ICI Chairman Erdal Bahçıvan: "It's Incumbent On Us All to Maintain Türkiye's Ratings"

• 27.08.2014
• News

Istanbul Chamber of Industry (ICI) Assembly held its August meeting today under the main item of "Causes of Climate Changes and Their Effects on our Economy and Industry". Professor Mikdat Kadıoğlu of Istanbul Technical University Meteorological Engineering and Disaster Management Center and Murat Sungur Bursa, President of the Sustainability Academy Türkiye were guest speakers during the meeting. Erdal Bahçıvan, Chairman of the Board of Directors of ICI gave the opening speech during which he drew attention to the rise of credit ratings of Türkiye thanks to its successful economic performance in recent years and added: "It's incumbent on us all to strive to maintain this rise."

Erdal Bahçıvan, Chairman of the Board of Directors of ICI, stated that during the eighth month of the year we are in, it is observed that downward risks persist despite the recovery trend in the global economy.

Bahçıvan also stated that the developments in the Middle East and Ukraine increased the risk of an upswing in oil prices while global financial markets face the risk of a rise in long-term interest rates. He added: "Especially the sharp and rapid rise of long-term interest rates in the USA, contrary to expectations, could lead to the growth of a risk perception. It is critical that growth potential and structural reforms to increase sustainability are accelerated in many economies in the coming term. "

Bahçıvan emphasized that indicators revealed a certain level of slowdown in economic activities chief of them being industrial production. "The sensitivity of international financial movements towards countries such as Türkiye has soared significantly compared to last year. Any sort of an austerity signal from FED constitutes an important element of sensitivity on the Turkish lira. On the other hand, the uncertainty over the new cabinet and the general elections of 2015 seems to continue its seminal effect on investments."

Debates surrounding interest rates keep economic stress alive

Bahçıvan continued his speech as follows: "Considering the failure to bring inflation down to the desired level, the shrinking export market, the weak course of saving rates, the debate on the global rise of interest rates and the sensitive foreign exchange balance in our country; it's important to emphasize that this debate on the rise of interest rates keeps our economic stress alive. It is incumbent on us all to value the rise of ratings enabled by our successful economic performance in recent years and to strive to maintain this rise in the coming months."

Türkiye could not manage the risk of climate change

Bahçıvan stated that climate change, one of the most critical problems of the 21st century, has changed for the first time in the history of the world due to human activities and added that according to a United Nations report; it is estimated that by 2050, 200 million people worldwide might relocate due to climate-related sudden disasters. He added: "According to a British economist, the cost of the failure to take measures against climate change will amount to 20% of gross national product by 2050. However, from 2007 onwards, the cost of failure to take measures on the global gross national product has been 1%."

Bahçıvan underscored Türkiye's failure to manage the risk of climate change. He stated: " Among the effects of climate change such as migration and security problems, the disaster the most dangerous and the most difficult to handle is drought, which is also considered one of the four horsemen of the apocalypse. The National Action Plan on Climate Change published in 2011 states that Türkiye will have a warmer and drier climate with an uncertain precipitation structure in the near future. The cost of a rise of only one meter in sea levels will amount to 12 billion dollars in Türkiye. Water is the most essential and most critical input for industry. As a result of giving priority to potable and domestic water use, the industrial sector might not be able to find water necessary for production. This might create a negative impact in all industrial sectors."

Bahçıvan pointed out that industrialists should predicate their actions on holistic, sustainable development, which was the main theme of our latest Industrial Congress of ICI and added: "Approximately 80% of product-related environmental effects can be determined in the design stage. Considering environmental factors in the very early stages of product development could thus minimize environmental effects stemming from life cycles. I believe that environment should be the centerpiece of all our activities, R&D and education in particular."

Bahçıvan also mentioned Türkiye's G-20 Term Presidency starting December and added that Istanbul Chamber of Industry is playing a leading role and making effort in this respect. He also stated that bloody conflicts in the Middle East continue to negatively affected the lives of many innocent people and that the failure to secure a permanent ceasefire in Gaza unfortunately made it impossible to establish permanent peace and stability.