BRANCH GENERAL ASSEMBLY

8 MARCH 2021

BURSA

Honourable Governor,

Honourable Members of Parliament,

Honourable Deputy Metropolitan Mayor,

Honourable Rectors,

Honourable President of the Bursa Chamber of Commerce and Industry,

Esteemed Members of our Board of Directors, our Branch Presidents,

Esteemed Presidents and Representatives of the Business and Political Worlds and of Civil Society Organizations, Esteemed President and Members of our MÜSİAD Bursa Branch, members of the MÜSİAD Women’s Committee,

My brothers and sisters from Young MÜSİAD, Esteemed Members of the Press,

Welcome to the General Assembly of our Bursa Branch; I respectfully greet you all.

Distinguished Guests,

I would like to begin with assessments concerning the period before and after the pandemic .

The year 2020 greeted us with the pandemic. In fact, this process, which began in 2019, took hold of the entire world in 2020, and it does not look like a period that will pass quickly. Although vaccination efforts give us some hope, particularly in the name of economic and social normalization, the formation of social immunity and our return to our former lives will in all likelihood take until the middle of 2022. Well, I suppose the critical question here will be this: will we be able to return fully to our old normals? As you know, for more than a year we have been working and sustaining our economic life within a different way of living. In fact, we may say that we have gradually adapted to these conditions as well. The human mind first resists every new situation and then accepts it as the new and established normal. We do not even feel pain with the intensity of the first moment. In the end, even if the COVID process comes to an end, it will have left us with brand-new habits and production-trade models. What is more, we will have grown used and adapted to them — our working life, our business models, the ways in which we employ workers and managers. Applications such as mobile technologies, e-commerce, remote work, production bases and artificial intelligence software have already begun to gain acceptance in many enterprises. This means that it will not be very possible for us to return to the past and to its methods of production and trade. Partly for this reason, economists define this process as the great reset.

At the beginning of the process we had perceived the great reset as a paradigm shift of capitalism. We were expecting that the Bretoon Woods system would collapse and that institutions such as the IMF, the WTO and the WB would be replaced by a far more humane model of production and sharing, one more merciful towards tomorrow. What we were in fact expecting was a deep change of understanding at peace with the human being. Indeed, as I said in an interview I gave in those days: we needed to make a covenant of mercy and compassion with nature. But it did not happen. Instead of renewing itself, the system this time took the basic rules of a century earlier and combined them with digitalization, and what emerged was a model of a nation-economy that would operate through state interventions governed by digitalization. Why did this come about? Because, my esteemed friends, the pandemic showed us a reality we had never taken into account: when production stopped all over the world and all the doors were closed, that is, when everyone, every nation, was left on its own, how was each one going to fend for itself? While for years we produced and traded with globalization and the economic wind it unleashed upon the world, with the impact of the pandemic globalization suddenly collapsed.

Let me remind you:In the early days of the pandemic the states of the world came to the point of stealing masks, medical supplies and medicines from one another. There was looting. So where was the globalization that was supposed to save us? Instead, states stepped in and tried to keep their peoples and their economies standing with aid packages and stimulus packages. Everyone shared this in proportion to its own national income. Yet at the point we have reached, both the form and the direction of money have begun to change once again.

Despite the packages announced, the projections of companies around the world were adversely affected in the face of uncertainty. The normalization of a single country would not produce great results. After all, every country was part of a network of trade with the others. The already heavy debt stocks of countries deepened further with the fiscal packages announced. At present, a broad additional debt stock is forming in all countries. In the medium term it will of course be inevitable that there will be fiscal pressures in the policies of these countries.

"Because the solution to a country’s economic problems lies hidden in production. Therefore the solution to the problems the economy faces can be solved only through production. For without production there is no growth, no wealth, no employment; unemployment cannot be coped with, inflation cannot be coped with, exports cannot be made, imports cannot be reduced, there is no development and no enrichment. Production has to be multi-sectoral rather than of a single-sector structure.

Esteemed guests,

Saying “I told you so” is, believe me, a heavier burden for the one who says it than for the one who hears it. Because a pressure builds up inside you: should I have insisted more? We drew attention to the importance of production. We stated that the financial markets were and would remain insufficient to explain the real economy! In production, no sector should be neglected. That is, production in the field of agriculture and livestock breeding, industrial production and production in the services sector must proceed in a synchronized manner. Not one of the fields of production should ever be sacrificed to another. This is called the Multiple Production Model.

For a long time in our country, consumption has been greater than production. The solution to our problems is closely linked to being able to reverse this fact. In other words, by moving to an understanding of “consuming by producing”, it is possible to overcome all our problems, economic ones first and foremost. Only to the extent that we succeed in producing can we become the rising country of this century. Otherwise, we may find ourselves face to face with the loss of even our present gains." It was September 2018 when we said these things. At the point we have reached now, it is as if we have rewound the film to the beginning.

