Category: Business

The Bridge to Nowhere in Istanbul

The Bridge to Nowhere

By ANDREW FINKEL

Istanbul’s Bosphorus Bridge during rush hour.Fatih Saribas/ReutersIstanbul’s Bosphorus Bridge during rush hour.

ISTANBUL — I suspect that many Istanbul residents, even those caught in the tailgate eternity of the daily commute to work, don’t spend much time worrying about the broad-leafed knapweed. Like the small meadow saffron, it is one of the 2,000 species of flora that thrive in the greater metropolitan area — that’s 150 varieties more than exist in all of Britain, a landmass 50 times the size. Famous as the juncture between Asia and Europe, Istanbul is also the meeting point of the climate systems of the Black Sea and the Mediterranean, which means that a diverse plant life complements its rich history.

But now this unique ecosystem, as well as the viability of Istanbul itself, is being threatened by a series of what Prime Minister Recep Tayyip Erdogan cheerfully calls “zany” urban development schemes. These include a huge canal that would run parallel to the Bosphorus Strait and, zaniest of all, a third bridge over the real Bosphorus.

Istanbul is the economic powerhouse of Turkey. It pays 40 percent of the nation’s taxes and is a magnet for business, people and capital from the rest of the country. In 1970, it counted two million residents; the figure now stands at more than 13 million. Urban sprawl, like some vigorous mold, is overtaking green spaces and threatening water drainage basins. “I don’t even want to think about what happens when the population exceeds 16 million,” says Haluk Gercek, a professor of transport planning at Istanbul Technical University. At the current growth rate, this could happen by the end of the decade. Istanbul is both feeding off and choking on its own expansion.

The two bridges that straddle the Bosphorus, the passage that splits Istanbul and separates Europe from Asia, are very much at the center of these problems: few other bits of tensile steel have so altered the destiny of a city. When the first bridge, the Bosphorus Bridge, opened in 1973, it instantly embodied Istanbul’s role as a link between civilizations. But soon it also became emblematic of rush-hour misery and the proof positive of how new roads generate their own traffic. In no time, summer resorts on the Asian side of Istanbul had turned into commuter heartland.

It was thought that a second bridge would fix the problems caused by the first.

The Mehmet the Conqueror Bridge, which opened in 1988, was intended to complete a ring road that would allow vehicles to bypass Istanbul altogether. Yet even before construction began, speculation over property along the bridge’s expected feeder roads took off. Once the bridge was built, and as the city grew larger and more prosperous, 600 new cars began pouring onto its roads every day. The resulting carbon emissions created a microclimate at least one degree Celsius warmer than before the second bridge was built, NASA data have confirmed.

Istanbul commuters, still frustrated by the unrelenting traffic, started clamoring for yet another bridge.

Back when he was the mayor of Istanbul, in 1995, Erdogan declared that a third bridge was no solution at all. It would be “murder,” he said, for the forests and reservoirs around the city. So in 2004, construction began on a metro system that would run through a tunnel on the sea floor of the Bosphorus Strait. The work had to be interrupted when the digging unearthed the ancient harbor of Byzantium and major archeological finds, including 32 medieval vessels. The project will be completed, however, and neither the Istanbul Metropolitan Plan of 2009 nor the city’s current Transportation Master Plan mentions any new bridge.

But recently in faraway Ankara, which sits high on the dry Anatolian plateau, the Ministry of Transport has unilaterally decided that Istanbul needs a third bridge. “This has nothing to do with solving the traffic and everything to do with developing property,” according to Gercek. And Ankara has the means to get the job done: new legislation allows construction in forested areas and places planning authority that once rested with city officials into the hands of the central government.

The planned position of the third bridge is so far north along the Bosphorus, near the mouth of the Black Sea, that the bridge cannot possibly relieve traffic in Istanbul. This has Gercek saying: “They are clearly planning a fourth” — one closer to the existing two.

A third. A fourth. A fifth. Simply building the feeder roads for any new bridge would mean power-sawing a path through 2.5 million trees. Local temperatures would likely rise, and the broad-leafed knapweed and the small meadow saffron would wither and die.

