BRANCH GENERAL ASSEMBLY

23 MARCH 2021

GAZİANTEP

Honourable District Governor,

Honourable Mayors,

Esteemed Members of our Board of Directors,

Distinguished Presidents and Representatives of the Business and Political World, of NGOs and of our Chambers, Esteemed President and Members of our MÜSİAD Gaziantep Branch,

Esteemed Members of the Press,

Welcome to the General Assembly of our Gaziantep Branch; I respectfully greet you all. Distinguished Guests,

Today we are in beautiful Gaziantep, the meeting point of the Southeast and a city that is taking important steps on the road to becoming a brand.

Until recently Antep was mentioned only as a city of education, trade and industry; now the title of “city of gastronomy” has been added to it as well.

In Gaziantep, which is the most developed province of Southeastern Anatolia, %40 of its total income comes from agriculture and %25 from industry, while % 60 of the active population works in agriculture. In the province, whose soils are suitable for every kind of agricultural production, dry farming is practised on its plateaus and irrigated farming on its plains.

Ranking fifth among Türkiye's provinces with the highest exports in 2020, Gaziantep managed to raise its exports by %6.1 to USD 7.9 billion in a period when exports were contracting across the country.

In this period the city carried out exports of goods and services to a total of 193 countries, and the first three places were taken by Iraq, the USA and the United Kingdom.

We have no doubt that the city will carry this success even further once the effects of the pandemic disappear; because Antep, with its industrialists, its local administration and its people, is a city that is aware of its high potential.

Dear Friends,

Like the whole world, our country too is going through a difficult period and undergoing a difficult test. The year 2020 dragged us into a full-blown crisis, both socially and economically. The process that began as a health crisis shattered, so to speak, an already fragile global economy. Even before the pandemic, the conditions, the functioning and the new elements of power of the global economy were being debated all over the world. As production shifted to the developing countries and to the East, Western economies were in fact becoming dependent on the Asian economy, both because their ageing populations left them unable to find a generation to which they could hand over their companies and because they moved their production bases eastward in the face of rising production costs. Türkiye, for its part, was a transit country between these two blocs in both supply and logistics. For this reason neither the global powers of the West nor the rising new countries of the East wanted to leave Türkiye aside. While production and investment networks were shifting to the East, Western global capital had been compelled to have a say in the world economy through financial markets rather than through Production. For this reason the downward growth trend that began in 2016, before the pandemic, was forcing the developed 20 to work in the name of a new economic system and now to carry out the “great reset”, that is, the great zeroing. The pandemic in a way became the point that set this process in motion.

In this economic and commercial war our country was working to guarantee its position and its weight by keeping both commercial and political diplomacy at the highest level. States are not friends or enemies of one another; they are close or distant in line with their interests. Indeed, in these relations between the two blocs, which are strained at times, Türkiye has continuously held the position of mediator and has in a way become one of the balancing elements of the new world order.

MÜSİAD, on the other hand, holds a completely different place and importance within this system of relations. Non-governmental organizations such as ours, which have only a few counterparts in the world and are spread over a wide area, are like a velvet glove drawn over the iron hand of the state. In the background, through the channel of economic diplomacy, they can rebuild and even repair strained relations by establishing trade and investment networks. We too, with both our commercial diplomacy network and our reporting system that gives priority to economic intelligence, are carrying commercial neighbourliness beyond borders. The foreign trade activity of our members in a way guarantees the continuity of our country's new power and position in the world.

Esteemed Guests,

There is a development at exactly this point that I cannot pass over without touching upon. As you know, for the last few days we have been experiencing rather turbulent days in the financial markets. We know that this volatility will not be permanent and that the markets will settle at a certain level of equilibrium. At such times it is a requirement of the rule to preserve calm, to act coolly and not to make wrong transactions out of panic. Managing financial markets is an art in itself, and the skill of this art lies in managing expectation effects. A process of expectations that is well managed both for domestic residents and for foreign investors will bring this temporary fluctuation to an end.

Indeed, the economic administration, the central bank itself and the institutions and organizations of the banking sector have all made the necessary statements on this matter and have declared that measures will be taken. A movement that began in the shallow markets of Asia was reflected in the exchange rate with a lower impact than expected, but of course this could not prevent foreigners from leaving the bond market in particular. Nevertheless, we have no doubt that this situation will be overcome, above all through the action plans of the reform Package being set in motion and through our trust in our state continuing unshaken under any circumstances. In the end, despite the statements made from abroad, Türkiye is still a highly attractive country for foreign funds.

