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Should you increase location allowances for Turkey?

Located at the point where East meets West, events in Turkey have always mattered on the global stage. For years it’s been a beacon of stability, its secular democracy and relatively open society a magnet for businesses and tourists alike. A member of NATO since 1952, it has long been a key strategic partner for the West. However, events of the last few weeks and months have cast a long shadow over that stability. 

Terror attacks are sadly not a new phenomenon in Turkey, especially from Kurdistan-based groups such as the PKK (Kurdistan Worker’s Party) seeking greater autonomy for their region. While these attacks have usually occurred in the South East, larger cities have not been immune. But the ongoing conflict in Syria has opened up a new source of danger and unrest. Not only has Turkey been at the centre of the migrant crisis which has arisen from the Syrian conflict and caused so much tension with its European neighbours, it has also been targeted by IS from its powerbase over the Syrian border. 

As some of these strikes have explicitly targeted foreigners, it is natural that many expatriates in Turkey feel under attack on a number of fronts right now, especially when confronted with constant (and sometimes hyperbolic) updates via social media and the 24-hour news cycle. Understandably, companies with staff working in this country are seeking reassurance that their expatriates are safe and that the location (or hardship) allowances they pay to compensate them for these kinds of difficulties are appropriate. 

So, should you revise location allowances to reflect recent events in Turkey? 

Security concerns

ECA’s Location Ratings are determined by researching a series of factors which affect the living conditions of expatriates and assigning a score to each. These scores form a basis for determining location allowances – the higher the score, the higher the recommended allowance.

Our team are constantly monitoring events around the world and assessing their impact on international assignees. Our philosophy is to take the medium to long-term view and not to respond to terrorist attacks with an immediate increase in the score for the location affected. Our annual review of Location Ratings includes an assessment of socio-political tensions in each country, with the current scoring for Turkey reflecting an unstable situation, with significant tensions present and a constant threat of terrorism and military activity. In other words, our recommended location allowances already recognise that Turkey has long been prone to terror incidents, so no change is required in response to the latest attacks. Ankara and Istanbul remain major expatriate destinations and Turkey as a whole continues to be an important international destination and transport hub.

Democracy and freedom of speech

The recent coup attempt by factions of the military to remove President Recep Tayyip Erdogan also garnered widespread media coverage. Even now the details are cloudy as to who exactly was behind the plot (conspiracy theories abound) but Erdogan has moved swiftly to make his position even more secure. To date this has seen over 50,000 military and security personnel, judges, teachers and civil servants arrested or suspended as the President cleans house. 

When examining the impact of the coup attempt on expatriates and location allowances we again need to look at some history. This was the fifth coup or attempted coup since the establishment of the Turkish Republic in 1923. Turkey’s founding father, Mustafa Kemal Ataturk, based this new state on secular rather than religious principles and the tensions between these two conflicting philosophies have never been far from the surface. The military have traditionally been seen as the defenders of Turkey’s secularity and this has formed the backdrop for subsequent coup attempts. The recent one is likely no exception and many observers worry that its failure paves the way for Erdogan to introduce a constitution increasing his power and moving the country even further away from secularism.

ECA’s Location Ratings system looks at systems of governance, how democratic they are, and whether opposition is allowed or stifled. Given Turkey’s history, its democracy index is somewhat lower than its European neighbours. If the recent coup attempt had been successful, this would have represented an undemocratic transfer of power in exceptional circumstances and we would have reviewed our assessment to decide if an increase to location allowances was recommended. Since the coup failed, however, we feel no review is necessary at this time. 

However, we have already seen further crackdowns on freedom of the press with a significant number of journalists detained. This is not a new phenomenon under Erdogan. Indeed, in last year’s Location Ratings survey the scoring for News and Media increased in Turkey owing to greater restriction on press freedoms and increased internet surveillance. This was significant as our recommended location allowance for Ankara increased for expatriates from Western Europe (our scoring system reflects both the expatriate’s home and host location). There may be indirect consequences of the failed coup on censorship and other aspects of the Location Ratings scoring; if so these should become evident in the coming weeks and months and be reflected in our latest Location Ratings when they are published in November.

We are unlikely to have heard the last from Turkey this year and events there will continue to be felt on a far wider scale. Concerns about potential Turkish accession to the EU was one of the drivers behind Brexit, while the topic of NATO is already playing a part in this year’s US Presidential election. Turkey’s handling of the migrant crisis will likely impact on the immigration referendum Hungary has planned in the Autumn, which has the potential to place more strain on the European Union. One thing is clear - what happens in Turkey will continue to matter, and increasingly so. 

To find out more about how our datatools and advice can help you to determine location allowances, please get in touch.

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