Official data shows worsening poverty in Turkey
At least 700,000 more people plunged into poverty and the income gap widened in Turkey last year as the coronavirus pandemic exacerbated the economic crisis that has plagued the country since 2018, official data shows .
President Recep Tayyip Erdogan can boast of continuing economic growth despite the pandemic, but the Turkish Statistical Institute annual survey on Income and Living Conditions, released on June 15, shows how economic inequality and poverty worsened in the country over the past year.
Ankara’s failure to fulfill its constitutional duty of social justice during the pandemic, which has dealt severe blows to low and lower middle income groups at a time when Turkey’s own economic crisis had already fueled unemployment and the Inflation is a major factor behind the widening spreads. . While many governments have increased their social spending at the expense of budget deficits and larger borrowing, Erdogan’s government has offered little support to the most affected segments of Turkish society, contributing to deepening poverty. .
According to the survey, Turkey Gini coefficient, a statistical measure used to assess economic inequality, worsened by 0.015 points to 0.41 in 2020 – a comparable level to those of Brazil, Mexico and South Africa. The coefficient varies from 0 to 1, 0 representing perfect equality and 1 representing perfect inequality.
The income ratio of the richest 20% of the population to that of the poorest 20% rose to 8 in 2020 from 7.4 the previous year. The richest 20% received 47.5% of total income, while the poorest quintile received only 6%.
In terms of deciles, the top 10% of the population received 32.5% of total income, while the share of the bottom decile was 2.2%, the ratio falling from 13 to 14.6 over one year.
The picture is even more telling in terms of the smaller clusters. The income gap between the richest 5% and the poorest 5% of the population widened by 7 points in 2020, with the former earning 30 times more than the latter. A centesimal division would have shown the disparity at its worst, but the statistical institute does not share this data with the public.
The government could have minimized the gap by increasing social assistance for low income groups, but it clearly was not. Income data show wages and salaries accounted for 47.1% of total income, up 0.4 percentage point from 2019. Social transfers were second, accounting for 21.8% of total income , but their share was down 0.1 percentage point from 2019, even as more people were in desperate need of support due to pandemic lockdowns. While entrepreneurial income remained unchanged at 17.7%, its decomposition shows that the share of agricultural income fell by 1.7 points to 20.9%.
With growing economic disparities amid the pandemic, the Turkish army of the poor has grown. According to a poverty line set at 60% of median household income, the poverty rate increased by 0.6 points to reach 21.9% of the population, which means that 17.9 million people in Turkey are now classified as poor, up from 17.2 million in 2019.
The material deprivation rate has also increased. The measure reflects household perceptions of inability to cope with unforeseen financial expenses, a week’s annual vacation away from home, mortgage or rent payments, a meal with meat, chicken or fish every other day and adequate domestic heating and possession of a washing machine, color television, telephone and car. The severe material deprivation rate – defined as the rate of people unable to afford at least four of these items – rose to 27.4% in 2020 from 26.3% the year before.
The persistent poverty rate – denoting the percentage of the population living in households with incomes below the poverty line in 2020 and for at least two of the previous three years – reached 13.7%, up 1 point from to 2019. In other words, poverty has worsened for almost two-thirds of the 17.9 million people classified as poor last year.
As for government assistance in the event of a pandemic, a report by the Ministry of Treasury and Finance, released in early June, states the following: “The economic size of the measures implemented as part of the COVID-19 response to mitigate the economic impact of the pandemic totaled $ 661 billion. Turkish Lira (11.7% of GDP) from May 2021. The central government budget, the Unemployment Insurance Fund and the Social Assistance and Solidarity Fund covered the share of 136.7 billion Turkish Lira of this sum (2.4% of GDP), while newly issued and deferred loans amounted to 524.3 billion Turkish Lira. (9.3% of GDP).
So the government itself recognizes that much of what it calls aid for the coronavirus pandemic was, in fact, borrowing and loan repayment facilities, which could hardly count as social assistance. . According to the statistical institute, 58.3% of Turkish citizens are struggling with debts other than mortgage or housing, with 18.8% qualifying the repayments as “heavy burden”.