RONDELI BLOG

Complications Caused by the Coronavirus in Turkey and Their Influence on Georgia

2020 / 04 / 13

Zurab Batiashvili, Research Fellow at Rondeli Foundation  

The spread of the novel coronavirus has thoroughly altered the social-economic and political order of the world. Combatting the pandemic has re-ordered the priorities of various countries. These changes have taken place in almost all countries of the world – including Turkey.

Situation in Turkey

Even though the very first case of the novel coronavirus in Turkey was recorded relatively late – on March 11, the epidemic spread fast and as of April 12, about 1,198 citizens had died from the virus and 56,956 cases had been recorded (9th in the world in terms of dissemination). At the same time, 122,500 people were in quarantine.

One could say that the pandemic hit Turkey at the worst possible time:  the country is actively involved in warfare in Syria and Libya while also having serious economic problems – the economic growth rate in 2019 was just 0.9% with high inflation, a significant depreciation of the national currency, a reduction in foreign direct investments (FDI), high unemployment, quickly reducing currency reserves and so on.

The spread of the virus in Turkey is facilitated by several factors. One of the most significant among those is the population size – 83 million people and about 5 million refugees – a total of 88 million. Keeping a population of this size at home and exercising social distancing is not always possible. Therefore, it is natural that Istanbul has turned into the center of the epidemic in Turkey – the largest megapolis in the country with a population of about 16 million people, accounting for 60% of the overall number of cases of infection in the country.

Spread of the Coronavirus in Turkey

Turkey has adopted serious measures against the pandemic:  quarantine has been announced in many settlements, borders have been closed for ordinary citizens (yet they remain open for cargo vehicles), large shopping malls have been closed down together with restaurants and bars, those over the age of 65 years and under 20 years have seen their ability to go out on the streets limited, with local and international flights stopped, as well as bus and railway transportation, 31 large cities have limited the ability of entering or leaving by an automobile, additional hospitals are being built, going to markets and grocery stores without face masks has been prohibited, a TRY 100 billion (USD 15 billion) plan for boosting the economy has been announced, about two million poor families were given assistance in the amount of TRY 1,000 and so on. However, all of this has failed to stop the spread of the virus or eradicate its negative effects.

Due to the halt of certain fields of the Turkish economy, approximately five million more people have become temporarily unemployed, adding to the 4.5 million unemployed recorded in December 2019 (the unemployment rate in December was already quite high – 13.7%).

The tourism sector, which constitutes 12% of the Turkish economy and generated USD 34.5 billion income in 2019, has halted completely. About 1.2 million people employed in this sector are also under threat of becoming unemployed.

Certain fields of agriculture have also experienced problems as many farmers are over the age of 65 years and, therefore, are not allowed to go outside. Consequently, they are unable to cultivate their land. At the same time, the seasonal workers employed in this field have also been limited in their movements, no longer able to travel to their workplaces.

Exports of Turkish goods reduced by 18% in March (and the income has reduced accordingly). At the same time, the period for repaying billions in debt owed by the Turkish private sector is also close (they have to repay USD 175 billion in upcoming 12 months) which is an added stress for the Turkish economy.

Due to political considerations, however, the Government of Turkey does not wish to ask the International Monetary Fund (IMF) for assistance. All of this has ultimately caused the national currency of Turkey to depreciate by 13%. It is expected that the inflation rate will increase as well.

The Government of Turkey believes that the economy should not come to a complete halt as the country does not have financial resources to provide assistance to the population of this size (88 million people) in terms of full quarantine and curfew. Therefore, Turkey has not stopped the implementation of large infrastructural projects with large factories and enterprises also remaining functional.

According to the opposition, such a situation creates danger of the quick dissemination of the virus. The Mayor of Istanbul from the opposition Republican People’s Party (CHP), Ekrem İmamoğlu, has been asking to introduce a long-term curfew in his city to no avail.

On April 10, the government only instituted a 48-hour curfew in Istanbul and 30 other large cities so that large numbers of citizens would not go out into the streets over the weekend. However, after announcing this, a lot of people rushed to the shops which exacerbated the danger of the dissemination of the virus. In this situation, Turkey’s powerful Minister of Internal Affairs, Süleyman Soylu, took responsibility on himself and announced his resignation. However, the President of Turkey, Recep Tayyip Erdoğan, did not accept his resignation.

The Turkish government also did not allow the Mayor of Istanbul to collect assistance, considering this to be the competence of the central government.

Influence of the Problems on Georgia

The problems connected to the dissemination of the coronavirus in Turkey naturally have had their influence on Georgia and its citizens working in Turkey. This is to be expected as Turkey remains the top trading partner for Georgia and tens of thousands of our citizens work there (according to Turkish data, 27,000 Georgian citizens have received long-term visas. However, the number of those who work in Turkey largely illegally is even higher):

  • Several Georgian citizens working in Turkey have already contracted the coronavirus and they are undergoing treatment (one of them has been transferred to Georgia). The growth of their numbers is to be expected.
  • Part of Georgian citizens working in Turkey decided to return to Georgia. Some have managed to get transportation permits when travelling from large cities (Istanbul, Ankara, Antalya); however, those Georgians in smaller towns find it hard to get to large cities (either bus transit between cities is stopped or they have ended up in quarantine) in order to take special buses to Georgia from there.
  • Our citizens who have returned to Georgia cannot go back to Turkey for work as borders are closed (they are only open for citizens wishing to go back to their home countries). Therefore, they and members of their families are left without income.

 

  • Due to the closure of borders, Georgian citizens who used to go to Turkey for seasonal work, mostly from border regions, also cannot get there. According to 2019 statistics, their number is approximately 40,000 and they mostly worked on tea and hazelnut plantations. The season for working in tea plantations usually starts in the second part of April. Consequently, these people and their families are left without significant income.
  • Georgian businessmen, students and patients who require treatment in Turkish clinics also cannot move across the border.
  • Even though traffic for cargo vehicles has not been cut off, the volume of trade between Turkey and Georgia naturally reduced in March (concrete numbers have not yet been named). The volume will probably reduce even further in April.

Conclusions:

  • The spread of the novel coronavirus has negatively influenced the entire world, including Turkey. Apart from human losses, economic damage is also great. If the situation is prolonged, it could also negatively influence the political field, the signs of which have already appeared in the case of the Minister of the Interior of Turkey.
  • Turkey has not yet reached the peak of the pandemic (it is expected in May). At the same time, no one really knows how long the pandemic may continue.
  • Therefore, so far it is difficult to calculate the losses that Turkey will experience due to the pandemic.
  • However, it can be said with almost complete certainty that Turkey will not be able to achieve significant economic growth. The World Bank has reduced the forecasted growth rate of the Turkish economy in 2020 from 3% to 0.5% due to the coronavirus. However, if the pandemic is prolonged, it is not excluded that even this forecast may have to be reviewed and a substantial recession will take place.
  • Difficulties in the Turkish economy will negatively influence Georgia and its citizens as well. Given the fact that we do not know how long the pandemic will last in the world, including Turkey, at this stage it is impossible to name the exact amount of damage.
  • In case the pandemic lasts a long time in Turkey, a severe economic crisis cannot be ruled out which would threaten the jobs of our citizens and negatively influence bilateral trade relations as well as the exchange rate of GEL.

 

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