In the same way, we had warned that 2019 should be the year of gathering strength and that 2020 and afterwards would be the beginning of a rather troubled process! We said that the risk of a new economic fluctuation over commodities was high. We had emphasized many times that the wave of protectionism that began with Trump would evolve into a new period in 2019, that we needed to pay attention to the possibility of a new wave of withdrawing dollars from the markets, and that “Türkiye had to rapidly expand trade in national currency against this. We had said that 2020 and 2021 would be a difficult process for the world economy and had emphasized the importance of developing new trade routes and supply systems. Now, before us there also stands a world whose balances of power are being reshaped. Look, a change of president took place in the USA, and the new president, Biden, displays an unpredictable policy in terms of process management with his way of doing business and his distant attitude towards our country. Biden does not appear to have moved very far from the discourse of his vice-presidency in the Obama era. Biden is a name who acts in accordance with diplomatic convention; that is, it can be said that he does not have Trump’s model of conducting politics primarily through personal social relations. When management processes are being assessed I always argue that (no offence intended in the comparison) those who whisper to the king must be analysed as well as the king himself. Not only Biden’s but also his team’s view of Türkiye will contain the codes of the new period between us. Biden’s team consists of expert bureaucrats and diplomats with doctoral-level studies not only on Türkiye but on the entire Middle East and Eurasian geography.

In the same way, the fact that the commercial dimension of the war between China and the USA is unfortunately being waged over transport, that is over logistics lines, will also show us how Türkiye will use its quality of being a transit country here and whether it can emerge from this process profitably. In a world where shipowners have been directing world trade for months, the bursting point of foreign trade squeezed in the face of rising freight costs will also bring with it a new impasse for the developing countries that will be caught between the USA and CHINA.

Companies that are struggling to stay on their feet, and banking companies in particular, are turning to the option of consolidating themselves through merger and acquisition activities. Yet the pandemic reminded us of such concepts that these have become the new elements of power by which the future will be shaped: food and agricultural security, rural development, renewable energy and energy investments, new lines in logistics, mergers and acquisitions, economic security, insurance and reinsurance, smart cities, infrastructure and superstructure investments abroad, production bases and campuses, pharmaceutical raw material production, technical textiles and many more that I have not been able to list.

My esteemed friends, go to our MÜSİAD website and look: the critical issues of the new period that I mentioned above are the names of the committees of the movement we designed three years ago and called renewal. For this reason, I would like you to see the vision, the strategic mind and the intelligence behind the work that has been done. For this reason, I recommend that you embrace this renewal movement and keep it alive. Distinguished Guests,

Even if the economic paradigm does not change profoundly, state control certainly makes itself felt. Because in times of crisis the understanding of the social state is a strong expectation on the part of the citizen. Look at the point we have reached now: however large the stimulus and support packages countries put into effect, they are in fact moving towards a closed economic system. This too points to the importance of the concept of the self-sufficient country. The same situation is in fact being experienced in our country as well. If you pay attention, the state is increasing its position as market founder, regulator and controller in almost every field. In such a global crisis process the state is of course acting for justified reasons in carrying out practices of this kind; but here we, as the industrialist and producer segment, must also take a position that protects ourselves. At this point MÜSİAD is carrying out comprehensive work with both the bureaucracy and the ministries in order to protect the positions of its members in terms of the profitability and the competitive environment of their production and trade.

Five months ago a strategic cooperation protocol was signed with an institution, the Presidency of Strategy and Budget, for the second time in the history of Türkiye. As MÜSİAD we both played a highly active role in the phase of preparing the 11th Development Plan and were influential in having strategic and promising sectors and road maps incorporated into the Development Plan, and, by crowning this process with a protocol, we showed that we would be an active player not only in planning but also in action, that is, in implementation.

At this stage our central committees have already begun their work with the relevant departments of the SBB. Now it is the turn of the teams to be formed from among you, in line with the projects and proposals that will come from our Branches, to be matched with the relevant committees and the SBB departments and included in this process. Perhaps the most unfortunate aspect of our renewal process was that, just as integration was to be carried out in our local and global networks, we were confined to the centre by the pandemic. But I believe that in the period from now on, with your renewed boards of directors, in both our local and our global units

all the components of the renewal project will be integrated with you, and you too, as active parts of this system, will take part in activities such as project generation and winning together, and fund creation. For there is no turning back from this new management model of ours, and from the road we have set out upon, which has been received with appreciation particularly by our state and by our esteemed President.

