Civilians search for survivors under the rubble of collapsed buildings in Kahramanmaras, near the epicenter of the earthquake, a day after a 7.8-magnitude earthquake struck the country’s southeast on February 7, 2023.
Adem Altan | AFP | Getty Images
Life for millions of people in Turkey and Syria changed forever on Monday, as two consecutive earthquakes sent tremors hundreds of miles away.
Nine hours apart, the quake measured 7.8 in Turkey and 7.5 in Syria on the Richter scale, the region’s strongest in nearly a century.
At the time of writing, the death toll from the earthquake is over 12,000 with many still missing and seriously injured. The World Health Organization put the number of people affected by the disaster at 23 million. At least 6,000 buildings collapsed, with many residents still inside. With nearly 25,000 deployed in Turkey and thousands more sent from abroad, rescue efforts remain a top priority – but a severe winter storm is now putting the lives of survivors and those trapped under the rubble at risk Is.
Syria, ravaged by 12 years of war and terrorism, is the least prepared to deal with such a crisis. Its infrastructure has been greatly reduced, and the country remains under Western sanctions. Thousands of people are already refugees or internally displaced people in the affected areas.
With the dust of the devastation still settling, regional analysts are zoning out on the long-term ripple effect the disaster could have on Turkey, a country whose 85-million-strong population was already beset by economic problems – and whose The military, economy, and politics have a great influence far beyond its borders.
An important year for Turkey
The year will serve as a turning point for Turkey as it nears its presidential election on 14 May. The outcome of that election – whether or not current President Recep Tayyip Erdogan remains in power – has massive consequences for Turkey’s population, economy, currency. , and democracy.
Erdogan’s response to the disaster – and likely calls for accountability for why so many buildings were inadequately designed to withstand such tremors – will now play a major role in his political future.
“If the hedge is mismanaged and people get discouraged, there is a backlash,” Mike Harris, founder of Cribstone Strategic Macro, told CNBC on Tuesday. “And of course the second issue, there are buildings and those that have fallen. To the extent that these were built under the new code and the authorities did not enforce the regulations, that could be some serious blow to Erdogan. So Erdogan’s Lost control of the narrative.
Erdogan called for an early May election after the national cost of life crisis hit 57% – down from more than 80% between August and November. Many analysts say the move reflects Erdogan’s urgency to secure another term in power before reversing his controversial economic policies.
Harris said the president “created this weird situation where inflation is running at 80%, but he needs to keep the currency stable between now and the election.”
Through very unorthodox policies, Erdogan has found “a very creative way, a very expensive way, to basically de-dollarize the economy,” he said, adding that Turks can borrow money from their banks at a 13% interest rate. Giving examples like allowing deposits to be held, then promising to cover their losses if the currency depreciates further.
Harris boldly predicted: “In fact, if he wins the currency will have to collapse, because there will be no confidence and he has created this artificial scenario that cannot be sustained for long.”
Additionally, Erdogan’s earlier financial pre-election promises – populist steps such as raising wages and lowering the pension age – may now be impossible, as more public money would need to be directed to rebuilding entire cities and towns.
financial concern
Turkey’s economic decline has been fueled by a combination of high global energy prices, the COVID-19 pandemic and the war in Ukraine, and economic policies directed primarily by Erdogan, who have held interest rates down despite rising inflation. turkish lira record low compared to Dollar, Turkey’s foreign exchange reserves have declined sharply in recent years, and Ankara’s current account deficit has widened.
The Turkish lira lost nearly 30% of its value against the dollar in the past year, severely hurting Turks’ purchasing power and hurting Erdogan’s popularity.
Turkey’s opposition parties have not yet fielded their candidates. The strongest potential challenger, Istanbul Mayor Ekrem Imamoglu, arrested and politically banned In December, his aides say the allegations are politically motivated and have been used solely to prevent him from running for president.
In recent years, investors have been pulling their money out of Turkey in large numbers. Mark Mobius, a prominent emerging markets guru at Mobius Capital Partners LLP, has remained bullish despite the earthquake disaster and economic problems.
“When it comes to investing in Turkey, we still believe it is a viable place to invest,” Mobius said. “Actually, we have investments there. The reason is that Turks are so flexible, so able to adjust to all these disasters and problems… even with high inflation which is a very With the weak Turkish lira… so it doesn’t scare us at all to invest in Turkey.”
Moebius addressed the burning issue of Turkey’s earthquake preparedness, which could soon affect Erdogan’s electoral chances.
“That’s one of the big problems, the building codes are not up to par in some of these areas,” he said.
NATO and Turkey’s Powerful Role on the Global Stage
Internationally, given Erdogan’s role as a mediator between Ukraine and Russia, Turkey’s future influences the war in Ukraine. Turkey is the main NATO member that still stands in the way of Sweden and Finland joining the powerful defense alliance.
Ankara is also brokering the Black Sea Grain Initiative between Ukraine and Russia, which allows vital supplies of grain from Ukraine to the rest of the world, despite the Russian naval blockade of Ukraine’s Black Sea ports.
Erdogan’s response to the earthquakes – and his subsequent election performance – will have an impact on all of this.
Russian President Vladimir Putin is expected to meet Turkish President Recep Tayyip Erdogan on Thursday.
Anadolu Agency | Anadolu Agency | Getty Images
Sinan Ulgen, president of the Istanbul-based Center for Economics and Foreign Policy, says Turkey will get some relief from Western pressure on its NATO stance in the wake of the earthquake, but not for long.
“It’s going to be temporary,” Ulgen said. “Turkey will see a few weeks of repression, but after that it will return to business in favor of foreign policy.”
For now, Western allies and countries around the world are sending aid and rescue teams to aid Turkey’s disaster relief efforts. Ankara will need to make massive public expenditures to help those in need and rebuild all areas affected by the earthquake.
“The positive side is that Turkey has fiscal space,” Ulgen said. Turkey’s public debt-to-GDP ratio is around 34%, which is very low compared to the US and Europe. According to him, “this means that Turkey has room for fiscal spending, even if it means a substantial increase in the public debt ratio.”
As a large country, Turkey has significant capacity to deal with natural emergencies. Still, Ulgen said, “no matter what the capability is, unfortunately it was going to be insufficient to respond to this type of disaster.”