Page 47 - bne magazine July 2022_20220704

bne July 2022 Special Report I 47
Russia, Ukraine, Turkey despair index
Following the increase in GDP per capita of 158% during 2000-2015, the poverty incidence decreased from 44% to 18% between 2002 and 2014, according to a World Bank study. In the same period, the incidence of extreme poverty declined from 13% to 3% of the population. Poverty continued to fall to about 9% and remained there for the next few years before starting to climb again as the currency crisis gather pace. Poverty rose to 10.2% in 2019 and to 12.2% in 2020, according to the World Bank.
The coronavirus pandemic, which hit Turkey particularly hard in 2020, drove poverty up, but even as the economy started to recover towards the end of that year, the more vulnerable segments of society didn’t feel the benefits.
"While the recovery in late 2020
has helped labour markets recover somewhat, many have been left behind, especially women, youth and lower- skilled workers," the World Bank said
in its Turkey Economic Monitor report.
"This, in conjunction with high inflation, is likely to have hurt the poor more. Poverty is estimated to have risen to 12.2% in 2020 from 10.2% in 2019. Bringing the poverty rate back to pre-pandemic levels presents a challenge," it said.
The World Bank said the impact of the pandemic would be a "struggle to shake off" globally but that Turkey's economy is expected to grow 5% this year due a recovery in exports.
4Q 2020
1Q 2021
2Q 2021
3Q 2021
4Q 2021
1Q 2022
2Q 2022
poverty
inflation
unemployment
despair
poverty
inflation
unemployment
despair
13.50
4.44
6.7
24.64
14.20
5.55
5.6
25.35
12.50 11.0 8.50
6 6.86 8.31
4.97 4.4 4.3
23.47 22.26 21.11
14.50 14.50
11.5 20
4.2 8
30.20 42.50
1.1 2 2 2 2 2 90
6.2 8.8 9.97
10 10 11
16.8 20.9 22.47
10.73 9.9
9 9
22.03 21.1
14.67
11
27.27
14.67
11
115.27
poverty 9999999
inflation
unemployment
despair
13.5
12.87
35.37
15.59 17.1
13 12.52
37.59 38.62
19.26
11.77
40.03
25.76
11.3
46.06
54.76 150
11 11.3
Of course, where you set the bar for poverty makes a big difference and each country has a different level, making direct comparisons between countries problematic, but the despair index remains a useful indicator of how much a country is suffering from economic problems.
Russia and Ukraine are both suffering from high despair rates at the moment, thanks to the effects of the coronavirus (COVID-19) pandemic
in 2020 and now exacerbated by the war that began in February. But as bne IntelliNews reported, Russia’s despair index has probably already fallen back to an almost normal, albeit high, rate of 30 thanks to the successful emergency actions taken by the Central Bank of Russia (CBR). Ukraine’s rate could decline from here too if the war stops soon and the impulse of the reconstruction work gives the economy a boost.
In Turkey the outlook is bad, and things are likely to only get worse.
Poverty, unemployment and inflation
Turkey achieved significant poverty reduction between 2004 and
2016 with growth in earnings and employment being the major drivers, according to the World Bank.
However, in a sign of how much work there is left to do, the poverty line, like in Ukraine, is measured as the number of people that have an income of less than $5 per day
74.76
170.3
Source: bne IntelliNews, World Bank, national statistic agencies
“While the recovery in late 2020 has helped labour markets recover somewhat, many have been left behind, especially women, youth and lower-skilled workers”
($150 per month), whereas in more developed economies like Russia the line is set at some low average salary. Today a bit more than one in ten people live in poverty in Turkey.
In 2021 poverty jumped again as the combination of the global impact of the coronacrisis and Turkey’s own currency crisis took its toll, sending the poverty rate to 21.9%, according to the Turkish Statistical Institute’s annual survey.
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