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ICI Hosted The Minister of Industry and Technology Mustafa Varank in the October Assembly

24.10.2018
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Istanbul Chamber of Industry (ICI) October ordinary Assembly meeting was held on 24 October 2018 in Odakule with the main agenda of “Focusing on the New Moves Towards Becoming A Powerful Industrial Country” The guest of the Assembly meeting chaired by ICI Assembly President Zeynep Bodur Okyay was the Minister of Industry and Technology, Mustafa Varank.

The Minister of Industry and Technology, Mustafa Varank stated that one of the most significant duties of the public is decreasing the bureaucratic obstacles in a way that it could reflect the spirit of the new period and offering permanent and effective solutions, and said: “I am implying exactly this while talking about being proactive.” Varank who mentioned that he believed the impulse in development and welfare increase should be the industry, recorded that they have to realize the structural transformation in production to strenghten the industry and increase the competition. Varank said that the route to target of big and powerful Türkiye is passing through this.

Sanayi ve Teknoloji Bakanı Mustafa Varank

Varank listed their three basic strategies in the structural transformation as high value-added production, productivity increase in industry and digital transformation said that they will realize production reform with the vision of “National Technology, Powerful Industry”, and take their short-average and long average steps through this conscious.

ICI President Erdal Bahçıvan emphasized that speed loss in economical growth has considerably accelerated; and the leading indicators, especially Istanbul Chamber of Industry Türkiye Manufacturing PMI, the weakest growth since 2009 crisis with high inflation rate in third quarter will be experienced.

Bahçıvan indicating a balancing process in financial markets recently, following the fluctuation of previous months resulting from the various measures and steps that the government took so that they could enable the wheels to turn again in economy said: “While this process is being experienced in financial markets, the matters concerning the real sector and our industry keep their place in the agenda. There exists a financial balance but balance of the real sector has not been put in order yet.”

ICI October ordinary Assembly meeting was opened by ICI Assembly President Zeynep Bodur Okyay. Okyay talked about assembly agenda briefly as follows:

“Trusty environment comes first. Following period will not be easy one obviously. Deterioration in the real sector, signals coming from banking sector, global liquidity problem of which signals already came before itself have affected all. We should not be afraid of these situations. The liquidity problem has been affecting our financial system. As ICI, we are doing our best for our country’s goals. The day is the day of backing up for the industry. Industry is the backbone of our country’s economy. However, the industry requires a serious transformation. Yes, we have come a long way, but a lot of cases have occurred that keeping up with them is so hard, but following these is the duty for all of us.”

A presentation about operations and project of ICI by Haktan Akın, Deputy Secretary General ICI was carried out following the speech of Okyay. Then, Okyay invited ICI President Erdal Bahçıvan to the stage to make his speech about the main agenda item. While mentioning about current economical news in the world and Türkiye, Bahçıvan said that the acceleration loss in economical growth in Türkiye which is under global challenging conditions has significantly accelerated. Bahçıvan reminding that Istanbul Chamber of Industry Türkiye Manufacturing PMI (Purchasing Managers Index), the leading indicator of economical activity has decelerated to its minimum level by the level of 42,7 since March 2009 mentioned that PMI has been under the threshold value of 50 for six months successively and revealed the challenging operation conditions in the sector.

Bahçıvan drawing attention to the balancing process in the financial markets recently following the fluctuation of previous months with the effects of measures and steps taken emphasized that the matters concerning the real sector and our industry have kept their places in the agenda. Bahçıvan said: “Yes, there exists a financial balance but balance of the real sector has not been put in order yet.”

Drawing attention to fractures in debt-credit chain, increase in the number of applying for concordat, density in the problems of cash flow and warranties while especially the increase in the prices of public-originated inputs, particularly the energy, has caused increase in the cost pressure on the industrialist, Bahçıvan told that the manufacturers have experienced cost-price imbalance and the business world and banks have continued to come across in finding fresh credit and restructuring.

Mentioning that the interests have been keeping their process and credit growth speed has been running negatively, Bahçıvan stated that commercial credit interests have exceeded 35% while consumer credit interests have exceeded 40%. Bahçıven indicating that while credit growth speed in private banks has been in the level of 13% negative, it has been in the level of 3,7% positive in public banks stated that these rates have drawn attention as the minimum levels since 2009 global crisis. Drawing attention that this also reveals obviously the banks’ unwillingness in giving credit, Bahçıvan said that credit should be given to public banks trying to be supportive for the industry responsively.

Bahçıvan stated that according to them, accumulated VAT liens of the industry should be used as a warrant tool. Telling that the industrialist who is experiencing limit problem in the market can use the VAT amounts which he will take as a warrant with the advice not requiring any cash outflow from the budget Bahçıvan mentioned that the option of providing incentive support should be taken into consideration to strengthen the resources of the companies, if fund is provided.

