23Rd Meeting of the EU-Turkey Joint Consultative Committee

Brussels, 30 October 2007

23rd meeting of the EU-Turkey Joint Consultative Committee

Adapazari, Turkey

9 & 10 November 2007

REPORT

PROMOTING WOMEN'S ENTREPRENEURSHIP IN TURKEY

RAPPORTEUR

Margarita LOPEZ-ALMENDARIZ

EESC member – Employers Group

Member of the EU-Turkey Joint Consultative Committee

Member of the Spanish Confederation of Employers' Organisations (CEOE)

1. Introduction

1.1 Entrepreneurship is the mindset and process to create and develop economic activity by blending risk-taking, creativity and/or innovation with sound management, within a new or an existing organisation[1].

1.2 In today's society, promoting entrepreneurship is of key importance to successfully meeting the challenges posed by globalisation and as a means of improving growth and, consequently, social wellbeing. Nevertheless, as well as making a huge contribution to job creation, competitiveness and growth, entrepreneurship should also be seen as a personal choice, which should be respected and encouraged, irrespective of gender.

1.3 An individual's decision to start up a business not only depends on a great variety of factors such as the opportunities available, barriers to entry and qualifications; there are also other obstacles that lie beyond the entrepreneur's control and include social, administrative, financial and cultural barriers. These are barriers which, varying in line with each country's social traditions, do affect both men and women, but women generally face greater problems.

1.4 This certainly applies to Turkey which, whilst it does have a legal system that respects gender equality, still needs to work hard to remedy the numerous problems facing women wanting become entrepreneurs, in particular, less well-educated women from more traditional social backgrounds and mainly located in rural or deprived urban areas.

1.5 The EESC wishes use this document to express its support once again for initiatives to promote entrepreneurship, aimed at boosting business start-ups and eliminating the factors that prevent many Turkish women from succeeding in their business projects.

1.6 The aim, therefore, is to evaluate the current situation of women entrepreneurs in Turkey and to address the issue of why relatively few women start up businesses when many are keen to do so. Secondly, the document aims to propose a number of measures that could help Turkish women not only to set up their own businesses but also to ensure that these businesses, once up and running, remain viable and sustainable in the long term. More specifically, the priority should be to give Turkish women the opportunity to create their own jobs, which they can continue to build up and turn into micro-businesses, SMEs, etc.

1.7 A distinction must thus be made from the outset between traditional business activities, which also include SMEs, and self-employed activities (such as micro-businesses employing one person or a small number of people from the same family)[2].

1.8 To conclude, the EESC considers that boosting women's entrepreneurship in Turkey and setting up businesses will lead to economic growth and job creation, which are key aspects of social cohesion in Turkey.

2. The political, economic and social situation.

2.1 The political situation

2.1.1 Turkey stands at the crossroads between Europe and Asia, covers 783 562 km2 and has a population of 73 426 979[3]. The current Turkish Republic was founded in 1923 as a western-style secular state.

2.1.2 Turkey first applied to join the European Economic Community (EEC) in July 1959 and signed an Association Agreement in 1963 (known as the Ankara Agreement), which provided for the establishment of a customs union. This agreement was complemented by an additional protocol in 1970, which laid down a timetable for removing tariffs and quotas for the movement of goods between the EEC and Turkey and, in 1995, the customs union was established.

2.1.3 The European Council of December 2004 concluded that Turkey fulfilled the Copenhagen criteria[4], enabling negotiations on accession to open. These negotiations opened on 3 October 2005, when the EU Council of Ministers adopted the negotiating framework.

2.1.4 One of the main challenges facing the EU's current agenda for enlargement is Turkey's development. Against this backdrop, the European Commission welcomed the Turkish Prime Minister Recep Tayyip Erdogan's victory in the general elections held on 22 July 2007. Specifically, it hailed the Prime Minister's personal commitment to promoting economic and political progress, a commitment that was repeated on 5 September 2007 in the Turkish parliament's vote of confidence in the government formed by Mr Erdogan's party.

2.1.5 Turkish society is by and large more open now to discussing a number of issues, including those that have traditionally been sensitive. Turkey's progress on its political reform should, therefore, be acknowledged, although shortcomings can be seen in major areas such as freedom of expression and women's rights. In November of this year, the European Commission will publish its progress report on Turkey's path to accession and it is hoped that the Commission will ratify its opinion on the democratic nature of Turkey's elections.

2.1.6 The marked increase in women's representation in the Turkish parliament following the last legislative elections should provide a key starting point for raising society's awareness of the importance of promoting entrepreneurship amongst Turkish women and of helping them to develop. Women's representation in parliament would, therefore, be the appropriate platform for generating better policies to promote Turkish businesswomen and to remedy current shortcomings in the implementation of legislation.

2.2 The economic situation

2.2.1 Turkey has the third-largest economy of the non-EU Mediterranean states and is one of the world's ten largest emerging markets. It has a fast-growing young population, obvious consumer potential and a future market for infrastructure.

