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2019 Was Evaluated and Expectations from 2020 Were Talked in ICI December Assembly Meeting

25.12.2019
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Istanbul Chamber of Industry (ICI) December ordinary Assembly meeting was held on 25 December 2019 in Fazıl Zobu Assembly Hall with the main agenda of “New Financial Horizons in 2020 while Leaving 2019 Behind”. Dr. Mahfi Eğilmez, previous advisor to treasury, Hakan Güldağ, the President of Board of Directors of Magazine Dünya, Dr. Şeref Oğuz, the President of Publishing Board of Magazine Dünya and Abdurrahman Yıldırım, author of haberturk.com participated in the meeting directed by Zeynep Bodur Okyay, the Chairperson of ICI Assembly. Dr. Ömer Toraman, the Governor of Kütahya with a Board from Kütahya Chamber of Industry and Commerce, Ahmet Altun, the Chairperson of Assembly of Şanlıurfa Chamber of Commerce and Industry, and İbrahim Halil Peltek, the President of Board of Directors of Şanlıurfa Chamber of Commerce and Industry with ŞUTSO board participated in the ICI December Assembly Meeting. While the budget of ICI for 2019 was acquitted by the members, the budget for 2020 was approved by Assembly Members in the meeting.

Bahçıvan, the President of Board of Directors of Istanbul Chamber of Industry pointed out to a large young population who focus on happiness, instead of finance, money, interest concepts and act sensitive to climate change, environment and sustainability; and he stated that: “We have to comprehend the tendencies of this generation who will break through for and shape our future. We must think about the impacts of sharing economy which has been popularized in the recent years on our production style and business life.”

Bahçıvan said that: “It is though provoking that CDS which has been followed closely in terms of risk premium of our country does not decrease around 150-200 in a permanent and healthy way. We should emphasize the consumer confidence index which insists around 50s and the asset prices which do not increase.”

ICI September ordinary Assembly Meeting was launched by Zeynep Bodur Okyay, Chairperson of ICI Assembly. While launching the meeting, Okyay briefly mentioned that:

“We all know that the growth which we are in need of are not a palliative-type of growth which is obtained by temporary precautions by igniting the consumption. We are waiting for and demanding a policy collection which will start a sustainable growth period. Applications of financial and monetary policies should be paid attention to have a confidence-increasing nature by not entering into a new stock increase period based on currency debt, instead, by revising the bank and real sector statements. We have to understand that there is not any other way to create a growth without changing economic model and increasing confidence level, instead of expecting interest movements to bring out a miracle, even though it is vital importance for interest and inflation to have single digit values.

We should accept that the fundamental basis of permanent growth is to increase fixed capital stock; and we should adapt a moderate and foreseeable growth strategy to ignite the enthusiasm of domestic and foreign capital, especially the manufacturing industry, by acting elaborately in resource distribution. We should be motivated to draw the large investment pursuit in the world towards us and transform Türkiye into a country through which a value chain is passing, by moving from offer to strategic framework.”

Okyay, Chairperson of ICI Assembly invited Erdal Bahçıvan, ICI President to present his speech. While presenting his speech on the agenda, Bahçıvan said that they could not make use of resources public sector, private sector and individuals in the past. Stating that the abundance of resources of that period directed them to this wrong action, Bahçıvan reminded that they are experiencing a period which does not have that kind of abundance. Bahçıvan underlined that they should use the resources in an effective and right way all together.

Expressing that value added structure of export activities and competency capacity have gained crucial importance today, Bahçıvan drew attention that their export activities increased in quantity but decreased in value. Bahçıvan recorded that they should upgrade themselves constantly and increase the intensity of information and technology of their export activities by the investments in order to compete when it is taken into consideration that the export value per kilogram is under 1,5 dollars.

Pointing out that even though they can export to more than 200 countries for the time being, very few amount of countries and products included in such export activities have high density, Bahçıvan stated that they have to reduce their dependence to low amount of export items by increasing the sectoral and geographical diversity in order to maintain the contributions of export to the economy in the medium term.

Stating that CDS premium is an important indicator in the new year, Bahçıvan said that: “It is though provoking that CDS which has been followed closely in terms of risk premium of our country does not decrease around 150-200 in a permanent and healthy way. Consumer confidence index which insists around 50s and asset prices which do not increase are drawing our attention as significant titles which we should emphasize. On the other hand, ICI Türkiye Manufacturing PMI which we share with the public based on tangible analyses and data cannot increase above 50 which is the threshold value for two years. Data of Export Climate Index which we announce monthly show that our country lost acceleration in important foreign markets and might challenge our exporters in the following period. We should carefully think on such data in the following period, as well.”

Expressing that they are experiencing a period where economy is approached by a more comprehensive perspective, Bahçıvan stated that people more talk about income distribution, prosperity, happiness, population, migration, environment instead of finance, money, interest, central bank, etc. Bahçıvan expressed that awareness on climate change, environment and sustainability has been significantly increased.

Bahçıvan continued:

“A large young population who read and understand world in a different way and who possess sensitivity and responsibility is coming. We must comprehend the tendencies of this generation who will break through for and shape our future. Because of enterprises such as Uber, AirBnB, a popular concept has emerged in the recent years: Sharing economy. Some call this economy which draws the interest of the youth as ‘solidarist consumption, while some call it as ‘solidarist economy’. I would like to underline that we must more think about the impacts of this development on our manufacturing style and business life.”

