MÜSİAD BATUMI GENERAL ASSEMBLY
21 JUNE 2021
Honourable Ambassador,
Presidents and Representatives of the Business and Political World of Georgia, of the Chambers and of the NGOs,
Esteemed President and Members of our MÜSİAD Batumi Branch,
Esteemed Members of the Press,
I respectfully greet you all at our General Assembly; welcome.
Distinguished Guests,
As you know, the year 2020 met the entire world with a global disaster that at times reached levels almost impossible to bring under control: the Pandemic.
This situation, which at first appeared to be a health problem, an epidemic, of course evolved through a domino effect into an economic crisis that engulfed the whole world. Although countries tried for a time to manage the situation with the support packages they launched so as not to leave their own citizens aggrieved, this settled into an inflationary course, leading both to budget problems and, of course, to rising demand as a result of the large amount of money entering the market.
This state of affairs, which we inherited from 2020, of course also became the main item on the agenda of the year 2021 and will continue to be so. Although the epidemic has calmed with vaccination efforts and the arrival of the summer months, what course it will take in the coming winter months still remains uncertain.
The year 2020 became a year of complete introversion and closure for almost all the countries of the world. As a result, economic and commercial activities of course came to a standstill. The halt in movement between countries and the fall in output as a result of full closure in domestic production showed how fragile the economies of countries in fact are in the face of a possible crisis.
The pandemic in fact brought to the surface many a truth that almost the whole world had been ignoring for quite some time: a world drifting ever further from a production-weighted economy had submitted to the conditions of money earned over money, that is, of the financial economy. Since 2016, production in Western economies had been shifting increasingly towards Asia, just as growth and trade volume had. The Developed Economies had become the consumption area of the world in the face of the ever-increasing growth rates, production and trade volumes of the Asian Bloc and the developing economies on which they leaned before the Pandemic. In the East the situation was somewhat riskier; this time China had bound the world to itself at a rate of %28 in terms of intermediate goods for production. In logistics and technology exports this rate was at the level of %15. In other words, the system we praised as the Global economy was in fact quite fragile and needed to write a new story in order to renew itself. Unfortunately, in this environment the pandemic caught us unprepared. I hope that we emerge from it having drawn the necessary lessons.
What kind of lessons: first of all, the importance of production. That is, the fact that money which does not actually exist in derivative markets, money turned into a promissory note secured on the future, ceased to be a means of exchange in the economies of countries and came to be seen as a commodity, has distanced us from the importance of producing and of the real economic power that production gives. As I have always repeated: the power of money in a country is determined by that country’s power of investment and production.
To invest anew, to prevent the loss of capital and at the same time to increase the efficiency of support and incentives by directing the right investment channels with suitable resources into the right regions. Furthermore, by correctly understanding the new definitions and concepts that the notion of investment has arrived at in the world, without disregarding the importance of digitalisation in investment planning, not to see investment as an element standing on its own but to operate the synchronisation of investment, production and trade in the best possible way.
As MÜSİAD we were frequently voicing these concepts long before the Pandemic. On many broadcast channels I had stated that serious economic ruptures awaited us along the 2020-2022 line. I had underlined the need to write a new story. In order to be prepared for change before anyone else, we carried out a serious Renewal effort within our own institution and, thank God, we have largely completed it. This new structure — fast-moving, far from bureaucratic sluggishness, operating with project-based committees and uniting our presence in the world within a logic of gathering and processing information in a single hand — has been registered as a management model with no equivalent in the literature. To see that the committee names we designed 2.5 years ago are today strategic elements in the world, and that they have become fields of study at the level of the EU, makes us proud in terms of predicting the future and of having carried out our simulations correctly.
Distinguished Guests, in terms both of its internal dynamics and of its relations with its neighbours, Türkiye is always a young, fast, proactive country capable of writing new stories. We are not an island country. Very few countries in the world have so many neighbours in the sense of direct land borders or territorial waters. Turning this situation into an advantage for both countries is of course indispensable under the new production, investment and competition conditions of the new world order.
The Black Sea is an indispensable element for Türkiye’s trade. So too are our relations with the neighbours with whom we share territorial waters within the scope of the Black Sea. In this respect Georgia is the intersection point of investment, trade, tourism and joint cooperation. Four years ago, when we first put forward the concept of trade diplomacy and produced a scholarly publication examining it down to its finest details, we were well aware of what we were talking about. For the language of trade and its diplomacy are both different. This concept we put forward turned first into the mission slogan of an institution and then into a state strategy. This makes us proud.
For MÜSİAD, with its active structure at 225 points in the World, is a capital platform whose like is rarely encountered. Now we are voicing yet another concept altogether: investment diplomacy. For trade, in the end, is a buying and selling transaction that takes place within the framework of certain rules. Investment, however, is a decision-making process. That is, investment is a field that demands end-to-end management and support and requires an entirely different lobbying and use of language. The most critical concepts for this are of course: economic information and field structures that will encourage investment between countries, just like the MÜSİAD BATUMI Branch.
These structures work like agencies both for following economic intelligence and for drawing the right investor to the right investment areas. Just as Georgia holds the position of a key country for the Black Sea in our country’s neighbourly relations, Batumi is of equally strategic importance.
