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As Turkish authorities grapple with the agony of a mounting death toll from the deadliest earthquake in a century, President Recep Tayyip Erdogan is confronting a parallel crisis: the disasters blow to an economy that was already in urgent need of repair.

The quake, which has killed over 40,000 people in Turkey and thousands more in neighboring Syria, will saddle Ankara with a staggering reconstruction bill and weakened economic growth, posing a fresh challenge to Mr. Erdogan as he seeks a third five-year term and maintain a grip on his political fortunes ahead of a crucial presidential election in May.

Before the devastation, which also left millions homeless, Turkey was already reeling from a collapsing currency and runaway inflation that had reached an annual rate of 85 percent in October. Those vulnerabilities have punched holes in the nations balance sheet and tipped Turkish families and businesses into a cost-of-living crisis.

Aggravating the problems are unorthodox financial policies pursued by Mr. Erdogan, a strongman leader who has tightened his control over the economy and strengthened ties with Russia and the Gulf States to help bolster Turkeys finances.

Reconstruction is expected to cost $10 billion to $50 billion, although the Turkish Enterprise and Business Confederation has put the totalcloser to $85 billion. Over 8,000 buildings were flattened and supply chain infrastructure, including roads and the Iskenderun seaport, were damaged when the quake rocked southern Turkey. The area, a manufacturing and maritime transport hub that was also home to thousands of war-hit Syrian refugees, accounts for 9 percent of Turkeys economic activity.

Secretary of State Antony J. Blinken stopped on Sunday at the Incirlik Air Base in southern Turkey, where the United States is distributing relief supplies to quake-stricken areas. From there, Mr. Blinken flew in a Blackhawk helicopter around the city of Antakya and saw dozens of damaged and destroyed buildings. Noting that relief efforts were moving from rescue and recovery to humanitarian aid, Mr. Blinken announced $100 million in new U.S. assistance for people affected by the earthquake. The State Department said the new spending brings total U.S. aid to $185 million.

The recovery operation is on, Mr. Blinken told reporters at the Incirlik Air Base, from which the United States has long operated. Its going to take a massive effort to rebuild. But were committed to supporting that effort.

The situation in Turkey remains dire, with emergency crews still extracting the dead from the ruins of apartment buildings and homeless survivors sheltering in cars and making bonfires from wreckage to stay warm. They are also short on food, fuel and medical supplies.

Analysts say Mr. Erdogan, who has been criticized for his handling of relief efforts, is doubling down on an autocratic playbook for managing the economic and political fallout.

His main focus is on the elections, said Soner Cagaptay, director of the Turkish Research Program at the Washington Institute for Near East Policy. Erdogan has never won without delivering growth, and he will be seeking a rebalancing effect once reconstruction starts.

Brushing off accusations of crony ties between his government and Turkeys construction industry, Mr. Erdogan earlier this month ordered the detention of dozens of building contractors and announced a fast-track rebuilding program to startreplacingthousands of destroyed homes within one year.

Turkeys economy had been slowing from an 11 percent growth rebound in 2021 from the pandemic, and it had been expected to grow 3 percent this year and next, according to the European Bank for Reconstruction and Development.

The earthquake could now reduce growth by at least a third but Mr. Erdogans huge rebuilding effort will limit the hit, the bank said.

Economic activity could rebound quickly after the quake, said Liam Peach, senior emerging markets economist at Capital Economics in London. Any impact this quarter will be made up.

Whether that is enough to resolve Turkeys entrenched economic problems remains to be seen.

The Turkish lira lost nearly 30 percent of its value against the dollar in the past year as inflation soared, severely damaging Turks purchasing power and hurting Mr. Erdogans popularity. In January, inflation cooled slightly, to an annual rate of just under 60 percent, as energy prices fell.

Turkey also faces a mountain of external loan payments, worth nearly $185 billion, that have grown harder to pay off because of a plunge in foreign currency reserves, raising fears of a crisis. International investors, worried about heavy debt burdens at Turkish companies, have increasingly pulled money from the country since 2018.

Adding fuel to the fire is Mr. Erdogans insistence on lowering interest rates in defiance of a broad economic consensus that inflation should be contained by raising them.

Although that approach has helped stabilize the liras free fall a dollar now buys nearly 19 lira, compared with 13.50 a year ago it has come at a high price. Today, over two-thirds of households are struggling to pay for food and rent, and more than half of workers earn wages worth less than the equivalent of $300 a month because of the liras devaluation, according to an analysis by the Middle East Institute.

