The City Between Two Worlds

Old Costantinople is a vibrant, cosmopolitan and rising city. A unique metropolis that provides a world of modern life without forgetting its tradition. This new business centre of the Millennium has now more things to offer.

Istanbul is my city, and is the “place” where the ancient culture, built through 3,000 years of history and three empires (Roman, Byzantine and Ottoman) blends with modernity. Geographically, Istanbul is the Asian city nearest to Europe and the European city nearest to Asia. The two continents are separated by the Bosphorus Strait, so Istanbul is bounded by two seas, the Black Sea and the Sea of Marmara.

Apart from being the largest city and former political capital of the country, Istanbul has always been the centre of Turkey’s economic life because of its location: a junction between international land and sea trade routes. Istanbul employs approximately 20% of Turkey’s industrial labour and contributes to 38% Turkey’s industrial workspace.  As a result, Istanbul is the world’s 34th largest economy, generating a GDP of 133bn. The city and its surroundings produce cotton, fruit, olive oil, silk, and tobacco. Among the city’s major industrial products are: food processing, textile production, oil products, rubber, metal ware, leather, chemicals, pharmaceuticals, electronics, glass, machinery, automotive, transport vehicles, paper and paper products, and alcoholic drinks. Today, the city generates 55% of Turkey’s trade and 45% of the country’s wholesale trade, generating 21.2% of Turkey’s GNP. Istanbul contributes to 40% of all taxes collected in Turkey, and produces 27.5% of Turkey’s national product.

All major cities in the world are faced, to a greater or lesser degree, with transportation problems that they are trying to solve. Some 90% of the transportation in Istanbul is made up of highway traffic that has severely negative effects on the geography, topography, natural, and – especially – the historical features of the city. Turkey’s Ministry of Transportation reports that there are nearly 64.000 km of highway and nearly 11.000 km of railway throughout the nation, 2.300 km of which are electrified. Seaports are connected to railways, so that combined transportation options are available. One of the largest projects in the Turkish transportation sector has been the Ankara-Istanbul high-speed train project by Turkish Railways, which was inaugurated on March 13, 2009. Another project, consolidating Turkey’s role in transportation and logistics, is the Baku (Azerbaijan)- Tbilisi (Georgia)- Kars (Turkey) railway project, which is already under construction, and is planned to connect Turkey to China via Central Asia. Turkey has 34 airports, as well as numerous seaports. These give Turkey the ability to transport 1.5 million tons of consumer goods by air, and almost 250 million tons by sea per year. Although logistics services are relatively new in Turkey, due to its unique location, the country is expected to become a logistics center in the near future. The Turkish logistics sector consists of 200 transport commissioners, 600 road transport companies having their own fleets, 300 customs consultants, and 20 inland distributors. In total, nearly 1,500 companies operating in Turkey are certified for international transportation

Because of its geographical position, Turkey has an increasingly important role as an “energy corridor” between the major oil and natural gas producing countries in the Middle East, Caspian Sea and the Western energy markets. More than about 70% of energy consumption in the country is met by imported energy sources, and the share of imports grows each year. Turkey’s principal energy resources come from water, especially in the Eastern part of the country, and from lignite. Turkey has no major oil and gas reserves. Almost all oil, natural gas and high quality coal are imported. On the other hand, the country has large renewable energy potential. In Turkey, where there is no nuclear power, electricity generated from thermal, hydro, eolic and geothermal power plants.

Health policy
Turkey has a very complex health care system because of the existence of different plans and departments involved in this sector. Today, health care has improved compared to the past but has still not reached the expected quality, especially in most of the state hospitals. The annual growth rate of GNP in Turkey is between 5% and 6 %, but health expenditure is only between 3% and 5% of GNP. The social security system is composed of three different major organizations. The Social Insurance Institution (SSK) covers the insurance of employees of the private sector. It provides health services for work injuries and professional job diseases, medical care, sickness, disability, and maternity. Meanwhile, Pension Fund for Civil Servants (Emekli Sandigi) covers the insurance and pensions of civil servants. Finally, Social Security Institution for the Self-employed (Bag-Kur) covers the self-employed outside the coverage of the Social Insurance (SSK) Law.  In addition, the Green Card System was established in 1992, and is directly funded by the Government for people earning less than a minimum level of income. By means of this scheme, they are provided with a special card giving free access to outpatient and inpatient care at all state, and some university, hospitals. Inpatient medical drug expenses are covered, but not outpatient drugs. However, private health insurance is well developed in Turkey. Many people pay their premium to these private companies in order to get  better quality health service. Private pension funds were started a couple of years ago, and are growing very fast. These private funds are usually offered by private banks.

