- Dr. Mehmood Ul Hassan Khan
Regional Geopolitical Analyst
& Member Board of Experts,
Center for Global & Strategic
Studies (CGSS), Islamabad.
The government of Turkey under the leadership of President Recep Tayyip Erdogan has initiated diversified but integrated short, medium and long terms policy measures to counter COVID-19 in the country. Turkey owns the best “public health system” in the whole Muslim world and has taken strong measures to prevent the spread of novel Coronavirus through the effective administrative measures, social assistance mechanism, and economic bailout. Turkey has now become an icon of hope, mercy, and generosity in the world.
Turkey has reported 74,193 COVID-19 cases and 1,643 deaths as of April 16, 2020, with over 515,000 tests completed. The government has adopted multiple containment measures including social distancing, curfews, travel bans along with quarantines for returning nationals, and the closures of educational institutes, malls, stores, and entertainment venues.
Biggest Economic Package
Turkish President Recep Tayyip Erdogan announced the biggest economic bailout package in the history of Turkey which is intended to help and protect the country from the adverse effects of the coronavirus outbreak. A Turkish Lira (TL) 100 billion (US$15 billion) package was announced. It consisted of TL75 billion ($11.6 billion or 1.5 percent of GDP) in “fiscal measures”, as well as TL 25 billion ($3.8 billion or 0.5 percent of GDP) for doubling the “credit guarantee” fund. It announced and implemented various support measures which included raising minimum pension and cash assistance to needy families, enhanced employment security by reducing/adjusting short-term work allowance rules, postponed taxes payments for affected industries and also for citizens over 65 or with chronic illnesses, extension of personal and corporate income tax filing deadlines, easing of households’ utility bill payments to local governments, imposition of job security by ban on layoffs, initially, for three months, with a state subsidy for affected staff, state payment of two-thirds of workers’ salaries in affected firms, debt relief for local governments’ earmarked revenues, new job creation 32,000 additional medical staff hired and performance payments maximized, allowances of social assistance and solidarity foundations increased, including accelerating support for farmers, direct support to Turkish Airlines and other affected entities, and last but not least, Turkey Wealth Fund (TWF) given new rights to buy stakes in distressed firms.
Tax Incentives
The economic package included measures for the postponement of tax duties, loans and social insurance payments, as well as several incentives for citizens and businesses. There will be a six-month postponement of tax and social insurance payments for all companies operating in a wide variety of spheres retail, iron and steel, logistics and transportation, food and drink, the auto industry, cinema and theatre, textiles, management companies, housing, and hotel businesses.
VAT
Value-added tax (VAT) and premium payments postponed for 6 months. The companies’ principal loan and interest payments to the bank postponed for at least 3 months.
Financial Support
The government also pledged to give financial support to its export companies. It increased the state credit guarantee fund from TL 25 billion to TL 50 billion to shield private banks. The government instructed all financial institutions to ease the requirements for new loans and not to cancel existing loans requests. Moreover, credit payments to Halk Bank for small and medium sized enterprises also postponed for three months.
Befitting Monetary Policies
Turkey’s Central Bank (CBRT) decreased the policy rate by 100bps to 9.75 percent, and a package of financial measures was announced and implemented. Liquidity facilities were augmented, including longer-term instruments and at discounted rates. The reserve requirements on foreign currency deposits were reduced by 500 bps for banks meeting lending growth targets. A new TL lending facility for SMEs in the export sector was set up. Exporters’ inventory financing is being supported by extending maturities for existing and new export rediscount credits. The second package of CBRT measures (March 31) allowed for an increase in outright purchases of sovereign bonds and broadened the pool of assets for use as collateral in CBRT transactions. It announced many measures primarily to limit the accounting impact of TL depreciation and fall in securities prices. The minimum payment for individual credit cards was reduced to 20 percent, and banks postponed repayments on credit card loans for housing, consumer and vehicle purchases. Public banks granted firms affected by the crisis a 3-month moratorium on bank loan repayments (principal and interest). Debt enforcement and bankruptcy proceedings have been suspended. Firms’ dividend payments limited to 25 percent of 2019 profits. Exporters will be provided with inventory financing, and reimbursement of rediscount credits have been extended by 90 days.
National Fund for Poor Families
A new, two billion Lira (285 million euro) fund for poor families affected by the COVID-19 outbreak was also announced. The government package included several benefits for elderly people, who are the most vulnerable to the COVID-19.
Preventive Measures
Turkey has increased the Credit Guarantee Fund limit from TL 25 billion to TL 50 billion and provided it to SMEs and companies with liquidity needs and collateral deficit. It encouraged the introduction of loan packages for social purposes under favorable and advantageous conditions for its citizens. It also implemented the Short Work Allowance. It announced temporary income support to the workers in the workplaces that suspend their activities.
