Big Gap Between Rich and Poor in Turkey

Gap between rich and poor widens in Turkey

The richest 20 percent of people in Turkey earned 47.6 percent of the country’s total income in 2009, while the poorest 20 percent had a share of only 5.6 percent, according to recent figures.

Increasing poverty rates and a widening gap between rich and poor in Turkey revealed by a recent study have alarmed some experts, who say the trends could lead to more conflict and crime.

“In [TurkStat’s] research we do not see improvement in income distribution. I believe this will drag us slightly toward a conflict culture as the inequality among people increases,” sociologist Aykut Toros told the Hürriyet Daily News & Economic Review on Wednesday.

The people in Turkey’s highest income group are 8.5 times richer than those in the poorest, up from 8.1 times in the previous survey, according to the “2009 Income Distribution and Living Conditions” report recently released by the Turkish Statistical Institute, or TurkStat.

The overall poverty rate in the country likewise increased from 16.7 percent in 2008 to 17.1 percent in 2009, the report said. This means a total of 12.97 million people living in poverty, up from 11.58 million a year earlier. According to TurkStat, the monthly income set as the official poverty line for a four-person household in Turkey was increased from 767 Turkish Liras in 2008 to 825 liras in 2009.

“These statistics indicate that in terms of struggling with poverty, we are not very successful as regional and class differences grow deeper,” Sedat Aybar, the deputy chairman of Kadir Has University’s Economics Department, told the Daily News. He added that the failure of rural areas to cope with the global economic crisis might have had an effect on the growing inequality of income distribution.

Not everyone believes the results of the TurkStat survey are a cause for concern, however. “I think these statistics show only one side of the coin,” Tuna Bekleviç, the former chairman of the Economists Platform, told the Daily News. He said income distribution had improved in Turkey since the survey dates due to the country’s rapid growth.

“While most countries in the world are still suffering from the crisis, Turkey’s trade has increased and diversified significantly, and recent figures show unemployment rates have also fallen,” Bekleviç said, adding that such developments have increased the welfare of people of both rich and poor, although possibly at different rates. This, he said, might have caused the results shown in the TurkStat study.

Disputing the TurkStat figures, Bekleviç said he believed the number of people below or near the poverty line had decreased in Turkey, and that high growth rates and the success of small and medium enterprises, or SMEs, in recent years had increased the ranks of the country’s middle class.

“I do not believe the statistics are accurate in this respect,” he said.

According to TurkStat’s figures, the richest 20 percent of people in Turkey earned 47.6 percent of the country’s total income in 2009, while the poorest 20 percent had a share of only 5.6 percent.

“Of course, as the statistics demonstrate, the gap of more than eightfold is a sign of inequality. But compared to Western Europe, this ratio is better and I don’t see a worse deterioration,” Professor Seyfettin Gürsel, the director of Bahçeşehir University’s Economic and Societal Research Center, or BETAM, told the Daily News. He said increasing income taxes in an equitable way would enable the social transfer of wealth needed to help solve the problem of income inequality.

TurkStat’s survey showed that poverty rates increased in both urban and rural areas, to 15.4 percent and 16.1 percent, respectively. The 7.09 million urban poor in 2008 went up to 7.51 million, while the total in rural areas went up from 3.2 million to 3.49 million.

The survey, which was first conducted in 2006, included a total of 13,026 households in its research, 8,340 from urban areas and 4,686 from rural ones.

“I think we should look at this research by making a few readjustments. The cost of rent in Istanbul is not the same as in Batman,” said Professor Gürsel of BETAM, referring to the province in Southeast Anatolia.

According to the survey, 59.3 percent of the Turkish population is in debt, 44 percent is not able to buy new clothes and 60.5 percent is unable to afford to eat meat. Eighty-seven percent of the population does not have enough money to take a one-week holiday.

However, the survey also showed that 60.8 percent of the population owns a house and 31.6 percent owns an automobile.

Such seeming discrepancies in purchasing power have to do with the family structure in Turkey, which provides a measure of security apart from the state, according to Toros, who is the chairman of Yeditepe University’s Sociology Department. “An individual searching for a job could stay in an acquaintance’s house for three to five months in Turkey whereas the same thing could not be tolerated in the West for more than a few days,” Toros said. “In Turkey, this person’s friends might even purchase him a cell phone during his stay. This mechanism diminishes the conflict [in income distribution] a little bit.”

From a sociological point of view, economist Aybar of Kadir Has University believes problems will be magnified as more poor people migrate to big cities in search of work, causing deterioration in infrastructure services and budget deficits. “The government should introduce new regulations such as increasing the minimum wage, because a rise in unemployment would lead to an increase in crime rates,” he said.

Hardships in the country are due to a combination of the government’s policy of high interest rates and low exchange rates, which has created struggles for small- and medium-size entrepreneurs, and a shrinking of foreign markets that has hit the agricultural sector hard, Aybar said.

Wages constitute the largest income source for the Turkish population, 42.9 percent, compared to entrepreneurial income, at 20.4 percent, the survey said. The breakdown of statistics by region and province showed that Istanbul residents continued to have the highest levels of disposable income in 2009, with an average of 12,795 liras annually in 2009, followed by the Western Anatolia region with 11,501 liras. Southeast Anatolia had the smallest amount of disposable income, an average of 4,655 liras. The number of poor people in Southeast Anatolia increased from 895,000 in 2008 to 999,000 in 2009, or 13.7 percent of the regional population.

Wednesday, March 2, 2011
ISTANBUL – Hürriyet Daily News


SOURCE: HURRIYETDAILYNEWS.COM