Turkish firms rushing to Iran

Turkey is looking to capture the  first mover advantage in business opportunities in Iran. Although Iran is still formally under sanctions levied by US in response to Iran's refusal to abandon its nuclear ambitions.

However, in November 2013, major world powers and leader in Tehran agreed to a deal that lead to reduction in sanctions in return of curtailing controversial aspects of Iranian nuclear program. It is widely believed that this is a positive step that will eventually lead to removal of all sanctions in US.

Iran has tremendous natural resources like oil and being a first mover would allow Turkish corporations to make major inroads before other multinational corporations.

However, it needs to be pointed out that US is strictly against companies doing business in Iran in the current scenario. Despite US warnings, Turkey hopes that 2014 will see bilateral growth reaching $30 billion dollars annually.

Read more at : Turkish firms rushing to Iran to grab slice of post-sanction opportunities

Turkish lira's dive wrecks balance sheets, deters foreign investment

Turkish currency lira fell sharply impacting corporations with foreign debt sending them scrambling for suitable investments. Here we look at the impact on such Turkish corporations.

Turkish Lira

Key facts:

* Lira has lost 16 pct against dollar since scandal broke

* Firms face rising cost of foreign currency debt

* Some foreign firms rethinking investment in Turkey

* Doubts over political climate, monetary policy course

Major Turkish business group TUSAID estimates that its borrowing costs have risen 25-30% within a short span of 1 month causing major concerns.

"We based our 2014 budget on a dollar exchange rate of 2.14 lira. Now everything is ruined," Tuncay Ozilhan, chairman of Anadolu Group, told Reuters at a TUSIAD conference.

In contrasts this is good news for the exporters since the currency decline made their exports cheaper in global markets. 

Read more at: Turkish lira's dive wrecks balance sheets, deters foreign investment

Turkey currency fluctuations

Turkish currency(Lira) has fluctuated greatly in value in the past 3 months. In this article we will try to examine the trends, response of Turkish government, possible reasons and impact of this change on Turkish people and businesses.

Turkish Lira

Trend

The chart below generated from http://www.finance.yahoo.com shows how lira has held its value in the last 3 months as compared to US dollar. We see a sharp decline in the value of lira in Mid Dec 2013 to end of Jan 2014. We also see that lira has appreciated in value since its low point on Jan 27 2014.

Turkish Lira exchange rate to USD for last 3 months

Reason

One of the major reasons cited for the fall of lira is the announcement of tapering by US treasury. This underscores the impact of US treasury on a global level.Fearing a rapid tightening of U.S. monetary policy and a flagging world economic recovery, investors pull back currently from Turkey and other emerging markets. In addition, in Turkey even that became known in December corruption investigations against government employees who bring the acting since the age of eleven Prime Minister Recep Tayyip Erdogan discredit and undermine the confidence of investors. 

Response from Turkish government

Turkey Central bank convened an emergency meeting to hash out a response to the crash of its currency. In  response it raised its interest rate by a steep 500 basis points despite opposition from government. Since the initial rate hike , Turkish central bank has raised rates further in an attempt to calm the currency fluctuations.

Impact

Industry experts believe the steep interest rate hike will lead to tightening of money availability and in turn hit growth and stoke inflation in Turkey.

People  

After the initial crash which caused households to hoard dollars fearing further devaluing of Lira, steps taken by cental government have assuaged fears of further fall. Speculators are on a buying spree expecting a recovery in the value of lira on a short term basis.

Business 

As expected, the fall in the value of currency had significant impact on balance sheets of some of the major Turkish corporations. This also dented profits of foreign firms that have operations in Turkey. Overall, exporters will see a positive impact on a short term basis as their products will be cheaper in the global market. However, importers will be hit as they will have to shell out a higher amount for their imports.