Mr. Erdogan has tried to offset the pain by increasing salaries for public-sector employees, raising the minimum wage twice last year and boosting fixed pension payments. But those measures have largely been gobbled up by inflation, said Atilla Yesilada, an investment analyst with Global Source Partners in Istanbul.

The economy, the way Mr. Erdogan has been running it, wasnt working for most people before the quake, Mr. Yesilada. Benefits arent trickling down.

Turkeys current state is in sharp contrast to Mr. Erdogans first 15 years in power, when he revived the economy after becoming prime minister in 2003. He pursued liberal economic policies and a debt-fueled construction spree thatspawned high-rise office towers and a new Istanbul airport. More Turks became prosperous, the middle class expanded and Turkey overcame its status as an emerging market laggard.

But the gains unraveled as he tightened his grip on the country, asserting control of the judiciary and the media, firing three central bank governors and naming his son-in-lawfinance minister. To help shore up Turkeys finances, he leaned more heavily on Qatar, Saudi Arabia and the United Arab Emirates, whose autocratic leaders are keen on keeping him in power.

He has been a useful counterbalance to the West, said Timothy Ash, sovereign strategist for emerging markets at BlueBay Asset Management in London. That is what the Gulf countries want.

More recently, Mr. Erdogan has played both sides of Russias war against Ukraine for economic advantage, said Marc Pierini, a senior fellow at Carnegie Europe and a former European Union ambassador to Turkey. As bad as the economy is, it would be worse without Turkeys energy trade with Russia, and the money that it reels in.

Mr. Erdogan allowed Turkish drones to be sold to the Ukraine military, even as he provided President Vladimir V. Putin of Russia with a way to work around European and American sanctions by ushering the transport of electronics, construction materials and more through Turkey. Russian flights continue over Turkish airspace. And Russian oligarchs who were shunned on the French Riviera headed to the Turkish Riviera.

The gambit has paid off: Turkeys trade with Moscow surged last year, with Turkey selling $1.3 billion in goods to Russia and importing $4.5 billion in products including large quantities of Russian crude at discounted prices. As the only NATO country not to participate in international sanctions, Turkey has converted the Russian oil in its refineries to be sold to the European Union and the United States, according to an analysis by the Center for Research on Energy and Clean Air in Finland.

Another $20 billion has flowed to Turkey from a long-term deal in which Moscow provided financing for the construction of the Akkuyu Nuclear Power Plant, a 4,800-megawatt reactor being built on the Mediterranean near an eastern earthquake fault line by Rosatom, Russias state-owned nuclear power provider.

On top of that, an additional $24 billion in funds of unidentified origin helped to financehalf of a record deficit that Turkey racked up last year from importing more goods and services than it exported. Some of that mystery money, reported in 2022 data published by the government last week under the obscure heading Net Errors and Omissions, is thought to be of Russian provenance, Mr. Ash noted.

Headed into the presidential elections, Erdogan will use all imaginable means to stay in power, Mr. Pierini said.

Irrespective of the reconstruction effort and whatever flow of money might be generated, he said, the economic outlook is linked to the result of the upcoming election, because there is the possibility that for the first time in 20 years he could be defeated.

Michael Crowley contributed reporting from Incirlik Air Base in Turkey.

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Turkeys Reeling Economy Is an Added Challenge for Erdogan

(Bloomberg) --

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Turkish President Recep Tayyip Erdogan plans to step up rebuilding efforts following two deadly earthquakes and stick to an election timetable he declared earlier, as he seeks to shore up popularity ahead of a potential hit to the economy.

Erdogan and senior members of his AK Party held meetings last week to discuss the pros and cons of a postponement to manage the aftermath of the natural disaster, according to people familiar with the talks. Their conclusion was to stick with the proposed vote timetable of May 14, though a return to the original date of June 18 remains on the table, they said.

That remains the case even after two more tremblors struck Turkey on Monday in the same area as the original pair, the people said.

The earthquakes that devastated southeast Turkey and Syria two weeks ago have killed more than 42,000 people and destroyed whole cities, upending election campaigns that were well in motion at the time of the disaster. The quake zone was home to about 8 million registered voters, or 14% of the electorate, and Turkeys supreme election council is expected to rule on how or whether ballots can be held there. About 2 million voters have left the area, according to the government.

Thats caused a headache for Erdogan, who was gearing up for what is expected to be one of the toughest electoral races of his two decades in power. The pace of the countrys emergency response and quality of construction work over a years-long boom have led to mounting criticism of the president, who has pledged a multibillion dollar construction blitz of quake-proof buildings and distributed handouts to quake victims in response.

