ANKARA, Turkey — Turkish Deputy Prime Minister Ali Babacan sounded the alarm in 2014: Industrial investment was in decline while a construction boom was luring entrepreneurs to build shopping malls and luxury housing projects with the promise of quick profits. He stressed the need to encourage investment in industry, warning, “Or else we are becoming an economy that builds very luxurious buildings, spending its money on stone and concrete, without producing.” Three years on, the Turkish economy is far from a major industrial revival, while dozens of shopping malls languish in a financial bottleneck or are headed toward closure, in particular in Ankara, Istanbul and Izmir.
According to the Turkish Statistical Institute’s 2016 Income and Living Conditions Survey, the material deprivation rate — which reflects inability to afford items and payments, such as for one week's annual vacation away from home, adequate heating, a meal with meat, chicken or fish every second day or basic appliances such as a washing machine and telephone — increased to 32.9% last year from 30.3% in 2015. Released Sept. 18, the survey showed that 68% of Turks were indebted, while 14.6% were under the persistent risk of poverty and 14.3% lived under the poverty threshold. Meanwhile, the richest 20% of the population took in 47.2% of total income. No doubt, this state of affairs bears on the viability of shopping malls and the retail sector in general.