Dünya Gazetesi Yönetim Kurulu Başkanı Hakan Güldağ

A panel which was directed by Hakan Güldağ, the President of Board of Directors of Magazine Dünya and participated by Dr. Mahfi Eğilmez, the previous Consultant to Treasury, Dr. Şeref Oğuz, the President of Publishing Board of Directors of Magazine Dünya, Abdurrahman Yıldırım, the author of haberturk.com. Speakers of the panel briefly said that:

Dr. Mahfi Eğilmez, the previous Consultant to Treasury:

At the end of 2018, the world seemed to have overcome the economic crises; however, recession expectation increased suddenly and 2019 was completed in that direction. But, we see that this atmosphere was not as intense as it was now, at the end of the year. An improvement has been experienced in growth, unemployment and inflation rates in USA. Even though there are impacts of trade war between China and USA, China suffers from debt crises because of improper investments which had been made to keep the economy alive. Indebtedness rate in the country is two times higher than GDP. But China has started to manufacture its own brands and it is a creative country. In the capitalist system, if the international trade activities increase, the international prosperity rate increases as well. Even though USA seems to benefit from Trade War, USA will be the losing part in the long run.

2019 was a challenging year for Türkiye and it experienced a downsizing. I believe we will experience growth in the following quarter periods. It will be possible by the base effect, not by the big steps which we took. When we look at the industry production index and capacity increase, we see that it has gained a positive direction. However, investments have negative direction still. While Türkiye has such big risks, we cannot expect for major investments. Türkiye is a risk-bearing country and we have to reduce such risks.

We experience a revival in demand. And the reason behind it is the tax reductions and interest reductions. However, they cause load on the budget. There is a deficit prediction for 80 billion TRY even though contingency revers of Central Bank have been used. It does not seem possible to experience such challenges in 2020.

Abdurrahman Yıldırım, the author of haberturk.com:

“I think the budget deficit will not be worse in 2020. Because tax revenues will increase. When it comes to growth, foreign capital input will not increase for high rates. Foreigners will not come Türkiye for direct investments. And there is not any excitement for investment, and either possibility. We cannot obtain progress, even if interest reductions. So, I do not believe that economy will grow through investment. Growth will be brought by consumption and credit. Consumers will be indebted by low interest. We experienced a real sector debt crisis in 2018. Private sector should have been restructured and growth should have been established on this restructured form. Banking and finance system was restructured in 2001, the same application should have been made for the private sector.

Dr. Şeref Oğuz, President of Publishing Board of Magazine Dünya:

Dünya Gazetesi Yayın Kurulu Başkanı Dr. Şeref Oğuz

“World is seeking for solutions out of the cycle in which it turns around. Technology and education come to the forefront in this sense. We all talk about Industry 4.0 and a technology which we do not produce will be imposed to us. We provide an advance education for a 4-percent-section in Türkiye but we provide a terrible education for 80 percent. The growth of China does not only depend on scale economy, but China has moved ahead of USA in production of academical articles in today’s world. We should find out solutions prioritizing the education. After the education provided in schools, factories provide trainings because the education activities provided by schools are inadequate. We need to transform diploma factories into competency factories. Human resource is of vital importance for us to leave this mediocre level behind us. A new concept has been emerged: Algoritocracy According to this concept, factories, human behaviors and preferences will be specified by algorithms. In such a world, we need to focus on higher value added production and adopt an education system centering on teacher.”

Following the panel, ICI Assembly members asked their questions to the panelists.

Dr. Ömer Toraman, the Governor of Kütahya took the rostrum. Toraman stated that geographical changes have been experienced in sub-branches of industry in the world and the industry has moved to different geographies, and he said that a similar transformation should be experienced in Türkiye as well. Telling that even though it is not high value added or based on R&D, a tendency towards Anatolia has been experienced in other industry branches, Toraman expressed that other regions such as Kütahya draws interest. Toraman stated that they try to establish an adequate infrastructure for investment with Zafer OSB, newly created, and invited industrialists for investment.

Kütahya Ticaret ve Sanayi Odası Başkanı İsmet Özotraç

İsmet Özotraç, the President of Kütahya Chamber of Commerce and Industry made a speech for ICI Assemble members. Özotraç said that ICI is the apple of Türkiye’s eye and they would like to make use of this value. Mentioning that the primary problem of Türkiye is education, Özotraç stated that 34 industrial vocational high schools are present in the province and they set a new education system as a target for themselves. Özotraç stated that Zafer OSB is located between Afyon, Uşak and Kütahya and they will not witness any problem in labor force in this sense.

Then Kutlu Eser, Head of Kütahya Unit of Investment Support Office made a presentation on the investment opportunities in Kütahya and Zafer OSB.

İbrahim Halil Peltek, the President of Board of Directors of ŞUTSO took the rostrum and made a speech for ICI Assembly. Peltek stated that: “We are very proud that ICI Assembly visited our city and gave a message for whole Türkiye. Şanlıurfa is the city which has the most productive agricultural lands. We have a large and efficient agricultural infrastructure. We are determined to bring agriculture together with industry. We have various advantages since we are the Sixth Region in the investment. That our city is an ancient city in terms of tourism has been provided by Göbeklitepe once again. The more our city is developed, the more our country is developed. I hope when our strong infrastructure units with your experience and knowledge, a collaboration which will be very beneficial for our country will be created.