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New Opportunities: Top 10 Facts About Poverty in Ankara

facts about poverty in ankara
With a population of approximately 5.2 million people, Turkey’s capital city of Ankara is the nation’s second-largest city after Istanbul. Originally planned to hold only around 500,000 people, the urban center has continued to see a high rate of population growth. The city saw a population increase of 6.7 percent between 2014 and 2015 and an overall population increase of 290,000 since 2015.

As more people began moving into the city for job opportunities and a higher quality of life, housing became an issue, especially during the massive growth of the 1950s. The influx of inhabitants outpaced the construction of housing. This issue inevitably led to the building of illegal houses, public housing, compounds and eventually a higher rise in poverty. Here are the top 10 facts about poverty in Ankara.

Top 10 Facts About Poverty in Ankara

  1. After the population boom of the 1950s, 59 percent of the population of Ankara were living in ‘gecekondu,’ or slum houses, by the late 1960s.
  2. In the Central Anatolia region, where the city of Ankara sits, more than 32 percent of households live in poverty.
  3. More than 26 percent of individuals living in the region live under the poverty line.
  4. Women living in poor households were found to be the most exposed to the effects of poverty from a study conducted in the squatter areas of Ankara.
  5. In poorer neighborhoods, some of these women’s burden was alleviated by transferring it to their daughters.
  6. More than 10 percent of the region is illiterate.
  7. Ankara makes up for 8.63 percent of the national GDP.
  8. Ankara exports very little to Asia or Latin America even though they are the fastest-growing economies in the world.
  9. In 2014, Ankara was found as having the highest annual average equalized household disposable income.
  10. As Turkey continues to expose itself to an over-dependence on investors, Ankara has become a “hostage of its own image as an economically successful state with a stable socio-political system.” Should the country see any changes to this, it would cause capital to leave and an increase in the cost of external debt.

Investing in Ankara

In 2018, Turkish President Tayyip Erdogan introduced a series of measures, including tax changes and an increase in the government’s Credit Guarantee Fund, which backs loans to smaller businesses. Erdogan is a self-described “enemy of interest rates” and wants the central bank to lower interest rates. He has commented that he plans to take greater control of the economy to increase and speed up growth.

As Ankara, and Turkey overall, debates and continue to look for solutions to alleviate poverty and grow its economy, one such idea remains at the forefront. During Erdogan’s 2014 presidential campaign, he announced Turkey’s 2023 vision.

Vision For Progress

Called “one of the most important economic project[s] going on in this century,” this plan focuses on six main points. Through concentrated efforts on economics, health care, tourism, transportation, energy and foreign policy, Turkey aims to remake its economic “face” by the 100-year anniversary of the founding of the Turkish republic.

These top 10 facts about poverty in Ankara are being assessed and alleviated through this very ambitious vision. This project will not only help lift the Turkish people but will also greatly benefit the Arab world.

Increases in the volume of trade between Turkey and other Arab nations, specifically Saudi Arabia and Gulf countries, will ease relations between the Turks and Saudis, which could lead to an alliance. Addressing these facts about poverty in Ankara may be the answer alleviating regional tensions.

– Aaron Stein
Photo: Flickr

Syrian Refugees in Turkey Create Jobs

Syrian Refugees in Turkey Create JobsToday, there are three million Syrian refugees in Turkey, more than there are in all other European countries combined. Despite xenophobic fears that Syrians are a drain on Turkish resources, the Turkish government spends less than one percent of GDP per year on refugees. Furthermore, economists estimate that Syrians have invested between $1 billion and $1.5 billion into Turkey thus far.

Globally, migrants compose only 3.4 percent of the worldwide population but add 10 percent to the overall GDP. In the U.S., the average refugee has a positive net fiscal effect after eight years of residency. Additionally, these refugees pay $21,000 more in taxes than they are awarded in benefits after 20 years of residency. This indicates that government assistance to refugees can be an investment in future profits.

According to research conducted by Building Markets, Syrian refugees in Turkey have invested almost $334 million into 6,033 formal companies since 2011. There are an estimated 10,000 formal and informal Syrian-owned businesses in Turkey. Syrian business owners employ an average of 9.4 people, with most employees coming from prior jobs in the informal sector.

Most Syrian business owners in Turkey plan on expanding. Approximately 55 percent have indicated that they intend to hire additional employees over the next year. Over the next few years, owners plan to add an average of 8.2 jobs to their companies.

Syrian refugee business owners intend to stay in Turkey. Around 39 percent plan to open a second business in Turkey. In the event of stabilization in Syria, 76 percent would keep their Turkish businesses while also expanding operations to Syria.

About 40 percent of surveyed Syrian business owners cited a language barrier as the biggest challenge facing their business. Lessening this inhibitor by conducting business in both Turkish and Arabic could encourage Syrian business expansion and create additional jobs.

Better integration of Syrian refugees into Turkey’s formal economy could further increase existing economic benefits. Out of the three million Syrian refugees in Turkey, only about 14,000 had work visas in January 2017. Work visas can only be obtained by companies, not individual employees, and employers are then required to pay monthly Social Security for each registered worker. The responsibility should shift from companies to employees who are more incentivized to pursue registration.

Turkey’s unemployment rate is 10.8 percent. Some fear that expediting entry to the formal labor market for refugees will displace Turkish workers. However, according to research on refugees conducted by the Center for Global Development (CGD), when native workers are displaced by refugee labor competition, they end up in higher-paying jobs. The native labor force has a competitive advantage as they possess language proficiency and job skills that are valued in their domestic market. The CGD found that displaced native workers receive, on average, a three percent salary increase at their new jobs.

The CGD concluded that the most important determining factor in the economic effect of a refugee influx is how quickly arriving refugees enter the domestic labor market and begin producing new tax revenues.

Ultimately, encouraging total integration of the Syrian refugees in Turkey into the formal sector could benefit the Turkish economy by creating new jobs and additional tax revenues. The positive fiscal payoff could grow with the mitigation of existing regulatory and cultural barriers.

– Katherine Parks

Photo: Flickr