The cost of the earthquake in Turkey is unbearable mainly because as an economy it showed signs of contraction long before the earthquakes.
Two earthquakes of this magnitude in Turkey were enough to bring an already ailing country to its knees economically and socially. At this point, it should be noted that the tragic death toll has passed 36,000. Meanwhile, back home, survivors are angry with the government for granting “construction amnesty” to contractors, but also for failing to mobilize your machinery quickly.
On the economic front, according to the Turkish Business Confederation (Turkonfed), the cost to the economy is estimated, with current data, at around 84 billion dollars, or around 10% of the GDP of the Turkish economy.
The economic impact of earthquakes
The two earthquakes and dozens of aftershocks are estimated to have caused about $70.8 billion in damage to residential buildings and additional losses in national income of $10.4 billion. According to Turkonfed, job losses will cost the Turkish economy $2.9 billion.
To make these calculations, Turkonfed used data from the 1999 earthquakes near Istanbul that killed 18,000 people. The death toll from the latest quake far exceeded the 1999 quake, while thousands remain missing. Turkonfed’s estimates also put the economic losses above those of other economists, who stressed that it was too early to assess the full impact.In terms of infrastructure, damage to Turkish infrastructure (roads, power grids, hospitals and schools) could push the country’s budget deficit to more than 5.4% of GDP this year, against the official forecast of 3.5%. says Turkonfed. On the other hand, preliminary calculations by Bloomberg Economics showed that costs related to disasters, including reconstruction efforts, could amount to around 5.5% of GDP.
What analysts say
According to Daily Sabah, Mahmoud Mohieldin, chief executive of the International Monetary Fund, said that the impact of the large earthquakes that occurred last week is expected to be greater than that of the 1999 earthquake. The deadly earthquakes that occurred last Monday (06.02) roads, pipelines and infrastructure destroyed The other is in the region of the region, which is home to some 13.5 million people.
Officials and economists said the quakes will add billions of dollars to Ankara’s budget and are expected to cut economic growth by two percentage points this year. Turkey is dealing with rising inflation and the depreciation of the Turkish lira.
As a result, the government adopted a new economic model aimed at moving from chronic deficits to current account surpluses. It also aims to reduce inflation, which fell to 58% in January, by increasing exports, manufacturing and investment and lowering interest rates. Inflation reached 85.5 percent in October, the highest level in 24 years.
blow to economic growth
Turkey has much lower debt levels than most countries. However, the earthquake damage is expected to affect production in the affected area, which is estimated at 9.3% of the country’s GDP, which would deal a severe blow to economic growth.
The southeastern region affected by the earthquake accounts for 8.5% of Turkey’s exports and 6.7% of imports. But economists say the earthquakes are unlikely to affect Turkey’s trade balance as exports and imports are expected to decline.
Three economists estimated that GDP growth could fall between 0.6 and 2 percentage points in a scenario in which the region’s output falls by 50%, and said that the recovery would take between six and 12 months.
A senior official told Reuters last week that growth could be one or two percentage points below the 5 percent target, saying some investment funds from the budget should be used in those sectors.
What did Erdogan promise the earthquake victims?
After Recep Tayyip Erdogan saw the anger of the citizens towards him and his government, he announced that the state would provide rent to earthquake victims for one year, in case they did not want to stay in the tents. At the same time, the government will rebuild the collapsed buildings within a year.
“We will give ten thousand Turkish lira (494 euros) to our citizens. In addition, for citizens who do not live in tents and who do not want to live in tents, we will work so that they can move and cover their needs.” rent,” he added. He also said that if the earthquake victims prefer to stay in hotels, we can provide this accommodation for them as well.
Of course, the question remains. How can Erdogan implement what he says and his economy in this case?
He finds contractors responsible for bad works
After a week of rescue efforts and to public outcry from citizens affected by Turkey’s deadly earthquake, the government launched a search for contractors responsible for the shoddy work being done on the buildings, ordering the arrest of 113 of the 131 suspects.
According to the BBC, Fuat Oktay promised a thorough investigation of anyone indirectly responsible for the deadly quake. So far, he said, 131 suspects have been identified as responsible for the collapse of some of the thousands of buildings that were destroyed in 10 provinces hit by the earthquake last Monday, and that “arrest warrants have been issued against 113 of them “.
Arrests in the context of the search of real estate
However, for the record, as Reuters notes, in the ten years to 2022, Turkey has dropped 47 places on Transparency International’s Corruption Perceptions Index. The state-run Anadolu news agency reported that prosecutors in Adana ordered the arrest of 62 people in an investigation into the collapsed buildings, while prosecutors requested the arrest of 33 people in Diyarbakir for the same reason.
It added that eight people were arrested in Sanliurfa and four in in connection with damaged buildings believed to have structural flaws, such as the removal of columns. Police arrested the developer of a collapsed Antakya apartment complex at Istanbul airport as he prepared to board a flight to Montenegro on Friday night, and he was officially arrested on Saturday, according to Anadolu Agency.
The 12-story luxury apartment complex was completed a decade ago and has 249 apartments. No injuries were reported in this building. The detainee declared his ignorance of the reasons for the collapse of the complex and assured that the trip he was preparing to make to Montenegro had nothing to do with it.For More Info: Smoothies News