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Terror and Tourism: How does terror hurt the economy?

On June 5, 2015, a rally was taking place in Diyarbakır, a city in Eastern Turkey, when an explosion took place. This was the start of a horrible line of terrorist attacks in Turkey. Over the span of 13 months, until the coup attempt of July 15, 2016, multiple attacks wreaked havoc, leading to the deaths of almost 500 people. Since then, not much has happened, until recently, on the 13th of November. Istiklal Avenue, practically the busiest avenue in all of Turkey at any given time, was the scene of the latest explosion, killing six people and injuring over 80. Concerns that there will be another period of terror like the one in 2015 for various reasons arose among citizens. Since it is close to home, I am motivated to investigate what kind of effect terror has on Turkey. Clearly, there are multiple ways terror affects a country, sociologically, economically, and demographically. However, the Western hemisphere is more concerned with tourism, as this New York Times tweet suggests. Thus, this article will focus on how tourism is affected by terror, by investigating economic data from Turkey comprising the period between 2015 and 2016 and before.

Though it is certain that the risk of death in an explosion would reduce going out and thus overall consumption, the calculation of the reduction in consumption is a challenging task to undertake because there are many other factors at play. On the other hand, tourism is directly affected by the possible risk of an explosion near tourist attractions, making it more fitting to calculate for this particular article.

Istanbul is and has always been an appealing destination for tourists. Whether it be for the incredible nightlife or the historical attractions, tourists have long loved visiting the city. The reason for my particular focus on Istanbul is the fact that the city has been in the top 10 tourist destinations globally for over a decade. In 2012, the city received 4 million more overnight visitors than New York. The numbers were high even in 2015, after which Istanbul experienced lower ranks on the list.

Table 1: Number of tourists visiting Istanbul and the city’s ranking in tourist destinations between 2012 and 2019.

Table 1 clearly shows Istanbul lost a lot of visitors after 2016. This is especially due to over fifty terrorist attacks taking place in 2016, but the failed coup attempt and the following martial law did not help either. This pattern was reflected throughout Turkey, as the country experienced reduced tourism income, a significant pillar in the country’s GDP. Table 2 demonstrates how income from tourism changed between 2012 and 2019.

Table 2: Income generated by tourism in Turkey and percentage of tourism income in the Turkish GDP between 2012 and 2019.

Although Table 1 would suggest otherwise based on the data collected on Istanbul, Table 2 shows Turkey experienced a significant reduction in tourism income in 2016. Tourism is needed to keep a convenient foreign exchange rate for the Turkish lira and not only to support a strong GDP. I have to emphasize that though the Turkish lira’s value has been affected by many factors, most recently inflation, the foreign currency the tourists brought has been a significant part of the Turkish lira’s stability for years. This was especially proven with the coronavirus pandemic, during which Turkey experienced a reduced number of tourists, and thus insufficient foreign currency intake. There is a simple link: as the demand for the Turkish lira decreases, it depreciates. Table 3 displays the change in how much Turkish lira one United States Dollar can buy.

Table 3: Average USD/TRY exchange rates between 2012 and 2019.

Table 3 shows there is causality between the reduced number of tourists and increasing exchange rates. It is important to note that terrorism affected other industries creating severe uncertainty, scaring away investors from both direct and portfolio investments, and once again reducing demand for the lira. Overall, it is evident that terror has significant repercussions for the economy, and it must be eradicated. Unfortunately, the Turkish government has been following the wrong policies on this matter for over a decade, since the Syrian civil war started. Turkey’s weak policy to prevent irregular immigration has resulted in millions of immigrants from the Middle East without identification entering the country, increasing the risk of crime. The state must act soon to tackle the issue of terrorism.

This is not an opinion piece, nor is it a critique of the Turkish government, but I must also state why I was motivated to write this article. I do not agree with only assessing terrorist attacks in terms of tourism as large news organizations have recently done. This is an article on the effects of terror on tourism in Turkey; that is true, but it is in no way an attempt to belittle the pain endured by individuals. It is a human tragedy, lives are lost, and people live in fear for their well-being. On top of that, they will experience economic difficulties. Newspapers with a problematic history with similar events, such as the New York Times, have and will continue to release articles with Eurocentric undertones that only consider human tragedies beyond Eastern Europe as harm done to tourist destinations, and it is important to acknowledge this problem. The “East” is not a tourist attraction, it is not an archeological site, it is not an “aesthetic,” but a very real place with people living in it. Mainstream media has to understand that terror causes the same problem everywhere, every single individual has the same reaction in face of terror, and their lives are as valuable as their counterparts in the West. So I leave you with this: whether it is Istanbul, Paris, or Jakarta that suffers from a terrorist attack, the outcome is the same, it is not a tourist attraction that is destroyed; it is a living, breathing city.


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