IAIN MARLOW – The Globe and Mail<\/p>\n
Agronart Corp.\u2019s Alper Kilic has just sent a container load of canary seed from Montreal to the bustling port of Istanbul. Landing at almost the same time as the cargo ship will be his business partner, en route to a client meeting in Iran via his company\u2019s Istanbul office.<\/p>\n
The Mideast is one of many regional markets that the Oakville, Ont.-based grain exporter can access from Turkey\u2019s historic city.<\/p>\n
\u201cThat is why Istanbul is so good, you can reach everywhere from Istanbul,\u201d gushes Mr. Kilic. \u201cIstanbul is becoming a kind of hub for the region.\u201d<\/p>\n
Mr. Kilic\u2019s big agribusiness rivals have already set up operations in Istanbul, from Cargill to Louis Dreyfus Commodities.<\/p>\n
But companies in sectors other than the traditional ones of commodities, energy and mining \u2013 including Microsoft and Coca-Cola \u2013 have also opened offices in Istanbul in recent years. The rush to this traditional crossroads of Europe and Asia will only increase as Turkey invests heavily to transform this cosmopolitan city into a growing global centre for commerce and finance.<\/p>\n
Multinational giants are turning to Istanbul because they need a stable, well-positioned pivot point from which to access emerging markets in the region \u2013 from Iraq and Iran to the Balkans \u2013 without the political headaches and strife- ridden urban landscapes of some other strategically placed cities in the region.<\/p>\n
Indeed, since Turkey\u2019s debilitating financial collapse in the early 2000s, the country has undergone an incredible renaissance, with Istanbul at its centre.<\/p>\n
A decade of majority governments helmed by reform-minded politicians has reduced unemployment, while maintaining a secular, business-friendly society that has attracted global businesses while allowing domestic companies to thrive. There has also been a concerted effort to turn Istanbul into a financial hub: The national government in the capital, Ankara, has made an astounding effort to move not only the central bank\u2019s main office, but the headquarters of other state-owned banks, the 350 kilometres northwest to Istanbul.<\/p>\n
Those economic initiatives have paid off: Turkey\u2019s real GDP has grown at an average pace of 4.8 per cent over the past eight years; further, it\u2019s forecast to lead the Organization for Economic Co-operation and Development member states with an average annual GDP growth of 6.7 per cent until 2017.<\/p>\n
\u201cAll of this is elevating the importance of Istanbul in international circles,\u201d says Burak Aktas, the co-ordinator for Export Development Canada\u2019s new trade office in Istanbul. \u201cIt\u2019s at the crossroads of almost everything \u2013 the Black Sea, Europe, Asia, Russia in the north, the Balkans. Geopolitically, it is a very important city.\u201d<\/p>\n
It doesn\u2019t hurt, of course, that Istanbul is also an incredible place to live \u2013 nestled along the wide-flowing Bosporus, it boasts world-famous cuisine, fashion, film festivals and a growing number of international economic and cultural meetings and conferences.<\/p>\n
\u201cIf you want to do business in Afghanistan and\/or Iraq, you can have your headquarters in Istanbul and travel back and forth,\u201d says Omur Sezerman, president and CEO of Oz Optics, a fibre optics manufacturer based in Ottawa that has a sales office in Istanbul and a factory in Izmir. \u201cYou\u2019re living in a city with thousands of years of history with all the modern things.\u201d<\/p>\n
There are lingering concerns about how the country deals with its minority Kurdish population, with some pro-Kurdish politicians banned in the lead-up to June elections, but observers doubt the elections will change Turkey\u2019s economic course. And there has been none of the dramatic unrest seen in countries such as Libya.<\/p>\n
Compared to other cities in the region \u2013 particularly Dubai, which is vying with Hong Kong to be Asia\u2019s financial capital \u2013 many business people speak of Istanbul not only as a place they have to be, in order to tap Turkey\u2019s well-trained work force and growing domestic market, but a place they want to be, given the city\u2019s long history and vibrant culture.<\/p>\n
\u201cDubai is not a real city. Istanbul is a real city \u2013 it has history, culture, people. It has everything that Dubai doesn\u2019t, except maybe tall buildings,\u201d says Henri Barkey, a visiting scholar at the Carnegie Endowment for International Peace who has written and edited several books on Turkey, and used to work on Middle East policy at the U.S. State Department. \u201cBarring any political crisis [involving the country\u2019s Kurdish population], I\u2019d say the trajectory is for Istanbul to assume a larger and larger role in global business.\u201d<\/p>\n
Mr. Kilic, the president of Agronart, is also pro-Istanbul. \u201cAnkara is just a city for contractors and governmental business. I lived there \u2026 it\u2019s a boring capital.\u201d<\/p>\n
