Businessweek Archives

From Russia With Empty Suitcases


Letter From Istanbul

FROM RUSSIA WITH EMPTY SUITCASES

I am in a cheap hotel in the teeming Aksaray district of Istanbul. The lobby is crowded with Romanians waiting for the dawn bus that will take them home with their myriad purchases wrapped in plastic. Across from me sits a woman studying a pack of cigarettes, turning it over and back, over and back. She has scrubbed skin with freckles, light-brown hair to her shoulders. Except for the dark makeup around her eyes, she looks 17. She's 23, she says, and from Crimea, where she was a nurse. Her name is Angelica. She has been in Turkey two weeks.

Here, she is a prostitute--or a "Natasha" as they are known, since so many come from Russia. "At first, I felt fear, horror--but after three days, I found this hotel," she says, meeting my eyes with a half-smile. Now, she feels relatively safe in her new--and, she insists, temporary--profession. At the end of the month, she hopes to have saved $500. With it, she plans to start a new life as a cross-border trader, joining tens of thousands of former Soviet-bloc citizens who flood in and out of Istanbul's Aksaray and neighboring Laleli every day.

Unlike Angelica, most of the traders aren't prostitutes. But like her, many are skilled: teachers, doctors, engineers. Back home, those skills don't buy much in the chaotic post-communist marketplace. Earning barely enough to live on, these people have seen their value system turned upside down over the past five years. Profit has changed from a near-obscenity to a necessity. Under extreme stress, they are trying to make the best choices they can.

Their efforts to prosper have created what is known in Istanbul as the suitcase trade. Shops and stalls display everything from leatherwear to kitchen sinks. Bearing luggage carts, bungee cords, and dollars or German marks--never currencies from Turkey, eastern Europe, or the Commonwealth of Independent States (CIS)--small traders swarm in, buying up goods worth $5 billion a year, according to Chamber of Commerce estimates, to resell at home.

This frenetic activity started soon after the collapse of communist states, when people there rummaged around their houses and sometimes workplaces for things to sell. "Russian markets" opened in Turkey, selling hospital instruments, vodka, cameras, amber, embroidered tablecloths, and kitchen utensils. At first, the new traders "didn't know anything about money," relates a carpet seller at the Covered Bazaar. "They might have a carpet this big"--he indicates the size of a room--"for $40. Now, they want $600."

FACTORY SECONDS. Lately, such traders are getting considerable respect for their business smarts--and in a city that has seen traders come and go on just about every tide of history since the early Greeks sailed the Black Sea. On climbing streets that look down on one of the great spectacles of commerce--as far as the eye can see, ships are lined up waiting to pass through the Bosporus--Turks sell wares out of two-story stone buildings that served as hans, merchant inns, in the days of the Silk Road.

Catering to the latest wave of traders, shops and factories have sprouted up in and around Laleli and Aksaray. Textiles are their biggest trade. These are sometimes seconds, as I found during lunch one day with two graduates of a Russian engineering school who now make their living buying up Turkish fabrics to supply a woman they hire to run a stall in Moscow. I ask about their success: Is it because the quality of their fabric is so good? "No," one of them laughs. "It's because our quality is so bad. We sell to country people who can't afford quality." The pair represent the upper echelon of traders: the technically educated, the children of former party officials, the lucky. Such folk make their trips in comparative luxury by flying and send their goods back as normal cargo. Istanbul--cafes, sun, and sheer physical beauty--is a nice break for them.

For those at the bottom of the heap, though, trading is an ordeal, starting with an overnight bus trip. They shop from morning to dusk for two or three days. Departure for the trip home requires something of a miracle: A bus pulls up to the hotel, and hours are spent making the loot--ranging from baby chairs to bales of clothes--fit.

ONLY ENTREE. Low on their springs as they crawl away, the buses are a blessing to Turks such as Murat Varga, head of Penta Tekstill, a towel maker that exports $13 million worth of goods annually. He says the legions of petty buyers at the Aksaray outlets are his only entree to the Russian market, which has "no distribution channels." Says Varga: "We sell more products there than if we took trucks to St. Petersburg."

For every company like Penta with its automated factory, there are probably a dozen like one I know run by a former textile salesman and his two sons. It sells jeans out of a cubicle tucked under some stairs. The youngest son, Ismail, stands on the sidewalk enticing prospective customers--in fluent Russian. In a top-floor workshop, the elder son cuts rolls of denim by hand. Their goal is 10,000 items a month and a $1 profit on each. Ismail says Natashas sometimes offer their favors in return for goods. He refuses, he adds.

The suitcase trade is changing. There is more market sophistication and more money in the former Soviet countries. China, Dubai, Syria, and Iran are competing with Turkey for the business. But its rivals might not match the charms of Istanbul. Hussein, who runs a shop in Laleli, notes how the Russians have taken to life in Turkey: "These Russians, if it's a sunny day, they work until lunch and then they go to the beach." That wasn't how the Golden Horn got its name.CAROLE CRAIG


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus