BRANCH GENERAL ASSEMBLY

20 MARCH 2021

MARDİN

Honourable Members of Parliament,

Esteemed Members of our Board of Directors,

Esteemed Presidents and Representatives of the Business and Political World, of the Non-Governmental Organizations and of our Chambers,

Esteemed President and Members of our MÜSİAD Mardin Branch,

Esteemed Members of the Press,

Welcome to the General Assembly of our Mardin Branch , you have honoured us with your presence , I respectfully greet you all.

Distinguished Guests,

Mardin, which is known as “the pearl of the Southeast”, more than deserves this description with its rich culture, its cuisine and its people. On this occasion, I would like to share once again the happiness I feel at being in Mardin.

As is known, the traditional economic structure of Mardin rests on agriculture, handicrafts, trade and, more recently, a growing manufacturing industry together with small-scale industry. The city also holds an important place on the transit transport route thanks to being one of the border provinces close to the Middle East.

We see that international transport too has an important place in the economy of Mardin. Because the province lies very close to the Nusaybin Border Gate (Syria) and the Habur Border Gate, the haulage sector is well developed.

Ranking 19th among the provinces of Türkiye with the highest exports in 2020, Mardin managed to raise its exports by %14 to USD 904 million in a period when exports were contracting across the country.

We hope that this success of Mardin, which pleases us so much, will continue and increase.

Throughout my Presidency I have chosen the path of constantly visiting our Anatolian branches in order to make direct contact with you, the true heart of the economy, and to address the Turkish economy from a genuine perspective. Because Türkiye does not consist only of its large cities. In fact, what makes us diverse, what makes us distinctive and what makes us strong in difficult times are our regional economic advantages.

In every meeting I have attended in Ankara and in every statement and interview I have given in the media, I have underlined it repeatedly: without regional economies and the contribution they make with their own distinctive assets to the national income of the country, this wheel does not turn.

Every region and every city of Türkiye works like a different sub-model. As MÜSİAD, thanks to our reach both locally and in our global networks, we spread out to the nerve endings of our country and obtain the economic and commercial information there instantly. At the same time, in order to respond instantly to the demands and difficulties of our members and to carry these to the competent authorities more quickly, we built a structure that works far more efficiently and rapidly than our old system and that is able to give instant responses, and we called it the Renewal process.

We actually tested the reflex power of this new structure against events during the pandemic. It made us happy that, with the Corona Crisis Centre we established, we organized ourselves long before all the other non-governmental and commercial organizations, made direct contact with our members and ensured that the decisions taken by the state spread into the field. Moreover, Mardin, in spite of all the adverse conditions of the epidemic from the very beginning, has managed to be among the blue zones of the epidemic today thanks both to its resilience and to the systematic approach it applied within itself. The Akhi tradition among the values of Mardin has a great share in this.

Esteemed Friends,

The whole world left 2020 behind as a difficult year. Since the beginning of 2018 we had been insistently emphasizing that the global economic system was under considerable strain and that we might have to face a serious commodity crisis. In every forum I was saying that the world economy was shifting eastwards in favour of the developing countries and that the Western economies, with both their ageing populations and their increasingly cumbersome corporate structures, had become mere centres of consumption. Of course, in order to come out of this situation with profit, Türkiye had to make good use of its advantage of being at the centre, that is, of being a transit country. Nor is it too late. Despite the pandemic China never paused and did not narrow its production volume; in its isolated production bases it began producing for the post-pandemic world and entered a struggle to regain its quality of being a monopoly power in terms of both supply and logistics networks. We now see that it looks likely to come out of this situation with profit.

The global economic data before the epidemic in fact showed that a severe global economic crisis awaited us. We even shared a comprehensive report on this with the press. The trade lines had both changed direction and declined considerably. Commodity prices were tending to rise. In a period when dependence on China had begun to increase, the Western economies, that is the 20 developed countries, had entered a contraction trend as of 2017. In other words, the pandemic became, in a sense, the place where a bomb whose pin had already been pulled landed.

My dear brothers and sisters,

The pandemic process brought us very different patterns of life, production, consumption and political behaviour. Today very large companies say that they will continue remote working after the epidemic as well and that they will adapt their structures to the digital world accordingly. A legal system will of course be established in line with this. Look, reaching by teleconference even those of our branch general assemblies which I cannot attend now seems normal to us. The digital system with which we struggled before the epidemic has now become a fundamental element. We no longer find it strange. Living at home, e-commerce, new production models and new types of products have become a part of our lives. And they will continue to be.

Let me draw your attention to one more point; states have now assumed a far more dominant position in the markets. During the pandemic every state announced support packages, as far as its power allowed, in order to protect its citizens. This situation gradually caused the state to carry its principle of the social state into the economic sphere as well. Look, this is a new trend that has begun not only in our country but all over the world. States will now enter the product markets not merely with institutions performing a regulatory function but as sellers or intermediaries themselves. Indeed they are already entering. We shall see in time how this situation will affect us producers under free-market conditions.

