IBF OPENING SPEECH
Honourable Minister, Mr. Chairman of the IBF, esteemed representatives of the business, political and academic worlds, our friends from MÜSİAD and Esteemed Members of the Press
I would like to express my pleasure at hosting you this year at the 24th IBF Program held within the scope of MÜSİAD EXPO 2020, and I greet you all with respect and affection. Welcome. You have honoured us.
If, through the most comprehensive trade fair of our country on an international scale, which we have organized under these difficult conditions of the pandemic, we are able to contribute even a little to the efforts of our state so that the wheels of our country's economic life keep turning and so that we can continue on our way standing tall in a new economic-political conjuncture, then how happy we shall be. I thank you once again for your presence and your participation.
This year, in keeping with the process we are going through, the strategic road maps for existing and surviving in this process will be discussed within the scope of the IBF under the main title of "Virus economy. As you know, the world is living through one of the sharpest economic and socio-political ruptures it has experienced since the economic depression of 1929, and we too are bearing witness to this period. Whatever their economic size, most governments were of course caught unprepared by this global crisis, which brought people face to face with deep-rooted weaknesses in public health and social security systems. During the pandemic we experienced together, like fish surfacing to the top of the water, the consequences of the problems that the global economic system has long tried to sweep under the carpet within its own dynamics, of the socio-political tensions, of the class conflicts produced by income injustice and, of course, of the shifting balances of power in the world economy and of the ever-increasing specific weight of the Asian economies as they tied the world to themselves particularly in production and supply chains; and we will continue to experience them.
Honourable Minister, Esteemed Participants,
Many governments tried to respond to this expectation of their peoples through the support programs they announced, in proportion to their own national incomes. Yet as the dimensions of uncertainty grew, this time the identity or the role of saviour between peoples and states also began to suffer deep damage. In time, even the most ardent defenders of state capitalism began to question the adequacy of the state in the new order, and they arrived at the line that the state factor alone could not be the key factor in the struggles of nations to exist and to survive in the new world conjuncture that began with the pandemic.
We saw how the production and supply lines that had increasingly shifted towards Asia before the pandemic, the new models of political governance led by China, and the global economic equation that riskily planned the entire world's production output on the basis of China-sourced inputs, all collapsed; and how, in a possible global shock, this risky distribution caused a shutdown and a contraction for the other countries of the world.
It is clear that the equation we built through China, and the world economy that is trying to find a point of balance for itself between the USA and CHINA, will this time distribute risks more rationally and within an order, drawing itself towards safer harbours against possible future shocks. Honourable Minister, Esteemed Participants,
Today, the digital transformation that is influential in the world particularly over Generation Z, and the companies that are its founding element, will both possess an enormous power within society, through the new rules of socialization and through the all-pervading dominance of digitalization in every field of life, and will form a new public opinion around themselves by filling the diminishing areas of control of states with their own spheres of influence.
The pandemic process in particular has proved to us how digital transformation and the power of capital behind it are effective as a powerful actor over our lives, our rules and our generations. In ever-increasing dimensions, this influence will leave us face to face with a new set of socio-cultural rules.
Alongside all these macro changes, the whole world will have to contend with a broad mass that is dissatisfied with its condition, made up in total of an army of the unemployed who cannot benefit fairly from income distribution, or who try to sustain their lives with the support they receive from the state, or who have lost their jobs.
In many a country of the world, the social tensions experienced despite the pandemic in fact make us hear the footsteps of a population ready to explode. The fact that the world found itself face to face with an epidemic at a moment it least expected must in fact be taken as proof of the defencelessness of the systems we have built in the face of the bitter realities of the 21st Century.
For this reason, the duty that falls to us must be, first of all, to read the new realities correctly and, by adapting to new concepts far beyond our classical patterns of behaviour, to put into practice policies of Renewal and, if necessary, of revision in our economic systems above all, as well as in our social, cultural and political systems.
Honourable Minister Esteemed Participants,
All existing economic indicators point to the fact that economic growth can return to what it was only after the epidemic has been brought under control in a clear and predictable manner. Despite all the uncertainties in question, the fact that Covid-19 will cause radical transformations in the global system stands before us as an indisputable reality.
We must bear in mind that the Covid-19 crisis broke out in an environment in which the Euro Area had long been struggling with a deep crisis, Japan had been quite unable to overcome the stagnation it was in, the other BRICS countries had fallen well behind China's dynamism, and global trade, steered by the China-USA tension, was growing more strained by the day. The question of where the tension between China and the USA will evolve in the post-crisis period, whether it will turn into a conciliatory path or into an economic conflict of ever-increasing intensity, still preserves its place on the agenda.
The fact that the G20 is shifting with each passing day towards a G2 structure composed of the USA and China is a serious danger for all the other actors of the global economy.
For this reason, in the new period we must develop a critical and common political language aimed at the reorganization of the principal institutions of the global system, above all the G20, the World Bank, the IMF and the World Trade Organization.
It is not possible for the leading actors of the struggle for global hegemony, which we predict will be even harsher in the period after the virus epidemic, to preserve their place at the table while leaving Türkiye out of the reckoning.
