20 May 2014 News Roundup
The fire in Soma Mine that killed 301 workers has put the whole nation to mourning. The deadliest mining disaster led to protests against the government’s policies on privatisation. The accident has underlined the negligence of private companies and the holes in Turkish legislation that should guarantee workers’ rights and safety. Meanwhile, the current account deficit has fallen, and new data reveals the amount of tax that the government is unable to collect.
Fire in a coal mine killed 301 workers.
Fire in a coal mine killed 301 workers in the western city of Manisa. The source of the explosion was initially alleged to be the power distributor. Although claims have emerged of slow burning old coal leading to the fire in the mine.
The tragic incident has sparked debates about workers’ conditions in Turkey, the effects of cost reduction measures employed by private firms and the negligence of the state in ensuring legal protection of employees.
The country has entered a phase of national mourning for three days. National celebrations for May 19 have also been cancelled.
Official investigation has begun into the sources and possible negligence leading to the fire that killed hundreds of workers. The CEO of the Soma Company Can Gürkan is being detained alongside 5 others. Also, five people are under arrest; high-level executives Akın Çelik and Ertan Ersoy, security advisor Yalçın Erdogan and two shift managers. Both the company and the relevant government offices claim that the mine was following all safety regulations. However, investigation reports conclude that hot coal interacting with oxygen led to a fire in the mine and 301 workers died of carbon monoxide poisoning.
There are, however, two arguments being put forward against the Soma Mine Company. The workers had notified their shift managers that they used to find hot, burning coal, but their managers did not take this seriously. Secondly, the level of carbon monoxide was alarmingly high the few days before the incident. Nevertheless, the management did not take any precautions.
News and reports were released demonstrating the layers of subcontractors (Turkish term: taşeron) operating in the mine. According to the allegations, there were four layers of subcontractors that were profiting from the higher output (or higher results of whichever process of the mining they were working for) while the workers received no extra income. The Soma disaster has highlighted the questions about privatisation, subcontracting workers and the lack of government law regulating the private sector as well as protecting workers’ rights.
Moreover, unlike what the owner of the mining company Alp Gürkan had stated before, it was revealed that the mine did not have the vital ‘safe rooms’. These rooms are where food and oxygen supplies are provided for times of emergency. Depending on the room size, these rooms can house 10 to 20 workers for weeks. Having these emergency rooms ready for the miners is not required by Turkish laws.
The incident in the Soma Mine, which was opened by the Minister of Energy 10 months ago, has instigated protests and gathering to show solidarity with the workers throughout the country. The Prime Minister was met with large protests when he visited the site in Soma. More than 100 factories in Kocaeli halted production in response to the disaster in Soma. Thousands took to the streets in Istanbul, Ankara, İzmir, Aydın, Bandırma, Çanakakle, Bursa, Adana, Ordu, Ereğli, Muğla, Trabzon, Aksaray, Konya and Tunceli.
Crowds also gathered in front of the Soma Mining Company’s headquarters in Istanbul.
Football teams have showed support for the relatives of those who lost their lives in the disaster. Telecommunications companies have increased the connectivity in Soma and erased the debts the families of the victims have to the companies. Civil society organizations have begun collecting money to help the families who have lost the main bread earners.
PM Erdogan’s public statement regarding the fire in Soma sparked controversy. In his speech, Erdogan referred to accidents in the UK and other countries, to argue that accidents were a part of this industry and death is in the nature of mining business. However, his examples referred to accidents in the 19th and early 20th century.
PM Erdogan who was met with protests in Soma was filmed jostling a member of the public inside a supermarket. It was claimed that PM intentionally hit this man as minutes before the incident another footage showed that PM was telling protestors ‘those who boo Turkey’s Prime Minister will get slapped’. The man who was slapped by PM said Erdogan ‘slapped him involuntarily’. At the end of this video PM’s bodyguards beat some other people, which no statement was provided by the government. Government spokesperson, Huseyin Celik, refused to answer questions regarding this incident suggesting that these some claims.
PM’s advisor kicked a protestor in Soma Mine Explosion site. Yusuf Yerkel, who advises PM in foreign policy, did not deny the photo. He did not apologise, but stated that he was ‘sorry’ as he did not keep calm. Government spokesperson made a statement regarding the photo. Yerkel was apparently injured as the person whom Yerkel was kicking had allegedly attacked him. Yerkel had to take medical leave for seven days for minor injuries on his right foot and knee. Nevertheless, Yerkel, who was meant not to work according the spokesperson, was seen with PM Erdogan in the following days. Questions remain regarding how a government official could even attempt to hit a member of the public, especially a Soma mourner. Also, that safety of individuals is in the hands of some government officials who are clearly protected by their leaders remains a concerning matter. The repercussions of physical attacks/actions of government members including PM Erdogan against members of the public will continue to damage politics in Turkey.
