Initially suspected, only to be later validated by analysts in the US consulate, the Turkish people (generally speaking) can be fairly polarizing in their very own views of Turkey, rarely playing devil’s advocate to many of the underlying weaknesses that lurk underneath its growing economy. In the context of international business, my attempt beneath is to try and flesh out the actual positives and negatives of the market, and its own authentic present and future business potential in Turkey.
While in Istanbul, I met using a young Indian gentleman who’s the epitome of international businessman. Just in his early 30’s, he’s worked in virtually every major city of the entire world, and routinely travels internationally. His most recent semi-permanent stop is a transfer within his solar energy company from Dubai to Istanbul. Although Cairo is marginally larger in size as well as population Istanbul and Cairo were basically equals on the economic global resort area only 15 years ago. Now, Istanbul /Turkey represent one of the greatest economies on the planet, and Cairo has fallen into anarchy that is near and chaos. Has this kind of sudden transformation been potential?
As the self-proclaimed, “Next Ataturk,” Turkey’s Prime Minister/new President, Erdogan carries quite a bit of bravado with him. Love him or loathe him, most cannot deny the economic transformation that has taken place under his leadership. In many ways, Erdogan epitomizes the fascinating juxtaposition and contrast which makes up Turkey. Amazingly critical, steadfast, stubborn, dynamic, controlling, traditional, international-minded yet very nationalistic, and “religiously secular”. Although he has quite a lot of opposition, I believe few would assert that anyone else could have better handled and balanced a Turkish market that basically sits on a day-to-day -saw of economic and geopolitical tremors. The means as to how he has decided to manage and perform this balancing act is certainly a whole other question, and very much a disagreement to get in a different newspaper.
Provided there’s a well-received series strategy when or if Erdogan relinquishes power, Turkey might take an exceedingly good spot for a long time. With an incredibly bright, entrepreneurial, engaged, educated, and dynamic youthful demographic, many Turks are being prepared (many perhaps automatically) to actually bring Turkey onto the global economic and political point. In this case, the rather big gap involving the “professional” economy that I saw within my business meetings and also the “road” economy that I experienced together with the carpet salesman in the Grand Bazaar will eventually narrow. More Turks studying in U.S. universities compared to any EU country means less are being trained for a sales job at the “Turkish Glengarry Glen Ross Academy,” and more are being groomed to be a player within the professional international business world.
Turkey, however, is playing having a bit of fire as it sits right on the fulcrum of this see-saw mentioned previously. On one side, this fire ignites one of the 21st century of the best economic success stories, and makes Turkey a beacon on the hill for all other comparable countries to follow in the region. On the opposite side, high inflation, youth unemployment, zero savings, implicit and explicit oppression, plus a chaotic/unsustainable geopolitical environment could tip this huge population that is youthful into a firestorm that makes the Arab springtime protest in Cairo look like a cake walk. At at the tiniest hint of unrest and instability, foreign cash flow vanishes, and also the scale suggestions instantaneously into dangerous territory. As we witnessed in Cairo, when everything is lost by individuals, and have nothing left to lose, they lose it. In this scenario, 15 years of improvement may be wiped out fairly quickly.
A representative from DEiK mentioned on several occasions that the lack of a monetary sector in the Turkish economy could be seen as a positive because more resources are being used towards infrastructure and property. But while Turkey isn’t to an economic fallout at risk due to these financial instruments, the lack of a fiscal sector means that wealth is not largely distributed. While many of real estate endeavors and the infrastructure are fine and can be appreciated by some regular Turks, very few own the possession of the last 15 years of Turkey’s economic boom. A large proportion of Turks have no equity in any of the many jobs in Istanbul because of the deficiency of a public market structure that allows for broader wealth and ownership allocation. Regrettably, many Turks (especially the big public from the “street” market) consider they have been participating in actual wealth development in the Turkish market, but this really is mostly thanks to the delusion made by credit expansion. The representative acknowledged that the usage of credit cards is high. Mixed with a 30-year low savings rate, we could presume that the Turk that is regular is just not employing actual riches that is personal join the ranks of the few elite Turks and to mingle with /external investors to share in the ownership of the growing asset base in Turkey. History will reveal that while asset prices can drop within an economic downtown, the owners still have management of the assets – the public, however, will soon be left together with the bill and inflation that is potentially disastrous.