Turkey’s doing well

Positive articles such as the one I’ve reproduced below are usually the preserve of the commercial press with an agenda to sell you something, not an eminent economist writing for Project Syndicate…. Turkey must be doing something right!

Jeffrey Sachs article “Why Turkey is Thriving” reproduced in full from Project Syndicate. Fully attributed to Jeffrey Sachs please follow link for original sourcehttp://www.project-syndicate.org/commentary/inside-the-turkish-economic-miracle-by-jeffrey-d–sachs

NEW YORK – A recent visit to Turkey reminded me of its enormous economic successes during the last decade. The economy has grown rapidly, inequality is declining, and innovation is on the rise.

Turkey’s achievements are all the more remarkable when one considers its neighborhood. Its neighbors to the west, Cyprus and Greece, are at the epicenter of the eurozone crisis. To the southeast is war-torn Syria, which has already disgorged almost 400,000 refugees into Turkey. To the east lie Iraq and Iran. And to the northeast lie Armenia and Georgia. If there is a more complicated neighborhood in the world, it would be difficult to find it.

Turkey has made remarkable strides in the midst of regional upheavals. After a sharp downturn in 1999-2001, the economy grew by 5% per year on average from 2002 to 2012. It has remained at peace, despite regional wars. Its banks avoided the boom-bust cycle of the past decade, having learned from the banking collapse in 2000-2001. Inequality has been falling. And the government has won three consecutive general elections, each time with a greater share of the popular vote.

There is nothing flashy about Turkey’s rise, which has been based on fundamentals, rather than bubbles or resource discoveries. Indeed, Turkey lacks its neighbors’ oil and gas resources, but it compensates for this with the competitiveness of its industry and services. Tourism alone attracted more than 36 million visitors in 2012, making Turkey one of the world’s top destinations.

Even a short stay in Ankara allows one to see these underlying strengths. The airport, highways, and other infrastructure are first class, and a high-speed intercity rail network links Ankara with other parts of the country. Much of the advanced engineering is homegrown. Turkish construction firms are internationally competitive and increasingly win bids throughout the Middle East and Africa.

Turkey’s universities are rising as well. Ankara has become a hub of higher education, attracting students from Africa and Asia. Many top programs are in English, ensuring that Turkey will attract an increasing number of international students. And the country’s universities are increasingly spinning off high-tech companies in avionics, information technology, and advanced electronics, among other areas.

To its credit, Turkey has begun to invest heavily in sustainable technologies. The country is rich in wind, geothermal, and other renewable energy, and will most likely become a global exporter of advanced green innovations.

Waste-treatment facilities are not typically tourist attractions, but Ankara’s novel integrated urban waste-management system has rightly attracted global attention. Until a few years ago, the waste was dumped into a fetid, stinking, noxious landfill. Now, with cutting-edge technology, the landfill has been turned into a green zone.

The private waste-management company ITC receives thousands of tons of solid municipal waste each day. The waste is separated into recyclable materials (plastics, metals) and organic waste. The organic waste is processed in a fermentation plant, producing compost and methane, which is used to produce electricity in a 25-megawatt power plant. The electricity is returned to the city’s power grid, while the heat exhaust is piped to the facility’s greenhouses, which produce tomatoes, strawberries, and orchids.

Turkey’s diversified, innovative base of industry, construction, and services serves it well in a world in which market opportunities are shifting from the United States and Western Europe to Africa, Eastern Europe, the Middle East, and Asia. Turkey has been deft in seizing these new opportunities, with exports increasingly headed south and east to the emerging economies, rather than west to high-income markets. This trend will continue, as Africa and Asia become robust markets for Turkey’s construction firms, information technology, and green innovations.

So, how did Turkey do it? Most important, Prime Minister Recep Tayyip Erdoğan and his economics team, led by Deputy Prime Minister Ali Babacan, have stuck to basics and looked to the long term. Erdoğan came to power in 2003, after years of short-term instability and banking crises. The International Monetary Fund had been called in for an emergency rescue. Step by step, the Erdoğan-Babacan strategy was to rebuild the banking sector, get the budget under control, and invest heavily and consistently where it counts: infrastructure, education, health, and technology.

Smart diplomacy has also helped. Turkey has remained a staunchly moderate voice in a region of extremes. It has kept an open door and balanced diplomacy (to the extent possible) with the major powers in its neighborhood. This has helped Turkey not only to maintain its own internal balance, but also to win markets and keep friends without the heavy baggage and risks of divisive geopolitics.

No doubt, Turkey’s ability to continue on a rapid growth trajectory remains uncertain. Any combination of crises – the eurozone, Syria, Iraq, Iran, or world oil prices – could create instability. Another global financial crisis could disrupt short-term capital inflows. A dangerous neighborhood means inescapable risks, though Turkey has demonstrated a remarkable capacity during the last decade to surmount them.

Moreover, the challenge of raising educational quality and attainment, especially of girls and women, remains a priority. Fortunately, the government has clearly acknowledged the education challenge and is pursuing it through school reforms, increased investments, and the introduction of new information technologies in the classroom.

Turkey’s successes have deep roots in governmental capacity and its people’s skills, reflecting decades of investment and centuries of history dating back to Ottoman times. Other countries cannot simply copy these achievements; but they can still learn the main lesson that is too often forgotten in a world of “stimulus,” bubbles, and short-term thinking. Long-term growth stems from prudent monetary and fiscal policies, the political will to regulate banks, and a combination of bold public and private investments in infrastructure, skills, and cutting-edge technologies.

An Istanbul Resident

The new law offering instant 12 month residency to foreign owners who purchase property in Turkey in my view is nothing short of a game changer for property ownership in Istanbul. I’m surprised the International press haven’t made more of it. No more will foreign owners have to leave the country for 3 months when their tourist visa runs out!

