MÜSİAD KONYA GALA DINNER
25 JUNE 2021
Honourable Minister, Honourable Governor, Mr. Metropolitan Mayor, Esteemed Members of the MÜSİAD Board of Directors,
Distinguished Representatives of the Konya Business World,
Esteemed Members of Our National and Local Press,
With the joy of coming together with you in our Konya, where we are always happy to be, I respectfully greet you all; welcome, you have honoured us.
Honourable Minister, Distinguished Guests,
Konya, which is also known as the “Agricultural Capital” of Türkiye thanks to its vast agricultural areas, its various agro-ecological sub-regions, its geographical position and the many agricultural products it grows, has in recent years recorded great progress in industry as well. However, to read Konya’s contribution to the national economy solely through agriculture would do an injustice to Konya’s potential. For Konya is not only one of MÜSİAD’s strong bastions in Anatolia; it is at the same time one of the locomotive forces of our country in the fields of industry and trade.
I believe that in the future, particularly within the economic constraints of the post-pandemic world, the values and the potential that cities such as Konya hold will be regarded as key factors for our position on the geostrategic atlas of the world.
Honourable Minister, Distinguished Guests and my MÜSİAD brothers and sisters,
The new world economic system that has developed with the pandemic and after it, and at the same time the new living conditions created by climate change which we had never witnessed before, have in fact shown us a reality we had never taken into account: being able to look after oneself and to be self-sufficient.
If you take note, in the early days of the pandemic, while all the countries of the world closed their doors to one another, we watched the state to which so many civilised countries — those which present themselves to the world as instructors in democracy and human rights — were reduced even over masks and disinfectant. Thank God, even in those days we never withheld our helping hand from anyone. Because that is what it means to be an ancient civilisation. Indeed, within a very short time our national companies made certain changes on their own production lines and rapidly gained momentum in the production of masks and disinfectant. And this is the sole proof of possessing a dynamic economy.
In times of crisis Türkiye somehow displays economic behaviour that is incomparably faster and more active than that of its competitors in the world — thanks both to its active population structure and, in terms of its field of production, to flexible SME structures capable both of switching production lines and of achieving sectoral breadth, and of course to low labour costs. The issue now is to develop the appropriate strategies and roadmaps so that we may take our rightful share of the trade and investment environment that has emerged after the process which began with the pandemic.
For years, while shaping our economic perceptions through globalisation and the so-called rules it dictated to us, we in fact overlooked a very important matter: producing. If you take note, from 2016 onwards, before the pandemic, production power — which was declining dramatically particularly in the developed economies — was ceding its place to the developing countries even in raw materials and in supply. In addition to this, from 2015 through to 2020 the gradual decline in growth rates in the developed countries was being transferred as an additional entry into the growth accounts of the developing countries.
While the world still preserved its perception of production in the East, the Western economies had built themselves a financial economic ecosystem around a concept of money in which money is traded as a commodity and which, in the derivatives markets, is defined as a promissory note for forward transactions that does not actually exist. And unfortunately we, the developing economies such as ours, were being affected a great deal by this financial economic system because of our fragile capital structures. We still see this effect. The solution, as I have always said, is to take real economic concepts based on production as the basis for explaining economic problems.
The new era brings with it new threats and economic necessities as well. Foremost among these are, of course: the effective use of agricultural land, food sufficiency, food safety, the food prices that will rise because of drought and the inflationary pressure this will create throughout the world, the formulation of national policies on seeds, reducing imports in food to a minimum, and entering the category of self-sufficient countries. To the extent that Türkiye can turn to its advantage the positive perception environment created by the pandemic, it will emerge from this competition as a winner.
Alongside all of this, the difficult conditions brought by climate change are pushing us towards producing through new policies in 2021 and beyond. The fundamental message that the green deal in fact obliges us to adopt is the effective and efficient use of the basic resources that are becoming ever scarcer, namely water and soil.
I say it at every opportunity: energy is of course one of the most important criteria establishing the balance of power for the world economy. But in the coming period the new balances will be established over a far more vital resource: WATER! The fundamental conflicts that perhaps await us in the future will be over the sharing of water resources and water wars. I explained this same matter in detail this month at the commission meeting of the Grand National Assembly of Türkiye where the subjects of Climate Change and Clean Energy were addressed.
Both the report prepared on this subject by the United Nations Nations in 2020 and the report prepared by the French Institute of International Relations (IFRI) underline that from 2030 onwards the fundamental cause of war and conflict in the world will be water. However, the serious conflicts that have begun since last year in Iraq, Mali and Niger are signs that this date will be brought forward even further. Unfortunately Türkiye is not a water-rich country, and it must adopt far more effective policies for the water used both in agriculture and in industry, and it must begin effective work now, particularly in the field of water law regulating international water sharing.
