MÜSİAD SAKARYA GENERAL ASSEMBLY

28 JUNE 2021

Honourable Governor,

Honourable Member of Parliament,

Honourable Metropolitan Mayor,

Honourable Rector,

Honourable District Governor,

Honourable District Mayors,

Distinguished Chairmen and Representatives of the Sakarya business world, of the chambers, the commodity exchange and the non-governmental organizations,

Esteemed Members of the MÜSİAD Board of Directors

My Branch Presidents who have come from the neighbouring provinces,

The former-term presidents of our Sakarya branch,

Distinguished President and Members of our MÜSİAD Sakarya Branch,

Members of the MÜSİAD Women’s Committee, my Young MÜSİAD brothers and sisters,

Esteemed Members of the Press,

I respectfully greet you at our General Assembly; welcome, you have brought joy with you.

Distinguished Guests,

We work day and night, generate ideas and put them into practice in order to be able to contribute more to our country’s economy and to be even more useful to our nation. We travel inch by inch from west to east in order to be aware of every point of our homeland and to touch more people. On Thursday we were in our provinces of Bandırma and Balıkesir, on Friday in Konya, and on Saturday and Sunday in Samsun, where we held our general assemblies. Today we are pleased to be in Sakarya as well.

Standing out in the Marmara Region with its fertile lands and its developed industry that hosts the sectors making the greatest contribution to the national economy, Sakarya ranks among the top of our cities in terms of its share of GDP, its socio-economic development ranking and its competitive strength.

The provincial economy, which was significantly wounded especially by the grievous earthquake disaster experienced on 17 August 1999, has shown a rapid recovery within 20 years. During this period Sakarya achieved rapid development and growth in the economic and social spheres through the investments made in the education, health, transport and industry sectors.

Drawing attention with its breakthroughs in industry, Sakarya is among the most advantageous provinces with its experienced and qualified employment and especially with its privileged position in logistics.

In the city, world-class companies that can be shown as a reference operate in fields such as automotive, machinery manufacturing, metal industry and wagon industry.

Sakarya, which is a gateway opening to European and Asian countries by railway, airway and roads, ranked 7th among the provinces carrying out the highest exports in 2020.

In this period, although a decrease of approximately %13 compared with the previous year was observed, Sakarya succeeded in carrying out exports at the level of USD 4.5 billion.

Exporting to a total of 163 countries in 2020, Sakarya has been one of our provinces with the widest foreign trade market.

Sakarya’s strong performance in foreign trade continues to increase in 2021 as well. According to the data for the first 5 months of the year, Sakarya increased its exports by %47 compared with the same period of the previous year and thus succeeded in reaching an export volume of USD 2.2 billion within this short time.

Along with the agriculture sector, Sakarya, one of Türkiye’s rapidly developing provinces with its 11 organized industrial zones, occupies a very significant area in our country’s industrial and manufacturing capacity.

We know Sakarya’s value for our country; but when we look at the international companies operating in the city, we see that this value in fact has a counterpart in the world as well.

While we have no doubt that the city’s development will continue to increase, as business people we will strive to contribute to this development, and as MÜSİAD we will also endeavour to increase this contribution both with our projects and with our work.

Dear Friends, my MÜSİAD brothers and sisters,

At the meeting I held last Wednesday with broad participation, with the esteemed economy editors of our press, we found the opportunity to explain our country’s investment strategies suited to the new world order and our project of developing and branding cities through their distinctive values.

As you also know, in recent years Türkiye has not been going through a good period, particularly with regard to direct foreign investments. Within the commercial and economic activity that opened up after the pandemic, investment too shifted towards developing countries, in parallel especially with the increasing quantity of money. The developed countries were unable to take the share they wanted from this pie.

Our country, for its part, although it is in the upper ranks in the class of developing countries and possesses quite favourable conditions in terms of investment components, was unable to attract the direct foreign investment it wanted.

Foreign investments made in Türkiye recorded a decline of 19 percent compared with 2019 and, at the point they have now reached, stood at USD 6.8 billion in 2020. In the last months of this year, unfortunately, the low figures show us that investors’ interest in our country has decreased.

My Dear Brothers and Sisters,

The pandemic process is not a period that will end from one day to the next. Even if the epidemic ends, it is clear that we will now move to a new economic order and to new rules. We must now follow the new models of development and growth, that is, the new business development models of the new world order.

Investments must be attracted in the right way and channelled to the right places, investors must be hunted for, and the values peculiar to each city of our country must be explained far better. And this is possible only through a new investment network that is spread to every part of the world, that draws investment, production and trade information from every point, that knows investment climates and that establishes the system to bring investors together with the companies in Türkiye.

We made a statement; we said that in the future it is not states but cities that will compete. For this reason the formation of regional and urban economies, that is, of city economies, is essential. In this way we will have cities that are self-sufficient and that have been able to turn their own assets into value.