Andrew Finkel has been a foreign correspondent in Istanbul for over 20 years, as well as a columnist for Turkish-language newspapers. His latest book, “Turkey: What Everyone Needs to Know,” will be published next year.

via The Bridge to Nowhere in Istanbul – NYTimes.com.

November 17, 2011
Querying Erdogan Zero Rates Plan Creates New Turkey Enemies List

By Benjamin Harvey

Nov. 16 (Bloomberg) — As Prime Minister Recep Tayyip Erdogan pursues his vision of an economy with real interest rates at zero, critics of Turkey’s monetary policies are increasingly being portrayed as enemies.

Trade Minister Zafer Caglayan says analysts who find fault with the initiative belong to an “interest-rate lobby” that wants to force Turkey to raise rates to help create higher returns. Erdogan says interest rates should be close to zero after inflation. He said during a speech in May to the Islamic business association Tuskon in Istanbul that Turks should earn their money “through work, not interest.”

The skeptics are seeking to “suck Turkey’s blood,” stop its growth and keep the country indebted to foreigners, Caglayan was quoted by state-run Anatolia news agency as saying in July. In a written response to questions on Nov. 3, Caglayan said the government’s view hasn’t changed. He declined further comment.

“This is very typical Turkish politics,” Mert Yildiz, an emerging markets economist at Renaissance Capital, said in an interview in Istanbul. “You find an enemy that doesn’t exist, but then that enemy can become real.”

Muharrem Karsli, chairman of TC Ziraat Bankasi AS, the country’s largest state-run bank, said Sept. 22 the lobby used its influence to keep Turkey’s credit ratings low, forcing the nation to pay higher yields to holders of its debt.

Sabah newspaper, owned by Calik Holding, whose Chief Executive Officer Berat Albayrak is the prime minister’s son-in- law, has led the charge in the media, including a Sept. 27 piece that says Bloomberg News quotes analysts who question the government’s policies and publishes articles that mislead investors.

Rate Cut

Central bank governor Erdem Basci surprised investors in August by cutting the benchmark lending rate by 50 basis points to a record low of 5.75 percent. Analysts at Edinburgh-based Royal Bank of Scotland Group Plc and Societe Generale SA in Paris said the reduction, the third since December, risked stoking inflation and causing the current account deficit to widen from a record 10 percent of economic output.

Basci may be acting under government influence, Yavuz Canevi, a former central bank governor and now chairman of BNP Paribas Turkish unit Turk Ekonomi Bankasi AS, said in an interview in Istanbul in August. Basci, 45, was deputy governor until Erdogan appointed him to head the central bank in April. He’s a school friend and former adviser to Deputy Prime Minister Ali Babacan.

Growth Question

Fitch Ratings said Sept. 30 the key question before an upgrade of Turkish debt was whether the country could achieve “sustainable growth without major economic imbalances such as high inflation.” Analysts at New York-based Goldman Sachs Group Inc. said Oct. 20 that either the currency or the interest rate “will have to give.”

Erdogan, 57, told parliament in July that the central bank would “continue to decide on its monetary policy in an independent manner.” In a response to questions about the interest lobby, Basci said Oct. 10 that the relationship between the bank’s interest rate and the value of the currency “isn’t something we have to learn from foreign analysts.”

The rate cut was justified in August because the European debt crisis and slowing regional growth should cause inflation to decelerate next year, Basci said.

Inflation was 7.7 percent in October, exceeding all eight estimates in a Bloomberg survey, up from 6.2 percent in September and a four-decade low of 4 percent in March. The central bank said Nov. 4 that inflation would end the year at about 8.3 percent, exceeding its 5.5 percent target.

Reserve Rules

Rather than raise the benchmark rate, Basci has sought to control inflation by increasing bank reserve requirements to as much as 16 percent for the shortest-term deposits to limit lending and consumer demand.

Basci also reached for alternatives to defend the lira when it tumbled to a record low against the dollar in August and the central bank spent about 10 percent of its $84.4 billion of foreign-exchange reserves in three months to buy the currency. He announced plans last month for dual lending rates to banks ranging from 5.75 percent to 12.5 percent, saying he may switch between them on a daily basis. The policy rate remains at 5.75 percent, he said.

Basci said Oct. 26 his policies give him the flexibility that “no other bank in the world” has to strengthen the currency while retaining the option of cheaper money should Europe’s debt markets worsen.

