Turkey's Budgetary Responses to the Pandemic and Comparison of the Stringency Level of Interventions in Turkey and Countries in East, South, and Southeast Asia

Abstract

This study analyses strategies for responding to COVID-19 via considerations of the Turkish state budget, the effects of the pandemic, and projections of macroeconomic and fiscal indicators. Additionally, the stringency level of Turkey's interventions in the pandemic is examined by comparing the responses of countries in East, South, and Southeast Asia. The aims of the study are to analyse Turkey’s fiscal responses to COVID-19 and to assess future estimates of economic and fiscal indicators. Another objective is to compare the level of rigour of the Turkish government's interventions with that of selected Asian countries using various indices calculated by the Oxford COVID-19 Government Response Tracker (OxCGRT). Data belonging to macroeconomic and fiscal indicators of Turkey were examined from 2019 to 2023 using proportional analysis, and countries’ response indices were calculated by averaging daily data from OxCGRT between 11 March 2020 and 28 February 2021. The study includes comparative results based on the relationship between fiscal responses and the rigour level of interventions. The originality is to be the first study that comprehensively examines Turkey’s responses to the COVID-19 and its effects on the state budgeting in the short and medium-terms. It is reported that the Turkish government has taken decisive actions in the face of the pandemic when compared to Asian countries but response costs have driven significant increases in the planned levels of budget and borrowing.

Keywords

• COVID-19
• Budgetary Responses
• Stringency Level
• Turkey
• Asian Countries

References

1. An, B. Y., & Tang, S.-T. (2020). Lessons from COVID-19 responses in East Asia: Institutional infrastructure and enduring policy instruments. American Review of Public Administration, 50(6-7), 790–800. https://doi.org/10.1177/0275074020943707.
2. Ando, M., Furukawa, C., Nakata, D., & Sumiya, K. (2020). Fiscal responses to the COVID-19 crisis in Japan: The first six months. National Tax Journal, 73(3), 901-926. DOI: 10.17310/ntj.2020.3.12.
3. Andrew, J, Baker, M., Guthrie, J., & Martin-Sardesai, A. (2020). Australia’s COVID-19 public budgeting response: the straitjacket of neoliberalism. Journal of Public Budgeting, Accounting & Financial Management, 32(5), 759-770. https://doi.org/10.1108/JPBAFM-07-2020-0096.
4. Anessi-Pessina, E., Barbera, C., Langella, C., Manes-Rossi, F., Sancino, A., Sicilia M., & Steccolini, I. (2020). Reconsidering public budgeting after the COVID-19 outbreak: Key lessons and future challenges. Journal of Public Budgeting, Accounting & Financial Management, 32(5), 957-965. DOI 10.1108/JPBAFM-07-2020-0115.
5. Ahrens, T. & Ferry, l. (2020). Financial resilience of English local government in the aftermath of COVID-19. Journal of Public Budgeting, Accounting & Financial Management, 32(5), 812-823. DOI 10.1108/JPBAFM-07-2020-0098.
6. Argento, D., Kaarbøe, K., & Vakkuri, J. (2020). Constructing certainty through public budgeting: budgetary responses to the COVID-19 pandemic in Finland, Norway and Sweden. Journal of Public Budgeting, Accounting & Financial Management, 32(5), 875-887. DOI 10.1108/JPBAFM-07-2020-0093.
7. Ashfaq, M. & Bashir, M. (2020). Pakistan: Making a “COVID budget” in a struggling economy. Journal of Public Budgeting, Accounting & Financial Management, 33(1), 69-77. https://doi.org/10.1108/JPBAFM-07-2020-0118.
8. Balajee, A., Cafral, S. T., & Udupa, G. (2020). Fiscal situation of India in the time of COVID-19. Indian School of Business, http://dx.doi.org/10.2139/ssrn.3571103.

