Challenges in Turkey

Today we look at the political implications of the devastating earthquake in Turkey. [View in browser]( [Bloomberg]( Turkish President Recep Tayyip Erdogan wants to have general elections three months from now, but the devastation from this week’s two massive earthquakes may be too great for him to ignore. Erdogan is hoping to pave the way for voting on May 14 by using the additional powers from a three-month state of emergency he declared yesterday. They allow him to take swift security and financial measures in the areas stricken by the quakes that have killed 7,000 people in his country with many more still trapped under thousands of collapsed buildings. Key reading: - [Erdogan Wants Elections in May Despite Earthquake Fallout]( - [Turkey’s Erdogan Announces State of Emergency in Quake Areas]( - [Turkey Suspends Trading in Stock Market After Rout Deepens]( - [In Pictures: Major Earthquake Strikes Turkey, Syria]( - Follow our rolling coverage of the disaster [here](. The death toll is likely to mount as troops and rescue workers continue the search for survivors amid wrecked infrastructure in towns and cities with a combined 13.4 million inhabitants. Erdogan, who plans to visit the disaster zone today, has strong support in parts of the quake-hit regions, making them essential to the ruling AK Party’s success at the polls. Reconstruction costs in a limited part of the earthquake zone analyzed by Bloomberg Economics may reach as high as 5.5% of Turkey’s gross domestic product, while the banking sector’s loan exposure there is estimated at around $30 billion. Add in the government’s first emergency aid pledge of $5.3 billion, and it becomes easy to see how the cost of the disaster can quickly grow. In previous quakes, the government showed it’s capable of providing quick shelter and finding the funds necessary to meet immediate needs. Still, the enormity of the disaster means relief efforts will soak up much of the money that the government was planning on using elsewhere. The real challenge to the president’s plans will come from the electoral complications of potentially millions of displaced voters. Even conducting opinion surveys, let alone enabling voting, may be too difficult, according to a report by Atilla Yesilada, an economist at GlobalSource Partners in Istanbul. Aiding victims of the disaster remains the government’s immediate priority. The window for Erdogan to achieve his political aims is also narrowing. — [Onur Ant]( Rescue workers search the rubble of a collapsed building in Adana, Turkey. Photographer: Can Erok/AFP/Getty Images [Tune into]( our weekly Twitter Space today at 8am ET for a conversation about the devastating earthquake in Turkey, including what it might mean for Erdogan and for broader geopolitics. And if you are enjoying this newsletter, sign up [here](. Global Headlines Rallying call | President Joe Biden vowed not to allow the US to [default]( on its debt, calling on Congress in his State of the Union address to raise the debt ceiling and chastising Republicans seeking to leverage the standoff to force spending cuts. He struck a blue-collar tone in calling for higher taxes on billionaires and tax buybacks, new consumer protections and antitrust efforts, while urging the legislature to break through partisan gridlock and pass new measures. - Biden taunted Chinese President Xi Jinping, saying autocracies had grown [weaker]( around the world and no one would want Xi’s job. - Biden’s appeals for bipartisanship were met by [jeers]( from fringe Republicans, with Representative Marjorie Taylor Greene of Georgia repeatedly shouting “Liar!” over his claim that members of her party support cuts to Medicare and Social Security. Zelenskiy visit | Ukrainian President Volodymyr Zelenskiy is [in London]( for talks with UK Prime Minister Rishi Sunak, only his second trip outside Ukraine since Russia’s invasion began. He’s set to address Parliament and to visit Ukrainian troops training in the UK. The leaders will discuss support for Ukraine, beginning with an increase in military equipment to help counter Russia’s spring offensive, Downing Street said. - Biden said in his State of the Union speech Russian President Vladimir Putin’s invasion was a test the US and its NATO allies had [passed](, and pledged again to stand with Zelenskiy for as long as needed. - Germany, Denmark and the Netherlands will supply Ukraine with as many as 178 older generation Leopard 1 battle [tanks](, with the first arriving in the coming months. Roaring [exports]( of commodities helped funnel capital into the coffers of Russia’s government and companies, feeding an upswing in business [investment]( that was without precedent in previous economic contractions and proved crucial to powering Putin’s war effort. Still, Bloomberg Economics predicts fixed-asset investment will shrink by 5% in 2023 — a major drag on an economy that’s expected to contract 1.5%. Best of Bloomberg Opinion - [Erdogan Has Undermined Turkey’s Quake Response: Bobby Ghosh]( - [America’s Return to the Philippines Makes Sense: James Stavridis]( - [EU’s East Was Right About Russia. Can It Lead?: Andreas Kluth]( Defining issue | Sunak’s unwillingness so far to negotiate with unions on wage demands is exacerbating waves of strikes over the cost-of-living crisis that have become almost a daily occurrence in Britain. While the government is seeking to avoid a wage-price spiral, [Emily Ashton]( writes that failure to get a grip on deteriorating public services may be the [biggest danger]( to his premiership. - New Conservative Party Chairman Greg Hands hinted that the next UK general [election]( will happen in the second half of 2024, suggesting Sunak intends to maximize his time in office before calling a vote. Lost property | China’s ambassador to France said the US should [return debris]( from the balloon it shot down because it belongs to Beijing. Lu Shaye’s remarks are the first time China has officially expressed a desire for the US to return the balloon it downed off South Carolina. US Navy divers are now trying to retrieve its parts. - Xi told top officials that China’s successful development shows there is another way to modernize, as he [rejected]( any need to “Westernize.” - Xi appears to be [recalibrating]( his hardline approach to Taiwan, wooing opposition leaders ahead of the island’s presidential election next year. Explainers you can use - [Biden Immigration Push, 2024 Themes, GOP Heckling: Key Takeaways]( - [New Zealand PM Unwinds Ardern Policies After Two Weeks in Job]( - [Japan PM to Ratchet Up Wage Hike Push With Business, Labor Talks]( Nearing goal | Sri Lankan President Ranil Wickremesinghe said the bankrupt country has taken difficult measures and is [getting closer]( to securing a $2.9 billion International Monetary Fund loan to address the worst economic crisis in its independent history. He laid out his policies for recovery while calling for unity during a speech at a new session of parliament today, marking the 75th year of freedom from British rule. Bloomberg TV and Radio air Balance of Power with [David Westin]( on weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online [here](. News to note - Putin’s government is [pressuring]( the Bank of Russia to be more upbeat about the outlook for the economy and signal it’s ready to loosen monetary policy as his invasion of Ukraine heads for its second year. - Russian Foreign Minister Sergei Lavrov and envoys from the US and Europe have converged [on Sudan]( simultaneously as the Kremlin and its opponents step up competition in Africa. - Officials from the US, China, Russia, the UK and France held a two-day meeting in Dubai early this month to discuss [nuclear]( non-proliferation issues, Russian newspaper Kommersant reported. - North Korea appears to be staging its first military [parade]( in almost a year, providing leader Kim Jong Un a platform to show off his latest weapons after threatening to expand his nuclear arms programs. - Vietnam’s commercial hub Ho Chi Minh City announced an effort to court a $3.3 billion [investment]( from Intel Corp., only to amend much of its original statement to remove mentions of the US chipmaker. And finally ... The greening of Republican-led states in Midwest America is accelerating. Ohio and Indiana, long dependent on coal power, are on the verge of [solar-farm booms]( so staggering that their respective buildouts between now and 2027 may vie with Nevada’s and trail only those of California and Texas. The low cost of solar power and the promise of construction and manufacturing jobs are winning over communities that may not be predisposed to the climate benefits. Doral Renewables Mammoth North Solar plant in Starke County, Indiana, under construction last year. Source: Doral Renewables Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. You received this message because you are subscribed to Bloomberg's Bloomberg Politics newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. 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