Specifying that while targeting a powerful industrial country for Türkiye, planing a new success story in economy and discussing the future of industry; the goal, plan and discussions’ complying with the events happening in the world is of great importance, Bahçıvan continued his words:

“21St century is bringing great changes in manufacture and industry understanding with itself, just as in various areas. This century’s manufacture and industry understanding is distinctive compared to the old one. Old manufacturing style based on low-cost labor and raw material is giving its place to an industry which is high added value of which main element is based on science and technology. I think it would be beneficial to express clearly: By maintaining low-value-added traditional manufacturing structure, taking place in the global competition is not possible anymore. While the competition is increasing day by day, fortunately, industrialism is gaining value in all over the world with a new generation understanding. On the other hand, the understanding that the most stable and qualified contribution can be made in a sustainable economic growth can be made by the industry is increasingly being approved day by day. We should improve our own high national technology by catching up with the change in all over the world in line with this understanding and approval, after leaving being consumer of the technology which has been produced by others.”

Emphasizing that according to them, the middle-income trap and low-growth which they really complain when taken into consideration Türkiye which has great goals and youth population is no longer acceptable, Bahçıvan touched upon that they come across with the difficulty of increase of the quality in the manufacture in the route of Türkiye’s becoming a powerful industrial country. Bahçıvan said that the matters of strengthening the human capital by education, ARGE and increasing the technology content in all manufacture and service processes which have been advised as the antidote of low-growth by carrying the science and technology into manufacture should be the point on which they should mainly focus. Bahçıvan said: “Should I mention that this kind of focus will lead the way for a qualified manufacture? We all agreed on this matter: Qualified export in which the high-value-added products’ share has increased is indispensable for us. Our priority target is to increase the manufacture industry’s share which is currently around 10% within gross national product to the levels of 25% again. On the other hand, we should increase the share of high technological industry products within the export above the 4% which it has currently.

Emphasizing that while technology and high-value-added manufacture take place in the center of the new story of this period, the qualified person who can reflect his or her knowledge and competences is the main element, Bahçıvan drew attention that achieving these goals in our era is possible only by making investment in qualified person. Bahçıvan stated that the education programs of universities and vocational high schools should be revised in a way that they will meet the needs of qualified person and qualified work force.

By repeating an advice they made previously concerning the universities, Bahçıvan said: “‘Distinguished universities league’ should be created in Türkiye and research and education universities should be separated from each other, just like the developed countries. This is a reality that the countries who achieve this, reach to the competitive position in the world.”

And then, The Minister of Technology and Industry Mustafa Varank said that they have to transform into high-value-added structure in order to strengthen international competition powers and increase the share which they gain from world export. Varank drew attention that they consider the technology manufacturing, design and branding as the main center lines of this transformation. Informing that they will announce the end-to-end Indigenization Program to decrease the dependency of Industry to import, Varank said that their goal is to increase the medium-high and high technology manufacturing share within the domestic industry in a way it will be integrated to international markets.

Stating that works for establishing industrial regions in which high and middle high technological products will be manufactured will be continued, Varank emphasized that they will continue to say “We are here!” in global competition by taking into consideration the demands of industrialists and structural transformation priorities.

Telling that they are working on a financing model appropriate for industrialists and aiming to present this model for the opinions of the relevant party, Varank expressed that when they realize this transformation both energy productivity will increase and industrialists’ cost will decrease. Varank said that they will use digital transformation tools to manufacture concrete policy outputs and become pioneer in public sector in accordance with their names.

Mentioning the creation of smarter, faster and more productive business process thanks to the real-time interaction in the following period, the Minister Varank told that high quality products will be manufactured by low costs thanks to this.

The Minister of Technology and Industry Varank continued his words:

“While realizing its digital transformation in industry, Türkiye will maintain its global competition claim. On the other hand, we will proceed according to our targets and capabilities. Instead of copying the routes of the other countries, we will track our own route map. We will increase our ideas, effort and fund to the possible highest level from basic scientific work to manufacturing prototype in each technology field; and design our national technology move through this belief. Our Ministry has presented Enterprise Information System which is the inventory of real sector into the service. Therefore, we can make detailed analyses by aggregating economic activity information of more than 3 million enterprises within our database. We will ease the resolution processes concerning our industry and technology policies by taking advantage of data mining and artificial intelligence with EIS in the following period. In other words, we will use the digital transformation tools to manufacture concrete policy outputs and become pioneer in public sector in accordance with their names. We will provide these aggregated data incrementally on sectoral basis into the public service and enable our entrepreneurs and investors to benefit from them.

Sanayi ve Teknoloji Bakan Yardımcısı Hasan Büyükdede

Vice Minister of Industry and Technology Hasan Büyükdede

ICI Assembly Vide President Hasan Büyükdede who was appointed to the position of Vice Minister of Industry and Technology some time ago made his valediction to ICI Assembly because of his new duty. In his speech, Büyükdede said that three vice ministers who have been assigned in the Ministry of Industry and Technology just like him are from Istanbul, and this is a chance for Istanbul. Stating that he will not continue his duty in ICI Assembly Presidency Council because of his intensive tempo but continue to provide service to industrialist in every matter, Büyükdede mentioned that his colleague friend who will be assigned as substitution of him will carry out this duty deservedly. Stating that they took opinions from 25 ICI member industrialists from their sectors in organizing the regulations, Büyükdede told that they made the decisions they took and regulations they published together.

Following the speeches, ICI Assembly Members presented the works by ICI Assembly Work Groups and their solution suggestions for the problems to the Minister of Industry and Technology Mustafa Varank through a presentation. Also the Assembly Members representing various different sectors obtained the chance of transmitting their opinions concerning the current matters and the problems they have been experiencing to the Minister Barank by going up to the rostrum.