BRANCH GENERAL ASSEMBLY

9 MARCH 2021

MALATYA

Honourable Governor, Honourable District Governor,

Honourable Mayors,

Esteemed Members of our Board of Directors,

Esteemed Presidents and Representatives of the Business and Political World, of Non-Governmental Organizations and of our Chambers, Esteemed President and Members of our MÜSİAD Malatya Branch,

Esteemed Members of the Press,

I welcome you to the General Assembly of our Malatya Branch and respectfully greet you all.

Distinguished Guests,

As you know, 2020 has been left behind as a rather difficult year. Especially since the beginning of 2018, we had persistently emphasized that the global economic system was under severe strain and that we might have to face a serious commodity crisis. Yet the flashpoint of this anticipated crisis came from a direction no one could have foreseen: the global pandemic. Unlike the others, this crisis did not have an economic basis, but through its effects it made us question an economic system that had come to a standstill all over the world.

With the Covid-19 pandemic, the global economy entered a major shock on both the supply and the demand side; the movement of capital, goods and people came almost to a halt, and in many sectors survival became impossible. From that point on, the global economic system gradually gave way to unitary structures and to the rule of self-sufficiency for countries. While we were expecting sharp paradigm shifts after the pandemic, what we encountered was a statist capitalism, and this model was in fact not at all unfamiliar to us.

For in a logic built upon national economies, the state was bound to make its regulatory role and its weight over the economy felt ever more strongly, and that is indeed what is happening. At the outset of the pandemic, almost every state announced support and incentive packages so that its own nation would be affected by the outbreak with the least possible damage. As long as the pandemic continues, and until it is completely over throughout the world, these measures must remain in place in a graduated manner. Perhaps this is also the new economic model within which the business world will operate.

Today, both in our country and in many countries of the world, the areas of state intervention are steadily widening because of income injustice, of capital lost in the middle-income trap, and of rising prices of goods and services. Despite this, it is possible to say that global capital is once again flowing from developed countries towards developing countries such as ours. However, the important point here is not that this capital flow should come and go with the logic of short-term fund movements; it is that it should provide production, investment and employment in our country through direct investments. And realizing this is once again in our own hands.

Distinguished guests,

Owing to the conjuncture, our state organs have of course had to adopt certain temporary policies, and they will continue to do so. The important point here is not to refrain from supporting our state throughout the process we are going through. We are receiving the first-period outcomes of the steps taken to prevent the excessive depreciation of the Turkish lira and the course of high inflation, for example the adjustment in credit costs. In recent weeks we hosted at our Headquarters Building a delegation composed of the Governor of the Central Bank, Mr. Naci Ağbal, and senior bureaucrats. We held consultations on highly critical matters. We even decided that the Central Bank team and our relevant committees would work jointly on some projects carried out by our committees. We underlined that, just as we as MÜSİAD played a very active role in the 11th Development Plan of the Presidency of Strategy and Budget, we would show the same support this time in the process of meeting the inflation targets.

The persistent and determined stance of the economic administration and of the Central Bank in the fight against inflation, and their preference for cooperating with all economic stakeholders in order to develop policy at this stage, have of course given hope to business people, to the end consumer and to foreign capital alike. In other words, up to this point there is certainly a movement in a positive direction. Yet all these steps are merely the paths leading towards the main artery road that must be reached. They are useful, they buy time, but they do not offer a final solution. They will not last forever. After a while the market will demand from you more permanent and more fundamental moves, that is, economic planning.

As I have expressed in various statements and indeed in the meeting we held with the Central Bank team, if cyclical adjustments are truly unavoidable, we of course respect the decision taken by our state on this matter. Yet we voice our red line on interest rates in particular at every opportunity. Likewise, for us a permanent and sustainable price level and growth trend can only be achieved through a planned production policy and the synchronization of production, trade and investment.

Esteemed Guests,

The global economy, which before the pandemic had been expected to grow by %3.5 over the course of 2020, is estimated according to current forecasts to have contracted in this period within a 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 pandemic.

Our country, for its part, is among the leading countries that have come through this difficult period with the least damage.

As is known, the Turkish economy, which grew by %5.9 in the last quarter of 2020, was in that period the country recording the highest growth among the G20 countries 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 forecast a contraction 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, holds a significant advantage compared with other comparable countries. It would not be wrong to say that the Renormalization process 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. Yet here again the determining factor is the course of the pandemic and the efficiency of the vaccination efforts. For should we face a third wave, in order to compensate for the possible loss of capital we would once again suffer, we must, exactly as China has done, continue production in certain regions without interruption and move to increase our stocks.

