Business world reiterates faith in economy, expects further recovery

Zaman brought leading figures from various sectors and Finance Minister Mehmet Şimşek together in a meeting on Friday to evaluate the latest developments in the economy and discuss solutions to problems in the market. The Turkish economy has the potential to turn prevailing threats to the market to its own advantage and maintain stable growth as the impact of the crisis has eased to a great extent, participants at the meeting agreed. Young Businessmen's Confederation of Turkey (TÜGİK) President Hazim Sesli cited recent noticeable increases in natural gas consumption and employment in the organized industrial zones (OSBs) of Bursa, Kayseri and Uşak as a clear indicator that the crisis has eased to a great extent.

Sesli asserted that recovery in the OSBs was the preliminary sign of an exit from the crisis. Underlining that his company has managed to maintain growth due to taking the right steps at the right time, Ağaoğlu called on Turkish entrepreneurs to challenge the limits and work hard for a faster recuperation.

Some prominent players in Turkish business circles, including Turkcell CEO Süreyya Ciliv, TAV Airports Holding CEO M. Sani Şener, Ağaoğlu Holding Chairman Ali Ağaoğlu, İstanbul Gold Exchange (İAB) Vice President Osman Saraç, Turkish Exporters’ Assembly (TİM) head Mehmet Büyükekşi, Association of Turkish Furniture Manufacturers (MOSDER) Chairman Nazif Türkoğlu and the Turkish Retailers Federation President Şeref Songör, were present at the meeting.

Asserting that the latest figures suggested that the Turkish economy is picking up, Şimşek said businesses from large to relatively smaller showed strong signs of recovery.

Sharing his views on the current picture in the Turkish economy with the participating businessmen in the first part of the meeting, Şimşek recalled that the Turkish economy had enjoyed sustainable growth between 2002 and 2007 but that the global credit crunch of last year dealt a major blow to this positive outlook. “Global trade suffered the fiercest stagnation in the past 80 years last year,” Şimşek noted, adding that the major problem the crisis inflicted on the Turkish economy was a rapid rise in unemployment. “Unemployment in Turkey soared by 2.7 percent last year over 2008. ... This alone is enough to see how deeply the markets were hit by the crisis.” The minister said the unemployment problem would remain a major issue for the markets despite a recovery in the global markets. Mentioning declining inflation figures, the minister said: “Turkey has seen a 6.5 percent inflation rate, the lowest in 40 years. This created an expectation of deflation in the markets. However this is no longer a threat since demand is increasing and the prices are as well.” The minister said inflation could emerge as a problem in the coming months.

The Finance Minister Mehmet Şimşek (C) speaks to representatives of Turkish business world during a meeting held in the Zaman daily headquarters. Şimşek was accompanied by Zaman editor-in-chief Ekrem Dumanlı during the meeting.

Noting that governments had to spend billions of dollars as part of stimulus packages, the minister asserted that Turkey managed to overcome the difficulties with relatively smaller wounds when compared to most countries. Underlining that most foreign investors had maintained their confidence in the Turkish economy, the minister said the government sees the utmost importance in retaining stability and confidence in the markets, Turkey’s biggest advantage amid the crisis last year.

The minister recalled that the crisis had the most severe effect on Turkey’s non-financial industry, noting that banks, on the other hand, enjoyed historic high profits last year.

“Turkey could have been in a far worse position than the current one had the government not taken effective measures to address those problems. We have refrained from relying on heavy tax burdens. … We could have, but we did not opt for such a measure.” Şimşek said the government tried to do its best to support exporters and worked on possible ways to minimize unemployment to ease the burden on companies. Noting that the government has intensified its quest to continue the current positive outlook in the markets, Şimşek said they worked hard to maintain an advantage due to declining interest rates while they studied steps to keep inflation rates low.

‘We need opposition’s support for a new trade law’

In the second part of the meeting, businessmen shared current developments in their sectors in detail and conveyed their demands and suggestions to the minister. Şimşek answered a number of questions, including queries on anticipated regulations in the market, new incentives for various sectors and measures to further rejuvenate the economy. One of the topics that participants accentuated was the need to introduce a new trade law. As he acknowledged that the Turkish economy is urgently in need of a modern trade law, Şimşek said the government has brought the issue to the table many times and accused the opposition parties of “blocking the process.”

“Whenever we discuss this issue in Parliament, the opposition produces new objections.” Recalling that the law includes 1,500 articles, the minister said the government has concentrated on restructuring articles concerning the repayment of public and private debt.

Gov’t to combat unregistered economy with strict measures

The growing threat of unregistered employment was also among the discussion topics during the meeting. Representatives of the business world reiterated their concern over expanding underground business activities and demanded that the government accelerate studies to address the problem. Listening to participants’ suggestions, the minister said the government was currently entertaining a number of measures to prevent firms from engaging in unregistered business activities. The minister said his ministry has already started to hire new staff to investigate the market, adding that the government is committed to minimizing unregistered economic activity. “We may introduce stricter fines on these activities,” he said.

New projects to contribute to employment, but problems linger

Asserting that the major problem the crisis created in the Turkish economy was a rapid rise in unemployment, the minister noted: “Unemployment in Turkey soared by 2.7 percent last year over 2008. ... This alone is enough to see how deeply the markets were hit by the crisis.” The minister said the unemployment problem will remain a major one for the markets despite a recovery in global markets. Mentioning the current unemployment problem, the minister said the government has recently accelerated studies to finalize large projects such as the Southeastern Anatolia Project (GAP), the Eastern Anatolia Project (DAP) and the Konya Plains Project (KOP), which are expected to eventually trigger an increase in employment. Recalling that the government aims to finalize the GAP project before the end of 2012, the minister said he believes the project will provide jobs for more than 1 million people. The minister added that the government is aware that it will take some time to decrease unemployment in the country and that these large projects will hopefully contribute to this process.