Turkey News Channel Sports

If you are traveling to Turkey you must be ready to talk football. No, not the NFL and the Super Bowl Champion Seattle Seahawks but what the rest of the world considers football and what Americans call soccer. Football is the most popular sport in Turkey. Since the turn of the century the Turkish national team has experienced some success on the international scene including a third place finish in the 2002 FIFA World Cup followed by an appearance in the semi-finals UEFA Euro competition in ‘08.

(Left: Tayyip Erdogan, Right: Aziz Yildirim)

A huge story dominating the sports scene in Turkey right now and over the last couple of years is match-fixing in Turkey's top football league. At the center of the controversy is Istanbul based Fenerbahce – the Dallas Cowboys of Turkey football. Fenerbahce chairman Aziz Yildirim was convicted in 2012 of fixing matches and organizing a criminal gang to facilitate the match-fixing. Yildirim was sentenced to over 6 years in prison but insists he was framed – a claim that is supported by Turkey's Prime Minister Tayyip Erdogan. Yildirim insists a parallel state, specifically 'cemaat,' is behind these accusations. Fenerbahce has been banned from European matches by UEFA along with their rival Besiktas. Last month, Yildirm received another damning blow as Supreme Court of Appeals upheld his conviction for match-fixing. On February 16, Yildirm, out-on-bail pending appeal, went to the streets along with thousands of fans to protest the court’s decision.  Yildirm will have to return to prison if his final appeal is rejected.

Read more:
Fenerbahçe fans march for 'justice' in İstanbul
Fenerbahce boss links soccer match-fixing case to Turkey corruption probe

(Asli Cakir Alptekin, AP Photo/Matt Slocum)

Not only are the Turks dealing with issues on the football pitch but also another form of corruption is effecting their Olympians. This past August thirty-one Turkish athletes were suspended for using performance enhancing drugs - including 2012 Olympic champion in the 1500 meter Asli Cakir Alptekin and 2004 hammer throw silver medalist Esref Apak. In December, Turkey repealed the suspension of Alptekin but the IAAF once again reinforced the lifetime ban. This was the second offense by Alptekin.These suspensions expose the ramped use of PEDs in Turkish athletics and is the primary reason many believe Istanbul lost the bid for the 2020 Olympics to Japan. This doping scandal was the primary reason Turkish Athletics Federation chairman Mehmet Terzi stepped down after nine years in office.  On the bright side, FIFA found no football players guilty of doping after retesting over 600 samples.
Read more:
31 Turkish athletes suspended for doping
IAAF appeals Turkey decision to clear Alptekin

Although the Turks are more prevalent and competitive in the Summer Olympic Games - Turkey sent 6 competitors to Sochi for this year’s winter games. 

2014 Turkey Olympians

Alper UCAR

Figure Skating - Ice Dance Short Dance (Finished: 22nd)

Alisa AGAFONOVA

Figure Skating 

 Ice Dance Short Dance (Finished: 22nd)

Emre SIMSEK

Alpine Skiing 

 Men's Giant Slalom Run 1 (Finished: 76)

Kelime CETINKAYA

Cross-Country

Ladies' Skiathlon 7.5 km Classic + 7.5 km Free (Finished: 61)

Ladies' Sprint Free Qualification (Finished: 67)

Ladies' 10km Classic (Finished: 56)

Sabahattin OGLAGO

Cross-Country

Men's Sprint Free Qualification (Finished: 75)

Men's 15km Classic (Finished: 71)

Tugba KOCAAGA

Alpine Skiing

Women's Giant Slalom Run 1 (Finished: 70)

Women's Giant Slalom Run 2 (Finished: 59)

Turkey’s first ever duo, Alisa Agafonova and Alper Uçar, competed in Figure Skating Ice Dance this year. The only prior competitor in figure skating came in 2006 and 2010 as Tugba Karademir represented Turkey.

Despite only sending 6 competitors, Turkey is making advancements to become a bigger player in future winter games and look to be a force after constructing facilities leading up to Istanbul’s hosting of the 2011 Winter Universiade. These facilities include ice rinks, dedicated ski slopes, a biathlon venue and a ski jumping hill. This foundation will eventually lead to better and more prepared Turkish athletes competing on the international scene. It won’t happen overnight but soon Turkey will be able to compete on a high level in the Winter Olympics.

