The World Bank Board has announced the approval of a $500 million funding initiative aimed at creating jobs and supporting businesses in areas of Türkiye affected by the February 2023 earthquakes. This initiative targets the structural challenges in the local labor market, which were worsened by the natural disaster.
The Formal Employment Creation 2 Project focuses on supporting Small and Medium Enterprises (SMEs) and aims to facilitate about 17,000 new or improved job opportunities, with over a third tailored for women and youth. Employment generation has been hindered by limited access to financial resources, which the project aims to counter by providing long-term financing to firms in earthquake-affected areas, specifically SMEs. This initiative is expected to enhance conditions for formal employment creation by enabling firms to hire or retain employees more effectively, increase productivity, and boost labor demand.
“The World Bank has been accompanying Türkiye since the day of the earthquakes, sharing our international experience in disaster risk management and reconstruction. This project is a crucial step towards rebuilding local economies and providing much-needed employment opportunities in the formal sector,” stated Humberto Lopez, World Bank Country Director for Türkiye.
The 2023 earthquakes resulted in over 50,000 casualties, displaced more than 3.3 million individuals, and caused significant damage to housing, infrastructure, and local economies across the 18 affected provinces. To further alleviate credit constraints, the project will offer capacity-building support to firms. This support will focus on areas like financial management, environmental and social issues, gender, climate resilience, and market analysis.
This project forms part of a broader World Bank support package for Türkiye's earthquake-affected regions. These efforts aim to strengthen the labor market and promote economic recovery through reconstruction projects, public service provision, and a range of fast-tracked new projects, existing initiatives, and technical assistance.
In addition to these efforts, the World Bank is engaged in other projects in Türkiye, including the Türkiye Earthquake, Floods, and Wildfires Emergency Reconstruction Project, the Climate and Disaster Resilient Cities Project, the Disaster Risk Management in Schools Project, the Seismic Resilience and Energy Efficiency Project, and the Türkiye Preparedness for Public Health Emergencies Project.
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