We attach the utmost importance to our role in the European Green Deal, which the European Union has put forward as the new roadmap framing its industrial policy and its economic growth strategy for the coming period.
We can state that many of our industrialists within MÜSİAD are making an intense effort to reduce to a minimum the emissions arising from their production, to use more renewable energy products and to increase their resource efficiency. Moreover, the projects we have developed on this subject are, as always, our duty in order to build and protect the world of the future starting today.
Because MÜSİAD, with its 31 years of venerable history, is not merely a capital platform; it is at the same time a common roof under which are gathered courageous people who take their country’s troubles to heart, who stand fully alongside their state and who say “we exist for this country”. And our door is open to everyone who thinks and feels this way.
In agricultural production, in access to safe food and clean water, and in clean energy, MÜSİAD stands ready to serve our country
Looked at from this perspective too, Konya is one of Türkiye’s most important trump cards and key cities in the new world economic order, in the world’s new world order. It is one of the most critical cities both for the possible environment of scarcity that will begin with global warming and for our advantage of becoming the world’s reliable food manufacturer through the efficient use of agricultural land.
In Konya, where more than %90 of the land is suitable for agriculture, industry has developed in connection with agriculture, while machinery manufacturing, the automotive supply industry and the base metal sectors have also recorded very rapid growth.
However, the industrial item must not be forgotten either. Of course the %7 growth rate that Türkiye achieved in the first quarter of 2021 despite the most difficult conditions of the pandemic is an achievement that cannot be ignored. But growth alone is not a sufficient condition for sustainable development. For one thing, growth with high volatility unfortunately presents a rather risky investment and production environment for the industrial sector. In order to establish a reliable investment and production eco-system, we must not content ourselves with domestic growth and exports alone; we must pursue the matter of attracting direct foreign investment to our country and, in particular, of our SMEs being actively brought into these investments.
So, what should the basic conditions of a sustainable growth be?
The answer to these questions lies in creating correct investment strategies, in being able to attract foreign investment to our country, and in establishing a high value-added economic network around city economies.
We are obliged to keep pace with the conditions peculiar to the new world order. The most important of these is that investments be channelled correctly and, in particular, that city economies be adopted as the fundamental strategy in investment planning.
While the cities that are their counterparts in the world — that is, cities possessing similar characteristics — have reached enormous figures both in terms of production volume and of their contributions to GNP, it is not right that our own cities possessing the same values should remain economically constrained.
This is possible only through determining the distinctive values of cities, bringing those values together with suitable investments and investors, continuously monitoring the efficiency of support and incentives, and of course through the branding of that city in the process of turning value into assets.
I see that potential particularly in Konya.
With 9 organised industrial zones, 19 small industrial estates, 15 small industrial estates located in the provincial centre, 11 small industrial estates located in the districts of Konya province and 14 private industrial estates, it is one of the provinces shouldering the employment and industry burden of the Turkish economy.
In 2020, when exports declined across Türkiye, Konya increased its total export volume by %8.3 compared with the previous year, and the fact that the sectors in which it exported most were, in order, Machinery, Automotive, Cereals/Pulses, Chemical Substances and the Defence Industry also lays bare the distance Konya’s economy has covered across the industrial sector as a whole.
For instance, Konya, which ranked 5th in Türkiye in exports of Machinery and Parts in 2020, had a share of %6.7 in the exports directed at this sector.
Again, Konya, whose share in our country’s Automotive exports is %1.6, ranked 8th in Türkiye in 2020 with automotive exports of USD 421.3 million.
Konya, one of the provinces that also comes to the fore in the Defence and Aviation Industry, ranked 4th with exports of USD 153.5 million and a share of %6.7 in this sector.
Possessing an export potential considerably above its imports, Konya is in this respect one of our rare provinces that runs a foreign trade surplus.
Located at the centre of Anatolia and positioned so as to be able to reach 10 million people within 3 hours and 57 million people within 6 hours by road, and triggering regional growth thanks to this strategic position, Konya is also one of the important stops on the road we have set out upon in order to develop city economies.
Distinguished Guests,
At the meeting we held the other day with the directors of economy, which took place with very broad participation, we finally found the opportunity to explain our project of developing and branding cities through their distinctive values. At a time when economic and commercial activities that had contracted all over the world are finally beginning to open up and even to expand, and when the developed countries in particular are falling behind in taking a share of investments while the developing countries are attracting the world’s direct foreign investments at a rate reaching %70, the fact that our country is unable to take the share it deserves from this productive flow of course reveals the necessity of establishing a brand-new investment planning roadmap. .
