COVID-19 surprised everyone. Fareed Zakaria tweeted on April 10 that “it’s not right to call this a recession or even to talk about a Great Depression. This is a great paralysis.” Looking back, to what happened in Turkey this last year, I think that is an apt description.
Remember that time, when nobody had any idea what we were facing? As cases were surging, countries withdrew into a weird sense of nationalism about keeping personal protective equipment (PPE) inside their borders. People were getting anxious about food and other essentials. Export restrictions to PPE rose everywhere, including in Turkey.
In Turkey, the initial lockdown and sudden stop to economic activity occurred between March and May 2020. The first official case of the virus was recorded in late February. None of us were equipped to deal with the situation, and we hoped that it would end in a quarter or so. Many countries, including Turkey, had unsustainable policy frameworks. Why? Because we had wildly optimistic expectations regarding the length of the “great paralysis.”
By late June, we were in the “dancing with the virus” phase, not only in Turkey, but also in many other countries, including Germany and Poland. It was the intimacy of the term that gave us the wrong impression regarding this period. It may have felt like the virus was getting domesticated and less harmful, but it really wasn’t. It was us getting to learn how to live with it. There was a second surge during this period, which acted as a reality check.
Yet in this second period, corporate adjustment to dancing with the virus already started. From June to November, the number of new motorcycles registered in Turkey increased by 61 percent compared to the same period in 2019. This figure denotes a 11 percent decline from March-May 2019 to March-May 2020.
What does this mean? Well, people were ordering food online, and the country needed more motorcycles for couriers to carry the meals. Hence the increased demand for motorcycles. Leaving aside the doubtlessly high number of couriers who ride without a valid license, the number of average monthly new registrations of motorcycles increased by 65 percent from the great paralysis (March-May) to the dancing with the virus phase (June-November) in 2020. In 2019, there was a 9 percent decline between similar periods in 2019.
There is a similar trend in new small commercial vehicles traffic registrations. Between the great paralysis and the dancing with the virus, there was a 42 percent increase in small commercial vehicle registrations. In 2019, there was a 3 percent decline between similar periods.
I see these as attempts for adjustment to the virus in the Turkish corporate sector. The credit boom of 2020 may have helped the adjustment, albeit unintentionally and in an unsustainable manner, at the cost of raising the indebtedness of the corporate sector. Like motorized couriers, our system doesn’t always find the most optimal route to adjustment, but it always finds a route, and makes the delivery more or less on time.
In thinking about the negative growth impact of this second surge in virus cases, this increased preparedness of the corporate sector in finding ways to cope with the lockdowns need to be taken into account. We like to highlight the dynamism and flexibility of the Turkish corporate sector a lot, and for good reason. I see this rapid adjustment to the virus as another sign of vitality in Turkish business dynamism.
Originally published at https://www.tepav.org.tr.