Prof. Yilmaz: Turkey’s Marmara earthquake cost could reach 300 billion dollars, some 30 percent of GDP

The Earthquake Reality: Economic and Structural Lessons from Kahramanmaraş and the Urgency of Preparing Istanbul

Seventy percent of Turkey’s population lives in earthquake-prone zones. The 1999 Gölcük earthquake was a turning point, with nearly 20,000 people losing their lives and approximately 50,000 injured. Yet in the years that followed, the public and political will to address earthquake preparedness gradually faded.

That complacency was shattered again on February 6, 2023, when devastating earthquakes centered in Kahramanmaraş caused unprecedented destruction in the centenary year of the Republic. Nearly 50,000 lives were lost, and the disaster served as a grim reminder of Turkey’s ever-present seismic risks.

Economic Impact of the Kahramanmaraş Earthquakes

From the first day of the disaster, I closely followed the damage assessment work. On March 16, 2023, I published a research report through BETAM (Bahçeşehir Center for Economic and Social Research) calculating the total economic cost of the earthquakes at $104.8 billion. A day later, the Presidential Strategy and Budget Department (CSBD) released a similar estimate of $103.5 billion—underscoring the gravity and reliability of these assessments.

The breakdown of this cost reveals the multifaceted economic toll:

• $85.5 billion in damage to capital stock: destroyed buildings, infrastructure, goods, and vehicles.
• $19.3 billion in lost national income due to disruption in production.

According to data shared by the Ministry of Environment, Urbanization and Climate Change (MoEUCC) in March 2023, 1.7 million buildings and 5 million independent units were inspected in the region. Among them, nearly 300,000 buildings were categorized as collapsed, emergency-demolition, or heavily damaged. As a result, approximately 685,000 new housing units are now needed—an enormous reconstruction effort.

In terms of responsibility, $82.3 billion of the cost is expected to be borne by the state, mainly due to rebuilding efforts. The Medium-Term Program (2023–2026) projects 2.77 trillion liras in earthquake-related spending, equivalent to $81.6 billion when converted using official exchange rate estimates.

Turkey’s Real Estate-Driven Wealth Accumulation Model

This disaster also reveals deeper structural problems in Turkey’s urban and economic planning. In Turkey, 74% of national wealth is held in real estate, compared to 46% globally. Real estate, not innovation or industry, is the primary source of wealth accumulation.

Between 2002 and 2021, land suitable for agriculture shrank from 30.6% to 25.4%, a loss of 4.1 million hectares. Much of this land was converted into residential or commercial real estate.

Annual building permit data supports this trend:

• 1991–2003 average: 70–80 million m² of permits.
• 2005–2010 average: over 100 million m².
• 2017 peak: 290 million m².
• Despite a dip in 2018, 150 million m² are still issued annually.

This real estate expansion is not just an economic issue—it’s a seismic risk. Zoning preferences prioritize vertical development. Politicians who permit 10-story buildings are rewarded, while those who allow only 4 stories are often voted out. This mindset, unfortunately, “builds our own graves.”

The Istanbul Earthquake: An Inevitable Catastrophe

Nowhere is the risk greater than Istanbul, a city sitting directly on a major fault line.

• Population density in the Kahramanmaraş earthquake zone: 140/km²
• Population density in Istanbul: 3,060/km²
• Average building height in Kahramanmaraş: 4 floors
• Average in Istanbul: 6.9 floors

The structural and human density alone implies that a potential earthquake in Istanbul could be far more devastating than what occurred in Kahramanmaraş.

From an economic perspective, the implications are dire:

If an earthquake were to hit the Marmara region, which includes Istanbul and its surrounding economic hubs, the national economy could face a shockwave of disruption due to forward and backward supply chain linkages. The loss of production in this region would reverberate throughout the country.

Estimated Economic Cost of a Possible Marmara Earthquake

Based on conservative modeling using official risk data:

• 1.5 million of 6 million houses in Istanbul are at risk
  (600,000 considered “very risky”)
• Estimated cost of rebuilding one 100m² house: $85,000
• Estimated retrofitting of moderately/slightly damaged homes: 1/5 to 1/25 of full cost
• Business unit losses: estimated as 1/5 of residential losses

Total Estimated Cost (Istanbul Only)

🏠 Structural & infrastructure damage: $190 billion
💼 Production, tourism, rescue & debris costs: $50 billion
📉 Total (Istanbul): $240 billion

When other Marmara region provinces are included, the total could reach $300 billion—roughly 30% of Turkey’s national income.

Unlike the Kahramanmaraş earthquake, Turkey cannot absorb such a loss without severe economic consequences.

What Needs to Be Done — Urgently

Time is of the essence. With an investment that is only a fraction of the projected damage, Turkey can undertake a massive urban transformation program to retrofit or rebuild risky structures over the next five years—without a single injury.

This requires:

• Unified effort between central and local governments
• Transparent prioritization of scientific urban planning
• A shift away from short-term real estate gains toward long-term public safety

Final Word

The Kahramanmaraş earthquake was a tragedy that shook the nation. The Istanbul earthquake, however, could be a catastrophe that changes the course of the country. But it doesn’t have to be. With political will, scientific planning, and public pressure, we can prevent the next tragedy—before it’s too late.

*Prof. Kamil Yilmaz / Translated from T24 Column