We must promote Türkiye as an investment and trade market for the direct foreign investor, operate MÜSİAD’s international field presence like a trade and investment system, and for this establish a structure that will work under the umbrella of the state. The models for this have been determined. Through this system, fund flows will be directed towards project partnership in Türkiye via MÜSİAD, an institution of proven reliability, and by this means investment diplomacy will be put into operation and the active investment diaspora abroad will be drawn to our country. We have called this M-TIA for short, that is, the MÜSİAD Trade and Investment Agencies System.
Honourable Minister, Distinguished Guests and my MÜSİAD brothers and sisters,
Two important concepts are now right at the centre of our economic life and, just like trade diplomacy, in terms of their origin and their definition these too are MÜSİAD’s own discourse:
1. Investment diplomacy: making good use of the language formed by the logic that in investment the industrialist knows the industrialist and his organisation
2. Investment diaspora: our national elements, who make us proud with their active investments abroad, directing their investment areas towards our country as well
This is possible only through determining the distinctive values of cities, bringing those values together with suitable investments and investors, continuously monitoring the efficiency of support and incentives, and of course through the branding of that city in the process of turning value into assets. In other words, one of the three legs of this investment network system passes through the process of Developing and Branding Cities Through Their Distinctive Values.
The branding of provinces and the transformation of their existing assets into value — that is, the proper identification of their potential and the increasing of the provinces’ values through investments suited to that potential — is what is required. Every city has its own distinctive values. Turning these into high value-added assets brands that city and increases its contribution to GDP. Comparing, according to certain criteria, the cities that are counterparts possessing similar characteristics in the world with our own cities, and applying in our cities the methods and processes by which the examples in the world produce added value, will both increase our cities’ contributions to the national income and make them self-sufficient elements.
When you look at it today, cities that come to the fore with the domestic production and the contribution to GDP that multiply the national income of many states can, as brand values, have even more say in world global production than their own countries do. And believe me, this passes through the concept of self-sufficiency.
Discovering the distinctive and strategic values, the resources and the sectors of every city and directing them and putting them to work correctly — this is correct planning. Acting on this logic, we too have matched provinces with their foreign counterparts. How their foreign counterparts transfer similar values to the national income with higher added value may serve as an example for our cities as well, or as a roadmap to be supported with suitable investments.
At this morning’s general assembly we announced the province we have determined as the match for our province of Konya………………………………………………………….. MR PRESIDENT, HERE you may briefly explain the province you have matched with Konya and the reason for it.
I see that potential particularly in Konya.
As the Capital of Agriculture, we see that in 2020 Konya exported approximately USD 270 million of Cereals and Pulses, USD 85 million of Fishery Products and Animal Products, and USD 46 million of Fruit and Vegetable Products. When Dried Fruit and Products, Olives and Olive Oil, Fresh Fruit and Vegetables, and Ornamental Plants and Products are added to these, we see that exports of agricultural and livestock products of almost half a billion dollars have been reached.
Honourable Minister, Distinguished Guests,
As will be recalled, last year, after the first collapse in economic activity following the initial shock of the pandemic, the recovery that set Türkiye apart from its peers drew the attention of the whole world.
The Turkish economy, which grew by %1.8 over the whole of 2020, was in the first quarter of 2021 the fastest-growing economy within the G20 after China.
We believe that if our cities are enabled to meet with investment plans and investors suited to their own values, sustainable development will work in Türkiye’s favour after the pandemic.
With the revival of the economic activity that had contracted because of pandemic conditions, we believe that the contribution of domestic demand to growth will record an increase. As will be recalled, in the first quarter we saw that the contribution of domestic consumption to growth was 4.7 points.
I would like to underline one point here: where there is no production, we cannot speak of consumption either. For this reason, we cannot say that those who wish to create the perception that “the Turkish economy is growing merely by consuming.” in every period in which our country attains high growth rates are acting in good faith.
In every period in which domestic demand conditions have been buoyant, the production capacity of the Turkish economy has also recorded an increase. The clearest indication of this is that in the first quarter the industrial sector expanded by %11.7 and the manufacturing industry by %12.2.
The important point here is that the production responding to domestic demand should be met as far as possible by domestic resources. The fact that in the period in question the contribution of net external demand to growth was 1.1 points indicates that the Turkish economy has had a successful period in terms of “being able to be self-sufficient”.