International Flights Suspension
Turkey imposed flight bans on six more countries including the U.K. and the United Arab Emirates, bringing the total number of countries to 20, and also temporarily closed public gathering venues, like cafes, sports, and entertainment locations and is suspending mass prayers in masjids to contain the spread of the coronavirus.
Social Package
The Turkish government announced to start “Project to House” for housing and other needs of the homeless people in the country and set a good example for others to follow. US$ 150 will be paid to needy families. 2.1 million Households will receive 1000 Turkish Liras. More than 1.5 million senior citizens will also be received handsome financial assistance from the government. It has also started to provide 5 masks to every household free of charge on a weekly basis because the mask has been made mandatory for every citizen in Turkey. The minimum pension raised to TL1500 (US$221) to every pensioner. Short term employment allowance has been announced.
Turkish Health System
Dr. Aykut Ozdarendeli Erciyes University in Central Kayseri province and Dr. Aykut Ozkul Ankara University successfully managed to isolate the Coronavirus.
Global Assistance
Turkey has sent humanitarian aid and medical supplies to nearly 30 nations on five continents to support efforts against the COVID-19 pandemic. It has sent supplies such as protective equipment and sanitizer to Balkan countries, as well as, Spain, Italy, and the UK. Turkey has set a new example of global assistance after China and dispatched humanitarian assistance to 30 countries including Bosnia, Bulgaria, China, Colombia, Germany, Hungry, Indonesia, Iraq, Iran, Italy, Kosovo, Kyrgyzstan rep ublic, Lebanon, Libya, TRNC, USA, Yemen, UK, Spain, Serbia, Poland, Philippines, Palestine, Pakistan, Tunisia and many others. It has turned tears into smiles and crises into opportunities in the world.
Pakistan and Turkey have agreed to work together and reinforce each other’s efforts in the fight against COVID-19. An agreement to his effect reached during a telephonic conversation between Prime Minister Imran Khan and Turkish President Recep Tayyip. A Turkish non-governmental organization distributed rations among needy people affected by the COVID-19 in the country.
Ration bags comprising flour, rice, sugar, oil, and other essential commodities were provided to the needy people in Rawalpindi by Stichting Internationale Humanitaire Hulporganisatie Nederland (IHH-NL) at a ceremony held at the office of Rawalpindi Development Authority (RDA). Turkish Ambassador to Pakistan Ihsan Mustafa Yurdakul said Ankara would not leave Pakistanis alone at this trying time.
Turkish Cooperation and
Coordination Agency’s (TIKA)
TIKA with its global humanitarian assistance program and support against COVID-19 has become one of the biggest pillars of the Turkish government’s national policy to help other countries around the globe.
More than 370,000 people from Azerbaijan to Yemen, Sudan to Bosnia and Herzegovina have so far been benefited from the Turkish Cooperation and Coordination Agency’s (TIKA) aid efforts against the outbreak, including its distribution of locally obtained masks and other medical supplies, in addition to its ongoing aid operations.
Countries, Humanitarian Assistance
Azerbaijan
Food distributions and cleaning material to 2000 low-income families in Azerbaijan.
Bosnia
TIKA aimed to produce 50,000 shield masks under a project. So far, 5,000 masks initially produced have been dispatched to medical centers in Zeneca and Visoko.
Colombia
TIKA established the Casanare Chamber of Commerce of Colombia’s Entrepreneurship, Innovation and Modeling Center and produced protective shield masks to be distributed to healthcare workers in Colombia via Turkish-made 3D printers.
Georgia
TIKA renovated the Batumi Infectious Diseases Hospital, increasing its capacity with donations from Turkey and re-opening on Nov. 22, 2019. The hospital has now become the country’s headquarters of the fight against the pandemic.
Kyrgyzstan
The 72-bed Bishkek Kyrgyz-Turkish Friendship State Hospital, which was built by TIKA and recently fully equipped, will open partially as part of the fight against the outbreak
Palestinians
The Palestine-Turkey Friendship Hospital in Gaza, equipped with modern medical devices, was handed over to Palestinian officials on March 26, under the instructions of Turkish President Recep Tayyip Erdogan. Funded by TIKA, the 180-bed hospital began operating as part of efforts to curb the coronavirus.
Yemen
Amid efforts to stem the outbreak in Yemen, TIKA has begun the training of 360 health workers from eight districts in the southern city of Aden.
Being a prominent regional expert on Turkey and MENA, I appreciate the concrete efforts of the Turkish government which has now instrumented to save the precious lives of not their own people living in 81 provinces but also in five continents. Due to Turkey’s massive international drive of humanitarian assistance against COVID-19, it has become a sign of life, hope, help, and humanity to all the struggling people living around the globe.
Turkey has also introduced holistic economic, financial and banking policies to mitigate the grave effects of COVID-19 on its macro-economy and society alike.