The branding of cities and the transformation of their existing assets into value, that is, the proper identification of their potentials and the increase of the provinces’ values through investments suited to these potentials.

This turned into a project through the data I obtained as a result of these travels of mine and the experience brought by being in direct contact with you. Every city has its own distinctive values. Turning these into high value-added assets brands that city and increases its contribution to GDP. It consists in comparing our cities, using certain valuation criteria, with the cities in the world that have similar characteristics and are their counterparts, and applying in our own cities the methods and processes of the added value produced by their counterpart examples in the world. Matching cities in this way is the basic starting point of the study. We gave this study the name “Developing and Branding Cities through Their Distinctive Values”.

Determining a correct industrialization policy in fact means finding, supporting, enlarging the scale of and increasing the capital strength of promising companies that will keep this economy standing in order to form city economies, and, with the domestic-national production drive, carrying this out in such a way as both to brand the cities and to strengthen the companies. I call this putting city economies to work for the execution of industrialization.

When we look at our province of Sakarya, its GDP is USD 9.2 billion, while the brand province we have determined for Sakarya is Munich, the city which, besides Germany’s leadership above all in the industrial and economic field, has brought itself to the fore by attracting international companies in agriculture, automotive, aviation and medical fields and, with its universities, in the field of biotechnology to invest in the region. Its GDP is USD 120 billion. Growing like Munich is possible only through the determination of the city’s distinctive values together with all segments of the local administrations, the bringing together of those values with suitable investments and investors, the continuous monitoring of the efficiency of support and incentives, and the branding of that city.

Our distinguished city of Sakarya possesses this potential in abundance.

My Dear Brothers and Sisters,

In fact we also see our City Economies development project as a road map for Türkiye’s determination of a new investment policy. Because carrying out the tasks I listed above will be possible only through an organization spread across the whole world, and there are counterpart organizations of this kind in the world.

And the capital organization that will give support so that this can be done in Türkiye is MÜSİAD. Because the organization that can most effectively conduct the commercial-economic diplomacy and the investment diplomacy between the World and Türkiye, one that understands the language both of the industrialist and of the SME, that develops projects and that is more dynamic with its renewed structure and its widespread presence, is MÜSİAD.

The primary duty falling to us must first of all be a change of mentality. That is, it must be to approach investment not merely as inviting the companies in certain countries here as partners, but as promoting Türkiye as an investment market. And it must be to grow soundly the SME elements that are the locomotive of domestic production and, with the advantages of economies of scale, to bring them together with foreign partners and fund owners, that is, in a sense to match them.

The MÜSİAD TIA (MÜSİAD TİCARET ve YATIRIM AJANSLARI) system, 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 operate MÜSİAD’s overseas field presence like a trade and investment system, will serve this purpose, and in this way it will both put investment diplomacy into operation and draw the active investment diaspora abroad to our country.

Distinguished Guests,

As you know, in order to prepare in advance for the new world system, we as MÜSİAD launched our Renewal process. Our motto at the outset was “Together”. And now we say “WE ARE HERE”. With the peace of mind of having kept the promises I made to you when I first took office and of having fulfilled this sacred duty I received as it deserves, we leave the word WE ARE HERE to the next term. For Türkiye, in production, in trade, in investment, in every field of society from art to culture, in mutual aid, for our country’s development and prosperity, we say that we are always here.

From the very first day I took office until now, my dear brothers and sisters, I have believed wholeheartedly in this: no institution whose FIELD is not strong can remain standing, and without mastering the FIELD, that is, without direct contact with people, one cannot be a good administrator either. As you also know, MÜSİAD is one of the rare capital organizations in the world with its widespread presence both at home and abroad. For this reason, to see MÜSİAD merely as a non-governmental organization would now be an injustice to this structure’s history, to its memory and to the services it has rendered on behalf of the country.

Especially after the Renewal process, MÜSİAD is taking its place among the world’s leading organizations by arranging its own structure in the face of the new world order and by developing a distinctive management-organization model. My team colleagues and I fought for this in order to reach something better throughout our term of office, and we have no doubt that the brothers and sisters who will come after us will take over this cause and this relay of the flag in the same consciousness and with the same motto and carry it on. Before the Renewal process, MÜSİAD used the concept of organization. But now we command such a broad expanse that we have had to divide this into two brands, GLOBAL and LOCAL, and of course the management model has changed too. As for MÜSİAD’s widespread presence, it was already long ready and worthy to take the name MÜSİAD SAHA. We arranged the system according to the new conditions and gave it a fresh spirit.