Read more:
Turkey lags behind sporting giants in Winter Olympic squads

Turkey to compete in couples’ figure skating for first time at Sochi Olympics

Winter Universiade - Sochi delegation the legacy of Turkish Universiade

Turkish pragmatism at Sochi Olympics

(Emrah Gurel/Associated Press)

Turkey did come up big in the Winter Olympics and possibly saved the entire winter games. Turkey thwarted a hijacking attempt by an inebriated Ukrainian man during the opening ceremonies.  The man attempted to enter the cockpit claiming he had a detonator to explosives in his hand and demanded the plane head to Sochi. These threats weren't taken lightly as there were heightened security concerns surrounding the games. Turkey was able to squash this threat easily without anyone being hurt and the opening ceremony went on without a glitch. There might not be many Turks at this year’s Winter Games but the country made a key save.

Read more:

Turkish F-16s scrambled for'drunken' Sochi hijack attempt

Quick Hits

-Current Turkish side Sivasspor coach and FIFA Cup Dream Team member Roberto Carlos is contemplating a return to Spain at season’s end. Carlos, considered one of the greatest soccer players of all-time, is in discussions with multiple teams but hasn’t ruled out staying in Turkey.

(Roberto Carlos)

-On the hardwood, Turkey will host the women’s 2014 FIBA World Championship from September 27^th to October 5^th. The United States has won 6 of the last 9 FIBA World Championships dating back to 1979. Turkey has high hopes for this year.

-The Turkey men’s hoops team nabbed a wildcard slot in this year’s FIBA Basketball World Cup and are set to face New Zealand on August 30^th and USA the following day in Spain. The Turks feature Houston Rockets’ big man Omer Asik and former Longhorn Dogus Balbay.

(Omer Asik)

(Dogus Balbay)

- Turkey will travel to Dublin to take on the Republic of Ireland in a Friendly. 

- The Miss Earth pageant featured a Turk in its top 16 as Florida Tech volleyball player Ezgi Avci represented her country.  

(Ezgi Avci) 

Read more:

 2014 FIBA World Champs Women go to Turkey

Republic of Ireland to face Turkey in May friendly

Miss Earth Turkey 2013 Eco-Beauty Video

Turkish economy overview

Turkey is one of the major emerging economies in the world. Turkey is the 15th largest economy in the world on the basis of GDP considering purchasing power parity. On nominal GDP basis, it is the 17th largest economy in the world.

Post independence in 1923, Turkey followed policies that imposed strict control and limitations on private sector, Foriegn Direct Investment(FDI), foriegn trade. Due to these limitations, economic growth was limited and Turkey experienced multiple crisis situations.

In 1980, Turkey ushered in a series of economic reforms that moved Turkey from a statist economy to a market driven economy.  Overall Turkey delivered an average of over 4% growth rate since the reforms were introduced.

Turkey GDP growth rate in Nominal terms

Instability in Growth

Turkish growth has been punctuated by multiple economic crisis in 1994, 1999 and 2008 even after the reforms were introduced. This has resulted in large range of growth in GPD terms.

GDP growth rate in nominal terms 1990-200 

GDP growth rate in nominal terms 2000-2010

Foreign Investment

Foriegn investment in Turkey has been witnessing a steady growth. In the decade 1990-2000, it averaged about $1 billion USD per year. This has increased to about $10 billion USD per year in the decade 2000-2010.

Major economic sectors

Agriculture

Turkey is the world's largest producer of hazelnuts, cherries, figs, apricots, quinces and pomegranates; the second largest producer of watermelons, cucumbers and chickpeas. Agriculture accounts for close to 30% employment in Turkey.

Consumer electronics  
Turkish brands Beko and Vestel are among the largest producers of consumer electronics in Europe.In 2005, these 2 companies accounted for about half of the TVs produced in Europe.