Distinguished Guests,

As you know, we launched our renewal process in order to prepare in advance for the new world system. Our motto at the outset was “together”. We have fulfilled almost all of the initiatives 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 country’s economy and at improving the culture of partnership among our members. To this end, a total of 23 committees under the roof of the MÜSİAD MECLİS, which we established during the renewal process, have begun to gather the potential investors and industrialists in Anatolia around specific projects with projects suited to their own thematic or sectoral fields.

These projects have begun to encourage the capital power in Anatolia to invest in projects or to become partners in them.

For example, with our Investment and Production Bases Project we have created a model that will, by building living and production zones where all their needs will be met in the same environment, turn our small-scale firms — which struggle to produce in confined spaces and therefore cannot reach economies of scale — into institutionalized firms ready in time to move into Organized Industrial Zones (OSB). We have completed the first prototype of this model and have also begun the construction of the second.

We have to establish production bases for epidemics and disasters that may recur. By establishing production bases it becomes possible to protect firms, employees and production in situations of epidemic or severe disaster and to keep them going without a full lockdown. On the other hand, with our Smart Agricultural Cities Project we have launched an initiative in the name of encouraging rural development and in this way supporting reverse migration and achieving a homogeneous population structure.

We presented this to the Ministry of Agriculture and Forestry as a model.

With the Smart Agricultural Cities Model we have developed an initiative to encourage rural life and support rural development, with opportunities targeting the population crowded into the big cities and especially women’s and young people’s enterprises.

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 23 locations in 20 places and turning them into brands of Türkiye and of the world. These and many other projects have been the fruits of MÜSİAD’s renewal adventure.

We have created a MÜSİAD Brand in six basic fields in line with Türkiye’s six basic strategies:

MÜSİAD INNOVA (MÜSİAD INNOVATION), in the name of adapting to the conditions of innovation management and digital transformation.

MÜSİAD FUTURE (MÜSİAD FUTURE), in order to develop the strategic sectors and business models of the future,

MÜSİAD ACADEMY, in order to turn education into a MÜSİAD school of thought and to give it a corporate identity.

2023 YER-EL (20 PLACES 23 HANDS), covering the work aimed at our Anatolian firms in the name of bringing world brands out of Türkiye by increasing branding and the brand value of companies and turning our SMEs into large-scale corporate brands,

MÜSİAD INVEST (MÜSİAD INVESTMENT), in order to turn the credibility advantage of the MÜSİAD Brand in Türkiye’s investment strategies, its field presence and savings kept under the mattress into mass investments and partnerships and to establish the systematics of investment funds; and MÜSİAD TIA (MÜSİAD TRADE AND INVESTMENT AGENCIES), which we designed together with the Presidency Investment Office in order to promote Türkiye as an investment and trade market for the direct foreign investor and to run MÜSİAD’s wide presence abroad like a trade and investment system.

You, all our branches and our networks abroad, will be subject to this integration in the new Presidency period from where we left off and, God willing, will be instrumental in our process carrying our MÜSİAD much further forward. Distinguished Guests,

Türkiye is a very strong country and is indispensable in the puzzle of the world’s global economy. The global economy, which before the epidemic was expected to grow by %3.5 over 2020 as a whole, is estimated according to current forecasts to have contracted in this period in the band of %4.5 - %5.0.

Although the global economy, which contracted sharply in 2020, is projected to recover relatively in 2021, forecast uncertainty remains high depending on the course of the epidemic.

Our country, for its part, is among the foremost countries to have come through this difficult process with only slight damage.

As is known, the Turkish economy, which grew by %5.9 in the last quarter of 2020, was the country that recorded the highest growth among the G20 countries in this period after China. Over 2020 as a whole the Turkish economy grew by %1.8 and displayed a performance that surprised all the international institutions which at the beginning of the year had made contraction forecasts for it. Of course this performance was not surprising for us. For as MÜSİAD we had stated at every opportunity that Türkiye, with its existing manufacturing potential and flexible production capacity, had a serious advantage when compared with the other countries in its class.

For this reason, in this coming period which we may describe as the new era, we believe that we must go beyond the effort we have shown so far in the production-trade-investment triangle and place particular emphasis on export-oriented manufacturing production.

Indeed, despite the leap we have made in recent years particularly in the services sector, manufacturing industry maintains its importance for the Turkish economy. The industrial sector, which expanded by %10.3 in the last quarter of the year, and manufacturing industry, which grew by %10.5, were the driving force of the growth relating to the period in question.

In order to be able to reflect the advantage in question in the field together with all its parameters, we must prepare manufacturing industry very well for the medium- and long-term transformation process brought about by Covid-19. For before us there lies an area of opportunity in which, by using it to develop our R&D and innovation capacity and our workforce competencies, we can make a serious leap in the global economy in the long term. We think in particular that we have a serious advantage in terms of geographical position and that this will create a great area of opportunity for our country in the future projections of the global economy. We believe that this opportunity will offer possibilities within a very broad framework, covering many of our sectors and production power of every capacity.

