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Afghan Refugee Flows Risk Longer-Term Structural Issues as Migrant Population Grows Above 7%

TURKEY
  • Turkey is currently positioned to experience a substantial flow of refugees as a result of the recent Taliban takeover in Afghanistan.
  • While this has yet to impact domestic asset prices, the longer-term socio-political/economic and structural issues that may develop are somewhat more concerning.
  • With refugee flows historically being the largest cause of civil conflict, especially in emerging nations, Erdogan must walk a narrow tightrope to effectively balance destabilising Turkish societal demographics with gaining favour with the EU.
  • Turkey's population is currently 7% refugees from Syria, and while the Islamic nature of all countries makes for a relatively easy assimilation – the differences in interpretation of the Quran among more orthodox countries potentially creates scope for frictions and xenophobia in the future as we've already started seeing in recent weeks against Syrians in Turkey
  • Refugees are also often moved to singular areas where disease, weapons and radical ideologies can spread incredibly fast while also changing the ethnic, social and economic demographics of the area – which in turn boosts domestic discontent with the government among angered locals and could cause problems for an already troubled Erdogan regime.
  • Opposition CHP leadership has already spoken out against making new deals with the West over migrant camps outside of the EUR6bn 2016 Migrant Deal, and experts have said the Turkish infrastructure is not capable of dealing with the impending flows – placing the govt in a conundrum.
  • As mentioned earlier, this has seen limited short-term effect on asset prices, but may hold longer-term structural issues, should Erdogan effectively sell Turkish asylum to Western powers for funding and minor improvements to bilateral relations – which is something worth monitoring closely.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
Political Risk BulletEM BulletHomepageBulletPolitical RiskEmerging Market News
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
Political Risk BulletEM BulletHomepageBulletPolitical RiskEmerging Market News

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