Of course, what falls to us is to make this sustainable. For this, on the one hand we must keep domestic demand conditions buoyant, and on the other we must ensure that our exports permanently remain above our imports. Creating new roadmaps for our investment planning and making the best possible use of our cities within this scope, ensuring that each of our cities contributes to the national economy as much as its counterpart cities in the world do, must be the goal both of us as MÜSİAD and of Türkiye in the new era.
MÜSİAD, one of the most widespread capital organisations in the world, is structuring its domestic and international field presence as a network in order to hold investor scouting and investment information — that is, economic intelligence — in a single hand.
While direct investments in Asia amounted to approximately USD 476 billion, China became the country attracting the most direct investment in the world with USD 163 billion.
As for the investments made in Türkiye, they recorded a 19 percent decline compared with 2019 and, unfortunately, the point they have finally reached was USD 6.8 billion in 2020. And in the last months of this year we unfortunately see negative figures. That is, we are watching investors withdraw from our country to a serious extent.
We as MÜSİAD maintain that the investment philosophy of the new era must be to adopt the logic of turning Türkiye into the investment market of the world. And this in turn passes through bearing in mind that investment is to be seen not as a transaction like trade, but on the contrary as a long-term decision-making process.
All of us are industrialists and in a sense investors as well. It would not be wrong to take up the foreign investor from this angle too and to see him as acting within behaviour patterns similar to our own. In the end we are all human beings and we act with similar behaviour patterns.
When an investor comes to a country he looks at whether certain basic facilities are suitable for him: first of all he seeks the most suitable region that will supply raw materials for his investment; he investigates the existence of production regions whose logistics networks are favourable for him; he prefers countries where spatial problems and of course set-up costs and procedures are minimal and simple; the large investor looks at the production capability and the level of institutionalisation of the SMEs to which he will subcontract his sub-production. He calculates the contribution of labour cost and labour quality to his own investment. He investigates how much of a problem the infrastructure difficulties in the region where he will invest will be.
All of these are in fact calculations made in order to lower the risk premium of the investment, and each one is a step in the decision-making process.
As MÜSİAD, in order both to make domestic production more efficient and to raise institutional and solid SMEs in which the foreign investor can carry out his own sub-production, we have, as you know, also brought our Production and Investment Bases Project to life. The prototype of this project, realised with the support and the favour of our Honourable Minister, who was also present at its opening, has now been completed as well.
The aim here is compact SME incubation centres containing everything from a vocational school to a bonded warehouse, from accommodation areas to sports and cultural activities, for companies that cannot grow because of spatial problems yet are promising in terms of production. These Bases are also, for foreign investors, both an element of confidence for the planning of domestic production and a working model that will facilitate investment processes in domestic production.
The functioning of investment in a country is not limited only to the macro decisions of the foreign investor. Today in the world there is a perception of investment that advances in parallel with the scale magnitudes and the in-kind values of the domestic investor or of resident capital.
Honourable Minister, Distinguished Guests, my MÜSİAD brothers and sisters
From the very first day I took office I have tried to keep my finger constantly on the pulse of the MÜSİAD FIELD, both at the level of members and at the level of companies, through my continuous domestic and international travels. The time I have spent at the Head Office is rather little. My purpose here has been both to be in personal contact with our people, to convey their demands and expectations directly to the relevant organs of the state, and of course to ensure that the policies determined by our state become effective and understood in the field and to help wherever there are bottlenecks in their implementation. Because NGOs are bridges between the State and the people, and that is how they should be.
If you are managing an organisation spread not only across Türkiye but across the entire world, such as MÜSİAD, then you will be not merely an administrator but, when the occasion demands, an elder brother, a friend, a brother. Sometimes you will explain like a teacher and sometimes you will know how to listen like a student. You will both know and observe the rules of bureaucracy and show understanding, and you will also know how to take upon yourself, from time to time, part of the burden on the shoulders of the politician. Thousands of members, and their employees, and the families of those employees… While taking a decision you will act justly, knowing that all this responsibility rests with you. You will take the country’s troubles to heart and, when the occasion demands, pass sleepless from one city to another for the country, just as I have done on these tours. You will produce new projects and initiate new processes.
I have tried to fit many projects, countless friendships, hundreds of visits and of course the renewal process into my four years as MÜSİAD President. By renewing the institution I am proud to belong to, we have made it as fit as possible for the conditions of the new world order. Praise be to God, I shall hand over this duty in a short while. God willing, we have left no one aggrieved behind us and have left people pleased with our service.
As I conclude my words here, I offer my thanks to our Honourable Minister of Environment and Urbanisation for honouring us with his presence.
I thank everyone who has contributed to this fine organisation that has brought us together here today, foremost among them my Konya branch president, and I greet you with respect and affection.
Abdurrahman KAAN
President of MÜSİAD