Prices took another jump this week in Istanbul, at least in the grocery stores. It seems just when you think prices will level off, another jump comes and substantial they are when compared to the average workers' pockets.
With Turkey being ranked among one of the best places to invest for emerging markets, I believe they may well have emerged. At the same time, while cities like Istanbul, Ankara and Izmir are wallowing in delight, other parts of Turkey still struggle with lack of infrastructure, poverty, and basic needs.
Cost of goods in the top three cities continue to rise and begs the question whether the economy is on-track or just gives the appearance of a thriving economy.
I spent last week in Ankara, where prices for food, rent and entertainment are remarkably lower than Istanbul. This makes me wonder why costs keep rising in Istanbul at an unprecedented rate in comparison to elsewhere in Turkey.
So today, let's look at some facts and figures which tell the other side of the story; and then later this week, you'll get the lowdown where prices fare for groceries, personal care and other household supplies.
First off, has anyone questioned the government lately on their policies for incentives and subsidies to businesses? Maybe we should.
When city and national governments lure businesses, foreign and national, to set up in their area, they offer inducements to create jobs and reduce unemployment. This is good, right? Maybe not.
A critical question to ask is: Are they initiating more low-wage, minimum-skill jobs faster than higher-paying, skilled jobs? If so, then maybe those inducements to businesses are going into their pockets instead of actually reducing the poverty line in Turkey.
Second, Kamu-Sen, the Public Employers' Trade Unions Confederation with research from the Turkish Statistical Institute (TUIK) established the January 2007 minimum threshold for a family of four at 2,225 YTL, which translates to about $1600 per month.
Do you think this is reasonable when compared to a western country's cost of living? Add to it that the poverty line sits at 1107 YTL per month and hunger balances at 848 YTL. All in all, these figures revealed over a 5.5 percent rise from the month before, December 2006, and the hunger brink rose by 5 percent.
What's more, a civil servant's salary is better than the pay of many other workers in Turkey, especially outside of the biggest cities.
Next, while construction is booming everywhere in Turkey, the builders are faced with rising costs for materials. At the same time, the real estate market has declined, probably due to the ridiculously high cost of an apartment, while a mortgage system newly arrives in the country.
Since the contractors are faced with near doubled costs since last year for all building materials, along with slumping sales of homes, worries about the sector and economy are heightened.
What's in store? A continued decline in sales and increasing material costs in 2007 may result in a crippled construction sector and leave many without the possibility of purchasing a home.
Last but not least, the CLINCHER: The New Anatolian reports Turkey ranks second lowest with 28 points on the purchasing power parity indexed at 100, which is the average for EU countries. So, Turkey ranks rock bottom, save Macedonia, with even Bulgaria and Romania ranking higher!
Stay tuned this week for more commentary and current prices in Turkey and Istanbul.
Check out Global Voices writer Deborah Dilley who expounds on Business and Travel at Turkey is Typing.
http://www.globalvoicesonline.org/2007/03/20/turkey-is-typingbusiness-and-travel/
Posted by: Bea | Wednesday, 21 March 2007 at 04:48 AM