ISTANBUL — In a prominent spot on a shelf close to his desk, Fuat Tosyali keeps a reminder of what his life was like long before he became a steel magnate and one of the richest people in Turkey, with a penthouse office outside Istanbul and a Mercedes limousine parked out front.
It is a black and white photograph of a young man polishing a stovepipe.
The young man is Mr. Tosyali, and in many ways the photograph tells the story of how far the Turkish economy has come. Mr. Tosyali’s road from poverty to wealth mirrors Turkey’s journey from tattered former empire to Mediterranean powerhouse with growth rates to rival China, at least until the economy took a steep dive last summer.
In an interview in his office, which is furnished with ample couches covered in beige leather and a polished black coffee table the size of a double bed, Mr. Tosyali professed confidence despite a downturn that has been exacerbated by the punitive tariffs imposed on Turkish steel by the United States.
“This is my 51st year in the business,” said Mr. Tosyali, 55, who began helping out his father’s metalworking shop before he was old enough to go to school. “I have seen many crises.”
“The economic turbulence is temporary,” he said in a follow-up telephone interview. “As a company, we are aware of our strength. We know our country’s economic strength, too.”
Mr. Tosyali’s bravado may sound odd given the events of the past year, when he and other Turkish business executives have been forced to cope with a plunge in the value of the lira, a sharp decline in consumer demand, and President Trump’s 50 percent levies on steel imported from Turkey — twice the size of tariffs imposed on Europe and other American allies.
The problems have put Turkey, which has the world’s 17th-largest economy, high on the list of places where the next global financial crisis could start.
Many of Mr. Tosyali’s peers are becoming more pessimistic. In growing numbers, Turkish entrepreneurs are leaving the country or transferring their wealth overseas because they fear that the country’s economy could get much worse, or that their assets and freedoms could be seized by President Recep Tayyip Erdogan’s authoritarian government.
Not Mr. Tosyali. He said he planned a major new investment in steel production, although he declined to give details. “It is unforgivable to hide the money you made in Turkey by taking it abroad,” he said.
Until recently at least, Turkey has been viewed as an economic success story, despite episodes of harrowing financial and political turmoil. Since the beginning of this century, poverty has fallen by half. The average resident of the country lives a quarter-century longer than his counterpart in the 1960s. The economy has grown more than a third since the 2008 financial crisis. In 2017 growth was more than 7 percent, putting Turkey on the cusp of becoming what the World Bank classifies as a “high income.”
Entrepreneurs like Mr. Tosyali have benefited from the growth and helped generate the jobs and investment that kept it going.
The company now known as Tosyali Holding began in the Mediterranean port city of Iskenderun, near the border with Syria. The family metalworking shop was so tiny, Mr. Tosyali said, that it would take up only a corner of the office he occupies today in a neighborhood outside central Istanbul where the hills are dotted with new luxury apartment complexes.
Mr. Tosyali said that his father, Serif Tosyali, was illiterate and deeply ashamed of it. But he understood numbers and could gauge a piece of steel’s thickness to a fraction of a millimeter just by holding it between his fingers.
When Fuat Tosyali was not in school — his father insisted his children get an education — he and his younger brothers Ayhan and Fatih helped hammer scrap metal into parts for stoves and boilers. Later, the family began producing enameled steel for the washing machines that more and more Turks could afford, and pipes for homes that increasingly had modern heat.
In 1994, the Tosyalis bought a factory in Iskenderun that produced iron used in construction. The acquisition positioned them to profit from a sustained building boom, started a steel-making empire that now includes 18 factories in Algeria, Montenegro and Turkey and helped transform the family’s business into Turkey’s biggest producer of steel pipes.
Mr. Tosyali attributes the success to hard work. He received a reporter on a Saturday morning and said he planned to spend the rest of the weekend visiting factories.
“We are working nonstop seven days, 24 hours,” he said. “Not only me, all of my family.”
After one of the country’s most difficult years in two decades, it is unclear how the current chapter in the story of Turkey’s rise will end. Will it fall victim to economic mismanagement by Mr. Erdogan’s increasingly repressive government? Or will Turkish entrepreneurs like Mr. Tosyali once again demonstrate their instinct for survival?
Most economists expect things to get worse before they get better. “Everyone is anticipating a recession,” said Güven Sak, who leads the Economic Policy Research Foundation, a think tank based in Ankara.
There are a few hopeful signs. The lira, which was in danger of falling below 7 to the dollar in August, has recovered somewhat and was trading at about 5.30 to the dollar on Monday. Still, the Turkish currency lost 28 percent of its value in 2018.
In another positive development, inflation is retreating from the astronomical levels it had reached. The annual rate, which had climbed above 25 percent, fell below 22 percent in November after the Turkish central bank raised its benchmark interest rate to 24 percent.
The lira’s decline is not all bad for steel makers. They earn revenue from exports in dollars but must pay many of their bills in devalued liras. That gives manufacturers a potential advantage in export markets, although those benefits are partly canceled out by the higher prices they must pay for imported raw materials.
But the drop is dangerous for Turkey’s financial system. It is also a source of anxiety in Europe, where analysts and bank regulators fear that loans to Turkish businesses might not be repaid, which could destabilize banks like UniCredit of Italy that have significant holdings there.
In many cases Turkish banks have issued loans to businesses that must be repaid with dollars or euros. Banks are already reporting increases in troubled loans because companies that do not rely on exports and earn revenue in liras are having trouble servicing these foreign currency debts.
The Turkish economy began slowing markedly around the middle of 2018 in reaction to the financial stress. Economic output is expected to shrink 0.4 percent in 2019, according to the Organization for Economic Cooperation and Development.
Mr. Erdogan is not making things any easier. He has driven some business owners into exile for allegedly plotting with his opponents. Akin Ipek, another of Turkey’s richest men, had holdings in mining and media before the government seized his conglomerate in 2015 while he was visiting London. Mr. Erdogan has also criticized the Turkish central bank for raising interest rates, a step that most economists considered the only way to corral inflation.
The government has responded with temporary measures like tax incentives for people who buy furniture, large appliances, cars and homes.
“Some precautions are being taken for industry,” said Mr. Sak of the Economic Policy Research Foundation. “But these are Band-Aids, not the remedy.”
Mr. Trump’s policies are also weighing on the Turkish economy. In August, he set the tariff on steel imported from the company at 50 percent after Turkey detained Andrew Brunson, an American pastor. But the tariffs were kept in place even after a Turkish court freed Mr. Brunson in October.
“There was no explicit quid pro quo for the arrangements with the pastor,” Wilbur Ross, the commerce secretary, told reporters in October. The statement seemed to contradict a message Mr. Trump had posted on Twitter in August, when he linked the tariffs to bad relations with Turkey.
Like many Turkish business leaders, Mr. Tosyali is reluctant to discuss politics.
“We truly respect the United States,” he said. “Of course we would like to be there. If they don’t want to buy our products we will respect that.”
Mr. Tosyali noted that while Tosyali Holding may not be able to sell products to customers in the United States, it is buying from American companies. In 2017, the company formed a joint venture with Harsco Corporation in Pennsylvania to recycle scrap metal and waste products in Turkish factories.
As Mr. Tosyali sees it, the rough period now facing Turkey is another opportunity for entrepreneurs to demonstrate their fortitude. Tosyali Holding, he said, planned to take advantage of lower manufacturing costs to expand and put itself in position to gain market share when the crisis is over.
Other bosses “put their feet on the brakes, they cut the work force,” Mr. Tosyali said. “We do the opposite.”