This, of course, passes through the logic of establishing secure production bases in which every stage has been thought through. Our fundamental aim in this model is to develop the strategy pursued by China under the conditions of our own country, with even more advanced arrangements and with a logic that gives priority to the human being and to nature. Whatever anyone may say, it is clear in the light of the recently announced growth data that we have displayed a considerable performance of resilience. Yet for this growth performance to acquire a sustainable character, a long and difficult road lies ahead of us.

Increasing the self-sufficiency policies of all our sectors that hold a critical position in domestic and national production, and in particular determining a new strategy for foreign trade, would be the right step.

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

The COVID 19 process is not one that will end from one day to the next. Experts state that even if the vaccination efforts are completed entirely, herd immunity will take time. In other words, we still have as long a road ahead of us again. While all of this is happening, a new way of life is in fact quietly entering our lives and we are calmly adapting to these new rules.

There is of course a social fatigue, but at the same time we can say that a settling has occurred in our reaction mechanisms. In the end, after a while the brain provides adaptation and habituation to every state of mind. Therefore many rules that we found strange last year have become normalized today. A year from now they will have become habits: eating and drinking habits, shopping habits, the new models being tested in working systems and the advantages they bring. It is also certain that we shall remain on alert for quite some time. Moreover, even if the COVID process is completely over, two further major problems await us: climate change and biological terror or armament. Therefore, in this process every country is of necessity making its own contingency plans. In every field, from production to security, measures will be taken against a possible recurrence. In order to be able to reflect this advantage on the ground with all its parameters, we must prepare the manufacturing industry very well for the medium- and long-term transformation process brought about by Covid-19. For there lies before us a field of opportunity in which, by using it to develop our R&D and innovation capacity and our workforce competencies, we can in the long term make a considerable leap in the global economy.

We believe that we hold a significant advantage particularly in terms of geographical position, and that this will create a great field of opportunity for our country in the future projections of the global economy. In a period in which supply chains are being redesigned and logistics lines redrawn, Türkiye, the country where the roads intersect, must take part in the game as a far more active player.

Look, it is not by coincidence: read once again now the names of the committees within our Renewal process, which we launched two years ago by analysing these days very well and by drawing up a genuinely strategic road map. You will see how the line drawn in 2018 designed a road extending as far as 2023-2030. We set out this vision years ago, before anyone else saw it.

We said the Committee on New Routes and Approaches in Logistics. Look, today world trade is being directed by logistics companies and by the new routes they draw. We said the Committee on Domestic and National Production Planning; look, today the fundamental starting point of unitary economic structures has become domestic and national production planning. We said the Committee on Energy and Mining Management and Investments; today an entirely different field of economic sharing is taking shape in the name of energy security and new mineral deposits. We said the Committee on Industrial Zones and Campuses; look, today establishing production bases has become an indispensable field of investment throughout the world. We said the Committee on Smart Cities and Urban Economies; 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. There are many more examples: Gastro-economy, Rural development, Mergers and acquisitions, Export Matching… These strategies, which at one time we had difficulty understanding and for which we even criticized those who conceived and built them, have today, look, become the world's new turning points. So it turns out that one must first listen impartially, then show respect and try to understand. In the end the new world order is built upon the young, and we carried out this Renewal with a cadre that is young in age. Now Türkiye too, with the same logic and as our President has also expressed, has entered a process of Renewal. A new reform movement has begun. God willing, we took its first step yesterday with the Human Rights Action Plan, in which I also took part. Our faith in our country and in our country's potential is complete, dear friends. Indeed, whatever was said to be impossible, we did during the pandemic, praise be to God. In 2020, a year that was economically troubled, we held one of Türkiye's most important fairs.

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

Nearly 15,000 visitors from 102 countries, primarily 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 investment opportunities in our country at close hand.

Esteemed Guests,

Malatya, defined throughout the historical process as "the west of the east and the east of the west", maintains the same position today as well and, owing to its socio-economic structure, stands as an important centre of attraction in its region.

Despite the %20.3 decline experienced in 2020 compared with the previous year, Malatya, which ranks 32nd among Türkiye's largest exporting provinces, recorded total exports of USD 301.2 million, within which the share of Dried Fruit and Products was %50.

This group was followed in exports by the Fishery and Animal Products and the Ready-Made Clothing and Apparel groups.