Shipbuilding
Turkey is the 4th largest producer of ships and mega yachts in the world.

Tourism
Tourism is one of the fastest growing sectors in the economy. Turkey ranks as the 6th most popular tourist destination in the world.

Travel tips during Turkey visit

Travel

Istanbul is the largest city in Turkey and also is a transcontinental city across Europe and Asia. The Bosporus Strait connects the European and Asian sides with 65% of the city’s residents living in the European portion and 35% in the Asian side. When the stars of McCombs visit the European side of the star-city of Turkey, Istanbul, the eventual collision course of the complex culture, ideas, business, and most important, the cherished experiences are set to navigate the Taksim Square. To bring home a unique blend of memories, here are a few highlights that include how to reach the square and a look and feel of the square:

Taksim Square is considered the heart of modern Istanbul and the travel-hub during our visit in April of 2014.  Independence Avenue, a long pedestrian shopping street, ends at this square and a nostalgic tram runs from the square along the avenue and ends near the Tünel, a short underground railway line of the city and was inaugurated in 1875. Tünel is the second oldest subterranean urban rail line in the world, only after the London’s Underground (1863). Surrounding Taksim Square are restaurants, pubs, international fast food chains such as Pizza Hut and Burger King. The square is also home to The Marmara Hotel, the location of stay during our visit to the city.

Marmara Hotel:

View from the roof bar of the Marmara Hotel:

Istanbul Atatürk Airport to the Marmara Taksim Hotel

Istanbul Atatürk Airport is the main international airport serving Turkey was opened in 1924 and renamed Atatürk International Airport in honor of Mustafa Kemal Atatürk, the founder and first president of the Republic of Turkey. The time-saving way to travel from the airport to Taksim Square is to use the Havatas bus service at a cost of 10 Turkish Lira and about 40 minutes of travel time.

http://havatas.com/en/coach.aspx?i=1

Once arrived in Taksim by bus, travelers will need to walk toward the Taksim square. (Most likely the bus just passed under the square when it came in from the airport). Gezi Park is on the left and toward the middle of the square is located the Marmara Hotel and a stature of Ataturk on the right.  Havatas coach services are also available when returning from the square to the airport.

Hagia Sophia

Hagia Sophia is one of the greatest surviving Byzantine architectures. Constantine became the emperor of the Roman Empire in 324 and established Constantinople as the capital of his empire in 330. This act served as one of Constantine’s most lasting accomplishments. Hagia Sophia, built during the reign of Justinian the Great in 537, remained the world’s largest cathedral for a thousand years.

In 1453, the Ottoman Turks conquered Constantinople. Sultan Mehmed II ordered to convert Hagia Sophia into a mosque. Bells, altar, iconostasis, and relics were removed; the mosaics depicting Jesus, Mary, Chistian saints were also removed and plastered over. Islamic features such as minarets were added. It remained a mosque until 1931, was closed to the public for four years, and reopened in 1935 as a museum by the Republic of Turkey. In the recent years, several cathedrals have been converted to mosques and a movement to re-covert the museum into a mosque continues amid outcry among the nation’s minority orthodox Christians. A visitor to Hagia Sophia would not only be amazed at its architectural marvels but also would witness the country’s cross-roads. The site is about 7 km from the Marmara Hotel and can be reached using local transport.

Dining

Turkish cuisine is a fusion of central Asian, Caucasian, Middle Eastern, Mediterranean, and Balkan cuisines. Amid the complexities of varying fine delicacies stands a variety of kebabs, and a curious appetite cannot miss doner kebab. The kebab is made of seasoned lamb, beef, and/or chicken, is shaped an inverted cone, is turned slowly against a vertical rotisserie, and the cooked meat sliced into thin shavings is served with tomato, onion, pickled cucumber and chili, in a flatbread such as pita. Doner is served in every street and Taksim Square is no exception.