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Turkey: A bright spot in a troubled region, but are there clouds on the horizon?
With the consulting market growing at 8% in 2013, it’s no wonder consulting firms are building their practices in Turkey. Along with impressive growth, there’s the added security of plenty of well-paid work to be won in the not-too-far-away Gulf. The Turkish consulting market glows brightly among its troubled neighbours, but the glare can obscure the factors that make Turkey a dynamic and unpredictable place.
So, the good news first: a steady rate of foreign investment and a thriving domestic consumption is keeping the economy growing, albeit at a slower rate than the recent past. Demand for consultants is on the up; in addition to the traditional multinational client base, family businesses are coming around to the idea of using consultants to help with their knottiest issues as they reach the scale and maturity to need external help. A steady stream of regulation and government spending is also helping to keep the market buoyant. And, as mentioned, there is international demand for Turkish consulting talent driving growth too.
But before you pack your suitcase and fly out to Istanbul, consider the following. While the economic successes of the last decade have seen substantial improvements across many aspects of Turkish life, the foundations are shaky. The Turkish economy is dependent on external money flowing in and there is a huge current account deficit, earning it a place in Morgan Stanley’s ‘Fragile Five’ economies. The government, while strong, is another cause for concern – President Erdoğan’s democratic credentials leave much to be desired, having crushed protests in the streets and removed dissenting voices from positions of power throughout 2013. The year was topped off with a major corruption scandal, causing the resignation of cabinet ministers and a distinctly fishy smell to linger around the then-Prime Minister (who is immune from prosecution while in office). The consulting market was only minimally affected by the unrest until this story broke in December – it was at this point consultants began to see confidence falter and projects put on hold.
So what to make of this mixed picture? The chances are, the Turkish economy will remain stable in 2014 and the consulting market will see another strong year of growth. But perhaps consultants will begin to wonder how much time and money they should be investing in such a volatile market. Things might be good now, but what about in five years’ time? The economy desperately needs reform if it is to return to steady growth of four or five percent, but will Erdoğan, now in power until 2019, be the man to drive change? So far, his government has preferred to spend its way out of any difficulties.
In the short term Turkey is still a very attractive consulting market, but some consultants foresee a ‘survival of the fittest’ battle ahead if the storm clouds start to gather. Whether it will be a tempest or a light shower is difficult to say, but the bigger consulting operations who can leverage local and global expertise will be best placed to weather whatever is in store. They’ll just need make sure they pack for all eventualities – sunscreen and a raincoat, just in case.