The dual-rates initiative represents a “distinct shift” by Basci that will lead to “much higher interest rates” in Turkey, Amer Bisat, a money manager at hedge fund Traxis Partners LP and a former senior economist at the International Monetary Fund, said in a Nov. 7 phone interview from New York.

‘Mixed Messages’

The policy sends “mixed messages,” according to analyst Michael Harris and economist Turker Hamzaoglu at Bank of America Merrill Lynch in London. It has “confused” investors, according to Simon Quijano-Evans in London, head of emerging markets at ING Groep NV, and introduced “significant uncertainty and volatility,” said JPMorgan Chase & Co. analysts including David Aserkoff in London.

JPMorgan and Morgan Stanley, both based in New York, cited Basci’s policy as a reason for downgrading their ratings of Turkish equities and banks over the past month.

“We believe the central bank should have already raised rates,” said Melissa Ball, an economist at Lombard Street Research in London, adding that there isn’t an interest-rate lobby. “We are independent financial analysts trying to see the likely future of the Turkish economy.”

Argentina Conflict

Turkey isn’t the only country where economists are coming under fire for criticizing government policy. In Argentina, South America’s second-biggest economy, the government began fining economists as much as 500,000 pesos ($120,000) this year for saying consumer prices are climbing at more than twice the official annual rate of 9.9 percent. The country’s interior minister said economic consultants stand to profit by reporting annual inflation they estimate to be 24 percent, the highest in the world among major economies after Venezuela.

While some analysts are critical of central bank policies in Turkey, the country’s credit-default swaps trade at 259.5 basis points, less expensive than 12 of the world’s 52 investment grade-rated countries. Turkey’s foreign-currency debt is ranked two levels below investment grade by Standard & Poor’s and Moody’s Investors Service.

Turkish bond yields have gained 340 basis points this year to 10.51 percent, including a 90 basis-point increase since the adjustable rates policy was announced, according to an index of securities published by Turk Ekonomi Bankasi. The rate is the highest among emerging markets globally, data compiled by Bloomberg show. The lira has declined 14 percent against the dollar this year, the biggest slump in emerging markets after the South African rand.

SocGen to JPMorgan

The central bank will eventually raise rates to slow Turkey’s economy and protect the currency, Benoit Anne, chief emerging markets strategist at Societe Generale, said in an e- mail. Delaying a switch to an interest-based defense risks a “rapid and painful correction,” he said.

JPMorgan economist Yarkin Cebeci and Morgan Stanley economist Tevfik Aksoy, who have supported Turkey’s rates policy even as their banks downgraded Turkish stocks, declined to provide comment on the government’s claims of an alleged interest-rate lobby.

To accuse analysts of pushing Turkey to raise rates against the country’s interests is “a pretty ludicrous suggestion,” said Tim Ash, chief economist for emerging markets at Royal Bank of Scotland in London. The allegations are “probably a case of domestic party politics,” he said. “I think Turks and Turkish policy makers have valued people giving honest opinions, and I’d hope this is still the case.”

–With assistance from Bill Faries in Buenos Aries, Selcuk Gokoluk in Istanbul, and Steve Bryant and Ali Berat Meric in Ankara. Editors: Mark Bentley, Gavin Serkin

To contact the reporter on this story: Benjamin Harvey in Istanbul at bharvey11@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

November 16, 2011
Are Turkish Youngsters Too Smart?

by Justin Vela

Turkish university graduates struggling to find employment in their fields of study are often settling for menial part-time jobs until better times come around. The unemployment for Turks between the ages of 15 and 24 stands at 18.6 percent – nearly double the national average. (Photo: Justin Vela)

To get a sense of the scope of Turkey’s youth unemployment problem, you don’t have to look much further than downtown Istanbul’s inexpensive cafes, which are invariably jammed with 20-somethings during working hours. The country’s challenge isn’t simply one of creating more jobs to handle the rising tide of young people entering the work force, it’s also a matter of creating quality positions that can meet the heightened expectations of job-seekers.

Setting the stage for the unemployment conundrum is the demographic fact that more than half of Turkey’s estimated population of 75 million people is under the age of 30. And not only are there more youngsters seeking employment, they tend to be better educated than their elders.

