How does the Russian-Ukrainian war affect vital economic sectors in Turkey?

ANKARA

- The Russian war on Ukraine has raised concerns about the impact of its repercussions on the energy, wheat and tourism sectors in Turkey, and economic experts have warned of the repercussions and consequences of the war on vital economic sectors in Turkey if the conflict between the two sides prolongs.

Questions are raised about how the Turkish government will face the repercussions of that war on the economy, which is already affected by the doubling of inflation rates and the depreciation of the local currency.

Turkey hosted 24.7 million foreign tourists in 2021, including 4.7 million from Russia and 2.1 million from Ukraine

tourism

According to data from the Ministry of Culture and Tourism, Turkey hosted 24.7 million foreign tourists in 2021, including 4.7 million from Russia and 2.1 million from Ukraine.

Shares of Turkish Airlines and "Pegasus" fell by about 10%, while bond interests rose.

"In the event of a war between Russia and Ukraine, Turkey's loss of these two markets will cost the tourism sector $5 billion," said Bulent Bulbeloglu, head of the Association of Owners of Hotels and Tourist Facilities in the South Aegean.

In the same context, Mehmet Isler, head of the Federation of Tourism Facilities in the Aegean, confirmed that the sector's losses may rise to 10 billion dollars due to the multiplier effect caused by the impact of the tourism sector on 54 sub-sectors.

"After the material losses, the tourist facilities will move towards local tourism, but domestic tourism will not be able to meet the needs of the huge tourist facilities," he added.

The Turkish newspaper "Suzcu" stated that "Russia is an important economic partner for Turkey in terms of tourism and gas flow," noting that despite the slowdown in the currency exchange movement with foreign currency-backed deposits, the additional effects resulting from energy prices may pose a threat to inflation, and negatively affect the economy. Trade account balance.

Russia is an important economic partner for Turkey in terms of tourism (Getty Images)

Lira and wheat

With the start of Russian military operations in Ukraine, the Turkish currency fell on the Istanbul Stock Exchange by about 9%, and the lira fell against the US dollar by about 3%, to record 14.50 pounds per dollar, while the value of gold rose by about 8%.

Experts estimate that the sharp rise in oil and natural gas prices, coinciding with the Russian war on Ukraine, may lead to an increase in the Turkish import bill, reduce tourism revenues, and affect the accounts related to the current account balance, and this situation will lead to a loss of the Turkish lira and assets denominated in the local currency.

The trade deficit widened last January on an annual basis by 241% to 10.4 billion dollars, according to data from the Turkish Ministry of Trade.

With regard to wheat, Turkey imports 9 million tons of wheat, 65 percent of which is from Russia and 15 percent from Ukraine, which creates a fear of high prices for bread and wheat products, in return for the Ministry of Agriculture and Forestry confirming that there will be no shortage of grain - specifically wheat - until next harvest season.

Turkey imports 9 million tons of wheat, 65% of which is from Russia and 15% from Ukraine, which creates a fear of rising prices for bread and wheat products

energy

Turkey covers 95% of its energy needs through imports, and relies heavily on Russian gas, from which it imported 33.6 billion cubic meters in 2020 out of a total consumption in the same year that amounted to more than 48.1 billion cubic meters, according to a report by the Energy Market Regulatory Authority.

The global increase in the prices of various energy sources is likely to increase Turkey's energy bill given the country's heavy dependence on imports, as the energy import bill last year exceeded $55 billion.

Therefore, the statement of the CEO of the Turkish Gas Dey Company, Mehmet Dogan, was very concerned, “If we look at the worst case scenario, the escalation of the Russian-Ukrainian conflict during the summer, and Russia has stopped exporting gas to us, gas prices will jump dramatically, but if this happens during the winter, Turkey will not stand a chance."

Energy and oil experts also expected that oil prices would rise above $100 a barrel soon due to the Russian-Ukrainian tension, the imposition of more sanctions on Moscow, and an increase in global energy demand after the return of economic activity to circulation with the gradual lifting of restrictions imposed to confront the outbreak of the Corona virus.

Turkey covers 95% of its energy needs through imports and imports 9 million tons of wheat (Al-Jazeera)

government plan

In this context, Ismail Numan Talci, deputy head of the Orsam Center in Ankara, who is close to the Turkish government, confirmed that the ministries of economy, finance, energy, agriculture and tourism have prepared a complete plan to deal with any potential losses resulting from the Russian-Ukrainian war.

Talci told Al Jazeera Net, "Turkey has a stock of wheat that represents 5 times what the Turkish citizen consumes, in addition to that local wheat is sufficient to produce bread without other wheat products," noting that the option to import wheat from Iran is on the table if necessary.

For his part, Ozkan Taşpinar, Chairman of the Turkish Grain Board, said, "Turkey is a country that is self-sufficient in wheat. The average need for the local market is 20 million tons, and this quantity is produced locally." Therefore, in Tashpinar's opinion, the Russian-Ukrainian war will not cause In any problems in the supply of wheat to the domestic market in Turkey.

Talci: The war may benefit Turkey, not the other way around, because Western sanctions against Russia will force it to resort to Turkey economically and commercially.

With regard to energy, Talci explained that his country imports the largest proportion of Russia, but if it is impossible to import from it due to the war, Ankara will renew its agreements with Azerbaijan, Qatar and Nigeria, and raise the import rate from them.

As for the tourism file, he indicated that Turkey will be affected by the lack of Russian tourists, as they constitute the largest proportion, but improving relations with the UAE, Saudi Arabia, Egypt and Israel will relatively compensate for the loss, indicating that the Ministry of Tourism is preparing for a different summer tourist season that will attract tourists from all over the world.

Talci concluded by saying that the war might benefit Turkey, and not the other way around, because Western sanctions on Russia would force it to resort to Ankara economically and commercially.

In this context, Turkish Foreign Minister Mevlut Cavusoglu stressed that his country is not inclined to participate in the sanctions against Russia against the backdrop of its military intervention in Ukraine.

He said in televised statements that his country is studying in detail all decisions related to the sanctions, especially with regard to their impact on the country's economy and the security of its energy supplies, stressing that his country has not received any request or pressure from other countries to participate in the sanctions against Russia.