Story continues

Erdogan has acknowledged an initial delay in dispatching rescue teams due to harsh winter conditions, but his government and the army have denied the overall response has been inadequate.

Why Turkeys Next Election Is a Real Test for Erdogan: QuickTake

Erdogan has publicly refrained from making a commitment to his previously declared, preferred election timetable since the earthquakes. The government declined to comment.

While postponing the vote could give the government more time to prioritize and address the crisis, Erdogan sees a quick start to the rebuilding effort and a commitment to the election timetable as a way to show strength, the people said. He also fears a delay to the vote could coincide with a further deterioration of the economy, with large parts of the population contending with the worst cost-of-living crisis in two decades, they said.

Turkeys opposition leaders have insisted on holding elections as originally scheduled on June 18, and the president doesnt want to give the impression he is trying to dodge the vote, the people said.

The president has previously said he would officially trigger the election process by around March 10 for the ballot to take place in mid-May. If he refrains from doing that, the vote would have to be held on June 18, the original slated date.

Pushing the vote later than that isnt permissible under Turkeys current constitution, which allows the president to do such a thing only during times of war.

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Here is the original post:
Erdogan Clings to His Ideal Election Date Despite Earthquakes

ISTANBUL, Feb 5 (Reuters) - Turkish President Tayyip Erdogan said Western missions would "pay" for issuing security warnings and temporarily closing consulates in Turkey last week, while police said there was no serious threat to foreigners after detaining 15 Islamic State suspects on Sunday.

Ankara summoned the ambassadors of nine countries on Thursday to criticise their decisions to temporarily shut diplomatic missions and issue security alerts. Turkish officials said the following day that Western nations, including the United States and Germany, had not shared information to back up their claims of a security threat.

"The other day our foreign ministry summoned all of them and gave the necessary ultimatum, told them 'You will pay for this heavily if you keep this up,'" Erdogan said during a meeting with youth that was pre-recorded and broadcast on Sunday.

Alongside the closures, several Western states warned citizens of a heightened risk of attacks to diplomatic missions and non-Muslim places of worship in Turkey, following a series of far-right protests in Europe in recent weeks that included several incidents of burning copies of the Muslim holy book, the Koran.

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Turkey suspended negotiations for Sweden and Finland's NATO accession last month following a protest in Stockholm during which a copy of the Koran was burned.

Erdogan said that the Western states were "playing for (more) time" and that the "necessary decisions" would be taken during Monday's cabinet meeting, without elaborating.

Earlier on Sunday, police said they had not found evidence of any concrete threat to foreigners in the detentions of 15 Islamic State suspects accused of targeting consulates and non-Muslim houses of worship, state media reported.

Anadolu Agency cited an Istanbul police statement saying the suspects had "received instructions for acts targeting consulates of Sweden and the Netherlands, as well as Christian and Jewish places of worship".

While the suspects' ties to the jihadist group were confirmed, no concrete threats toward foreigners were found, the statement said.

Foreign Minister Mevlut Cavusoglu repeated on Saturday Turkey's frustration with what it says is Sweden's inaction toward entities that Ankara accuses of terrorist activity. All 30 NATO members must ratify newcomers.

Turkey, Sweden and Finland signed an agreement in June aimed at overcoming Ankara's objections to their NATO bids, with the Nordic states pledging to take a harder line primarily against local members of the banned Kurdistan Workers Party (PKK), which took up arms against the Turkish state in 1984.

Editing by Jonathan Spicer, Elaine Hardcastle and Frances Kerry

Our Standards: The Thomson Reuters Trust Principles.

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Turkey's President Erdogan says Western missions will 'pay' for ...

By AFP

ADIYAMAN: Hakan Tanriverdi has a simple message for President Recep Tayyip Erdogan days after Turkey suffered its worst disaster in generations: "Don't come here asking for votes."

The earthquake that killed more than 21,000 people across Turkey and Syria came at one of the most politically sensitive moments of Erdogan's two-decade rule.

The Turkish leader has proposed holding a crunch election on May 14 that could keep his Islamic-rooted government in power until 2028.

The date gives his splintered opposition little time to hammer out their differences and agree on a joint presidential candidate.

Whether that vote can now go ahead as planned remains to be seen.

Erdogan has declared a three-month state of emergency across 10 quake-hit provinces. The region is still digging out its dead and many are living on the streets or in their cars.

Campaigning here seems out of the question.

But there is also a political dimension that is deeply personal for Erdogan.