Over the past decade, many 20-somethings in Turkey have become the first members of their respective families to attend university or other institutions of higher learning. Over the same period, the country has experienced robust economic growth — 8.2 percent in 2010, and averaging 6 percent annually from 2002-2008. But the growing economy hasn’t been able to create jobs fast enough to handle the increasing number of youths entering the labor force. That has left many newly minted graduates unable to find a job to match their skills.

Turkey’s official overall unemployment rate stands at 9.6 percent. But the rate nearly doubles to 18.6 percent for Turks between the ages of 15 and 24. The unemployment rate is partly a reflection of a surge in the number of Turks graduating from universities, medical and vocational schools each year — up 155 percent since 2000 to 573,159 in 2010.

“There are too many young people,” commented Ilayda Karakas, a 24-year-old who moved from the western city of Bursa to Istanbul in search of a job as a graphic designer. “There are too many universities. Too many people looking for the same job.”

Unable to find jobs in their fields of specialty, many young Turks instead fall back on low-paid positions in fast-food chains or temporary work, most of which is unofficial or part of the country’s massive grey economy.

After a fruitless two-year job hunt, 27-year-old Zeynep Yıldırım, who graduated from an Istanbul university in 2009 with a degree in computer engineering, ended up working in her family’s grocery store in the Aegean resort town of Bodrum. “I feel horrible, terrible, of course,” she said. “Day by day, I am going to forget what I learned.”

Ümit Efendioglu, director of the International Labor Organization’s Ankara office, identified a lack of adequate job-market preparation among Turkish institutes of higher education as a contributing factor in Turkey’s youth unemployment problem. Technical and creative-thinking skills remain in short supply, particularly among graduates of vocational schools, she said. “There is a disconnect with industry and the private sector,” Efendioglu said. “The labor supply does not match the demand” for employees with highly specialized post-secondary degrees to work in scientific and technical sectors that require solid R&D or management skills.

Structural problems in Turkey’s labor market also play a role, commented economic consultant Emre Deliveli, a columnist for Hürriyet Daily News. The need to pay high severance packages – one month’s salary for each year of work – to former workers means that turnover at Turkish companies is not robust. Those who do hire do not always recognize diplomas from vocational schools, from which 231,601 Turks graduated in 2010, nearly a 200-percent increase from a decade ago. The preference is to keep entry-level salaries low or, in many cases, off the books.

“Young people are avoided or hired informally,” noted Dr. Seyfettin Gürsel, an economist at Istanbul’s Bahçeşehir University. Students who attended prestigious universities in Istanbul or Ankara sometimes are more likely to get jobs simply because Turkish companies like to show off highly accredited employees, added Deliveli.

Reflecting on her own six-month job search, 25-year-old Rabia Özkutlu, a recent graduate of Istanbul’s Beykent University with a degree in business management, said that her salary expectations — a monthly salary of 1,500 liras (about $836 as of the middle of November 2011) — was a stumbling block. Most potential employers only wanted to pay new employees a maximum of 1,200 liras (about $678) per month for full-time employment, she added. “We are used to the money our parents give us,” she said. “We cannot live [as accustomed] on this salary. If [employers] don’t agree with you, they say, ‘Next!’”

The Ministry of Labor and Social Security declined to comment to EurasiaNet.org about its ideas for improving the employment situation for young job seekers.

The ILO’s Efendioglu said that, as an incentive to hire young people, the government has given companies a five-percentage-point reduction in the amount of money they must pay each year for retirement and healthcare benefits for employees aged between 18 and 29 years old. The Turkish Employment Agency also is currently carrying out a “provincial market needs assessment” to determine labor supply trends in different locations around the country, she added.

So far, the issue of youth unemployment has not resonated politically. Among Turkey’s mainstream opposition parties, interest tends to gravitate more toward issues with regular news coverage, such as constitutional reform. Young people, meanwhile, haven’t been very politically active of late. For example, youth turnout was low at a scantily attended Occupy Istanbul event staged in early November.

