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Could megaprojects spell mega trouble for Turkey's economy?

Giant infrastructure projects launched by the Turkish government have raised the specter of potentially unpredictable burdens on public finances amid little transparency on loan and demand guarantees provided to private contractors.
Newly built Yavuz Sultan Selim bridge, the third bridge over the Bosphorus linking the city's European and Asian sides, is pictured during the opening ceremony in Istanbul, Turkey, August 26, 2016. REUTERS/Murad Sezer - RTX2N6E1

A key element in the image of success the Turkish government is trying to project is the large number of grand construction projects in the country combined with the narrative that Turkey faces challenges by adversaries who are “jealous” of its progress and resurging power. For instance, President Recep Tayyip Erdogan told a crowd of supporters in May, “Why is the West jealous of us? It’s because of the dams. … It’s because of the Yavuz Sultan Selim Bridge [over the Bosporus]. … It’s because of the Marmaray Tunnel and subway running under the Bosporus.”

The largest “megaprojects” — as Ankara calls them — include a giant third airport in Istanbul; the Eurasia Tunnel, an undersea motorway between the European and Asian shores of the Bosporus; and a highway complete with a suspension bridge from the industrial hub of Gebze outside Istanbul to Turkey’s third-largest city, Izmir. Yet the projects have never been free of controversy, criticism and protests over various legal, environmental and financial aspects. Many people worry that the construction drive is creating a “black hole” in public finances.

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