The pandemic reminded us of one more thing: being able to be 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 firms 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. But recall what we saw in the early days of the pandemic. The so-called modern Western economy, whose members competed with one another and even crushed one another and stole goods for medical supplies and food, failed in the global economy game it had itself created. Take note: the new era will be a century in which national economies come to the fore and every country clings 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 peculiar to us and used in medical production, our energy resources, our manpower and of course, together with national capital, our national companies which keep us standing in every forum and in every crisis.

Esteemed friends,

There is a matter I always raise. We resemble the German economy very closely. The dynamics of both of us are the same. Our SME structures. Our SMEs today account for %73 of employment, %57 of total production and %65 of our country's total turnover. Their share in exports is another proof that they are the locomotive element of our country. Our SMEs in Anatolia have in fact shouldered the economic weight of our country on their own. For this reason we have argued for years that, if a calculation of incentive efficiency is to be made in the distribution of incentives and supports, the incentive and support system must first be reviewed. It gave us hope to see that this matter was particularly highlighted in the Economic Reform Package announced at last under the leadership of our President Recep Tayyip Erdoğan.

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. My dear brothers and sisters, inflation stands before us today as one of the most important problems of our country. We have repeatedly stated that the most effective solution in the fight against inflation is that production planning be carried out effectively. Production, production, production. Because in a country the value of the national currency is determined by that country's power of production and investment. Nor is producing alone enough; with a sales-oriented production planning logic we shall carefully calculate first domestic demand and then foreign market demand and determine our periodic production quantities and our product groups. Nor is even this enough; this time we shall operate a system that supports our investment areas and our investors. We call this, in short, production-trade-investment synchronization.

We shared the proposal files containing this solution with the relevant authorities and even directly with the Presidency. At the YOİKK meeting, which convened with a special agenda on what needs to be done in Türkiye within the scope of the ease of doing business index, we presented a study based on field data on how this line would be operated for SMEs. Nor did we stop there: in order to enable production to continue without interruption under all circumstances, to remove the problems experienced before their transition to organized industrial zones by the enterprises we call micro SMEs, which have not been able to reach SME status, to restructure them according to the new conditions and circumstances of the future and to ensure their growth, we developed our business model of medium-scale industrial zones that will work like SME incubation centres and turned it into the investment and production bases project. This project was taken under state protection directly by the Presidency of Strategy and Budget. All of these are the steps we have taken to make it easier for you to grow your enterprises and to remain standing in difficult conditions.

Not only such enormous projects: our renewed structure is now in fact built, thanks to its project-based functioning, upon bringing together the projects of all our branches and representative offices in local and global networks with suitable stakeholders and investors, or upon encouraging possible partnerships and preparing the appropriate legal and bureaucratic ground for them. Because our aim is to enable all our members, thanks to MÜSİAD's sphere of influence and its umbrella, to increase their capital power and become the locomotive element of industrialization. This is our essential duty. Because we are a capital platform.

Distinguished Guests,

The global economy, which before the epidemic was expected to grow by %3.5 over the whole of 2020, is estimated according to current forecasts to have contracted in this period within a band of %4.5 - %5.0.

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

As is known, the Turkish economy, which grew by %5.9 in the last quarter of 2020, was in this period the country recording the highest growth among the G20 countries after China. Over the whole of 2020 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. Our growth forecast for the first quarter of 2021 is %5.5-6.

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 its flexible production capacity, holds a serious advantage when compared with the other countries in its class. But here again the determining factor is the course of the pandemic and the efficiency of the vaccination work. For, in order to make up for the possible capital loss we would experience once again should we face a third wave, we must continue production without pause in certain regions, exactly as China has done, and move to increase our stocks.

And this of course passes through the logic of establishing safe production bases every stage of which has been thought through. In this model, whose details I shall touch upon shortly, our basic aim is to develop the strategy China has pursued under the conditions of our country with even more advanced conditions and with a logic that puts people and nature first.

Distinguished guests,

The integration of the Renewal process into the branches will be swiftly completed in the new administrative term and committees will be established in a way that depends on 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 every one of our members, whether in the form of their own company or of individual work, will now be operated in direct connection with the head office and will be transformed 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. Our industrialists in Türkiye have a very great appetite for investment in this period. Not only large enterprises but SME structures too are very insistent and eager to grow and to invest. We must turn this situation to advantage without delay. As my duty at MÜSİAD requires, I am constantly in the field and travelling around Anatolia. Not only in the metropolitan cities but everywhere in Anatolia the producer is genuinely ready to write a new success story if brought together with a financial structure suitable for investment. But there are of course certain problems here. In particular, firms turning to exports because of the foreign exchange advantage in the domestic market and supplying goods to the domestic market more sparingly. What really needs to be done here is to increase production especially in the strategic sectors and above all in raw materials. In the long term, firms must revise their import strategies, that is, in fact invest in raw material production.

