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Economic turmoil and spiraling prices: Just how bad is poverty in Turkey? – Euronews

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The Turkish economy was a success story of the 21st century, but now things aren’t so rosy.

Three months behind on the rent.

Water and electricity cut off.

Landlord hammering on the door.

This is the dire situation faced by one family with three young children, including a four-month-old baby in Istanbul, Turkey’s largest city. 

“You know my son has epilepsy. He has been in the hospital for 2 weeks,” the father of the family told Euronews, wishing to stay anonymous. “I’m dying of sickness too, my cupboard is empty.”

“I feel so victimised. I don’t know what to say. I have 100 liras [€3.4] in my pocket. Should I buy nappies? Milk formula? Or do I get cooking oil,” he added, alluding to an impossible choice between buying food or other essentials. 

But the struggling family is far from alone. 

Nearly one-third of Turkey’s population is currently at risk of poverty or social exclusion, according to a recent report published by the Turkish Statistical Insitute. 

This worrying trend risks reversing the significant achievements the country has made in combating poverty since the early 2000s, with the Turkish economy growing rapidly over the last two decades. 

“I have been working on poverty for 22 years, but I have never seen such a bad situation,” says Hacer Foggo, a Poverty Solidarity Office Coordinator for the Republican People’s Party (CHP). 

She lists the troubling symptoms of how this crisis is affecting ordinary Turks: Women unable to afford sanitary products, rising obesity as families switch to cheaper, low-quality food, students dropping out of university – the list goes on. 

“People cannot meet their basic needs,” Foggo told Euronews. “This in turn is causing  anxiety, depression and isolating families.”

And these troubled times are taking their toll. 

Turkish medical professionals have sounded the alarm over rising levels of mental illness, pointing to a “serious increase” in the use of psychiatric drugs.

Meanwhile, two-thirds of respondents in a 2022 Yöneylem Social Research Center survey said they were depressed due to financial difficulties. 

‘No money to eat’

A broad cross-section of Turkish society is currently struggling. But children are bearing the brunt of the poverty problem, according to Foggo.

Some are going to school hungry or dropping out of education entirely to instead work and bring in money for the household, she claims. 

“A generation that is both mentally and psychologically unhealthy is coming,” she warned.

Around a third of children in Turkey are living in poor households and experiencing some type of material deprivation, according to data cited by UNICEF in 2020. 

Grave economic problems lie behind what is happening inside the country.

Turkey has been battered by years of sky-high inflation, with prices nearly 50% higher in July compared to the year before, as per official data released earlier this month.  

Independent economists at the Inflation Research Group say the true figure is far higher at around 70%, however. 

“Once I get money, I am out of pocket,” the father of three from Istanbul told Euronews, claiming that after paying his rent and bills, he is left with nothing. 

“I am not eating. Sometimes I write off a debt to the grocery store,” he added. 

The man points out that the 1550 lira (€52) he receives in state support does not even cover his family’s food bill, which he estimated at nearly 2500 lira (€84) a month. 

Last week, the Confederation of Turkish Labour Unions (Türk-İş) reported the hunger line – referring to the minimum amount a family of four has to spend to feed themselves – is now more than the minimum wage

That’s despite the government raising the minimum wage by 34% in July.

Many countries around the world have been ravaged by inflation, fuelled by the Ukraine war and climate change, but some factors are unique to Turkey. 

Currency collapse has helped drive one of the highest rates of inflation in Europe, eroding wages and hammering local businesses. Yet deeper structural issues are also at play. 

In September 2021, 1 US dollar was worth around 8 Turkish lira, yet in July 2023 it was 27.

Behind this lies something else. 

Speaking to Euronews last autumn, Timothy Ash, an emerging markets expert at BlueBay Asset Management, said economic mismanagement by Turkish President Recep Tayyip Erdogan and his Justice and Development Party (AKP) has fuelled inflation and caused the lira to nose dive.

He blamed Erdogan’s decision not to lower interest rates – which would cool inflation – due to his “unorthodox” understanding of monetary policy, Islamic beliefs about usury, and how many of his political allies benefit from rock bottom rates.

A centralisation of power is at the heart of this issue, Ash claimed, with the Turkish president widely accused of taking an authoritarian turn. 

“Erdogan blames everyone else,” he told Euronews. “He has a team of people around him who are yes men. They don’t tell the truth to power. It’s like the Emperor’s New Clothes.”

Following his re-election in May, Erdogan’s government is reportedly forging a new economic path, having signalled he is ready to reverse his unconventional policies by appointing new figures to the central bank and finance ministry.

The lira’s plunge continues, however.

For CHP official Foggo, many of Turkey’s poverty problems are far from new, claiming the authorities have failed to act for years.

“All of these [issues] are actually alarming things in the past. This shows that no action has actually been taken,” she told Euronews, calling for a solution based on human rights. 

“We need a rights-based social policy that includes students, women, single mothers, the disabled, the elderly, children and every individual living in poverty according to their needs.”

“As poverty deepens and prolongs, its effects only get worse.”

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Economy

Minimum wage to hire higher-paid temporary foreign workers set to increase

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OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

The Canadian Press. All rights reserved.

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

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OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

The Canadian Press. All rights reserved.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

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OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

The Canadian Press. All rights reserved.

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