Monday, the lives of millions of people in Turkey and Syria were turned upside down when shockwaves from two earthquakes hit the area at the same time.
The quakes, which happened nine hours apart in Turkey and Syria and measured 7.8 and 7.5 on the Richter scale, were the biggest to hit the area in the past 100 years.
Because of the earthquakes, more than 12,000 people have died, and many more are still missing or in very bad shape. The World Health Organization said that it affected 23 million people. Over 6,000 buildings were destroyed, and many people were stuck inside as they fell. A harsh winter storm is now threatening the lives of those who have survived and those who are still buried under the rubble. This is happening even though rescue efforts are still the top priority, with 25,000 people working in Turkey and many more coming from other places.
Syria is the least ready for this kind of emergency because it has been dealing with war and terrorism for the past 12 years. Its infrastructure has been badly hurt, and the West is still putting pressure on the country. Already, thousands of people have been forced to leave their homes or move within their own countries because of the damage.
Analysts in the area are starting to think about the long-term effects the disaster could have on Turkey, a country with 85 million people that was already having trouble with its economy and whose military, economy and politics have a big effect far beyond its borders.
“This year will be a turning point for Turkey, which will vote for a new president on May 14. Depending on whether or not Recep Tayyip Erdogan stays in office, the results of that election will have big effects on Turkey’s people, economy, currency, and democracy.”
Erdogan’s political future will now depend a lot on how he reacts to the accident and whether or not he wants to find out why so many buildings were not ready to withstand shocks.
Mike Harris(the founder of Cribstone Strategic Macro):” told CNBC on Tuesday that rescue efforts could lead to retaliation if they were not well planned. The other problem is, of course, the structures themselves and which ones have been destroyed. Erdogan could get in a lot of trouble if these were built according to the new rules without any rules being put in place by the government. Erdogan has lost control of the story, that much is clear.”
Erdogan called for elections to be held in early May because the cost of living across the country was going up. At the moment, inflation in the area is over 57%, which is down from August through November, when it was over 80%. They say it shows that Erdogan wants to stay in power as long as possible before the effects of his unpopular economic policies become clear.
Harris said: “The president has created this strange situation where inflation is at 80%, but he needs to keep the currency stable until the election.”
Erdogan has discovered a very new way, a very expensive way to basically de-dollarize the economy, he said, giving as examples his policy of giving Turks 13% interest on their bank accounts and his promise to pay back their losses if the currency falls even more.
Harris said with confidence when asked about Trump’s chances of winning, “Actually, the currency has to collapse if he wins, because there will be no confidence, and he’s made up this fake situation that can’t last for a long time.”
More public money will need to be spent on rebuilding whole cities and villages. Because of this, it is unlikely that Erdogan will be able to keep the financial promises he made before the election, which included populist actions like raising salaries and lowering the age at which people can retire.
High energy prices around the world, the Covid-19 pandemic, the war in Ukraine, and, most importantly, Erdogan’s economic policies that have kept interest rates low even though inflation is rising have all contributed to Turkey’s economic decline, which has caused the Turkish lira to fall to an all-time low against the dollar. Since 2013, Turkey’s foreign exchange reserves have dropped and Ankara’s current account deficit has skyrocketed.
Over the past year, the Turkish lira has lost about 30% of its value against the dollar. This has made it much harder for regular Turks to buy things, which has hurt Erdogan’s popularity.
So far, no one has been put forward by a Turkish opposition party. In December, Ekrem Imamoglu, the mayor of Istanbul, was arrested and given a political ban because of accusations that his supporters say are political and only meant to stop him from running for president.
In the past few years, a lot of investment money has left Turkey. Mark Mobius of Mobius Capital Partners LLP, who is a well-known expert on emerging markets, is not worried about the earthquake or the economy.
Mobius said of Turkey: “We still think it’s a good place to put money,” which means it’s a good place to invest. In fact, we have investments in that area.”
All of these tragedies and crises have happened in Turkey, but because the people are so flexible, the country has been able to get through them all. So we don’t have any worries about sending money to Turkey.
Mobius did say that Turkey wasn’t ready for an earthquake, which could hurt Erdogan’s chances of getting re-elected.
This is a big problem because “some of these places don’t have up-to-date building codes,” as he said.
Since Erdogan acts as a middleman between Ukraine and Russia, what happens in Turkey affects the conflict in Ukraine. At the moment, Turkey is the biggest reason why Sweden and Finland can’t join the powerful security alliance NATO.
“With Russia’s naval blockade of Ukraine’s Black Sea ports, Turkey’s role as a mediator between Ukraine and Russia in the Black Sea Grain Initiative makes it easier for Ukraine to sell food to other countries.”
All of them will be affected by how well or badly Erdogan does in the next elections based on how he handled the disasters.
Sinan Ulgen, the head of the Center for Economics and Foreign Policy in Istanbul, thinks that after the earthquakes, the West will put less pressure on Turkey to join NATO, but only for a short time.
Ulgen said: “that this would only last for a short time. Turkey’s foreign policy may take a break for a few weeks, but then it will be back to normal.”
Western allies and other countries are sending aid and rescue teams to Turkey to help the country get back on its feet after the recent disaster. Ankara will have to spend a lot of public money to help people in need and rebuild all the places that were destroyed by the earthquakes.
Ulgen said: “that the good news is that Turkey has room in its budget. The ratio of Turkey’s public debt to its GDP is about 34%, which is low compared to the US and Europe. So, as he put it, “Turkey has room for fiscal spending, even if that means a big increase in the ratio of public debt.”
Turkey is ready for natural disasters because of its size. Even so, Ulgen said that “whatever capacity was available, it was not going to be enough to deal with this kind of tragedy.”
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