The number of real estate ads that leap out at you from Turkey’s weekend press testifies to the large supply of quality housing available in Istanbul these days. However, while real estate developers are looking for would-be consumers to take the bait, home-seekers are reluctant to bite.

Housing developers and construction companies point to a slowdown in the market. “Last year was an exceptional period, with a boom in housing sales,” said Teoman Metehan, CEO of Teknik Yapi, a leading construction and residential development company. “This year, there is difficulty in financing projects. In 2005, demand outstripped supply in up-market housing. Now, Turkey’s home-seekers are more sensitive to the price of real estate and weighing their options more carefully. A proliferation of housing development in Istanbul is providing greater choice for would-be home-owners.”

The housing market also felt the brunt of the spike in interest rates in May and June, encouraging families to delay plans to acquire housing loans, leading to a dip in demand for residential units. Now home-seekers are expected to delay their plans once again until the presidential and parliamentary elections have passed in 2007, and consumers feel confident that an extended period of market stability lies ahead, punctuated most importantly by lower interest rates. For Turkey’s yet-to-be legislated mortgage system to take flight, monthly interest rates need to decline to around 1%, insiders say.

“Monthly interest rates increased from 1.1% up to 2.5% after May,” said Yucel Ersoz, the general manager of real estate investment company Yapi Kredi Koray. “Now, they are around 1.7% to 1.8%, which is detrimental to home buying.”

Wishful thinking

Some home-seekers are also hoping for a reduction in real estate prices. A futile wish, observers say. “I don’t see a massive reduction in prices primarily because land is limited,” said Metehan, referring to the struggle of property-searchers to find attractive apartments close to downtown Istanbul. “In such up-market areas as Levent or Etiler, a 120m2 apartment in a 15 to 20 year old building would go for roughly $120,000 to $150,000 in 2000/01, with the same apartment fetching an estimated $250,000 today,” said an industrial insider. At that price, the flat may even require some refinishing and further decoration.

Real estate developers themselves are having increasing difficulty finding plots to develop close enough to the city center. This has not stopped companies from providing homebuyers with a helping hand to reduce the cost of acquiring property. “The vast majority of developers are subsidizing interest rates on loans to provide more favorable borrowing conditions. This is equivalent to a discount, in some cases as much as 20% to 30%,” said Ersoz.

Market analysts say that real estate developers offer these discount rates to register sales even for a smaller profit margin. Such is their desire to liquidate their investments and register a return.

Still, there is cause for optimism for firms in the business. Though construction companies and real estate developers are struggling for a share of the pie in the upper end of the housing market, delayed demand is likely to snowball. Insiders expect demand to be released in 2008 much as it was in 2005 – assuming that interest rates are appropriately low – spurring home-seekers to make new acquisitions.

While Istanbul’s well-heeled property-seekers have no need to hold their breath for the long-anticipated mortgage law, the new legislation will likely play an important role in fuelling a future property boom. The bulk of middle-income earners, who are forced to save, will be the main beneficiaries. Important is the fact that mortgage lending in Turkey counts for as little as 4% of GDP, representing some contrast to 55% for the US and 39% in the Eurozone. With an estimated 600,000 new home-seekers emerging every year, there is little doubt that Turkey’s real estate market has great potential.

Jordan is looking to position itself as the region’s center of information and communications technology (ICT).

In recent years, the ICT sector has taken on an important dimension in the Jordanian economy. The sector is growing by 50% annually; the income it generates represents roughly 10% of GDP and it employs more than 6,000 people. ICT has also benefited from the government’s push to support its development, through easing investment requirements in the industry, enhancing education in information technology and, most importantly from the point of view of overseas ICT firms, passing legislation to protect intellectual property rights.

Since 1999, with the prompting of King Abdullah, the government initiated a campaign to energize the ICT sector in Jordan. Within this period, revenue has jumped from $60 million to more than $500 million, while last year it saw $90 million of direct foreign investment flow in, up from just $3 million six years earlier.

The booming ICT market has opened many new opportunities. Many software developers or designers of equipment have established companies, while many of the industry’s big names, such as Microsoft, Intel, Cisco Systems and France Telecom have also invested in the country.

Amman takes every opportunity to promote its increasing ICT industry and tries to attract overseas investment. The most recent example of this was the fourth ICT Forum, held on December 6 and 7, which focused on Jordan’s position in the region’s ICT sector and its potential for growth.

Pushing forward

Citing both King Abdullah’s ambitious challenge to the government and the private sector, and Jordan’s commitment to building on the sector, Gerri Elliot, the corporate vice president of Microsoft’s Worldwide Public Sector organization, said that Jordan is unique in the way it uses ICT.