By simplifying our structure, we gathered the project-based committees under the roof of the MÜSİAD ASSEMBLY. The MÜSİAD ASSEMBLY is in fact an economic network in which the project, partnership, trade and investment demands and proposals of the whole country and of our networks abroad are blended. You, that is, our Anatolian branches, will open your committees according to the appropriate and distinctive conditions of your cities and will connect to the main committee at the Head Office and to the ASSEMBLY roof. Integration is continuing rapidly. The management that comes after us will also continue this integration in order to consolidate the communication and cooperation between the head office and the branches. Because this purpose lies at the foundation of the ASSEMBLY structure

We have fulfilled almost all the initiatives we planned and promised within the framework of our Renewal process. Now we are reaping 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.

When each of our committees under the roof of the MÜSİAD ASSEMBLY was formed 2.5 years ago, that is, when there was neither an epidemic nor a crisis, we chose such strategic headings that, at the point we have reached today, the names of our committees correspond exactly to the headings of the projects and main working principles in the EU’s new-period economic packages. This situation is proof of our vision, of our ability to read the future correctly and of the knowledge we obtain from the field.

Our committees have begun, with projects suited to their own thematic or sectoral fields, to gather the potential investors and industrialists in Anatolia around certain projects.

These projects have begun to encourage the capital strength in Anatolia to invest in projects or to become a partner in them.

For example, with our Investment and Production Bases Project we have formed a model that, by building living and production zones in which all their needs will be met in the same environment for our small-scale companies which struggle to produce in narrow spaces and therefore cannot reach scale, will in time turn them into institutionalized companies ready to move into organized industrial zones. We have completed the first prototype of this model, and the construction of the second one will also begin shortly.

We have to establish production bases for the epidemics and disasters likely to recur. By establishing production bases, it becomes possible to protect companies, 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 order 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 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 of ours 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, forming a safe real estate purchase and sale platform, and, in line with the 2023 targets, growing selected SMEs in 20 places and 23 locations and turning them into Türkiye and World Brands. This and many other projects like it have become the fruits of MÜSİAD’s Renewal adventure.

God willing, through this integration process of ours at the branches, you will be instrumental in carrying our MÜSİAD much further forward.

Distinguished Guests, Esteemed Friends,

Türkiye is a young and dynamic country. It proves this in the best way both during the pandemic period and with its growth in the post-pandemic process. While the developed countries struggled even in the production of masks and disinfectant, thank God our companies, most of which are MÜSİAD members, immediately adjusted their production lines and carried out the production of the medical supplies, medicines and disinfectant needed for the country.

2020 became a year in which, following the first contraction in economic activity with the onset of the pandemic, Türkiye’s recovery process was an example to the whole world.

Then we gradually began to recover, and this situation was reflected in our capacity utilization rates. Our manufacturing industry, for its part, settled into a notable course of development over the last two quarters.

However, we must certainly eliminate at the earliest possible time the two fundamental factors that are aggravating inflationary pressure here.

The first is self-sufficiency, that is, producing domestically as well the intermediate goods worth close to USD 175 billion that are imported, minimizing external dependency and of course giving up seeing money as a commodity instrument.

The second will be possible by providing resident savers with new and reliable investment opportunities in which they can put to use the foreign currency and gold they hold and their money in interest or profit-share accounts.

Establishing venture capital funds through which projects will be securitized and, through these funds, consolidating the culture of partnership and thereby encouraging production in Türkiye must also be a matter with which we absolutely must concern ourselves.

We may see this growth of %7 in the first quarter as the harbinger of the exit from the pandemic. Indeed, with the base effect, we may even see the growth rate in the second quarter above %15. However, for this situation to be sustainable, it is necessary to achieve investment-production-trade synchronization and to set out production as the basic economic policy.

The inflationary environment we are currently in and the high credit costs show that we are still a risky investment area.

Esteemed Guests, my MÜSİAD brothers and sisters

With little time left before I hand over the office, I hope that, God willing, I have carried out the duties incumbent upon me as they deserve and have not disappointed your trust. I chose to be a President who travels rather than one who sits.

Contact with our members, consultation and fellowship with them, the constant hosting of the Anatolian branches at the Head Office and thus the raising of the rapprochement between the centre and the FIELD to the highest level have been my basic goal.

On this occasion I also ask you to forgive me my dues. MÜSİAD is a school. MÜSİAD is a home. And we are marathon runners. I believe that the friends who will take over the office will do their utmost to carry our MÜSİAD much further forward than we did.

As I complete my speech with these feelings, I hope that our branch’s general assembly will be a means of good, and I wish success in the new term to our Sakarya branch president İsmail bey and his board. I pray to Almighty God that the contributions of the new management, through its work, to the Sakarya business world and to our country will continue to increase,

I thank everyone who has contributed to this organization and our sponsors, and I greet you with respect and affection. May God protect you.

Abdurrahman KAAN

President of MÜSİAD