Economic Update

Published 22 Jul 2010

With its parched soil and dwindling water supplies, Turkey wishes the weather man could have distributed the world’s annual rainfall more evenly this year. Such countries as the United Kingdom, China, India, Bangladesh and Nepal have had more than their fair share of late. Residents in Ankara are meanwhile stocking up on emergency water supplies in anticipation of water cuts.

The director general of Turkey’s General Directorate of State Hydraulic Works (DSI), Haydar Kocaker, warned this month that Istanbul had sufficient water supplies for the next 4.5 to 5 months, while Ankara has enough for 78 days. Some predict even less, with the Turkish media expecting large water supply cuts in Turkey’s capital from August. According to Kocaker, Ankara’s dam water levels fell to 5.5% in 2007 from 23% last year. Dam water levels for the whole of Turkey dropped to 46% from 54% in 2006. That for Istanbul declined by as much as 31.8%, according to the Istanbul Water and Sewerage Administration (ISKI)

Many analysts attribute Turkey’s water deprivation this year to the unpredictable effects of global warming. A number of journalists have nonetheless accused the government of allowing unhindered water consumption until after the elections, when supplies are to be restricted. Not losing votes over water cuts in the run up to the elections would have been the motivation. In a television statement, Istanbul Greater Municipality Mayor Kadir Topbas made the point that turning off the water flow would ultimately not make a difference to water supplies as people will stockpile. Personal economisation is the way forward.

The water shortage has already taken its toll on agriculture across Turkey. Insiders say that fig production has decreased by 40% in 2007 from the previous year – this for a country that is the world’s largest fig producer. The Aegean’s grape and olive producers have also suffered thanks due to a largely dry year.

Electricity generation is being affected by water shortages. Ugur Cingi, administrative manager of Electricity Production (EUAS) Demirkopru Hydroelectric power plant recently voiced concerns to the press over whether his plant units would be able to operate should water levels fail to increase next year. Already, Bozdogan town’s Kemer Dam in Aydin has had to pull down its shutters until water reserves are replenished, with 58m cubic metres of water left – a mere 10 days worth of electricity.

The government is taking measures to mitigate the effects of another drought in the years to come. In July, the DSI pointed to $12bn worth of foreign investment going towards hydropower plants in Turkey. The government will provide electricity purchasing guarantees to foreign firms for a 10-year period. That is if these companies sell electricity at agreed rates. The DSI also pointed out that the construction of 100 hydropower plants was already under way, and that as many as 960 tenders for the construction of plants had been held and completed. In four years’ time – when construction is complete – Turkey will have more plugs and water-stops to collect precipitation and transform it into energy.

Meanwhile, an increase in food prices thanks to the drought could challenge the central bank’s efforts to reduce inflation. Fears earlier this year about water supplies in Turkey have proven true, with the government having to come up with increasingly innovative ways of addressing unpredictable rainfall.