The earthquake struck just as he was gaining momentum and starting to lift his approval numbers from a low suffered during a dire economic crisis that exploded last year.

Tanriverdi's bitterness is a bad sign for Erdogan in a province where he handily beat his secular opposition rival in the last election in 2018.

"We were deeply hurt that no one supported us," Tanriverdi said of the government's earthquake response.

Erdogan fights back

Tanriverdi's grievances are common in Adiyaman province -- one of the hardest-hit by the quake.

Locals complain that rescuers didn't arrive in time to pull out people who survived the first critical hours. Some pointed to a lack of machinery to drill through slabs of concrete.

"I did not see anyone until 2:00 pm on the second day of the earthquake," Adiyaman resident Mehmet Yildirim said.

"No government, no state, no police, no soldiers. Shame on you! You left us on our own."

Erdogan admitted "shortcomings" in the government's handling of the disaster on Wednesday.

But he is also fighting back. The 68-year-old led a rescue response meeting in Ankara on Tuesday and spent the following two days touring a series of devastated cities.

He is yet to visit Adiyaman.

That upsets Hediye Kalkan, a volunteer who travelled nearly 150 kilometres (95 miles) to help with the Adiyaman rescue and recovery effort.

"Why doesn't the state show itself on a day like this?" she demanded. "People are taking their relatives' bodies out by their own means".

'Isn't it a sin?'

The sheer scale and timing of the disaster -- spanning a large and remote region in the middle of a winter storm -- would make any rescue effort complicated.

Erdogan has received a largely warm reception from locals in carefully choreographed visits broadcast on national television.

One elderly woman came out to hug Erdogan and shed tears on his shoulder.

Veysel Gultekin might not do the same if he had a chance to face the Turkish leader.

Gultekin said he had seen one of his relatives' feet trapped under the rubble after running out on the street after Monday's pre-dawn tremor.

"If I had a simple drill, I could have pulled him out alive," Gultekin said. "But he was completely trapped and after a strong aftershock, he died."

AFP reporters saw more machines and rescue workers -- including international teams -- around collapsed buildings on Thursday.

But this was not enough to soothe Tanriverdi's pain.

"People who didn't die from the earthquake were left to die in the cold," he said. "Isn't it a sin, people who have been left to die like this?"

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'Don't come here asking for votes': Turkish President Erdogan faces ...

The devastating earthquake in Turkey poses a significant test of governance for President Recep Tayyip Erdogan, who is fighting for his political future just months before an election in May that could reshape the country.

Mr. Erdogan swept into power after a bungled government response to a 1999 earthquake that left more than 17,000 people dead and a financial crisis two years later. He has dominated Turkish politics for the two decades since but his support has been weakened recently by sky-high inflation that dented his reputation as a capable, if controversial, administrator.

The earthquake could really destroy the image of Erdogan as a powerful, autocratic, yet efficient leader, said Soner Cagaptay, who heads Turkey research at the Washington Institute, a policy research organization. We have to wait to see it could play out depending on the disaster response.

Mr. Erdogan, 68, faces a staggering task in the aftermath of Mondays earthquake, which was one of the deadliest and most destructive natural disasters this century. Damage could top $1 billion, according to an estimate by the United States Geological Survey. Thousands are dead and the toll is rising.

He also faces a political challenge: Recent polls suggest that no one would win outright in the first round of presidential voting, and that either of two potential opposition candidates could beat Mr. Erdogan in a runoff, with survey margins ranging from single digits to more than 20 percentage points.

Turkish opponents and Western officials have accused Mr. Erdogan of pushing the country toward autocracy, largely because of sweeping powers he granted himself since a narrow majority of voters passed a referendum in 2017 that expanded the presidents role.

On Tuesday, he declared a three-month state of emergency in 10 provinces affected by the earthquake, allowing for limitations on freedoms that could include curfews, travel bans and compulsory assignment for civil servants.

The move raised immediate concerns, given the steps Mr. Erdogan took in 2016 after a failed coup attempt against him. A nationwide state of emergency was initially supposed to last three months but was extended for a total of two years. During that time, more than 100,000 people were detained and 150,000 public employees were purged from their jobs.

But analysts called Tuesdays announcement an understandable step in light of the scale of the quakes devastation. The three-month period would end shortly before the May 14 vote.

So far, the opposition has refrained from criticizing the response to the earthquake, with all the political parties on Tuesday issuing a rare joint statement of unity in the face of the temblor.

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Erdogans Election Hopes Could Hinge on Earthquake Response