As a reflection of this belief of ours, in 2020, a year that passed with economic difficulty because of the pandemic, we held one of Türkiye’s most important fairs.

We held MÜSİAD EXPO 2020, the largest fair organized after the pandemic, which attracted intense interest from both exhibitors and visitors, with broad participation, and completed it successfully.

Close to 15 thousand visitors from 102 countries, principally from Europe, Asia-Pacific, Eurasia, Africa and the MENA countries, attended the four-day fair. At the fair, which we held under the slogan “Global Trade Is Here”, we hosted 400 purchasing delegations from 50 countries.

EXPO 2020, which we held at the İstanbul TÜYAP Fair and Congress Center and which was attended by business people, politicians and academics from every region of the world, enabled our business people to open up to new collaborations while also allowing foreign investors to examine at first hand the investment opportunities in our country.

Distinguished Guests,

Today we are in Bursa, which is extremely important for our industry and which pleases us in terms of exports.

How beautifully Ahmet Hamdi Tampınar says it in his poem Time in Bursa: We visited its Yeşil Türbe last evening

We heard from time, like a piece of music,

The sound of the Qur’an that had seeped into the tiles,

The pure joy of the days of the conquest

It is truly so, a crystal chandelier, time in Bursa…

With the contributions it makes to the development of the national and regional economy, to the provision of foreign currency inflows through exports and to the strengthening of industrial infrastructure, Bursa is in the position of a global centre of attraction thanks to its developed manufacturing industry and trade.

Ranking second after İstanbul among Türkiye’s largest exporting provinces in 2020, Bursa displays great dynamism in economic terms. Although the exports of the city, which has a say in the industrial sector, recorded a decrease of %14.0 compared with the previous year, it put forward a strong performance with USD 12.9 billion.

The Automotive Industry, which ranks first in the province’s exports with a share of %53, is increasing its importance for the Bursa economy day by day. In total automotive exports Bursa ranks first with a share of %26 across the country. Automotive exports were followed by the Ready-to-Wear and Apparel and the Textiles and Raw Materials groups.

In Bursa, which in this period carried out exports of goods and services to a total of 191 countries, the first three places were taken by Germany, France and Italy. As I have stated, Bursa has always displayed performances that give hope for Turkish industry and has been instrumental in our taking important steps on the road to Türkiye’s targets.

We are proud of the positive economic performances of our cities, but we always strive to carry this one step further. With this aim, as MÜSİAD we support our fellow travellers with 89 points in Türkiye and 225 contact points in 95 countries in the world.

With the employment of 1 million 800 thousand people it provides, we have brought this valuable structure — which works harder every day in order to be of benefit to the Turkish economy and to the nation — to this point together with each one of our members.

We do this with the strength we draw from our corporate culture, our accumulated knowledge and our organization.

By processing the information we obtain from the regions through you, we are creating an important database. As a result of this we present the business world with a picture that sets out all the risks, the opportunities and the current problems. We evaluate the micro information that reaches us, and the output we obtain, the economic administration

We become the voice of the business world. On the other hand, we create a ground for a sustainable flow of knowledge and experience.

As MÜSİAD, while embracing the ideals of our founders and these targets of ours, we also carry on the MÜSİAD tradition.

Our Qard al-Hasan Fund, one of the finest applications of this tradition, becomes a balm for wounds with the favour of our members and enables us to strengthen the culture of brotherhood and pass it on to new generations.

Our Qard al-Hasan Fund project, which we brought to life out of a desire to sustain an ancient tradition, has institutionalized the culture of mutual aid and solidarity among our members by turning it into a corporate structure, which we created with the thought of making our merchants’ trade easier, and the culture of mutual aid and solidarity.

On the other hand, we also carry on the “Zimem Ledger” practice, another of our ancient traditions, with the support and contributions of all our branch members, primarily the head office.

Dear Friends,

MÜSİAD is a family, a home, a school. Here we all walk with the pride of being soldiers of the same consciousness and the same cause, and when the time comes we hand the flag over to the brothers and sisters who come after us. This rule is ancient for everyone. This is what makes MÜSİAD distinctive. For this purpose, being present at the General Assembly of our branch makes me exceedingly happy. As I complete my words here, I hope that the MÜSİAD Bursa General Assembly will bring good things and that the contributions our branch makes to our business world will continue to increase. I wish success to our Bursa Branch president Nihat Bey, to the board of directors, to the MÜSİAD women’s committee and to our brothers and sisters from Young MÜSİAD. I also thank our MÜSİAD Local High Board president Ahmet Bey and our local relations committee, as well as our production and trade high board president Oktay Bey, for their presentations; I thank our professional staff and everyone who has contributed.

I greet you all with respect and affection

Abdurrahman Kaan

President of MÜSİAD