Yılmaz’s remarks came at the Structural Development in Foreign Trade: Global Dynamics and the Turkish Economy conference organized by the Central Bank at the Marmara Hotel. The bank chief said the central bank was closely following the ongoing development in the industrial sector, adding that two of the institution’s research projects would be of critical importance to Turkey’s international standing. “The findings indicate that in order to ensure a lasting increase in Turkey’s global competitive strength, what is needed is not short-term policies based on exchange rates, but a long-term perspective including micro reforms,” he said.
The central bank chief went on to talk about the two studies, saying that they were complementary to one another. The first study summarized global trends in international trade, while the second examined the connection between production and imports in Turkey, he said. The first study showed that following World War II national economies opened up to foreign markets quickly, beginning with developed countries and with the trend later spreading to developing countries. “While the share of exported industrial products rose in developing countries, in developed countries there is a shift from exporting industrial products to services,” Yılmaz said.
Yılmaz also spoke about the second central bank study, which examined the effect of global trends on the Turkish economy by utilizing data from firms. The study focused on production’s dependence on importation, and polled industrial manufacturers on the reasons why they preferred to import intermediate materials and investment materials from abroad. “The study determined two separate processes that increased the dependence of production in Turkey on importation. The first of these is the increase in trends toward the usage of imported input materials by sector firms, and the second is that the sectors which heavily used imported input materials grew at higher rates than those which did not,” Yılmaz explained.
State Minister Zafer Çağlayan also spoke at the conference, commenting that it was impossible for Turkish industrialists to compete with foreign products in places where cheap imports were involved. “In such an environment the Turkish exporter became forced to turn toward importation -- this isn’t a situation involving inability on the part of the Turkish industrialist,” he said. He said that the decrease in the value base in exports was much more than the decrease in amount and again emphasized exporters’ concerns over exchange policies and stock prices.
But Çağlayan disputed the findings of the central bank’s study on foreign trade that said that the need for quality intermediate and investment materials boosted imports, saying: “As someone who worked in industry for 27 years, I can’t agree with this. Is our problem here arising from the quality of materials or from other problems, particularly the financing problem -- these must be very well analyzed.”
Turkish Exporters Assembly (TİM) President Mehmet Büyükekşi said that his council expected the central bank from now on to be sensitive to the issues of competition, production, employment and the value of the lira and to strengthen the exchange reserves. He said that the crisis period presented TİM with the opportunity to work closely with the central bank administration and that as part of the precautionary measures realized during this period, exporters had drawn a total of $1.25 billion in Eximbank loans. Turkey has no choice but to attain superiority in competition, Büyülekşi said, and work is ongoing to develop a strategic plan and a performance program in alignment with this goal.