Given the circumstances, as well as the potential for an economic downturn, more and more young people seem to be revising their expectations. Twenty-five-year-old, multilingual Ozge Akkaya graduated this year with a history and English degree from Istanbul’s prestigious Boğaziçi University, and accepts that she might not find work in her fields of choice. Instead, she is translating a book from Italian to Turkish. The job is unofficial, but “I can’t say I am unemployed,” she said.

Editor’s note:

Justin Vela is a freelance reporter based in Istanbul.

November 16, 2011
Turkish Airlines – Istanbul to New York

Turkish Airlines – Istanbul to New York

I should be posting about the Turkish airport and the Turkish Airlines Lounge but because I only spent around an hour at the airport I didn’t really have too much time to explore it. Since I’ll be spending more time at the airport on the return flight, I’ll post about the lounge once I get back to Kuwait. So instead, I’m going to post about the flight from Istanbul to New York.

The total travel time from Istanbul to New York is around 10 hours and 50 minutes and we flew in their Boeing 777-300ER V2. The business class setup on this flight was the latest one which is made up of just 4 rows split up as 2-3-2. One of the first people to greet you once you enter the business class is the chef which kinda sets a level of expectation on the kind of food you’ll be served during the flight. There’s obviously a ton of legroom in business class and it’s needed since the chairs turn into 180 degree flat beds. I wasn’t sure at first if they would be true 180 degree “flat beds” or instead be “lie flats” which are seats that turn flat but are slightly angled. I’ve experienced lie flats on two other airlines and they’re not as easy to sleep in and I always feel like I’m going to slide off them. Thankfully, the Turkish Airlines seats were proper flat beds which made sleeping really cozy.

Since the flight was long we were served two meals, one around an hour after take off while the other around 2 hours before arrival. The chef handled everything related to the food including handing out the menus which I noticed were customized with our names. It’s a little thing but gives the meals a very personal touch. The first meal we started off with were light appetizers which they rolled out on a trolley. You just tell the chef what you want and he’ll fill up your dish for you. Once we were done with the appetizers we were served soup which they only had one option called the traditional Turkish wedding soup. I had it and it tasted kinda like the Lebanese dish called “kebbeh bi laban” and that’s probably because think they both involve the same elements, beef and some sort of creamy sauce. After that we were presented with three options for main course, Swordfish Brochette, Grilled Beef Tournedos or Artichoke Ravioli. I went with the beef, Nat with the fish. She didn’t end up liking her fish much but I loved the beef. Once we were done with lunch they rolled out the dessert trolley which had a lot of different goodies. I was pretty full so I just went with ice cream. For my second meal later on in the flight I had a pasta dish and it was also superb.

The flight was very comfortable and I didn’t have any issues falling asleep on the flat bed. I’m actually not sure how I can fly economy knowing how much more comfortable it is in business. On short flights it’s not as important but when you’ve only slept for 3 hours and you get on board a 10 hour flight, the thought of being able to fall asleep comfortably on a cushy bed is priceless. Actually not priceless, just a lot more expensive than economy. We had large screens in front of us with a ton of movies and tv shows to watch. One disappointing thing was the fact internet access wasn’t active yet and was still “coming soon” according to the message I got on the screen when trying to access it. On the other hand they did have live news feeds available. Power sockets and USB sockets were available of course. If you have a USB stick or hard drive loaded up with movies you can watch them on your seats screen via the USB port. Not sure what movie formats their media player handles but I would be safe and not take any 720p or 1080p movies with me.

There’s an episode of Seinfeld where Jerry and Elaine’s flights get cancelled and they had to rebook on another flight. They end up finding two seats left, one in first class and the another in economy. Jerry explains to Elaine how she should take the economy seat since she’s never flown first and really wouldn’t miss anything but he on the other hand has and so he could no longer fly economy. Well that’s me right now, next time I fly economy I’m going to be thinking about all the cool things I’m missing from business.

via Turkish Airlines – Istanbul to New York – 2:48AM.

November 16, 2011
Islamic social networking site to launch in Istanbul

Photographed by AFP

Archived

A new, Islamic social networking website is set to launch in Istanbul, Turkey. It is funded by prominent Muslim businessmen, according to Hurriyet Daily News, a Turkish newspaper.

“No politics, no bans, no limits,” reads the motto of the website, which the newspaper says will be streamed in 15 languages.