The latest data concerning the third quarter of the year, in which the negative growth trend continued in many countries such as the USA, the Euro Area, Germany, France, the United Kingdom, Spain, Italy, Russia, Mexico and Indonesia, show that the Turkish economy displayed strong growth in this period. Yet from this point on, the matter lies in taking with determination the macro steps that will influence the behaviour of market actors, and in reinforcing the element of confidence in real economic perception.
Unlike many countries of the world, Türkiye is not a resource-poor country. Whether in terms of its natural resources, its capital power or its labour market, it is one of the balancing and active elements of the new world system. What falls to us is to continue real economy policies with determination, in line with the new requirements and expectations of the raw material, capital and labour markets.
Honourable Minister Esteemed participants,
The world is developing alternative solutions to the concept of money, whose definition is changing and whose content may also change in the period ahead, and is making a serious effort to put real economic balances back in place in the face of the money stock inflated by the financial markets, particularly in the derivative markets. Today money transfers reaching trillions of Dollars can be made with a single keystroke for a future date; money moves constantly within the banking system, yet it also drifts further and further away from the fact of reality.
Yet money's drifting away from its fundamental economic functions and turning into a commodity instrument endangers the independence of national currencies and, unfortunately, values the strength of the national currency under the control of the currencies of other countries.
In a country, the power of money is determined by that country's power of production and investment. If we try to explain and even to solve real economic principles by means of financial policy instruments, we both condemn the money in the system to remain idle and deprive ourselves of the power of investment and production that is essential for development.
For this reason we wholeheartedly support the economic development mobilization launched by our Honourable President and built upon three pillars. Within a short time we tested how, once confidence is instilled in the markets, Türkiye becomes once again a centre of attraction in the eyes of foreign investors thanks to its strong geopolitical advantage. Yet we also hope that this determination will continue in the period ahead and that, by moving in particular to a macro production policy, the production of the inputs and semi-finished goods that will reduce the risk of cost inflation, one of our country's most important problems, will be realized not through imports but through a national production drive.
The New World order in fact shows us the key role of three fundamental conditions in economic development.
1. Self-sufficiency
2. Effective and appropriate use of resources
3. The conversion of foreign policy elements into economic advantages through political manoeuvring capability
Self-sufficiency is in fact also the key factor for price stability and for the strengthening of the national currency. In order to emerge from the spiral of cost inflation and pass to a demand inflation at reasonable levels, we must in fact back up our supply, logistics and production capabilities alike with packages covering every possibility, and above all establish the philosophy of national production as the point of departure in all our sectors.
Moving away from input dependency in our key sectors, above all food, agriculture and livestock, and in the high value-added manufacturing industry and the technology-intensive sectors, is an element that will make it easier for us to return once again to the principle of equity efficiency. The effective use of our resources and the mobilization of the savings factor will present us with efficiency criteria in three fundamental areas: capital efficiency, incentive efficiency and entrepreneurship efficiency.
The evolution of capital not into wealth but into investment and capital stock will ensure that, in difficult times, we attain a more resilient structure both for our companies and for our state budget. And this passes through effective project management. The private sector must take the burden of forming capital stock off the shoulders of the state and become directly involved in the system through project-based partnerships.
We have all witnessed together the impasse into which the path of money earning money where it stands, by using financial market instruments, has brought not only us but the entire world economy. At this stage, entrepreneurship efficiency is also a matter that must be kept in view. Of course we are not speaking of obstructing entrepreneurship policies; yet in this process we have also witnessed how resilient each company is in the face of shocks. We must remove companies that cannot withstand shocks from being an additional burden on state budget items and adopt a more effective and selective entrepreneurship policy. Another element at this point is that vocational qualification training oriented towards development should be carried out within correct planning. For a strong economy is possible only with the existence of an adequate and qualified labour market. For this reason, the mobilization for qualified employment that we shall launch from now on, within the framework of future simulations as to which sectors will face which type of personnel shortage, will make us strong in terms of achieving labour force efficiency in the new world system and thus in terms of the effective use of resources. Finally, incentive efficiency is an important matter in terms of the effective distribution and management of state resources.
Of course our state is taking steps towards supporting entrepreneurs and companies for the development of projects and for these to increase investment. Yet how and in what manner these incentives are used, whether they truly create resource efficiency or cause a waste of resources, must be thoroughly investigated. To this end, we attach importance to projects and to the incentives provided to these projects being taken up once again with a set of evaluation criteria.
We have set out on a good path. We have full confidence that in this mobilization our new economic road map will produce positive results both in attracting foreign direct investment and in increasing our national production capacity, and thus in revaluing the strength of our currency. This afternoon, at our World Presidents' General Administrative Board, which will take place with the participation of the Honourable President of the Presidency's Investment Office and our Honourable Minister of Trade, we will put on the table the functioning of our MÜSİAD INVEST and MÜSİAD trade and investment agencies brands, with which we set out in order both to attract foreign investment and to bring together companies with investment potential, by operating our field-wide presence as a system of trade and investment agencies. God willing, the cooperation we have carried out on this matter with the Presidency's Investment Office and the Presidency of Strategy and Budget will be a means of good in our country's economic planning for the new period.
I wholeheartedly thank the President of the IBF, our Global High Board and our Secretariat General, who did not withhold their contributions in the realization of this organization.
I hope that our IBF Meeting, and the strategic topics and panels that will be addressed in the panel sessions, will be a means of good for our homeland.
I greet you all with respect and affection.