Notaries - just one big fun day out

Notaries – just one big fun day out 

Combined both with the reciprocal foreigners right to buy and the lifting of the non-Turk ownership ban in municipalities such as Beyoglu the property market in Istanbul has gone in 3 short years from being a difficult closed shop for foreign buyers to a free for all liberated open market.

Where not too long ago when buying your city bolt hole you had to virtually set up camp in a Notary, have a costly “bureaucracy heavy” corporation with limited tourist visa access, now it couldn’t be more different… Very soon, you’ll be able to rock up and buy very simply and cheaply in your own name and have a 12 month resident permit thrown in, which from what we understand can legally be renewed on a rolling yearly basis. Please see this article scripted by the lawyer Berk Cektir for more summarized details. http://www.todayszaman.com/columnist-313308-residence-permit-for-property-owners-in-turkey.html

Evidence - New homeowners with 12 month residency

Evidence – New homeowners with 12 month residency

It will be a few months before Law no 6458 on Foreigners and International Protection becomes operational but when it does it’ll be a godsend for foreign property owners in Istanbul. Finally Istanbul foreign property owners can make the most of their new pad.


The Neighbourhood Watch – Taksim

Taksim has always been a mixed bag in terms of real estate, attractiveness and the kinds of properties that can be found there.

Demiroren Mall for buying stuff

Demiroren Mall for buying stuff

As anyone who has been there can attest, it is one of the busiest and most vibrant places in the world. When most people think of Taksim, they think of it as starting at Taksim Square and running down the whole length of Istiklal, including a myriad of streets that run parallel and off Istiklal Caddesi. Istiklal has always been the great commercial retail district and in recent years it has consolidated its position as the king of real estate in Istanbul, with commercial properties reaching astronomical levels, on par with the most expensive streets world wide. There have been several large scale renovations that have given the street a facelift, namely the Demiroren Shopping Mall and currently the Emek Cinema building.

But perhaps the biggest story has been what is happening on the side streets. Once home to legions of seedy bars and unspectacular restaurants and entertainment venues of dubious quality, these areas are being transformed as small to mid-size hotels are opening up every month. With that, of course, are shops and restaurants that cater to the tourists. There are also small residential pockets that are becoming more desirable as slowly the thumping budget discos get replaced with far tamer entertainment pursuits.

Emek Cinema redevelopment next door

Emek Cinema redevelopment next door

The renovation of several large “Han” buildings that sometimes are as big as a whole block, has accelerated the new feel of these areas and made them more desirable as places to live. It’s still pretty chaotic and hedonistic, and not to everyone’s taste, but certainly the younger crowd view these as being viable domestic set ups.

There are also some upcoming high end residential projects where there will be courtyards and gardens in an attempt to lessen the effect of being surrounded by throngs of people and buildings. Most probably, foreigners who spend only part of the year here will be the target for these, although wealthy Turks are fond of having a pied de terre in Taksim, particularly as the gallery and café scene goes more upmarket.

Directly to the north of Taksim above the Hyatt Istanbul hotel are the Taksim Residences apartment complex. These were built a few years back and quickly snapped up by the very wealthy with prices reaching 10000 euro per sqm. Some owners are letting these but don’t expect to pay less than 5000 euro per month for 2/3 bedroom apartment.

great view

Gumussuyu with a great view

Directly to the East of Taksim Square banking down towards the Bosphorous is Gumussuyu, this neighbourhood is great for its transport connections, centrality, relatively cheap, and only a 5-10 min walk to cool Cihangir cafes. Take a look at this, a great apartment for rent in Gumussuyu with a pretty damn good Bosphorous view - http://www.lilimont-istanbul-realestate.com/for-rent/residential-apartment-gumusuyu/

To the East of Taksim Square is Talimhane, an area that has been transformed over the past 10 years into new offices, shops, hotels and now with very swanky high rise residential developments such as the Elysium Residences.


Don’t forget that the Tarlabasi 360 project is no more than a good stones throw from the square and could, rightly, be seen as connected, where the Beyoglu mayor has confidently predicted that Tarlabasi Blvd leading up to Taksim will be on a par with the Champs Elysee! … well I suppose you never know, however, lets not wish for that chaotic mess of a fairground ride circling the Arc de Triomphe.

In terms of buying prices, the side streets of Taksim hover around the 2000 euro per sqm. Rents tend to be competitive, so you may be able to pick up a one bedroom for 700-800 euro still. As with anywhere in central Istanbul a Bosphorous view can easily double the average. It is very hard to speak of pricing on Istiklal, as it is not a very transparent market, and you just have to collect scraps of data. Rumour has it that Hard Rock Café is paying $50 K  per month for a 5 story building that has 80 sqm per floor. We have dealt with a couple of street level property retail lets on Istiklal and if you’re interested then be aware you’ll have difficulty getting anything below 100 euro per sqm per month.


Diggers and holes

Diggers and holes

To round off this pretty fast-paced change is the continuance of the massive Taksim Square project, where the disorienting square will become much more user and pedestrian friendly, with much of the traffic being re-routed underground. The rebuilding of the old Militatry Barracks in the centre of the square is an interesting idea, harking back to a Ataturk age portraying strength with a very 21 Century retail and commercial twist. Please take a look at this video link for more detailed info regarding the Taksim Square project – http://www.akparti.org.tr/english/video/11306/taksim-square-project

Underground roads - how very modern!

Underground roads – how very modern!


Taksim will be forever changed entering a new prosperous era for Turkey, acting as a political and economic gateway showcase to the country, I doubt such a large scale state project would have occurred in an equally or more deserving area that tourists and travellers rarely see.

Please take a look at what we have on offer around Taksim -