CHARLOTTE – Tomorrow and trouble

Tomorrow and troubleMaybe you remember the plot of andldquoThe Music Man,andrdquo with con man Harold Hill who poses as a boysand#39 band organizer He promises folks in a small town band uniforms and warns that there is going to be serious trouble facing River City ifandhellipSome are saying the same for Turkey these days. Turkey has experienced rapid economic growth in the past few years and the per capita gross domestic product (GDP) has increased from just above $2,000 in 2003 to over $10,000 last year Though the number of millionaires has increased, the gap between the andldquohaveandrdquo and the andldquohave notsandrdquo is growing.

The Turkish economy seems to be in transition. It has been impressive how the Turkish market has been resilient during the double shock of a global rise in interest rates and the anti-government and anti-development protests in Taksim Square and elsewhere around the country last yearIn my piece on the Turkish economy and spending trends (Aug.

15) I explored how one of the drivers of growth in retail banking has been the explosion in the number of credit cards over the last decade and I asked if this could continue. Many of us remember the same trend in the US and the impact it had on the American economy not that long ago.

In Turkey, the number of cards in consumersand#39 wallets just keeps increasing. The majority of credit card holders pay for goods in installments over long periods.

The impact of this on the local economy is putting many into financial difficulty, particularly Turks who have never really learned how to budget their money. We are good at spending on our cards, but we may not be so good at clearing the balance every month, despite steps that have been taken to raise the minimum monthly payment.

Along with the increase in credit card debt, unemployment has increased. You canand#39t help but wonder just what the future will be for Turkey.

I shared in the piece I referred to earlier that the figures for 2013 published recently by the Turkish Statistical Institute (TurkStat) put unemployment for 2013 at 97 percent. Interestingly enough, the unemployment rate in Turkey averaged 10.

67 percent from 2005 until 2014, reaching an all-time high of 16.10, according to the website tradingeconomics.

comIt states that the unemployment rate in Turkey increased to 10.10 percent in August of 2014 from 980 percent in July of 2014.

This trend will hit those who have maxed out their credit cards and canand#39t repay the debt, causing a ripple effect.Another factor that affected the economy in a positive way earlier, but now seems to be in question is the way Turkish banks were lending — particularly for property development.

More recently, Turkeyand#39s President Recep Tayyip Erdogan, who was the countryand#39s prime minister for more than a decade, has been known to criticize the central bankand#39s policies and call for interest rate cuts to support economic growth. Economists are wondering if with Turkish interest rates having spiked and the economy slowing down in Turkey, whether or not one should become worried about Istanbuland#39s property market falling.

Current trends in the economy are influencing some to be cautious in their spending.These days, it seems that some Turks who are in construction work want to be recognized as the biggest this or the tallest that or the grandest whatever In my piece andldquoUp in the cloudsandrdquo (March 30, 2011), I wrote about the opening of a new skyscraper, Sapphire, which claimed at the time to be tallest building in the city.

Located at the heart of Istanbul in Levent, it is another residential skyscraper that is also a leisure zone and shopping center For the promotion, Alain Robert, who is internationally known as andldquoSpidermanandrdquo for climbing the worldand#39s tallest building, climbed the Sapphire shopping mall.The Mall of Istanbul opened this past May and is an indoor amusement park at present it is considered the largest mixedandndashuse development.

That is, until the next project is completed and steals the title.Turkey has experienced explosive consumption in recent years.

Turks have been spending and the rate of saving is low. As growth slows, unemployment climbs and what will come tomorrow for Turkish youth?andldquoYou pile up enough tomorrows, and youand#39ll find youand#39re left with nothing but a lot of empty yesterdays.

I donand#39t know about you, but Iand#39d like to make today worth remembering.andquot andndash Harold Hill, andldquoThe Music Manandrdquo.

SOURCE: Today’s Zaman