Tuesday, 2 August 2011

Full Speed Ahead

The fact that Turkey is bursting at the seams is clear even before the plane lands. Our short flight from Athens was in a lazy holding pattern over the Black Sea because traffic had backed up at Istanbul’s Ataturk Airport. And this was a 3 pm on a Monday afternoon.

As we pulled up to the jetway I could see planes from every corner of the globe. The passport queue was long, but moved rapidly as each of the booths was manned by officials who took a cursory look at the passport, slammed down the stamp, and waved you through. I remember times past when you could wait 45 minutes. The booths then were manned by only one or two extremely bored officials who laboriously examined each page of your passport to see if you really were the person you claimed to be.

The baggage claim area is dominated by at least three very busy duty free shops where passengers were loading up on relatively inexpensive booze and cigarettes. The road into the city runs along the Sea of Marmara lined with clean parks filled with people escaping the heat and humidity of July in crowded city of 13 million people.

We had not been back to Istanbul since leaving about 18 months ago, and signs of construction activity are evident everywhere you look. Massive new buildings are going up, the tunnel under the Bosphorus has reached its final stages, and the number of cars has seemed to double. The Bosphorus itself seemed more crowded than ever with tankers, bulk carriers, ferries, private yachts, fishing boats, and water taxies. My first impression was that wealth has definitely increased.

The car swept through the 1,500-year old land walls of the old city, along the sea walls and finally around Seraglio point beneath Topkapi Palace to the Galata Bridge across the Golden Horn. We could see the balcony of our old apartment in the Cihangir section of the city where we would sit for hours looking at the incomparable view of the Golden Horn, the old city, the entrance of the Bosphorus and the Princess Islands in the distance.

Hotels are fully booked, but our friends at the Four Seasons along the Bosphorus managed to find us space in this busy season. There are two Four Seasons hotels in Istanbul, and each of them offers the best service by far of any of Istanbul’s great hotels.
View of the old city from the hotel
The next few days were busy with visits with old friends, dinner at favorite restaurants, and, of course, visits to the Covered Bazaar and the Spice Market with an old school friend and his wife who just happened to be visiting Istanbul. While I was loading up on roasted almonds, pistachios, dried apricots and a kilo of baklava Mariella was having lunch with friends in one of the modern shopping centers in a distant section of the city. She is a great advocate of public transport, and reported gleefully that the trip from the shopping center to the Covered Bazaar to meet us took only 45 minutes using the vastly improved metro and tram system. By car it could have taken well over an hour. Even the dolmuses (shared cabs) have improved and many are air conditioned.
Sunset at a roof-top restaurant in the Pera neighborhood
One consequence of the country’s economic boom is that the number of cars has increased greatly while the number of roads has not. Evening traffic along the Bosphorus road is a nightmare. One night it took more than an hour to go just over a mile from our hotel to a restaurant up the coast. We would have been much smarter to use a water taxi. When we returned about midnight it was just as bad as the nightclubs and outdoor concert venues were just warming up.

How long can these economic boom times continue with growth of more than 8%? That is the main question people ask themselves. Will this boom be followed by an equally deep recession? Warning lights are beginning to flash. Inflation is creeping up (Turkey is definitely more expensive than it was 18 months ago), rapid credit expansion fuelled by demand for cars and homes, current account deficit exploding to record numbers, and financing for large infrastructure projects becoming more difficult. Groups that won large privatization projects like the Ankara natural gas distribution system, the port of Izmir, or several electricity distribution areas had to withdraw because they couldn’t find financing. The stock market has declined sharply this year and the Turkish lira has begun a long overdue depreciation.

So far the government maintains its usual upbeat tone. Prime Minister Tayyip Erdogan steadfastly claims that the global economic crisis will not affect Turkey at all. The Central Bank governor who recently warned against borrowing in foreign currency was encouraged to change his tune. A few days later he, too, said everything was rosy. Time will tell. But for the moment the vitality and energy of the country are driving it forward at a rapid pace.

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