Moreover, even if the COVID process ends completely, two further major problems await us: climate change and biological terror . Therefore in this process every country is of necessity making its own contingency plans. Measures against a possible repetition will be taken in every field, from production through to security. In order for us to reflect this advantage into the field with all its parameters, we must prepare the manufacturing industry very well for the medium- and long-term transformation process brought by Covid-19. For there lies before us an area of opportunity in which, by using our R&D and innovation capacity and our labour force competencies in order to develop them, we can make a serious leap in the global economy in the long term.

Look, it is not a coincidence: now read once again the names of the committees in our Renewal process which we launched two years ago, having analysed these days very well and having drawn up a genuinely strategic road map. You will see how the line drawn in 2018 designed a road running all the way to 2023-2030. We set out this vision years before anyone else saw it. The committees we planned and established years ago are counted as items in the economic strategies not of today but of tomorrow. We saw these in advance, praise be to God.

For example, we said 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 far-sighted we were on this matter. When we used the word gastro-economy, only a very rare and limited circle in our country was carrying out limited work on it. Today it has become almost everywhere the basic starting point of tourism and of the country's development. Likewise we said new resources and investments in tourism, and tourism moved out of purely summer tourism towards entirely different fields. We set up our rural development committee and there, with the Smart Rural Towns Project which I shall mention in much more detail shortly, we supported the annual planning of our Ministry. Mergers and acquisitions, Export Matching…

And now, with an entirely different project, we shall once again set a precedent, the details of which we will announce to you soon, in order to lend a hand to the development of our country. With this project we shall, God willing, make it possible for our country to develop as a whole and for each of our cities to contribute to this development movement with its own assets. We have named this work “Developing Cities with Their Distinctive Values”. That is, determining criteria for valuing their own assets by comparison with their counterparts in the world, and city matching. And at this point the most important of the comparison criteria is the corporate strength possessed by that city. Determining a correct industrialization policy in fact passes through finding, supporting, enlarging the scale of and increasing the capital power of promising firms that will keep this economy standing in order to create city economies, and through carrying out the domestic and national production drive in such a way as both to turn cities into brands and to strengthen firms. I call this operating city economies for the execution of industrialization.

Look, we are courageous people,

In 2020, a year that passed with economic difficulty, we held one of the most important fairs of Türkiye.

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

Nearly 15 thousand visitors from 102 countries, above all from Europe, Asia-Pacific, Eurasia, Africa and the MENA countries, attended the fair, which lasted 4 days..

Distinguished Guests,

We support our fellow travellers with our 89 points 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 with a strong trade and investment network. We, together with each of our members, have brought to this point this valuable structure which works harder every day in order to be of benefit to the Turkish economy and to the nation with the employment for 2 million people that it provides.

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

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 wide-ranging 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. To this end, our 23 committees in total under the roof of the MÜSİAD ASSEMBLY, which we established during the Renewal process, have begun to gather the potential investors and industrialists in Anatolia around particular 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 a partner in them.

For example, with our Investment and Production Bases Project we have created a model that will build, for our small-scale firms which have difficulty producing in confined areas and therefore cannot reach economies of scale, living and production zones in which all their needs will be met in the same environment, and that 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 we are shortly beginning the construction of the second..

In order to enter among the top ten economies in the world, and for the epidemics and disasters likely to recur under any conditions, we are obliged to establish production bases. By establishing production bases it becomes possible to protect firms, employees and production in epidemic or severe disaster situations and to keep them going without a full lockdown.

We have given this model the short name SME INCUBATION CENTRES. This model, in which all the needs of SMEs, from education to accommodation and from social activities to artistic settings, 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 too became one of our works planned from the centre and transferred out 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 within the scope of YOİKK.

In the same way, 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 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 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 to implement this initiative in their own regions.

Many more projects like these have been produced by our committees and have 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 safe purchasing platform in the second-hand vehicle market; creating a safe real estate purchase and sale platform; growing selected SMEs in 23 locations in 20 places in line with the 2023 targets and turning them into Türkiye and World Brands. These and many projects like them became the fruits of MÜSİAD's Renewal adventure.

As many of you have witnessed, we are continuing our work without interruption and will continue to do so. We shall continue to develop projects and to serve our country, our nation and the lands in which we were born.

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

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

On the other hand, we are also carrying on 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.

Esteemed 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 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 Mardin General Assembly will bring good things and that the contributions our branch makes to our business world will continue and increase.

I wish success to our branch president, to the board of directors, to the MÜSİAD Women's Committee and to our Young MÜSİAD brothers and sisters. I thank our MÜSİAD Local High Board President Ahmet Bey and our local relations committee, and also our production and trade high board president Oktay Bey, our professional staff and everyone who has contributed. I greet you all with respect and affection.

Abdurrahman Kaan

President of MÜSİAD