Central Asians who depend on relatives working in the former imperial power and send money home," the Economist writes in an article "Central Asia and Russia are in crisis."
The World Bank estimates that remittances make up one third of the GDP of Kyrgyzstan and almost half of Tajikistan's GDP. With the fall of the ruble, remittances will continue to decline. Due to the crisis, Kyrgyzstan and Tajikistan may experience double-digit inflation. It is expected that a quarter of migrants working in Russia currently will return to their homeland in Central Asia. The prospect of hundreds of thousands of unemployed young people, flooding these weak states, should frighten Central Asian governments, which do little to create jobs and rely on emigration to alleviate social pressure. The article said that "despite the obvious risks, Kyrgyzstan sees no alternative but to join the Eurasian Economic Union.”