Ali Babacan, a former heavyweight from Turkey’s ruling party who founded the rival Deva Party last month, said the Turkish government’s stimulus package to mitigate the economic impact of the coronavirus pandemic had failed to provide for millions of people employed in informal work.
On March 18, Turkey unveiled a relief package worth 100 billion Turkish liras ($15.4 billion) which includes debt payment delays and tax cuts across various sectors to limit the economic fallout from coronavirus.
But Babacan told Fox TV that nearly 10 million people would be left out of the support packages and the “Short-Term Employment Allowance” provided by Turkey’s Employment Agency, leaving them unable to benefit from government support during the pandemic.
The former deputy prime minister quoted the Turkish Statistical Institute (TUIK)’s figure stating that there were 9 million unregistered workers in Turkey, saying the government had ignored these people’s needs.
“How can we tell people who cannot even afford to buy bread to stay at home?” Babacan said. “27 million people in Turkey earn an income from the government because they are civil servants that are retired or still working. But 55 million people have no income from the state. Precautions should first and foremost be taken for these 55 million people.”
The state has different options to create resources at this stage, Babacan said, including suspending tax and other payments or making loans or benefits payments available to citizens.
“The state can and should do all of these things,” he said. “They should use every piece of ammunition they’ve got. Even a one-day delay will cause much damage in the future.”
Turkey has been caught weak in this crisis, Babacan added, “because of the shrinking of the fiscal space, the reduction of foreign currency reserve in the Central Bank, the weakening of the bank balance sheets, the exhaustion of reserve funds and the decline of confidence in institutions.”
Erdogan’s package has been criticized by the political opposition and economists for being insufficient to help the economy survive and for benefiting companies more than workers that are most affected by the loss of income caused by the coronavirus.