But even if Ankara\u2019s institutions and politicians are less interesting \u2013 or less adventurous \u2013 than those in financial centres such as New York and London, they has served the country extremely well. Like Canada, Turkey has emerged from the devastation of the global financial crisis with nary a bank failure.<\/p>\n
Indeed, even as countries around it \u2013 such as Greece \u2013 collapse in financial ruin, Turkey is gearing up for more growth. Recently, the Brookings Institution and the London School of Economics Cities Programme placed Istanbul at the No. 1 spot in its survey of 150 metropolitan economies \u201cin the wake of the great recession.\u201d Throughout 2009 and 2010, the report notes, Istanbul\u2019s employment grew by 7 per cent, even as employment dipped 7 per cent in more-renowned financial and commerce hubs such as Shanghai and Guangzhou, and fell 8 per cent in Dubai.<\/p>\n
Using solid and stable economic growth as a springboard, Turkey\u2019s politicians have re-imagined the country\u2019s role in the region, asserting itself as a natural ally of countries on both sides of the Bosporus. Instead of blindly chasing membership in the euro zone, Turkey has solidified relationships with other nations in the region, inserting itself between Israel and Iran and attempting to win friends \u2013 and contracts for its companies \u2013 in high places.<\/p>\n
\u201cThe leadership, plus the personalities of both Prime Minister Recep Tayyip Erdogan and the President, Abdullah Gul, are also part of the drivers of Turkish ascendancy in international relations,\u201d says Ron Denom, president of SNC-Lavalin International, an arm of the global engineering and construction giant based in Montreal.<\/p>\n
\u201cAnd that\u2019s another good reason to be there, because obviously if you are working with Turkish companies and those companies are making headway into Iraq [and] countries like that there is the opportunity to take advantage of that, to go along with them, working with these markets.\u201d<\/p>\n
______<\/p>\n
IN QUOTES<\/p>\n
\u201cIt\u2019s partly the physical setting and partly the atmospherics, but you can watch the world\u2019s shipping go by up the Bosphorus. If i had to pick three or four spots in the world that have a true \u2013 magic is the wrong word \u2013 attraction to them, sitting in a fish restaurant on the edge of the Bosphorus is a great place to sit, and to contemplate the future of civilization.\u201d<\/p>\n
Ron Denom, president of SNC-Lavalin International<\/p>\n
—<\/p>\n
\u201cTurkish Airlines is going to all sorts of places most Turks have never heard of, and this is part of a very concerted plan to turn Istanbul into a hub… There was turmoil in the adjacent regions even before the Arab spring… (but Istanbul is) a real city. It\u2019s beautiful, it has history, it has culture. It\u2019s also a huge city. They\u2019ve done a lot in terms of infrastructure. Traffic is still a problem, but that\u2019s a problem anywhere.\u201d<\/p>\n
Henri Barkey, visiting scholar with the Carnegie Endowment for International Peace<\/p>\n
—<\/p>\n
\u201cGeneral Electric, IBM, Microsoft, Coca Cola, Unilever, Proctor and Gamble \u2013 all these big international companies are locating their regional headquarters in Istanbul. It\u2019s the same time zone as Eastern Europe. There\u2019s a great work force, a western educated work force is strong. It\u2019s a secular country, there\u2019s an ease of doing business. But there\u2019s also many other aspects \u2013 there\u2019s other things, like film, arts, fashion week, museums.\u201d<\/p>\n
Baruk Aktas, Export Development Canada\u2019s Istanbul office<\/p>\n
______<\/p>\n
TURKEY FAST FACTS<\/p>\n
Population: 78.7 million<\/p>\n
Population of Istanbul: 10.4 million<\/p>\n
GDP real growth rate in 2010: 7.3 per cent<\/p>\n
Unemployment rate: 12.4 per cent<\/p>\n
Exports in 2010: $117.4-billion (U.S.)<\/p>\n
Median age: 28<\/p>\n
Size of labour force: 24.7 million<\/p>\n
Economy<\/p>\n
Average annual real GDP growth rate for the past eight years: 4.8 per cent<\/p>\n
16th-largest economy in the world in 2010.<\/p>\n
Work force<\/p>\n
4th-largest labour force when compared to EU member states.<\/p>\n
Longest working hours, lowest sick-day leaves per-employee when compared to Europe (53.2 hours worked per week and annual average of 4.6 sick days per employee).<\/p>\n
Domestic market<\/p>\n
35 million Internet users in 2010, up from 4 million in 2002.<\/p>\n
62 million GSM cellphone users in 2010, up from 23 million in 2002.<\/p>\n
46 million credit card users in 2010, up from 16 million in 2002.<\/p>\n
Over 102 million airline passengers in 2010, up from 33 million in 2002.<\/p>\n
28.5 million international tourist arrivals in 2010, up from 13 million in 2002.<\/p>\n
Taxes and incentives<\/p>\n
Corporate income tax: Reduced from 30 per cent to 20 per cent.<\/p>\n
Individual income tax: Between 15 per cent to 35 per cent.<\/p>\n
There are a variety of free trade zones across the country, including in Izmir.<\/p>\n
There are a variety of regulations passed to increased R&D spending and investment by both region and sector.<\/p>\n
Iain Marlow
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