6 key-words for working in Turkey

  1. Emotionality
    Akile Özkaya, HR Manager at Accenture, explained that, in Turkey people are emotional. Sometimes, even in business life, decisions are taken on an emotional basis. For instance, the promotion of a colleague can sometimes be interpreted as a message to leave the company by employees who believe that they deserved to be promoted. Smiling is very important in daily life also. People believe sharing problems and smiling at each other is a tool to cope with problems. The assumption here is that “you have a problem. I have it too. So this is no big deal”. This sometimes makes the problem easier to bear. 
  2. The Banking System
    Seyda Saribiyik, Corporate Sales Manager at the City Group and Aybek Ersari Private Banking Branch manager, told us that even though Turkey’s banks are a lot older, the current system is less than 20 years old. However, in these 20 years everything has changed, and developed very rapidly. There is a disadvantage regarding to the mortgage system, in terms of interest rate and time. Mortgages are usually only between ten and fifteen years, and the banks take the house as collateral. Therefore, if you cannot pay, banks seize the house, sell it  — usually at a “lower than  market” price, in order to sell it quickly. If the total amount of the debt is more than the proceeds of the house sale, you have to make up for the difference. The system is very much geared to the lender. Another example, the market value of the house is irrelevant. It does not reduce your debt. This refers only to the money that you borrowed, and the interest rate.
  3. Work
    Can Emrah Yilmaz, Marketing&Sales Manager, at Greeneks, told us that working in Istanbul is not much different from working in Paris or London. But, compared to London or Paris, the salary range is a little lower. However, life, real estate and household expenses are cheaper. Working hours are similar to USA, because people really work hard, and have a great sense of responsibility. They prefer to stay late to finish what they started. Hasan Yildiran, who is an Associate in the Birsel Law Office, added that companies cannot terminate your contract without paying two months’ salary for each year of work as compensation. The reasons for terminating a contract are: bad interaction with other colleagues, bad performance, and crisis. Employees can file a lawsuit against the employer for wrongful dismissal. The courts can reinstate the employee, if the wrongful dismissal is proven. In your first year of work, you do not have vacation, except for national and religious holidays. After that, up to a certain age  — such as 50 — you are entitled to fifteen days’ annual vacation. After 50, this increases to 20 or even 30 days. However, these are minimums; all depends on the employer. Foreign people, of different religions, are entitled to have their religious holidays too, such as Christmas. Burak Altikulac, cofounder of the Eternal Child fashion apparel company, explained that most of the largest companies in Turkey are family-owned. The present (third) generation, has been transforming those companies into commercial concerns. Hasan Yildiran also clarified that, to attract Foreign Direct Investment in Turkey, there are various tax-free policies, for set periods. He added that it is easy to hire foreign employees. The only necessity is to present a few framework papers to get a work permit. The procedure takes about six months. Aybek Ersari added that banks have many foreign investors due to the very stable system and Turkey’s very competitive interest rates compared to those of other developing markets.“It is easy for foreigners in Turkey to open a bank account or to use financial products,” she says
  4. Hiring & Unemployment
    Turkish production quality and other modern management issues, such as diversity and ethics, are higher or better than in some other countries. In some industries, such as fashion, it is not easy to find qualified people in Istanbul because until 5 years ago Turkey was only known as a producer. “We cannot ignore the unemployment rate, which is 12.7 %,” says
    Kartal Tolga, HR Director at LeGrand. Seyda Saribiyik adds that, ten to fifteen years ago, it was very common to hire people with experience in the industry, but now “we prefer to hire new graduates because we prefer to train them from the start. Almost every major bank has its own culture. Therefore companies prefer to develop their employees according to that culture, hiring the new generation with fresh minds,” she adds. For Tolga, after the crisis, the retain management has became more important than ever before. Companies and HRs focus on young potential talents because they are the future. Actual legal minimum salary 760,5TL./Month gross (395 Euro/month gross), the work week is 45 hours, while social charges come in at between 20% and 35%.
  5. Training.
    Can Emrah, Burak Altikulac, as well as Okan Attila, who works for one of Turkey’s three GSM telecoms operators, told us that, in Turkey, there are tens of thousands of certain type of engineers but no employment opportunities for them. “For instance, we have lots of universities offering Genetics degrees, but really there is not much private sector investment in that area,” explains Can Emrah. It seems that there is a need for coordination. “For instance, many car manufacturers are looking for blue-collar workers with certain skills, but cannot find them” states Altikulac. On the corporate side, Kartal Tolga, HR Director at LeGrand, told us that — generally — international companies have subsidiaries whose global HR policies are coherent with group values, so it is almost the same in Turkey. “Usually, we provide key competencies courses, and we have planned the other years training plan by the four main areas such as leadership, managerial, individual and functional competencies improvement requirements. For instance, innovation and also the retain management will be more important in the future and because of that, HR and line managers need to work together during times of major organizational change to identify people whose retention is critical,” he states. Some other companies prefer to train their employees on site as revealed to us by Siyabend Suvari, Managing Director at Purple Concerts.“Of course there is a selection, involving an interview process, but that is mostly about personality, energy, experience and the ability to work well with the others,” he explains.
  6. Government help
    “Because the textile industry is very important in Turkey, the organization called ITKIP supports companies attending trade shows”, says
    Burak Altikulac. He explained that, if you meet the evaluation criteria, and if your project is accepted, ITKIP will finance several aspects of the expenses involved.“The government also helps with exports. For instance, if you want to open a shop in New York, they give you incentives and they also cover up to 50% of your advertising expenses for foreign marketing campaigns,” he adds.

