Not only I but also other economists have been discussing since the last autumn on the facilitation of the conditions for benefiting from the unemployment aid, extension of the duration of the aid, revision of unemployment aid amount and concentration on skill development trainings geared to unemployed, in particular to unskilled ones.

Over the nine months since then (from September to May), we have regularly heard statements from officials that some of the aforementioned recommendations will be taken into consideration. Nonetheless, there is no considerable decision yet. The most important step geared to the labor market (of course as only one step is taken, that only step becomes 'the most important step') was that flexible employment reading "do not fire your worker and we pay their wages for a while" was allowed. I do not know the latest figures, but at the initial phase the number of beneficiaries was quite low as the conditions were quite harsh and the bar was raised high.

Of course public budgets of all states have been deteriorating recently: Tax revenues decrease as spending is reduced by the fall of national income stemming from the global financial crisis. However, in Turkey, budget has deteriorated because of the resources wasted for elections. Beyond that, limited resources were also wasted for the tax cut decision made in mid-March and facilitated automobile sales by Italy or France to Turkey.

Measures listed in the first paragraph could have easily been taken with a certain portion of the resources transferred to local administrations at amounts above normal before the elections and the tax revenue waived as a result of tax cut. Furthermore, we have also showed that this way it is as well possible to stimulate directly the spending on domestically produced products. Why is that important?

It is important because: It makes it possible to limit the rate of economic contraction. Second, it prevents to a certain extent the erosion of tax revenues. These are short-term gains.

In the medium term, in particular trainings to develop skills contribute to the quality of labor force. In technical terms, it improves the human capital. And this implies an enhancement in the potential level of production.

Beyond these macroeconomic motives the issue also has a social dimension: What is of higher importance? That a person buys an automobile at a cheaper price when he can already afford buying a car, or that an unemployed man can take food to home and raise hopes about the future? Moreover, while designing more generous unemployment aid plans, some set of options might have also been focused on. For instance, amount of the aid could have been increased provided that the children at school age are sent to school. Why is that important? For several reasons...

See what the results of a recent research on Canada show: "Well-designed income transfers and skill development trainings (for instance, unemployment aid and skill development trainings in our case) cannot only help families make their way back to employment, but also improve the educational, mental health and behavioral outcomes of the next generation. Mentioned qualifications differ between children of families receiving transfers and not receiving transfers, in favor of the former group". For the brief summary of the study that gives these differences as a result of some scientific measures, please visit VOX web site (Authors: Milligan and Stabile, 15 May 2009; http://www.voxeu.org/).

I hope that from this point on, efforts will be concentrated on an economic program that is coherent, considers both the short and the medium run and always notes the social dimension of the problem...

This commentary was published in Radikal daily on 17.05.2009