9. Beh, L-S., & Lin, W. L. (2021). Impact of COVID-19 on ASEAN tourism industry. Journal of Asian Public Policy, DOI: 10.1080/17516234.2020.1871180.
10. Bloomberg HD (2020, 13 March). Albayrak: İstikrar Kalkanı adımlarımızın maddi tutarı 240 milyar TL'ye ulaştı. [Albayrak: The financial amount of our Stability Shield steps reached 240 billion TL]. https://www.bloomberght.com/albayrak-istikrar-kalkani-adimlarimizin-maddi-tutari-240-milyar-tl-ye-ulasti-2255323.
11. Bostan, S., Erdem, R., Öztürk, Y. E., Kılıç, T., & Yılmaz, A. (2020). The effect of COVID-19 pandemic on the Turkish Society. Electronic Journal of General Medicine, 17(6), 2-8.
12. Chan, S. P. (2020, March 23). Global economy will suffer for years to come, says OECD. BBC News. https://www.bbc.com/news/business-52000219.
13. Chen, S. X., Lam, B. C. P., Liu, J. H., Choi, H-S., Kashima, E., & Bernardo, A. B. I. (2021). Effects of containment and closure policies on controlling the COVID-19 pandemic in East Asia. Asian Journal of Social Psychology, 24, 42–47. DOI: 10.1111/ajsp.12459.
14. Christensen, T., & Lægreid, P. (2020). Balancing governance capacity and legitimacy: How the Norwegian government handled the COVID-19 crisis as a high performer. Public Administration Review, 80(5), 774–779. https://doi.org/10.1111/puar.13241.
15. Clemens, J., & Veuger, S. (2020). Implications of the COVID-19 pandemic for state government tax revenues. (Working paper no.27426). National Bureau of Economic Research.
16. Driessen, G. A. (2020). The Coronavirus relief fund (CARES Act, Title V): Background and state and local allocations. (Report no. 7). Congressional Research Service.
17. Djalante, R., Nurhidayah, L., Minh, H. V., Ngoc Phuong, T. N., Mahendradhata. Y., Trias, A., Lassa, J., & Miller, M. A. (2020). COVID-19 and ASEAN responses: Comparative policy analysis. Progress in Disaster Science, 8, 1-12. doi: 10.1016/j.pdisas.2020.100129.
18. Dutta, A., & Fischer, H. W. (2020). The local governance of COVID-19: Disease prevention and social security in rural India. World Development, 138, 1-11.
19. Dünya (2021, 23 January). 2020 yılı bütçe gerçekleşmeleri, sapmalar. [Budget realizations in 2020, deviations] https://www.dunya.com/kose-yazisi/2020-yili-butce-gerceklesmeleri-sapmalar/608058.
20. DW Turkey (2021, 1 March). Ekonomi büyüdü ama vatandaş fakirleşti. [The economy grew, but the citizen became poor]. https://www.dw.com/tr/ekonomi-b%C3%BCy%C3%BCd%C3%BC-ama-vatanda%C5%9F-fakirle%C5%9Fti/a-56738681.
21. Food and Agriculture Organisation of the United Nations (2021). MERS-CoV situation update. FAO. Retrieved 01 April 2020. http://www.fao.org/ag/againfo/programmes/en/empres/mers/situation_update.html.
22. Felix, A. (2020). COVID-19 challenges state and local government finances. kcFED Economic Bulletin. Federal Reserve Bank of Kansas City, the USA.
23. Ferry, L., & Eckersley, P. (2011). Budgeting and governing for deficit reduction in the UK public sector: Act one ‘the comprehensive spending review’. Journal of Finance and Management in Public Service, 10(1), 14-23.
24. Furman, J., Geithner, T., Hubbard, G., & Kearney, M. S. (2020). Promoting economic recovery after COVID-19. The Aspen Institute, Economic Strategy Group.
25. Grossi, G., Ho, A. T. & Joyce, P. G. (2020). Budgetary responses to a global pandemic: International experiences and lessons for a sustainable future. Journal of Public Budgeting, Accounting & Financial Management, 32(5), 737-744. https://doi.org/10.1108/JPBAFM-12-2020-189.
26. Gössling, S., Scott, D., & Hall, C. M. (2021). Pandemics, tourism and global change: A rapid assessment of COVID-19. Journal of Sustainable Tourism, 29(1), 1–20. https://doi.org/10.1080/09669582.2020. 1758708.
27. Güngör-Göksu, G. (2020). Küresel salgına yönelik alınan mali önlemlerin bütçe ve borçlanma üzerine etkileri [The effects of the fiscal measures taken against the global epidemic on the budget and borrowing]. In H. Kılıçaslan (Ed.). COVID-19: Küresel pandeminin ekonomik ve mali etkileri [COVID-19: Economic and financial ımpacts of the global pandemic] (71-98). Gazi Publisher.