But since the occasion has arisen, I would like to touch on another aspect of the matter. The real economy? Or the financial economy? Of course financial instruments should be among the methods we resort to in order to increase the efficiency of our real economic activities. But did we not ourselves witness how a world system entirely adorned with financial markets became blocked, pandemic or no pandemic? My dear friends, the essence of this business is production. Production alone sometimes remains limited. Production plans oriented towards sales must be adopted. That is, a production and trade planning is required that is suited to its market and scheduled according to the quantity, product and capacity of that market. In this way both domestic demand and exports are realized without interruption and without one obstructing the other. Let us go one step further: investment models compatible with production and trade planning. That is, ensuring the continuity of investment in the appropriate or strategic sector, the appropriate company, the appropriate time and the appropriate product. I call this production-trade-investment synchronization.

Operating this synchronization is possible only by applying three elements of efficiency without disregarding them and by following them continuously: resource efficiency, capital efficiency and incentive

efficiency. In order to achieve this synchronization, the existence and efficient use of resources such as labour, land, energy or natural resources is essential. How should capital be employed in this field? Or is capital going directly into investment or into wealth? Are you transferring what you earn back into your business or into wealth? This must be asked. And finally, are the incentives distributed by the state going to the right place? Is an effective distribution being achieved? Is the incentive going to production and investment or to the banking system?

This was why I asked whether it is real or financial. Phenomena such as inflation, employment, the current account balance and growth fall within the scope of the real economy, and they are again solved and brought into balance through real economic planning and instruments. Running the three basic markets — that is, the capital, raw material and labour markets — in such a way that they feed and consolidate one another allows us to remain within a sustainable development and enables even our growth rates to move at a predictable equilibrium, far from volatility.

Look, Dear Friends

I would like to share some figures with you so that we may see the gravity of the situation: the amount of physical money in the world in the sense of banknotes in circulation is on average at the level of USD 8 trillion. This money is not part of the banking system. Of this amount, 1 trillion is in China, 1.7 trillion in the EU Area, 1.6 trillion in the USA, 0.9 trillion in Japan, and the remaining amount (2.4 trillion) is in the rest of the world. This money is only the amount of money in our pockets. In the science of economics it is also called M! that is, the narrow money supply.

Let us come to the broad money supply, that is, to the money that lies in the banking system. %8 of the money in the world is cash. The rest, that is %92, lies in the banking system. In its most up-to-date form this figure is approximately USD 98 trillion. A portion of USD 38 trillion of this figure consists of demand deposits or cheques. The rest circulates in the system in order to be put to work.

These are the visible face of the iceberg. The real money is the segment we call the financial money supply, and it is at a level of approximately USD 1.5 quadrillion. The 2019 value of derivative contracts alone was USD 550 trillion. The financial money supply consists of funds, derivative assets, digital currencies and contracts through precious metal exchanges — in fact of promissory notes that do not exist and are secured against the future.

As you can see, a money supply beyond all imagination is circulating in the system. Well then, remember what we experienced during the pandemic period. Countries came to the point of stealing medical supplies and even food supplies from one another. That is, the money in the pocket was of no use. As long as there is no production, the money you print is invalid. As long as you do not produce and do not turn this production into trade, real economic problems cannot be solved with financial instruments. Rising commodity prices all over the world, food prices, food security, the water problem — and I claim that the greatest field of struggle in the coming period will be the sharing and use of water resources — could the world's money supply or financial transactions solve any of these?

The pandemic reminded us of one more thing: being self-sufficient. If you recall, within the rules of globalization the free movement of goods and capital had made countries somewhat lazy about production and about making use of their own resources. Multinational companies could easily come to resource-rich countries, carry out production in those countries in favour of their own countries and transfer the profit to their own countries. Take note: the new period will be a century in which national economies come to the fore and in which every country holds tightly to its own resources and to its domestic and national capital. At the head of these resources come, of course, water, agricultural land, seed, our animals, our mines, the plants that are unique to us and used in medical production, our energy resources, our human power and, of course, national capital together with our national companies that keep us standing in every field and in every crisis.

