The earthquakes of February 6 in Turkey, on the border with Syria, left the country devastated with 43,500 deaths and more than 160,000 buildings collapsed or with damage severe enough to prevent habitability. The tragedy has exposed President Recep Tayyip Erdoğan due to the slow reaction of his government.
The World Bank estimated the direct physical damage caused by the earthquakes and their aftershocks at 34.2 billion dollars, the equivalent of 4% of the country’s GDP in 2021, according to a rapid assessment report. Direct damage to residential buildings represents 53% of that amount (18,000 million dollars), another 28% (around 9,700 million dollars) has affected non-residential buildings such as health centers, schools, government buildings, and the like. private sector. While the remaining 19% of the damage (6.4 billion dollars) would be related to infrastructure: roads, energy or water supply.
This report does not include the broader economic impacts and losses to the Turkish economy, or the cost of recovery and reconstruction, which could be significantly higher than direct damage and requires further assessment. The magnitude of the catastrophe could bring about a change in Turkish foreign policy, so criticized for its isolationist practices, by promoting a strengthening of its relations with the US and the EU, whose aid could be essential for the reconstruction of the country.
Brussels has already shown its commitment
In this sense, Brussels has already shown its commitment to the cause, “The Commission is ready to do everything in its power to help rebuild homes, hospitals, nurseries and schools, so that normal life can return to these regions. This will take time and it will be expensive, but now it is key that we move forward as soon as possible,” said the Commissioner for Enlargement and Neighborhood, Oliver Varhelyi, at a press conference from Ankara on February 22.
Although the ten provinces affected by the disaster are among the poorest in Turkey, they account for 15% of the country’s population, 9% of Turkey’s GDP, 15% of agricultural production, 9% of industry and between 6 and 8% of foreign trade as indicated by an analysis prepared by the United Nations.
According to the World Bank, the country has a population of 84,775,404 inhabitants (2021) and its GDP reached 689,547 million euros at the end of 2021. It has twice as many inhabitants as Spain and the size of its economy is With all this , the Erdoğan government will have to invest at least 78.9 billion euros in the reconstruction of his country, a plan that could undermine the Turkish economy. Erdogan has not only been criticized for the slow organization in the first hours of the earthquake, he has also been blamed for the high number of deaths due to the “lax” controls in the construction of buildings that are blamed on the corruption of the system.
Shortly before the last elections in 2018, the Turkish government launched a comprehensive program to grant amnesty to companies and individuals responsible for violations of the country’s building codes. By paying a fine, offenders avoided having to adapt their buildings to the code. For this reason, the success of the reconstruction plan is essential. The Erdoğan government has asked its citizens for a minimum of one year for the construction of 40,426 residences in Hatay, 45,067 in Kahramanmaraş and 25,882 in Adıyaman, the three provinces most affected by the earthquakes.
Why is Turkey’s course so important?
According to the economic and commercial report of Turkey carried out by the Economic and Commercial Office of Spain in Ankara, there is an important commercial weight between the country governed by Erdoğan and its transatlantic partners. Turkey’s exports are highly diversified by country. The main clients to which they exported in 2021 were: Germany (with 8.6% of the total quota); USA (6.5%), UK (6.1%) and Italy (5.1%).
The United States was the second country that increased the volume of exports the most compared to 2020, 44.6%. However, it does not remove the position of the EU, which since 2017 has been the main client of Turkish exports, with 41.9% of the total in 2021. The role of Spain must also be highlighted as it is the fifth client and its importance for Turkey by acquiring 4.3% of its total exports.
The importance of the EU as a supplier to Turkey is also remarkable, with 31.5% of Turkish imports in 2021 and without great variations in recent years. According to the Turkish Statistical Institute, Spain is one of the twenty countries with the highest export of services to Turkey, ranking nineteenth in 2020.
Exports of Spanish services
According to sources from the Bank of Spain, exports of Spanish services to Turkey increased to 464 million euros in 2020, 46% less than the previous year. By sectors, according to data from the Ministry of Industry, Commerce and Tourism of Spain, the following services should be highlighted: information and technology (28.2%), insurance (25.4%), transport (21.7%) and business (19.5%). In total, there were 2,360 Spanish companies exporting services to Turkey.
Given the significant influx of transactions between Turkey, the US and the European Union, the recent tumble in the Turkish economy after the earthquake could have a serious impact on the rest of the economies. It is clear that Turkey will have to change its foreign policy if it wants to continue to count on the economic support that has become essential for the well-being of the country.