Distinguished Guests,
Batumi, the third largest city of Georgia, stands out not only as a popular choice for Turkish citizens in the tourism sector but also as an important centre of trade.
The Port of Batumi in particular, while making the city an important economic centre, carries considerable potential for the shipment to the European market of products leaving the Black Sea.
Türkiye’s exports to Georgia in 2020 rose by % 2.4 compared with the previous year and amounted to USD 1.5 billion. In the same period our imports from Georgia rose by %62 compared with the previous year and amounted to USD 349 million.
Both the export and the import figures indicate that 2020 has been left behind as a highly productive period in foreign trade between Türkiye and Georgia and that it was the year in which the highest trade volume between the two countries was reached.
That trade between Türkiye and Georgia peaked in this period spent under the impact of Covid-19, despite the serious contraction in global terms of trade, is highly significant in terms of reflecting the mutual economic potential of the two countries.
When we consider that we have around 2,000 companies in Georgia with Turkish owners or partners and that 327 companies with Georgian capital operate in our country, we can state that there is no reason why the mutual trade volume, which stands at the threshold of USD 2 billion, should not be raised to higher levels.
Indeed, the data for the first four months of 2021 also indicate that trade between the two countries is continuing to develop. In this period our exports to Georgia recorded an increase of %5.7 on an annual basis, while our imports from Georgia expanded by %21.6 and preserved their upward momentum.
Therefore, we have full confidence that through the efforts of us business people, and depending on our ability to evaluate opportunities correctly, we will carry trade between the two countries higher in a short time.
Esteemed Guests,
As you know, in order to prepare in advance for the new world system, as MÜSİAD we launched our Renewal process. Our motto at the outset was “Together”. Now, renewing that word, we say “WE ARE HERE”. We are here for partnership, for cooperation, for opening new fields of investment, and for realising cooperation between countries with the responsibility and the awareness that come from being one of the most widespread capital organisations of the World. We are here to write a brand-new story on behalf of our country. New investments,
We have fulfilled almost all the openings we planned and promised within the framework of our Renewal process. Now we are gathering the fruits of this process with our large-scale projects.
As MÜSİAD, we are developing projects aimed at increasing the contribution made to the national economy and at developing the culture of partnership among our members.
Our 23 committees under the roof of the MÜSİAD ASSEMBLY have begun, with projects suited to their own thematic or sectoral fields, to gather potential investors and industrialists in Anatolia around specific projects.
These projects have begun to encourage the capital strength in Anatolia to invest in projects or to become a partner in them. The duty now falling to us must be to bring the strength of Anatolia together with the investment diaspora abroad. This is a matching activity, and thereafter it will be to encourage cities to produce more capital and to build brands by developing them with their own distinctive values alongside the right investments. But for this we must keep ready production areas prepared for any epidemic or crisis. In addition, we must build production and investment bases that institutionalise and grow within themselves those companies which have growth potential but cannot realise it in terms of space, and that help them take even their first steps correctly on the way to becoming brands.
For example, with our Investment and Production Bases Project we have created a model that will turn our small-scale companies, which struggle to produce in cramped spaces and therefore cannot reach economies of scale, into institutionalised companies ready in time to move to Organised Industrial Zones, by building living and production areas in which all their needs will be met in the same environment. We have completed the first prototype of this model and have begun the construction of the second.
We are obliged to establish production bases for epidemics and disasters that are likely to recur. By establishing production bases it becomes possible to protect companies, employees and production in cases of epidemic or severe disaster and to continue without a full closure.
On the other hand, with our Smart Agricultural Cities Project we have launched an initiative to encourage rural development and in this way to support reverse migration and to attain a homogeneous population structure.
We have presented this as a model to the Ministry of Agriculture and Forestry.
With the Smart Agricultural Cities Model we have developed an initiative to encourage rural life and to support rural development, with its opportunities targeting the population crowded into the large cities and especially the enterprises of women and young people.
Today many of our members in Anatolia are carrying out preparatory work in order to implement this initiative in their own regions.
Many more projects like these have been produced by our committees and spread to the grassroots.
Branding cities in the field of gastro-tourism through gastro-economy and Turkish Culinary Arts; establishing structures such as Caravan Tourism and Field Hospitals through multiple partnerships; creating a secure purchasing platform in the second-hand vehicle market; creating a secure real-estate buying and selling platform; and, in line with the 2023 targets, growing selected SMEs in 20 places and 23 locations to turn them into Türkiye and World Brands. These and many other projects like them have become the fruits of MÜSİAD’s Renewal adventure.
You, all our branches and our networks abroad, will be subject to this integration in the new presidential term from where we left off and, God willing, you will be the means by which our process carries our MÜSİAD much further forward.
Esteemed Guests,
As I complete my words here, I wish that our general assembly may be a means of goodness and that the contributions of our branch to the Georgian business world may continue to increase.
I thank Mr. Fatih Keçebir, President of the MÜSİAD Global High Board, and our foreign relations coordinators, and greet you all with respect and affection.
Abdurrahman KAAN
President of MÜSİAD