28. Hale, T., Angrist, N., Goldszmidt, R., Kira, B., Petherick, A., Phillips, T., Webster, S., Blake, E. C., Hallas, L., Majumdar, S., & Tatlow, H. (2021). A global panel database of pandemic policies (Oxford COVID-19 Government Response Tracker). Nature Human Behaviour. https://doi.org/10.1038/s41562-021-01079-8.
29. Heald, D., & R. Hodges (2020). The accounting, budgeting and fiscal impact of COVID-19 on the United Kingdom. Journal of Public Budgeting, Accounting & Financial Management, 32(5), 785-795. DOI 10.1108/JPBAFM-07-2020-0121.
30. International Monetary Fund. (2020a). World economic outlook: A long and difficult ascent. IMF. Retrieved 01 April 2020. https://www.imf.org/en/Publications/WEO/Issues/2020/09/30/world-economic-outlook-october-2020.
31. International Money Fund (2020b). Challenges in forecasting tax revenue. IMF. Retrieved 25 March 2020. https://www.imf.org/~/media/Files/Publications/covid19-special-notes/en-special-series-on-covid-19-challenges-in-forecasting-tax-revenue.ashx?la=en.
32. Jose, J., Mishra, P., & Pathak, R. (2020), Fiscal and monetary response to the COVID-19 pandemic in India. Journal of Public Budgeting, Accounting & Financial Management, 33(1), 56-68. https://doi.org/10.1108/JPBAFM-07-2020-0119.
33. Kaçak, H. & Yıldız, M. S. (2020). Stringency of government responses to COVID-19 and initial results: A comparison between five European countries and Turkey. Türk Hijyen ve Deneysel Biyoloji Dergisi, 77(2): 233-242. DOI: 10.5505/TurkHijyen.2020.60487.
34. Kim, B. H. (2020). Budgetary responses to COVID-19: The case of South Korea. Journal of Public Budgeting, Accounting & Financial Management, 32(5), 939-947. DOI 10.1108/JPBAFM-06-2020-0079.
35. Kim, W. J., Trung, N. X., Hung, L. V., & Trung, N. N. (2020). Relationship between cultural values and well-being: Analysis from some East Asian countries. Journal for Cultural Research, 24(4), 334-350. DOI: 10.1080/14797585.2020.1861812.
36. Lee, C., Negara, S. D. & Sambodo, M. T. (2020). Covid-19’s economic reckoning in Southeast Asia. (Publication no. 107). Yusof Ishak Institute.
37. Liao, W.-J., Kuo, N.-L., & Chuang, S.-H. (2020). Taiwan’s budgetary responses to COVID-19: The use of special budgets. Journal of Public Budgeting, Accounting & Financial Management, 33(1), 24-32. DOI 10.1108/JPBAFM-07-2020-0128.
38. Ma, M., Wang, S., & Wu, F. (2020). COVID-19 prevalence and well-being: Lessons from East Asia. World Happiness Report. Retrieved 31 March 2021. https://worldhappiness.report/ed/2021/covid-19-prevalence-and-well-being-lessons-from-east-asia/.
39. McNichol, E., Leachman, M., & Marshall, J. (2020). States need significantly more fiscal relief to slow the emerging deep recession. The Center on Budget and Policy Priorities. Retrieved 18 March 2021. https://www.cbpp.org/research/state-budget-and-tax/states-need-significantly-more-fiscal-relief-to-slow-the-emerging.
40. Mok, K. H., Ku, Y.-W., & Yuda, T. K. (2021). Managing the COVID-19 pandemic crisis and changing welfare regimes. Journal of Asian Public Policy, 14(1), 1-12, DOI: 10.1080/17516234.2020.1861722.
41. Nemec, H-J., & Spacek, D. (2020). The Covid-19 pandemic and local government finance: Czechia and Slovakia. Journal of Public Budgeting, Accounting & Financial Management, 32(5), 837-846. DOI 10.1108/JPBAFM-07-2020-0109.
42. NTV (2020, 8 September). Fitch, Türkiye için büyüme tahminini yukarı yönlü revize etti. [Fitch revised upwards its growth forecast for Turkey]. https://www.ntv.com.tr/ekonomi/fitch-turkiye-icin-buyume-tahminini-yukari-yonlu-revize etti,Y47K7CF6CkCgQZqr3lsWQQ.
43. Olivia, S., Gibson, J., & Nasrudin, R. (2020). Indonesia in the time of Covid-19. Bulletin of Indonesian Economic Studies, 56(2), 143-174. DOI: 10.1080/00074918.2020.1798581.
44. Organisation for Economic Co-Operation and Development (2021). Quarterly National Accounts: G20 - Quarterly Growth Rates of GDP. OECD. Retrieved 01 April 2021. https://stats.oecd.org/.
45. Organisation for Economic Co-Operation and Development (2020). Economic outlook. 1, 107. OECD. Paris, France.
46. Oh, S.-Y. (2020). From a “super spreader of MERS” to a “super stopper,” of COVID-19: Explaining the evolution of South Korea’s effective crisis management system. Journal of Asian Public Policy, DOI: 10.1080/17516234.2020.1863540.