Family Business success story

Tufan Abaci’s father started Turkey’s first company that deals with water treatment and filtration of water and pools in 1967. Tufan joined the company in 1977, when he was at university, studying to be a chemical engineer. In 1989, he founded his own business. While, from the late-1980s and thanks to Turgut Ozal (Prime Minister from 1983 to 1989 and President from 1989 to 1993) who improved relations with the western world,  Tufan company’s imports — over a ten-year period — increased from five to 500 products, staff grew from 2 to 45, and turnover grew from 500.000 to 50mn.  His wife joined the company in 1998.  Eventually, they decided to sell the company. Tufan started another business in the drinking-water sector, and they sell chemicals for water treatment to the municipalities including Istanbul, and Ankara. They also supply chemicals for waste treatment to power plants, steel plants, as well as sugar plants.

Tufan’s life-style choices
The Beyoglu and Sultanahmet areas, are favorite places for dining and night life, while Nisantasi area is the most popular shopping district.

Facts about Istanbul and Turkey

  1. The road to Europe
    The EU welcomed the recent ‘yes’ in the Turkish referendum on constitutional amendments, and President Barack Obama congratulated Mr Erdogan and acknowledged the vibrancy of Turkish democracy. Moreover, the passage of the reform package should help expedite Turkey’s EU entry negotiations. Among other things, this reform makes the military accountable to civilian courts, and gives the right to appoint judges to parliament. The amendments will enable Mr Erdogan’s Justice and Development Party (AKP) to organize the high courts on lines conforming to the European Union’s entry criteria. What must have hurt the army most was the lifting of immunity for those involved in the 1980 coup. Time will tell whether or not those who view the reform as Mr Erdogan’s attempt to gradually strip Turkey of its secular character are correct.
  2. In Istanbul women have the right to vote and to be elected in municipal elections since 1930. Thanks to Atatürk, the founder of the Republic, who believed in the necessity of complete equality between women and men, all political rights considered to be the foundation of citizenship rights were recognized for women in Turkey very early on, compared to many other countries.
  3. Rental prices for apartments in Istanbul range from 5-6 Euro per square meter in Acibadem to 11-12 in Bebek.
  4. Military service is compulsory for male citizens. If a citizen continues to his education in a superior institution, service duty is deferred automatically. For instance, if you have finished your bachelor degree, you would have to enrol for a master programme. If you have completed a master program, you would need to enrol for PhD.
  5. In Istanbul, humans and animals — especially cats — have a peaceful coexistence. The special status of stray cats in Turkey partly derives from Muslim ideas about tolerance, and an urban elite with Western-style ideas about animal rights. A popular saying goes: “If you’ve killed a cat, you need to build a mosque to be forgiven by God.”


Published in the hard-copy of Work Style Magazine, Fall 2010