“Jordan has the opportunity to become the technological breadbasket of the Middle East,” Elliot said, though he warned the global economy does not wait for anyone.

As part of the push to place Jordan at the heart of the region’s ICT market, the Princess Sumaya University for Technology (PSUT) is establishing a business college, which will work with the university’s ICT business incubator, iPARK, to train professionals and promote entrepreneurial creativity.

“The college, which will be set up in partnership with the Royal Scientific Society, Jordan Telecom, the Higher Council of Science and Technology and the ministry of planning and international cooperation, will enhance PSUT’s focus on academic, research and business-related activities,” said Princess Sumaya, the chairperson of the university’s board of trustees.

Jordan has also been taking its ICT promotion campaign on the road. While on a visit to India in early December, King Abdullah touted Jordan’s ICT potential to Indian business leaders. He stressed that as one of his country’s leading trade partners, India should look closely at investing in joint ICT ventures in Jordan, thus gaining access to international markets via Amman’s free trade agreements with countries, such as the US.

According to Jordanian ICT expert Zeid Nasser, the next stage in Jordan’s ICT revolution is expected to see well-established local firms hook up with regional or international partners.

“It is only natural that after several years of rapid growth, leading players in relatively maturing markets will look to consolidate their positions by partnering up with firms that will provide a competitive edge in the marketplace,” he said in an interview with the local press.

At the community level, the kingdom is working to expand a network of information access centers, mainly bases in poorer regions, to allow Jordanians to acquire ICT skills. Known as Knowledge Stations, the initiative was launched in 2003, and aims at allowing communities to use ICT in their daily lives and to link into the government electronic information system. The initial pilot stations proved so successful that more than 75 centers have been established.

Syria is looking to build on its already extensive textile sector in an effort to become an increasingly global player in raw materials and processed products.

However, Syria faces numerous difficulties both at home and abroad to lift its cotton production and processed materials output and quality, with massive investments needed to bring them up to international standards and make them competitive in the cut-throat world market.

Syria’s textile and apparel sector accounts for 30% of the country’s industrial employment. While figures for employment levels in the primary production of the main raw material, cotton, are seasonal, they do represent a sizeable proportion of the 25% of those engaged in agriculture.

The government has been pouring money into the cotton and processed materials sectors, improving irrigation for primary producers and spending on new plants to enhance milling, weaving and apparel production.

These efforts have met with some success, with the production of unprocessed cotton seed breaking the one million ton mark, giving 350,000 tons of cotton lint for processing, with the number of ready-made garments turned out topping 55 million, up from 35 million in 2000.

However, downstream industries still suffer from a lack of investment, with local spinning and weaving facilities only able to process 150,000 tons, the balance available for export. This lack of processing capacity has prompted the government to cut back on planting for the coming season, reducing seed cotton production to 900,000 tons for the 2007 harvest.

Gloves come off

The cotton sector has long been given a high level of government protection, with the importation of raw cotton, yarn and fabrics banned except in special cases. At the end of 2005, under international pressure, Damascus agreed to allow imports of cotton-based clothing, though with a near prohibitive 47.5% tariff. Over the past few years, there have been accusations that Syria has been dumping both processed textile products and cotton onto the global market at below cost in order to increase sales and support the industry at home.

Given that the government looks upon the cotton and textile industries as being of strategic importance to the country, the sectors have seen fewer developments in the economic reform program, with most elements, barring the ready to wear segment, still dominated by the state.

However, this too may be set to change. There have been a number of reports in the state-owned media highlighting losses and the drain on the budget. Similar reports have in the past flagged reforms in other sectors of the economy, meaning there could be a shake-up on the way for the textile industry.

The drive by Damascus to modernize and expand the sector, however, may be too late, given that most of the brakes have been taken off China’s massive apparel juggernaut. Clothing and textile producers around the world have been feeling the pressure of competition from cheap Chinese exports after the lowering of trade restrictions.

Stiff competition

Closer to home, Syria has to compete with the well-developed Turkish and Egyptian clothing and fabric production sectors, both of which have built up extensive links in existing markets in Europe and the US, and have modernized their facilities to meet the most up to date trends. Both the growing strength of China in the world’s markets and competition in the country’s neighborhood may explain the reluctance of overseas investors to put money into Syria’s textile industry.

Even with the concerted efforts of the state, Syria managed to boost its export revenue from yarn and cloth by only $2 million in 2005, bringing in a total of $96 million for the year.

However, according to Jamal al-Omar, the director-general of the Syrian Textile Industries’ Establishment, domestic sales showed a significant increase, coming in at $385 million, a 14.5% improvement on the previous year’s figures.

More significantly, al-Omar said that the industry as a whole had managed to turn a profit this year, for the first time in its history, though he added that further support would be required to allow it to compete in overseas markets.