The massive earthquake that hit southeast Turkey will likely put major pressure on the country’s economy amid an already dire financial situation, analysts told The Media Line.
Turkey and Syria continue to reel from the deadly powerful earthquake that hit the border region early Monday morning, with the death toll now at more than 7,500.
It is feared the figure will rise further as people continue to be stuck under the rubble and weatherhampering rescue efforts, making the full scale of the destruction not yet known.
Cem Çakmaklı, an assistant professor of economics at Koç University in Istanbul, told The MediaLine that the quake will put more pressure on the region.
He said the large size of the region that was impacted will make it difficult to distribute aid, withlikely debates over how much money goes to which cities and which industries.
“The main issue is how much money will be required for the reconstruction of the region andwhether it will be doable with local credit,” he said, adding that it was likely foreign assistancewould be needed.
Turkey’s economy has already been struggling, with massive currency devaluation in recent years.
The official inflation is at a staggering 60%, although independent economists believe the numberis much higher.
Ankara has already gone on a spending spree to provide extra support, such as by increasing thewages of public sector employees and subsidizing utilities.
“The extent of how the economy’s hit from this earthquake … will be clearer once the specificdamage can be identified,” Çakmaklı said.
“The extent of how the economy’s hit from this earthquake… will be clearer once the specific damage can be identified,”
Cem Çakmaklı
He believed that since Turkey asked for international help, it would eventually look tointernational financial organizations, such as the World Bank and the International MonetaryFund, for assistance.
Çakmaklı said one positive note for the economy was that it seemed, so far, that there was lessdamage to commercial buildings, compared to residential ones, meaning that businesses would beless affected.
The company SASA Polyester said on Monday that its facilities in Adana were not significantlydamaged, and that production continued.
Turkey has one of the 20 largest economies in the world and experienced rapid economic growth under Turkish President Recep Tayyip Erdogan.
However, it is now facing its second huge natural disaster in 24 years, following a 1999 earthquakethat killed more than 17,000 people.
The massive quake on Monday will likely have a major impact on Turkey’s finances.
“This could be another thing that drains Turkey’s reserves and strains its economic situation,”Ryan Bohl, a Middle East analyst for the risk intelligence company RANE, told The Media Line.
The earthquake has halted production
The epicenter of the earthquake hit close to one of the main production and industrial capitals inthe country, which is the city of Gaziantep.
Thousands of factories are based in this southern city of nearly 3 million people, near the Syrianborder.
According to official Turkish data, production has stopped on a large scale in the city of Gaziantepover fears of aftershocks in the coming hours and days.
The tourism sector will also be affected within a short period, and when this significant source offoreign currency will pick up again, depends entirely on when people’s confidence is restored andeconomic life is stable throughout the country.
The performance of Erdogan’s Justice and Development Party (AKP) in this crisis could proveconsequential to the country’s future, with parliamentary and presidential elections to be held byJune.
While relations with many of Turkey’s allies have soured in recent years as ties with Russia havestrengthened, Ankara quickly made an appeal for international help after the quake.
That was met with promises of assistance around the world, with international crews alreadyarriving in southeast Turkey.
Germany stated it is sending generators, tents, blankets, and water purification units and will helpprovide emergency shelter after the earthquake.
US President Joe Biden promised to “provide any and all needed assistance” while FrenchPresident Emmanuel Macron tweeted that his country was ready to send emergency aid.
Bohl stated that countries would be limited in providing help due to their own strugglingeconomies.
“We’ve seen aid numbers decline across the board. But I definitely think the United States and allof NATO, and in fact, countries like Israel and the Gulf Arabs, will all be providing humanitarian aid.It’s just an open question how much they are willing to [give], given all these economic issues theyare all facing,” he said.
Several Republicans in the US have fought against aid being provided in Ukraine, arguing that thegovernment should focus resources on domestic issues.
“Even with the Ukraine aid, the White House is getting flak from the Republicans for that, sayingthe money should be kept at home,” Bohl said.
“I think they will face a similar constraint for humanitarian aid for Turkey and also forhumanitarian aid for northwest Syria.”