Increasing the self-sufficiency policies of all our sectors that are in a critical position in domestic and national production, and above all determining a new strategy oriented towards foreign trade, will be the right step. We saw years ago the fundamental concept the world has arrived at today: Strategic Autonomy. That is, self-sufficiency in the domestic and national sense in critical sectors and being able to have a say on the world production-trade-investment line. Food security, the defence industry, information technology and data security, and the pharmaceutical industry are among the most important items of these.

It is at exactly this point that Gaziantep, with the sectors and companies that form the backbone of our country, is one of our locomotive cities. Türkiye carried out a total of USD 160 billion of exports in the one-year period between 2020 and March 2021. Gaziantep alone accounted for approximately USD 7 billion of this figure. In December 2020, despite the pandemic, the Southeastern Anatolia Region carried out exports worth 1 billion

29 million 85 thousand dollars and in fact proved that it was possible to work and to produce even in the most difficult periods.

Esteemed guests,

While the global economy, which contracted sharply in 2020, is expected to recover relatively in 2021, forecast uncertainty remains high depending on the course of the epidemic. Our country, for its part, is among the countries that have come through this difficult process with the least 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 that period after China. Growing by %1.8 over 2020 as a whole, the Turkish economy displayed a performance that surprised all the international institutions which at the beginning of the year had made contraction forecasts for it.

We believe that the implementation process of the new Economic Reform Package announced under the Leadership of our President Recep Tayyip Erdoğan will increase the revival of both the services and the production sectors, and that this will be reflected positively in our national income in 2021.

Another important point in the package is the emphasis placed on the importance of domestic and national industrialization and of city economies, and the headings on shifting production to domestic resources, above all in public procurement, in order to reduce import dependency.

The integration into the branches of the Renewal process, which was disrupted by the pandemic, will be completed swiftly in the new administrative term, and committees will be established in accordance with the diversity of the resources and sectoral structures in your city. Thanks to our new project-based structure, the projects of every one of you and of each of our members, whether of their own company or of their individual work, will from now on be run in direct connection with the head office and will be turned into large projects through strong partnerships.

Believe me, every kind of production and investment plan that will reduce our dependency on imports, and the projects suited to them, will be the sole force to carry us to the Türkiye of the future. In this period our industrialists in Türkiye are filled with a very great enthusiasm for investment. Not only large

enterprises but SME structures too are very insistent and eager to grow and to invest. We must urgently turn this situation into an advantage. Because of my duty at MÜSİAD I am constantly in the field and travelling around Anatolia. Not only in the metropolitan cities but everywhere in Anatolia, the producer is truly ready to write a new success story if he is brought together with a financial structure suitable for investment. But there are of course some problems here. In particular, companies are turning to exports because of the foreign exchange advantage in the domestic market and are supplying goods to the domestic market more sparingly. What really needs to be done here is to increase production, especially in strategic sectors and above all in raw materials. In the long term, companies should revise their import strategies — that is, in fact, invest in raw material production.

Whatever anyone may say, it is clear in the light of the growth data most recently announced that we have displayed a serious performance of resilience. However, a long and difficult road lies ahead of us before the growth performance in question can acquire a sustainable character.

Our faith in our country and in our country's potential is complete, dear friends. Praise be to God, whatever was said to be impossible, we did it during the pandemic process.

In 2020, a year that passed with economic difficulties, 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 we completed it successfully. Nearly 15 thousand visitors from 102 countries, above all 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 giving foreign investors the opportunity to examine investment opportunities in our country closely.

Distinguished Guests,

We support our fellow travellers with our 89 locations in Türkiye and our 225 contact points in 95 countries around the world. And now we are launching a brand-new restructuring movement in order to unite them through a strong trade and investment network.

With each of our members, we have brought to this point this valuable structure which, with the employment of 2 million people that it provides, works harder every day in order to be of benefit to the Turkish economy and to the nation. We do this with our institutional culture, our accumulated knowledge and the strength we draw from our organization. By processing the information we obtain through you from domestic and international regions, 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, opportunities and current problems.

As you know, we launched our Renewal process in order to prepare in advance for the new world system. Our motto as we set out was “Together”.

We have fulfilled almost all 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 national economy and at improving the culture of partnership among our members.

You will see how the line drawn in 2018 designed a road leading all the way to 2023-2030. We set out this vision years ago, before anyone else saw it. The committees we planned and established years ago are today counted as items in the economic strategies not of today but of tomorrow. Praise be to God, we saw these in advance.