Salam World is owned by Russians and Turks who plan to invest US$15 million to open branches in 16 countries with large Muslim populations, according to asiancorrespondent.com, an Indonesian tech-blog, which revealed that the new website will have an office in Indonesia.

According to Hurriyet, SalamWorld will also open branches in Cairo, London, Moscow, Dubai and New York.

SalamWorld (Arabic for ‘”hello world”) is not the first attempt to establish an Islamic website that would compete with social networking giant Facebook.

In 2010, a group of Pakistanis established millatfacebook.com. The initiative came in response to an offending Facebook page that had enraged Muslim users by running a competition for cartoons mocking Prophet Mohamed. The page prompted Pakistani authorities to temporarily block access to website in the country.

via Islamic social networking site to launch in Istanbul | Al-Masry Al-Youm: Today’s News from Egypt.

November 15, 2011
Yandex.Maps is now in Turkey with Panoramas!

by Fırat Demirel on November 15, 2011

Yandex entered into the Turkish search engine market as a new player but brought along many services, as well. One of the most important ones among these has been the map services by Yandex and now Yandex.Maps is in Turkey. Today at 14:50, Yandex Turkey is going to be introduced with a presentation at Webrazzi Summit but we are sharing the details in advance.

Russian service provider will be providing Turkish users with a country map, street view (panorama), satellite view and the updated traffic news. Harita.yandex.com.tr is the address of the Yandex.Maps service where you can find the maps and satellite views of 81 provinces, 947 districts and 40 thousand villages/quarters.

Resembling Google Maps, the map service of Google, and providing an easy usage, Yandex.Maps will also be ready for Turkey on popular mobile platforms very soon.

Panoramas and Shooting Method

Yandex Panoramas, which works just as Google’s Street View does; consists of the street shots taken by Yandex in İstanbul (3.205 km of roads, 447.812 photos, 111.953 panoramas) and Ankara ((1.706 km roads, 187.972 photos, 46.993 panoramas). Beside the street shots, Yandex has also taken images of Marmara Sea as well as some special locations (which you might guess about) and 360 degrees of special shots.

If you have recently seen a car with a camera passing outside your house (in İstanbul and Ankara), this was probably a Yandex car. To be honest, we could not see the car, either but apparently Yandex took great shots around our office, as well

The cars, which we found out to have a compass, a GPS and a resolution of minimum 10 megapixels, started to work at early hours on bright sunny days when the roads were empty. In narrow streets where it was impossible to go through with a car, they used bicycles with cameras or shot with hand cameras and the photos were combined into 360-degree-panoramic views. 4 different resolutions were used when uploading so as to let faster photo viewing.

The photos were combined automatically in accordance with geographical coordinates and the plates and faces were blurred (as per the law).

Yandex.Traffic and Data Resources

This is one of the features of Yandex.Maps which will be most used in İstanbul. Yandex.Traffic will calculate the average index of traffic density and show the traffic data in green, red and yellow. Traffic density index is a rating system between 0-10, 0 being clear and 10 being highly dense. For example, if the traffic density index is 7, Yandex tell us that the trip will last twice as long as it does at clear times.

Yandex Turkey shares the details of this service,too. We find out that this traffic data is provided by the GPS-equipped cars of the companies which aim to become partners with the service and great vehicle fleets. The coordinates, speed and directions info of these cars are communicated to Yandex.Traffic server and the most updated traffic info is compiled. As a result, the movement graph of the car is created by the analysis program of the system depending on the data acquired.

Yandex states that this service also abides by the confidentiality procedures (keeping the info about the car, the car owner or the driver confidential).

The Java and Android applications of Yandex.Traffic will soon be available for your mobile device on haritalar.yandex.com.tr. There is not an iPhone application yet (it will be available soon, though) for Yandex.Traffic and time will show if it will be able to compete with İBB Trafik but considering the fact that Java-based telephones are quite common in Turkey and the number of smartphone users is increasing each day, I reckon that Yandex.Traffic will gain popularity as Yandex grows.

As for the effect of Maps services on the organic search rate of Yandex, we have to wait and see what will happen.

via Yandex.Maps is now in Turkey with Panoramas! | Webrazzi Global.

November 15, 2011