2.2.2 Turkey is underpinned by a viable market economy, which is currently in the process of stabilising its reform measures. Macroeconomic policies aimed at achieving stability have helped to secure marked economic growth[5] and an increasing resistance to shocks. Budget deficits[6], public debt[7] and inflation[8] have also fallen considerably.

2.2.3 Despite these results, disparities in the labour market remain, with the women's employment rate, in other words, the proportion of women between the ages of 14 and 64 in employment, standing at 26%, compared to 68.2% for male employment in 2005. Furthermore, employment levels are low generally,[9] especially where women are concerned[10].

2.2.4 Where the business world is concerned, support and incentives for investment, the programme of privatisation and a harmonised definition of SMEs, in conjunction with the Law on Foreign Direct Investment[11], will not only help to improve Turkey's industrial and business policy but will also make the country more attractive to foreign investors. Turkish women surely also deserve this type of boost.

2.3 The social situation

2.3.1 Most of Turkey's population is concentrated in the Marmaris, Aegean and Mediterranean coastal regions, which have more highly-developed economies than the country's eastern and south-eastern regions, where most of the Kurdish population lives. Furthermore, the modernisation of farming and industrial development are leading to large-scale internal migration from rural areas to towns and cities (approximately 350 000 people per year). Today, 30% of the population lives in rural areas and the remaining 70% in urban areas, in particular Istanbul, which has around 14 million inhabitants[12].

2.3.2 Broadly speaking and even where progress has been made, reforms are needed in extremely important areas of Turkish society, such as the army, the judicial system, the fight against corruption and respect for minorities. Where women's rights are concerned, women are now receiving greater public attention in Turkey and civil society's attitude in this area is increasingly positive. Nevertheless, whilst the legal framework for equal opportunities is satisfactory, in practice, women's rights are sometimes abused, especially in the country's poorer regions.

2.3.3 Measures therefore need to be adopted to ensure that legislation is better implemented, that women are more fully integrated into the labour market and in particular that women are able to exercise their right to become entrepreneurs. These measures should focus on changing mindsets and should specifically target the most vulnerable women, such as those from rural areas and the most disadvantaged social spheres.

3. Promoting entrepreneurship: the current situation of businesswomen in Turkey

3.1 In recent years, the main aims of the policy to promote entrepreneurship in Europe have been to ensure the adoption of the European Charter for Small Enterprises in 2000, the Green Paper on Entrepreneurship in Europe in 2003 and the Euro-Mediterranean Charter for Enterprise in 2004.

3.2 At the 6th Euro-Mediterranean Conference of Ministers for Industry, held on 21 and 22 September 2006, the commitment to implement the Euro-Mediterranean charter was renewed, as part of the European neighbourhood policy and the national action plans developed under this policy. A recommendation was also made to raise the charter's profile at the national and regional levels and to involve the private sector more closely in the implementation process.

3.3 The EESC has had the opportunity to state its position on the initiatives described above and broadly welcomes them. Nevertheless, it must be borne in mind that, like the 27 Member States of the European Union, the Mediterranean Non-Member Countries (MNMCs) are also extremely diverse and the European Union should, therefore, reflect their specific characteristics when promoting women's entrepreneurship.

3.4 In the case of Turkey, experience shows that far fewer women than men own micro- or small businesses. The number of businesswomen has recently increased, but the percentage that they represent of all business owners (14%,[13] 8% of whom are located in urban areas) is not good enough.

3.5 If we look at Turkish women's work in the family setting alone, their contribution is clearly substantial. If we consider their contribution in relation to the economy as a whole, however, it is clearly less significant. The reason for this is that, even where considerable progress has been made on legislation, there is no real critical mass of women entrepreneurs who own and run their own businesses. This situation is even more marked in rural areas and in some urban areas, as a result of internal migratory flows.

3.6 Against this backdrop, Turkish women who want to become entrepreneurs face a number of obstacles, ranging from their traditional position in society to a lack of adequate knowledge of how to start up their own business projects. Consequently, in many cases it is only highly educated women that have been able to succeed in business.

3.7 At the other end of the scale, poorly educated women end up working in the informal economy and face problems arising from their social and family situations or from a lack of support in the day-to-day running of a business. These factors make the already difficult task of becoming a businesswoman even harder.

3.8 There is a gulf separating Turkish women working in public administration and those involved in business. This being the case, it would be useful to run awareness-raising campaigns that could lead to a change of mindset that understands the advantages of having a business class in Turkey formed by women. This change of mindset would have to start by establishing a system of education targeting two main areas: school and the family.

4. Conclusions and proposals

4.1 Helping more Turkish women to become self-employed will not only give these women greater independence but will also enable them to play a more active role in society. Self-employment will also create more new jobs and increase families’ incomes, with businesswomen becoming a source of pride for their relatives. All of this will result in greater wellbeing and social cohesion.

4.2 Consequently, where Turkey is concerned and where existing initiatives are on the right track, these should be strengthened through measures such as:

• raising public awareness (especially within families and schools) of the importance of promoting entrepreneurship amongst Turkish women;
• significantly strengthening women’s organisations that support women wanting to start up a business;
• allocating greater resources to current policies providing assistance, to ensure that they reach the entire population, in particular rural areas;
• adopting specific legislation to promote entrepreneurial training for women and their families;
• improving access to funding.

