The last ISIS bombing exploded in Istanbul in January of this year and threatened to deal Turkey’s tourist economy a major blow. The attack, in which a 28 year Saudi man identified by police as an ISIS member detonated an explosive device inside a crowd of German tourists, killing 10 people and injuring 15, exacted major damage on Turkey’s tourism sector. German tourists make up roughly 15 percent of Turkey’s tourism industry, which earns the country $34 billion annually.
Sunday’s bomb, which killed at least 37 people and wounded more than 125, is claimed to have been planted by a female member of the separatist Kurdistan Workers Party (PKK) and is the second such attack in the area in less than a month. The previous car bombing, which occurred just a few blocks away, on Feb. 17 targeted a military bus and killed 29 people, most of them soldiers, near the military headquarters, parliament and other key government institutions.
The last ISIS bombing exploded in Istanbul in January of this year and threatened to deal Turkey’s tourist economy a major blow.
Russia and PKK
The bombings come at a time when Turkish President Erdogan has been trying to contain the chaos unfolding across the Middle East. He now finds himself being drawn into the violence with hundreds of people killed in Turkey in renewed fighting following the collapse of the peace process between the government and the PKK in July.
Sunday’s explosion took place at Kizilay Square, one of Ankara’s most popular commercial and entertainment hubs. Almost immediately after the bomb went off, the Turkish authorities imposed a ban on local news media coverage and shortly afterwards, a court in Ankara issued an order blocking access to social media in an effort to prevent the dissemination of photographs from the bombing scene.
The effects of the latest terrorist activities on Turkey’s economy could be substantial. The first bombing came as the Turkish economy began to feel the effects of Russian sanctions, which Moscow imposed following a diplomatic row with Ankara over Turkey’s downing of a Russian fighter jet in along the Turkish-Syrian border last November. Russia's sanctions largely affect Turkey’s tourist, agricultural and banking sectors.
Budget Expectations
At a press conference last January, Finance Minister Naci Ağbal announced the government's budget expectations for 2016, with expenditures projected to be TL 570.5 billion while revenues are expected to be around TL 540.8 billion. The revenues are expected to increase 12 percent this year and taxes were estimated to total TL 459 billion in 2016 – a 13 percent increase when compared to 2015.
And recently, the Swiss international bank, Union Bank of Switzerland (UBS), announced that it had upgraded its growth expectations for the Turkish economy from 3.3 percent to 4 percent by the end of 2016 after estimating the impacts of the minimum wage hike, Turkey's financial strength and falling oil prices. The fallout of the latest explosion on the Turkish Lira and Turkish markets is yet to be felt.
With two massive explosions in less than a month, shifts in budget predictions are bound to take place with the government reallocating funds for increased defense and security purposes. Whether it turns to the U.S. and EU for help, Ankara will be forced to combat ISIS as well as the terrorist organization PKK which has fought a 31-year-old insurgency against Turkey and which is strongly linked to Russia.
At this point, Turkey has no choice but to rely on constructive cooperation with his western partners. Still, despite negotiations that have been going on since 1963, Turkey is not a current member of the EU and it is unclear when and if membership is in the offing.
Turkish officials, including Erdogan, are eager at the moment for opportunities to restore the old cooperation between Ankara and Western governments and to strengthen Turkey’s links to the west. The recent blasts may just work in Turkey’s favor.