In Malatya, which exported goods and services to a total of 124 countries in this period, the first three places were taken by Iraq, the USA and Germany.

In view of Malatya's importance for its region and for our country, we can comfortably say this: there is a potential in this city, and we can bring that potential to light with the right investments and a planned strategy. And we shall bring it out; we shall achieve this all together. As MÜSİAD we support our fellow travellers with 89 points in Türkiye and 225 contact points in 95 countries around the world. And now we are launching a brand-new restructuring movement in order to unite them within a strong trade and investment network. With the employment it provides for 2 million people, this valuable structure works harder every day to be of benefit to the Turkish economy and to our nation, and we have brought it to this point with each and every one of our members.

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 building an important database. As a result, we present to the business world a picture setting out all the risks, opportunities and current problems.

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 the initiatives we planned and promised within the framework of our Renewal process. Now, with our large-scale projects, we are gathering the fruits of that process.

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. To this end, our 23 committees under the roof of the MÜSİAD ASSEMBLY, which we established during the Renewal process, have begun to gather 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 such 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 in which all their needs are met in the same environment for our small-scale firms which struggle to produce in confined spaces and therefore cannot reach economies of scale, will in time turn them into institutionalized firms ready to move into Organized Industrial Zones. We have completed the first prototype of this model and shall soon begin the construction of the second..

In order to enter the world's top ten economies, and for the epidemics and disasters that may under any circumstances recur, we must establish production bases. By establishing production bases it becomes possible, in the event of an epidemic or a severe disaster, to protect firms, employees and production and to keep them going without a full lockdown.

We have given this model the short name SME INCUBATION CENTERS. This model, in which all the needs of SMEs, from training to accommodation, from social activities to artistic settings, are met within the same living space, aims to create a safe production and living area both for our workers and for our producers and their families. This project of ours has likewise been one of the works planned from the centre and transferred towards Anatolia. At the same time, this project of ours has been registered as a project under state auspices by the Presidency of Strategy and Budget within the scope of the Coordination Council for the Improvement of the Investment Environment.

Likewise, with our Smart Agricultural Cities Project we have 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, and with its facilities targeting the population crowded into large cities and especially women's and young people's enterprises, we have developed an initiative to encourage rural life and to support rural development.

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 Turkish and World Brands. This and many projects like it have been the fruits of MÜSİAD's Renewal adventure.

We have created a MÜSİAD Brand in 6 fundamental fields in line with Türkiye's 6 fundamental strategies: MÜSİAD INNOVA ( MÜSİAD YENİLİK), for innovation management and adaptation to the conditions of 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 of thought and to give it an institutional identity.

2023 YER-EL (20 YER 23 EL), covering the work directed at our Anatolian firms in order to bring World Brands out of Türkiye by increasing branding and the brand values of companies and to turn our SMEs into large-scale corporate brands,

MÜSİAD INVEST (MÜSİAD YATIRIM), in order to turn the credibility advantage of the MÜSİAD Brand in Türkiye's investment strategies, its field and the savings kept under the mattress into mass investments and partnerships and to establish a system of investment funds; and MÜSİAD TIA (MÜSİAD TİCARET ve YATIRIM AJANSLARI), which we designed together with the Presidential Investment Office in order to promote Türkiye as an investment and trade market for direct foreign investors and to operate 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 shall continue to do so. We shall carry on developing projects and serving our country, our nation and the lands in which we were born.

As MÜSİAD, while upholding the ideals of our founders and these goals 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 through 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, by transforming the culture of mutual aid and solidarity among our members into an institutional structure, which we created with the thought of facilitating the trade of our merchants, has institutionalized the culture of mutual aid and solidarity. On the other hand, we also continue the practice of the “Zimem Ledger”, another of our ancient traditions, with the support and contributions of all our branch members, and above all of the head office.

Dear Friends,

MÜSİAD is a family, a home, a school. Here we all walk with the pride of sharing the same consciousness and of being soldiers of the same cause, and when the time comes we hand the flag over to the 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 conclude my words here, I hope that the MÜSİAD Malatya General Assembly will bring blessings and that our branch's contributions to our business world will continue to increase.

I wish success to our branch president, to the board of directors, to the MÜSİAD Women committee and to our brothers and sisters of Young MÜSİAD. I thank the president of our MÜSİAD Local High Board, Mr. Ahmet, and our local relations committee, our professional staff and everyone who has contributed.

I greet you all with respect and affection.

Abdurrahman Kaan

President of MÜSİAD