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Business
Business Profile
Although Ankara is the official capital, Istanbul has always been the centre of the country’s economic life, due to its location at an international junction of land and sea trading routes. As a result, 36% of Turkey’s total exports and 40% of total imports are transported via Istanbul and nearly half the nation’s wealth is located in the metropolis. Land values have skyrocketed in recent years and coupled with high inflation, nearly 40% of the city’s wealth goes to rentiers, largely untaxed, and the growth of shanty towns is unchecked – one of the causes of the high death toll in the 1999 earthquake. Rural migrants, however, continue to stream into the city, for very good reasons, even though the risk of unemployment is currently higher than ever. The unemployment rate in the city currently stands at 10%, which is nevertheless much lower than the national rate of 14%.
Istanbul is by far Turkey’s industrial leader, holding a quarter of industrial jobs and nearly half the country’s medium- to large-scale workshops (those with 25 employees or more). Half of the top 500 industrial enterprises in Turkey also have their factories and business centres in Istanbul and so it has attracted the highest percentage of qualified workers in the country.
Food processing, textile production, oil products, rubber, metal ware, leather, chemicals, electronics, glass, machinery, automobiles, paper and paper products, tobacco and alcoholic drinks are among the major industrial products. Along with industry, the insurance and banking companies and major corporations in the city steer the nation’s economic life. Corruption scandals related to private banks have resulted in new laws, which allow some international arbitration.
The overall financial cost of the August 1999 earthquake is estimated at over US$10bn, a crippling blow to an economy that was already struggling and has since deteriorated. But production is up, despite the recession, and larger companies have been weathering the storms. The largest company in Turkey, in terms of value, is mobile telephone giant Turkcell, which was the first Turkish company to be listed on the New York Stock Exchange and has nearly 14 million subscribers, as well as a roaming capacity covering 111 countries. Its capital value began at US$18 billion and despite massive losses in the last few years, Turkcell is still considered a thriving concern.
Other major companies have built their gleaming office towers along the road from Mecidiyeköy through the suburbs of Levent and Maslak – home to the Istanbul Stock Exchange (IMKB), news channel NTV, Goodyear, Bosch and more. The major media groups (including Hurriyet, Milliyet, Sabah and Ihlas) have moved to high-tech complexes at the edge of town, in Ikitelli. As business tends to centre on major transport routes, the ring road or TEM, the Trans European Motorway, serves as the magnet for growth on the Asian side, running across the new Fatih Sultan Mehmet Bridge over the Bosphorus. Many foreign businesses have their main offices on this side, including Henkel and Ford Motor.
The main draw for foreign business is a high disposable income for the small portion of the city’s population that have most of it and a culture that thrives on conspicuous consumption. Evidence of this is more and more apparent – the Bosphorus has been earmarked for luxury villa projects and huge commercial and shopping centres are springing up. Construction standards have risen since the 1999 earthquake and with new satellite cities touting total safety springing up and many buildings (even those in luxury areas) being rebuilt, the construction industry is faring reasonably. But Turkey’s shadow economy remains constant and is expected to worsen, as unemployment rates continue to grow at alarming rates, especially in urban areas and among educated young people. Between 2001 and 2002 Turkish unemployment in the non-agricultural sector leapt to 14% and is currently hovering at around 10% in the metropolis. Registered tax payers at the lowest end of the scale carry the can for the vast numbers of unregistered earners and corruption remains Istanbul’s primary obstacle to economic democracy.
Business Etiquette
It is customary for business visitors to address new acquaintances by their first names followed by ‘Bey’ (sir) or ‘Hanim’ (lady). Ottoman society was extremely hierarchical and this system still remains entrenched in Turkish business practice, however, hosts (many of them women) may appear modern. The boss will invariably have a vast, luxurious office in which to entertain, while employees just outside the door are squashed into cramped spaces and have virtually no authority delegated to them. Secretaries are rarely empowered to take important messages or even know the boss’s schedule, so when telephoning, it is usual for callers to be told to ring back ‘one hour later’ or fax your queries. Once the appropriate contacts have been made, however, business visitors may be treated to a personal touch almost as surprising.
Business meetings could be formal or take place over dinner, although in all instances, punctuality is expected. Relations between business equals can be lavishly generous and although one is expected to make at least a gesture of resisting, the boss will almost always insist on taking visitors to the most expensive places in town and footing the entire bill. Turkish people do, however, adore having their photos taken with visiting dignitaries, even more so if it appears in print somewhere, so visitors should bring a camera. When visiting people’s homes, flowers or sweets are more appropriate than alcohol, as the host might not drink. If they do drink, however, good whisky is a sure-fire hit.
Business dress is the same as in Europe or North America, although women are advised to wear business suits with skirts below the knee. Visiting businesswomen will usually be treated with the same respect as male colleagues. However, women should resist any after-dinner invitations to accompany the men to a revue bar or belly-dancing club. These are basically upmarket brothels and a woman’s company will be resented, no matter how much she may be pressed to join in.
Business hours are technically 0900-1700, Monday to Friday, although most employees are still expected to put in a ten-hour working day.
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