Monday marked the end of an era for millions in Turkey and Syria, when two successive earthquakes drove shockwaves across hundreds of miles.
The magnitudes of the quakes were 7.8 and 7.5 on the Richter scale, separated by nine hours, and were the region’s strongest in nearly a century.
At the time of writing, more than 12,000 people have died as a result of the earthquakes, and many are still missing or gravely injured. The World Health Organization estimated that 23 million people were affected by the calamity. At least 6,000 structures fell, with many occupants still inside. A ferocious winter storm now threatens the lives of the survivors and those still entombed beneath the wreckage, despite the fact that rescue attempts continue to be the top priority, with over 25,000 personnel deployed in Turkey and thousands more despatched from outside.
Syria, which has been plagued by war and terrorism for twelve years, is the least equipped to handle such a disaster. Its infrastructure is severely degraded, and the nation is still subject to Western sanctions. Thousands of individuals in the impacted areas are already refugees or displaced individuals.
Regional commentators are focusing on the longer-term ripple effects that the calamity could have on Turkey, a country with a population of 85 million that was already struggling economically and whose military, economy, and politics have a significant impact far beyond its borders.
This year will be a turning point for Turkey, as the country approaches its presidential election on May 14. Whether current President Recep Tayyip Erdogan remains in office or not, the outcome of this election will have profound effects for Turkey’s population, economy, currency, and democracy.
Now, Erdogan’s response to the accident and probable calls for accountability as to why so many buildings were inadequately prepared to withstand such shocks may play a significant role in determining his political destiny.
Mike Harris, founder of Cribstone Strategic Macro, told CNBC on Tuesday, “If the rescue attempt is mismanaged and people become upset, there is a backlash.” “The second concern is, of course, the buildings and which ones have collapsed. Insofar as these were constructed under the new norms and the authorities did not apply regulations, Erdogan may face severe repercussions. Erdogan has therefore lost control of the narrative.”
Erdogan called for early May elections in the midst of a national cost-of-living crisis, with local inflation exceeding 57% – a decrease from the period between August and November, when it exceeded 80%. The action, according to a number of commentators, demonstrates Erdogan’s desperation to gain another term in office before his contentious economic policies backfire.
Harris stated that the president has created “this strange situation where inflation is above 80%, but he must maintain the currency stable until the election”
Erdogan has “discovered a very innovative, very expensive way to effectively de-dollarize the economy,” he added, citing policies such as enabling Turks to keep their bank accounts at a 13% interest rate and vowing to compensate their losses if the currency sinks further.
Harris boldly predicted, “Actually, the currency must collapse if he wins, because there will be no confidence and he’s created a false environment that can’t be sustained over term.”
In addition, Erdogan’s earlier fiscal pre-election promises – populist measures such as increasing salaries and decreasing the retirement age — may now be unattainable, as more public monies will need to be allocated to rebuilding entire cities.
Turkey’s economic decline has been fueled by a combination of high global energy prices, the Covid-19 pandemic, and the war in Ukraine, but primarily by Erdogan’s economic policies that have suppressed interest rates despite soaring inflation, sending the Turkish lira to an all-time low against the dollar. In recent years, Turkey’s foreign exchange reserves have plummeted, and Ankara’s current account deficit has skyrocketed.
In the past year, the Turkish lira lost about 30 percent of its value versus the dollar, drastically eroding the purchasing power of Turks and diminishing Erdogan’s popularity.
The opposition parties in Turkey have not yet nominated a candidate. The strongest prospective rival, Istanbul Mayor Ekrem Imamoglu, was jailed and issued with a political ban in December on politically motivated charges, according to his associates.
In recent years, investors have started fleeing Turkey in great numbers. Mark Mobius of Mobius Capital Partners LLP, a prominent expert on emerging markets, remains upbeat despite the seismic calamity and economic concerns.
“We continue to feel that Turkey is a viable investment destination,” Mobius stated. “We do, in fact, have investments there. The reason is because the Turks are so adaptable, so able to cope to all of these catastrophes and issues… even with huge inflation and a very weak Turkish Lira… Therefore, we have no qualms about investing in Turkey.”
Mobius did mention the glaring issue of Turkey’s earthquake readiness, which could soon plague Erdogan’s electoral prospects.
“This is one of the major issues; the building codes in some of these regions are inadequate,” he stated.
Given Erdogan’s role as a mediator between Ukraine and Russia, the future of Turkey has a global impact on the war in Ukraine. Turkey is the principal NATO member preventing Sweden and Finland from joining the formidable defense alliance.
Ankara also mediates the Black Sea Grain Initiative between Ukraine and Russia, which enables essential grain exports from Ukraine despite a Russian naval blockade of Ukraine’s Black Sea ports.
All of these will be influenced by Erdogan’s earthquake response and subsequent election performance.
As a huge nation, Turkey has tremendous potential to respond to natural disasters. Nonetheless, Ulgen remarked, “whatever capacity was available, it would be insufficient to respond to this type of tragedy.”