The major discussion points in Turkey have been drastically different – before and after the earthquake – with the upcoming elections gaining new importance, according to KP Law Managing Partner Onur Kucuk.
"The earthquake has affected 11 cities in Turkey, mainly in the southeast and eastern regions, and the current death toll is more than 48,000," Kucuk says. "The earthquake was huge and devastating and, since February 6, the agenda has changed dramatically."
"Before the earthquake, in our normal life, we were discussing legal developments, including the difficult topic of elections," he continues. "We talked about the unorthodox approach of the central bank of Turkey regarding interest rates and the fight against inflation, and whether this would impact foreign investments, imports, and exports in Turkey." Another topic before the earthquake, according to Kucuk, was the early retirement law. "Even if the person was entitled to retire in working days, he or she had to wait until the age of 58," he says. "People demanded the early retirement age be lifted, allowing for immediate retirement in Turkey for those who couldn't retire because of age barriers. This law was heavily discussed in the Turkish market and was recently passed two weeks ago."
"After the earthquake, life was greatly disrupted, not just legally but in every aspect," Kucuk adds. "Everything came to a halt for a few weeks. During the initial period, international and domestic aid flooded in to assist with the situation. These earthquakes caused an estimated USD 34.2 billion in direct physical damages in Turkey, according to a World Bank rapid damage assessment report, and damages in investment exceed USD 75 to 85 billion, which will have a significant impact on social and legal life." According to him, the government also took a number of measures to address the situation.
"The other issue at hand is the upcoming presidential election, which will be held on May 14, 2023," Kucuk notes. According to him, the elections are of crucial importance: "the ruling party has been in power for 20 years now, and the opposition, united behind one candidate, is hoping to defeat them. We will see if they are successful."
"While the earthquake has had a significant disruptive impact, we continue working on M&A and investments," Kucuk notes. "Turkey is never short on investments. Strategic investors are still investing in Turkey, mainly in industrial manufacturing and some in TMT." Additionally, "another issue to consider is that companies were already allowed to buy their own shares under the Turkish commercial code," Kucuk says. Still, "although the economy did not come to a complete halt due to the earthquake, there may come a point when Turkey will need those companies to finance various projects. In such a scenario, it is likely that Turkish companies will seek financing abroad," he points out.