The main opposition party CHP had proposed a motion in parliament two weeks ago regarding the security in the Soma mine, which was rejected in the voting of the parliament.
Meanwhile, Amnesty International has deemed the government as directly responsible for the accident.
9 workers have been kidnapped in south-eastern Turkey.
The armed Kurdistan Worker’s Party (PKK) kidnapped 9 workers in the south-eastern city of Sirnak. The workers were working on a road construction project. Security forces have begun a search for the kidnapped workers.
Turkey has been condemned by the ECHR to pay compensation for the 1974 military intervention in the island of Cyprus.
Turkey was condemned by the European Court of Human Rights to pay 30 million Euros to Greek Cyprus in compensation to the 1974 military intervention. Turkey refuses such a ruling on grounds that the ECHR is not legitimate to intervene in a state-to-state problem. Hence, Turkey cannot be forced to pay a fine, which Turkey deems to be political, to a state that it does not recognise.
On a different note…
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The Monetary Policy Committee’s meeting is awaited by investors.
As the markets wait for Presidential election in August, a change to the interest rates is not expected at the Monetary Policy Committee’s meeting on 22 May. Nonetheless, the TRY has been quite strong in the past few weeks and the talks of European Central Bank’s upcoming monetary easing policy could give confidence to Turkey’s Central Bank to decrease the rates.
The current account deficit has decreased since last year.
The Central Bank of the Republic of Turkey released March Balance of Payments data. The monthly current account deficit was USD 3.2bn, compared to USD 5.6bn in March 2013. The 12 month rolling current account deficit thus fell to USD 59.9bn in March from USD 62.3bn in February.
This improvement was supported by better trade and services with Turkey’s main export market, Europe, thanks to weaker currency and economic recovery in Europe. If slowdown in domestic demand continues the current account deficit for 2014 could fall even more in the coming months.
Also, net foreign direct investments increased to USD 0.95bn in March 2014 from USD 0.76bn in March 2013.
Private sector credit debt has increased.
Private sector’s credit debt that is financed from abroad has been revealed to be USD 158.7bn as of March 2014. This shows an increase of USD 2.5bn since the end of 2013.
- Banks debts in the form of credits have increased by USD 1bn since the end of last year, while their debts in the form of bonds have increased by USD 34mn since the end of 2013.
- Financial institutions other than banks increased their debts in the form of credits by USD 49mn, while their debts in the form of bonds were USD 1.5bn.
- Non – financial institutions debts in the form of credits increased by USD 1.5bn, while their bond stocks were USD 3.3 bn.
The government struggles to obtain its taxes.
In the period between January and April 2014, the government’s treasury has obtained approximately TRY 110.9bn of the TRY 180.6 tax income that it should have generated.
However, TRY 110.9 is shows an increase of 9.3% in the tax collected by the government compared to the same period last year.
45.82% of the taxes collected in the first quarter of 2014 were obtained from Istanbul. Istanbul was assessed to generate TRY 76,139,337,000 in taxes, while only TRY 50,841,499,000 was collected.
In January 2014, the treasury has been unable to collect TRY 69.7bn of taxes.
Meanwhile, budgets of 70 cities’ central governing authorities showed deficits in their accounts. Only the following cities showed a surplus in their accounts; Ankara, Istanbul, Antalya, Bursa, Hatay, Mersin, İzmir, Kocael, Tekirdağ, Zonguldak and Kırıkkale.
Number of small shopkeepers and tradesmen is falling.
The Economic Policy Research Foundation of Turkey has revealed that the number of small shopkeepers and craftsman have increased by 3,4% in Turkey in one year and fell to 1.85mn people. According to their Bulletin of Job Monitoring the number of small shopkeepers and independent craftsman has been falling since October 2012. The largest falls in the number of small tradesmen were seen in Istanbul, Ankara and Izmir.
The number of public workers has increased to 3,348,852.
The number of people employed by Turkey’s public sector has increased by 29,268 in the first quarter of 2014 to reach approximately 3 million people.
The estimations for Turkey’s youth population have been released.
According to the Turkish Statistical Institute, the youth made up 16.6% of Turkey’s population. This number is expected to fall to 15.1% in 2023.
CEFTUS Insights Editors