47. Özcan, Y. (2020). Impact of COVID-19 pandemic on tax revenues. Journal of Istanbul Commerce University Social Sciences, 19 (37), 342-354.
48. Presidency of Strategy and Budget (2020a). Presidential annual program 2021. Retrieved 24 March 2021. https://www.sbb.gov.tr/wpcontent/uploads/2020/11/2021_Yili_Cumhurbaskanligi_Yillik_Programi.pdf.
49. Presidency of Strategy and Budget (2020b). Medium-Term Programme 2019-2021, 2020-2022, and 2021-2023. Retrieved 24 March 2021. https://www.sbb.gov.tr/orta-vadeli-programlar/.
50. Raudla, R. & Douglas, J. W. E. (2020). This time was different: The budgetary responses to the pandemic-induced crisis in Estonia. Journal of Public Budgeting, Accounting & Financial Management, 32(5), 847-854. DOI 10.1108/JPBAFM-07-2020-0094.
51. Şanver, C. (2020). COVID-19 salgınının cari transfer harcamalarına etkisi [The effects of COVID-19 outbreak on current transfer expenditures]. In H. Kılıçaslan (Ed.). COVID-19: Küresel pandeminin ekonomik ve mali etkileri [COVID-19: Economic and financial impacts of the global pandemic] (119-142). Gazi Publisher.
52. The Central Bank of the Republic of Turkey (2021). Interest ratios statistics. Retrieved 25 March 2021, https://tcmb.gov.tr/wps/wcm/connect/TR/TCMB+TR/Main+Menu/Temel+Faaliyetler/Para+Politikasi/Merkez+Bankasi+Faiz+Oranlari/faiz-oranlari.
53. The Ministry of Treasury and Public Finance (2021). Public finance statistics. Retrieved 24 March 2021. https://www.hmb.gov.tr/kamu-finansmani-istatistikleri.
54. The Turkish Revenue Administration (2021). Tax statistics. Retrieved 20 March 2021. https://www.gib.gov.tr/yardim-ve-kaynaklar/istatistikler.
55. Turkish Statistical Institute (2021). The GDP growth statistics. Retrieved 26 March 2021. https://data.tuik.gov.tr/Bulten/Index?p=D%C3%B6nemsel-Gayrisafi-Yurt-%C4%B0%C3%A7i-Has%C4%B1la-IV.-%C3%87eyrek:-Ekim---Aral%C4%B1k,-2020-37180&dil=1.
56. United Nations Development Programme (2021). Responding to the Covid-19 pandemic leaving no country behind. (Publication no. SPR210111-2). UNDP. DOI: http://dx.doi.org/10.22617/SPR210111-2.
57. United Nations (2020). World population prospects. UN. Retrieved 02 April 2021. https://population.un.org/wpp/Download/Standard/Population/.
58. United Nations Conference on Trade and Development (2020). Trade and development report 2020. UNCTAD. United Nations Publications, the USA.
59. Upadhaya, B., Wijethilake, C., Adhikari, P., Jayasinghe, K., & Arun, T. (2020), COVID-19 policy responses: Reflections on governmental financial resilience in South Asia. Journal of Public Budgeting, Accounting & Financial Management, 32(5), 825-836. https://doi.org/10.1108/JPBAFM-07-2020-0130.
60. We are self-sufficient Turkey (2020, 24 March). https://bizbizeyeteriz.gov.tr/.
61. Williams, A. (2020). Stabilizing state and local budgets through the pandemic and beyond through beyond. Economics Policy Note Archive, 20(2). Levy Economics Institute of Bard College.
62. Withers, M., Henderson, S., & Shivakoti, R. (2021). International migration, remittances and COVID-19: Economic Implications and policy options for South Asia. Journal of Asian Public Policy, DOI: 10.1080/17516234.2021.1880047.
63. Wong, W. (2021). When the state fails, bureaucrats and civil society step up: Analysing policy capacity with political nexus triads in the policy responses of Hong Kong to COVID-19. Journal of Asian Public Policy, DOI: 10.1080/17516234.2021.1894314.
64. World Health Organisation (2021). Coronavirus (COVID-19) Dashboard. WHO. Retrieved 02 April 2021, https://covid19.who.int/.
65. Wu, S., & Li, M. (2020). Analysing the Chinese budgetary responses to COVID-19: Balancing prevention and control with socioeconomic recovery. Journal of Public Budgeting, Accounting & Financial Management, 32(5), 929-937. DOI 10.1108/JPBAFM-08-2020-0142.
66. Vakulenko, V., Khodachek, I., & Bourmistrov, A. (2020). Ideological and financial spaces of budgetary responses to COVID-19 lockdown strategies: Comparative analysis of Russia and Ukraine. Journal of Public Budgeting, Accounting & Financial Management, 32(5), 865-874. DOI 10.1108/JPBAFM-07-2020-011.
67. Yadav, A., & Iqbal, B. A. (2021). Socio-economic scenario of South Asia: An overview of impacts of COVID-19. South Asian Survey, 28(1), 20–37. DOI: 10.1177/0971523121994441.