4.3 To this end, a set of points for discussion is now provided, with the aim of making suggestions, whilst not excluding any other measures that might be considered:

4.3.1 Encouraging the creation of bodies that facilitate funding and access to credit, such as Mutual Guarantee Schemes, whose purpose is to support the start-up and development of micro-businesses by providing services and guarantees that a micro-business (or a SME) would not be able to obtain on its own. These are financial organisations in which the directors of the micro-businesses set up act as partners and offer personal guarantees to their members by underwriting banking operations without committing the business' own capital and by facilitating access to special lines of credit on terms more favourable than those available on the market. These organisations also provide consulting services and assistance with accessing credit or drawing up investment plans;

4.3.2 Creating support networks for businesswomen that can be accessed by women on a basis of complete equality with their male counterparts. In turn, support points should be interlinked, to ensure that women entrepreneurs can exchange information, knowledge and good practice;

4.3.3 Promoting programmes and courses specifically aimed at women, in order to make them aware of the possibilities of self-employment and business. It is particularly important that Turkish women have full access to ownership and independence in the decision-making process so that they can set themselves up as businesswomen and overcome potential misgivings within their families and consequently without needing the agreement of their families or the consent of their husbands;

4.3.4 Developing training programmes that stimulate personal skills and promote job creation. This type of programme should prioritise rural areas and target groups of women whose situation is worse than average;

4.3.5 Supporting the work of employers' organisations[14], and other bodies[15] in order to ensure an appropriate framework between men and women that promotes the entrepreneurial environment. It would also be useful to set up programmes for cooperation with the social partners in order to promote entrepreneurship at all levels of the educational system;

4.3.6 Setting up and funding business development centres[16] throughout Turkey. These centres would aim to provide decentralised and integrated support services and thus technical assistance for businesswomen starting up and developing their businesses. This would involve creating networks offering advice and support (administrative, tax, technical, commercial and logistical support and assistance with finding temporary premises, etc);

4.3.7 Promoting information and awareness-raising campaigns in schools and within families, adopting different approaches in rural and urban areas. To this end, it would make sense to agree on an entire educational strategy that is given the necessary funding and reaches all sections of society;

4.3.8 Levelling the playing field for businesswomen by offering tax benefits and putting in place measures to simplify legislation and to cut red tape, and by setting minimum thresholds below which micro-businesses and the self employed would be exempt from certain administrative procedures;

4.3.9 Making use of EU pre-accession instruments for rural development and gearing them towards the needs of women in rural areas, to provide support for initiatives to train and develop the potential of women in rural areas, such as 'training for employment' centres[17] that encourage in particular women's proven capacity for teamwork, which could lead to the creation of business cooperatives;

4.3.10 Carrying out monitoring, evaluation and support tasks for these and any other initiatives that might arise in the discussions of the EESC's EU-Turkey Joint Committee. The EESC proposes, therefore, that two members of this committee be appointed on a permanent basis to work on these tasks, to keep the joint committee informed and to propose new measures or, where appropriate, a change of direction for existing measures.

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1

[1] Green Paper on Entrepreneurship in Europe, COM(2003) 27 final.

[2] EESC information report of 26 August 1999 on the Role of women in economic and social life and, in particular, their integration into the labour market, CESE 286/99. Rapporteurs: Ms Cassina, Ms López Almendáriz

[3] Data published by Eurostat on 1 January 2007.

[4] The Copenhagen criteria were established for the accession of new members at the European Council of December 1993 and are as follows:

1) political criteria: stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities;

2) economic criteria: existence of a functioning market economy and the capacity to cope with competitive pressure and market forces within the European Union;

3) acceptance of the Community acquis: the ability to take on the obligations of membership, including adherence to the aims of political, economic and monetary union.

[5] 5.8% in 2003; 8.9% in 2004; 7.4% in 2005; 6.1% (estimate) in 2006; and 4.9% (forecast) in 2007, according to the European Commission's Spring economic forecasts for 2007.

611.3% in 2003; -5.7% in 2004; -0.3% in 2005; -0.6% (estimate) in 2006; and -2.2% (forecast) in 2007, according to the European Commission's Spring economic forecasts for 2007.

[7] 85.1% in 2003; 76.9% in 2004; 68.6% in 2005; 60.7% (estimate) in 2006 and 56.6% (forecast) in 2007, according to the European Commission's Spring economic forecasts for 2007.

[8] 25.3% in 2003; 10.1% in 2004; 8.1% in 2005; 9.3% (estimate) in 2006; and 8.2% (forecast) in 2007, according to the European Commission's Spring economic forecasts for 2007.

[9] In 2005, the employment rate stood at 68.2%. Appendix to the Progress report on Turkey. SEC(2006) 1390.

[10] In 2005, the rate of women's employment stood at 23.7%. Appendix to the 2006 Progress report on Turkey. SEC(2006) 1390.

[11] Law No. 4875, 5 June 2003.