Little bird flu impact on Turk economy yet
ANKARA – Bird flu is likely to have minimal impact on Turkey’s booming economy for now, but failure to stem the spread of the disease could endanger the country’s lucrative tourism industry and disrupt its balance of payments. Avian flu has killed at least three people in impoverished eastern Turkey since the start of 2006 and forced the culling of 764,000 poultry nationwide. Scientists fear the virus could mutate into a form transmittable between humans, leading to a global pandemic in which millions of people could die. All cases of the disease in humans so far have involved contact with infected birds. Turkey’s economy has been recovering strongly from a 2001 financial crisis, with annual growth averaging 8 percent and inflation in single digits for the first time in decades. Economists and industry sources saw no immediate threat to this positive picture yesterday. «For now we can talk of only a very small impact on tourism and the economy (from bird flu),» IS Investment analyst Turker Hamzaoglu said. The 2.1-billion-euro-turnover poultry sector may be hit hard as people switch to substitutes like fish and red meat, said Hamzaoglu. But he said Turkish consumers were unlikely to delay their spending plans on bird flu fears. Tourism jitters All eyes are now focused on the 16.7-billion-euro-turnover tourism sector, a major earner of much-needed foreign currency as Turkey battles a surging current account deficit. Industry officials said it was too early to gauge the impact of bird flu, if any, on tourism because bookings for the holiday season usually only start in January. They also noted that the areas worst affected by bird flu were in remote eastern Turkey, far from the tourist resorts of the Mediterranean and the Aegean. «Wide media coverage has scared some European tourists but we do not see a very big danger for our tourism sector,» the head of the Turkish Tourism Investors’ Association, Oktay Varlier, told Reuters. German travel group TUI said yesterday bookings to Turkey had been sluggish since last week, but it was too soon to say whether bird flu would damage Turkey travel business. There have been no travel warnings for Turkey from leading markets such as Germany and Britain. But Russia’s top state epidemiologist has urged sun-seeking Russians to avoid travel to Turkey. Russia is an important market for Turkish resorts. Rival tourist destination Greece yesterday urged its citizens to avoid unnecessary travel to Turkey, but said it would not yet close its borders. Another area of Turkey’s economy potentially at risk is the textiles and apparel sector. Buyers traditionally visit Turkey around this time of year to put in orders for clothing. «Several businessmen who had been expected to come to our country for business contacts have already postponed or canceled their trips,» said Canip Karakus, head of the Ankara Clothing Industrialists’ Association. But the news was bleakest in the embattled poultry sector. «It is hard to speak of a fall in prices because there are no sales at all,» said Omer Gorener, general manager of leading poultry producer Banvit, adding that Turkey’s poultry sector could halve in size by the end of 2006. The International Monetary Fund said last week the outbreak of bird flu is unlikely to affect the country’s $10 billion (8.3-billion-euro) standby accord at this stage, but said it was of concern and was being closely monitored by the IMF. Turkey can expect assistance from the European Union, which it aspires to join, or the World Bank if the outbreak puts too much strain on fragile state finances, analysts said. Turkey’s wide current account deficit, whose sustainability is being questioned and has drawn warnings from the IMF, may also be a weak point if bird flu becomes a serious problem. «With the current account deficit already extending above the equivalent of 6 percent of gross national product, the balance of payments is vulnerable to a bird flu-type of shock,» said emerging markets analyst Tim Ash of Bear Stearns in an investment note. Bourse at record high The main Turkish share index gained more than 4 percent to close at a record high yesterday, boosted by gains in foreign markets last week when Turkey’s markets were closed for a public holiday. Dealers said the outbreak of bird flu did not have an impact on markets. The lira firmed while bonds weakened slightly. Led higher by foreign interest in banking shares, the main Istanbul stock index closed yesterday 4.11 percent higher at 43,628.83 points, the fifth consecutive record-high close.