For example, we spoke of a smart cities and city economies committee; after us it became a policy at the level of the Presidency and was written into the 11th Development Plan. Indeed, the projects launched across the EU for the twinning of cities showed how right and how far-sighted we were on this matter. When we used the word gastro-economy, in our country it was still being carried out as very rare and limited work in the hands of a restricted group. Today it has become the basic starting point of tourism and of national development almost everywhere. In the same way we spoke of new resources and investments in tourism, and tourism moved beyond mere summer tourism and turned towards entirely different fields. We established our rural development committee, and there, with the Smart Rural Towns Project that I will describe in much more

detail shortly, we supported the annual planning of our Ministry. Mergers and acquisitions, Export Matching…

To this end, our 23 committees in total under the roof of the MÜSİAD ASSEMBLY that we established during the Renewal process have begun, with projects suited to their own thematic or sectoral fields, to gather the 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 partners in them.

For example, with our Investment and Production Bases Project we have created a model that, by building living and production zones where all the needs of our small-scale companies — which have difficulty producing in narrow areas and therefore cannot reach economies of scale — are met in the same environment, will turn them in time into institutionalized companies ready to move into organized industrial zones. We have completed the first prototype of this model, and we will soon begin the construction of the second as well. In order to enter the top ten economies of the world, and for epidemics and disasters that are likely to recur under any circumstances, we must establish production bases. By establishing production bases, it becomes possible to protect companies, employees and production in cases of epidemic or severe disaster and to keep them going without a full shutdown.

We have given this model the short name SME INCUBATION CENTERS. This model, in which all the needs of SMEs from education to accommodation and from social activities to artistic environments are met within the same living space, aims to create a safe production and living space both for our workers and for our producers and their families.

This project of ours has also been one of our efforts planned from the centre and transferred towards Anatolia. At the same time, this project of ours was registered as a project under state protection by the Presidency of Strategy and Budget (SBB) within the scope of the Coordination Council for the Improvement of the Investment Environment (YOİKK).

In the same way, with our Smart Agricultural Cities Project we launched an initiative in order to encourage rural development and in this way to support reverse migration and to attain 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 to support rural development, with opportunities targeting in particular the population crowded into the big cities and 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. Turning cities into brands 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 so as to turn 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 the MÜSİAD Brand in 6 fundamental fields in line with Türkiye's 6 fundamental strategies: MÜSİAD INNOVA ( MÜSİAD YENİLİK) in order to adapt to the conditions of innovation management and digital transformation.

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

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

2023 YER-EL (20 YER 23 EL), which covers work aimed at our Anatolian companies in order to increase branding and companies' brand values, to bring world brands out of Türkiye and to turn our SMEs into large-scale corporate brands; and MÜSİAD INVEST (MÜSİAD YATIRIM), in order to turn the reliability 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 a system of investment funds,

MÜSİAD TIA (MÜSİAD TİCARET ve YATIRIM AJANSLARI), which we designed together with the Presidency's Investment Office in order to promote Türkiye to direct foreign investors as an investment and trade market and to run MÜSİAD's international field presence like a trade and investment system. As many of you have witnessed, we are continuing our work without interruption and will continue to do so. We will go on developing projects and serving our country, our nation and the lands where we were born.

As MÜSİAD, while upholding the ideals of our founders and these goals of ours, on the other hand we are also continuing the MÜSİAD tradition.

Our Qard al-Hasan Fund, one of the finest practices of this tradition, is a balm to wounds thanks to the goodwill 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 continue an ancient tradition, has institutionalized the culture of mutual aid and solidarity by turning the culture of mutual aid and solidarity among our members into an institutional structure, which we created with the thought of making trade easier for our merchants.

On the other hand, we are also continuing the practice of the “Zimem Ledger”, another of our ancient traditions, with the support and contributions of all our branch members, above all 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 our brothers who come after us. This rule is ancient for everyone. This is what makes MÜSİAD unique. For this reason, being present at the General Assembly of our branch makes me exceedingly happy. As I complete my words here, I hope that the MÜSİAD Gaziantep General Assembly will bring good things and that the contributions of our branch to our business world will continue and increase.

I wish success to our branch president, to the board of directors, to the MÜSİAD Women Committee and to our brothers and sisters in Young MÜSİAD. I thank Mr Ahmet, the President of our MÜSİAD Local High Board, and our local relations committee, as well as Mr Oktay, our production and trade high board president, our professional staff and everyone who has contributed.

I greet you all with respect and affection.

Abdurrahman Kaan

President of MÜSİAD