Disarmament call' positive for Turkish economy

Analysts say Turkey’s solution process has spurred confidence in international markets.

Disarmament call' positive for Turkish economy
World Bulletin / News Desk
A call for disarmament of the outlawed Kurdistan Workers' Party, or PKK, will have a beneficial impact on the Turkish economy. 

London-based Standard Bank’s chief economist, Timothy Ash, said Monday that international financial markets had welcomed Turkey’s pro-Kurdish Peoples' Democracy Party’s statements regarding the issue of disarmament of PKK, saying it was "potentially very positive for the economy."

PKK is listed as a terrorist organization by Turkey, U.S. and the European Union.

Ash's comments come after a lawmaker with the Peoples' Democracy Party on Saturday announced that PKK had been invited (by its imprisoned leader Abdullah Ocalan) to hold a congress in spring this year to make the historic decision of finding common ground on the issue of laying down arms.

What is known in Turkey as the solution process was officially launched in 2013 to end the decades-old conflict with PKK in Turkey's eastern and southeastern regions which has claimed around 40,000 lives. In 2013, imprisoned PKK leader Abdullah Ocalan called for a "historic" cease-fire.

Ash said that the statement to call for the disarmament of the terrorist group constituted a positive outlook for the Turkish economy. 

Turkey is estimated to have lost more than one trillion Turkish Liras ($400 billion) after three decades of conflict with PKK, according to Turkish officials. 

The region's development has evidently been affected by armed clashes.

"If Turkey can prove this process is sustainable, it will enhance Turkey’s stability and enable investments to surge and growth to accelerate," said Ed Parker, chief analyst of Fitch ratings.

In January, Japanese credit rating agency president of JCR Eurasia, Orhan Okmen, said that unemployment, which is an important issue in the southeast and eastern regions of Turkey, would fall and labor productivity would increase once the solution process finalized. "Success of the process will accelerate the country’s credit note up," he said.

In April 2013, in a written statement, the credit rating agency Moody's had said that solution of the conflict was a positive development for the country's credit rating.

"The Government of Turkey agreed to form a parliamentary investigative commission 'to evaluate the resolution process,' a visible and credit-positive step," the rating agency said back then.

Moody's had suggested that the prospect of settlement would boost investor confidence and improve southeastern Turkey's attractiveness as a destination for foreign direct investment, which would deliver economic benefits and reduce Turkey's external vulnerabilities, enhancing sovereign creditworthiness.

Seven days after Moody's statement in April 2013, Fitch Ratings’ chief analyst had a similar take on the situation, saying the process would boost investments and accelerate growth.


Güncelleme Tarihi: 02 Mart 2015, 17:52