New spending alone will not revive Turkish south-east

Subject

Prospects for engineering economic revival in south-eastern Turkey.

Significance

Visiting Diyarbakir on September 5, Prime Minister Binali Yildirim announced a series of measures to boost the economy in south-eastern Turkey, the scene of incessant attacks by Kurdistan Workers' Party (PKK) guerrillas, mainly against the security forces, and large-scale counter-operations by Turkish security forces.

Impacts

• Some local businesses will benefit from government construction contracts and related business.
• Less troubled provinces such as Erzurum and Malatya will offer opportunities in labour-intensive manufacturing, agroindustry and services.
• Internationally, concrete investments will create some impression that the government runs the region and is working for all its people.
• Extra spending will slightly raise risks to the public finances amid increased military and security costs and a decelerating economy.