Abdurrahman Kaan, President of the Independent Industrialists and Businessmen Association (MÜSİAD), one of Türkiye's largest business world civil society organizations with nearly 11,000 members and a branch network reaching 311 locations, 224 of them abroad, made exclusive statements to Haber7.
We spoke with MÜSİAD President Abdurrahman Kaan about the Central Bank's interest rate decision, the expectations of the business world and new projects. Stressing that an important duty falls to the banks, Kaan said: "Our banks must no longer be institutions that merely buy and sell money; they must also attach importance to project-centred investment banking."
Underlining that the biggest problem facing the business world is access to finance, Kaan stated that the Central Bank's interest rate decision has produced a rapid effect towards reviving domestic demand. Touching on the unemployment problem as well, Kaan said: "The fundamental element that will revive the economy is of course the human being. Yet we are growing steadily poorer in terms of qualified personnel."
The Interest Rate Cut is Gratifying
The Central Bank cut interest rates, and a decline in loan rates followed. How do you assess the current situation in the economy?
The interest rate cut decision taken by the new management of the Central Bank of the Republic of Türkiye has been a gratifying development on behalf of all the actors of our country's economy. We see that this decision and its reflections on market interest rates have produced a rapid effect towards reviving domestic demand. As the cost of the loans extended by the banks falls, we expect the vitality of economic activity to increase further and this situation to acquire a sustainable character in the medium and long term. In this context, we know that we must remove high interest rates, which stand at the top of the obstacles before new investments and therefore before production, as an issue for the Turkish economy. As interest rates fall, loan costs will fall as well. On this occasion, we now believe that we must work harder on systems that will reduce or completely lift the burden of interest from the back of the economy.
Call to Banks: Do Not Merely Buy and Sell Money
As the business world, do you have difficulty in accessing finance? What kind of steps do you expect to be taken in this respect? What are your requests from the banks and the government?
The issue of access to finance is currently at the top of the greatest problems on behalf of the business world. Our SMEs in particular are the group that suffers most from the problem of access to finance. As MÜSİAD, we propose a transition to an economic model focused on "Production, Investment and Exports", and we believe that Türkiye's economy will grow on the shoulders of SMEs, the driving engine of dynamism and growth. In this context, we must increase the skills of SMEs in the field of finance by improving their level of knowledge about alternative funding sources and their strategic vision on financing; we must make legal arrangements towards financial stability, the protection of the investor and the opening of new financial channels for SMEs; and we must develop policies to establish private sector funding and appropriate risk-sharing mechanisms in cooperation with the private sector in order to fund innovative SMEs. Of course, an important duty falls to the banks at this point as well. Our banks must no longer be institutions that merely buy and sell money; they must also attach importance to project-centred investment banking.
"We Must Continue by Increasing It"
Recently there has been an increase in exports and a decline in imports. Indeed, in July a record for the history of the Republic was broken in exports. How do you assess the export and import figures?
As we have expressed on many occasions as MÜSİAD, if we aim to sustain our strong growth performance in the medium and long term, exports must absolutely be increased and the contribution of external demand to growth must permanently turn positive. Our economy, which turned the increases observed in the exchange rate throughout 2018 to its own advantage and achieved a record level of goods and services exports of USD 168.1 billion, is maintaining this performance in 2019 as well. However, we must never be content with the stage reached; in order for this performance to be surpassed and to acquire a sustainable structure, we must continue on our way by increasing our production-focused policies. We must strengthen production and continue to give weight to manufacturing production geared towards exports. With the serious effect of our export-oriented macro policies as well, we believe that the current performance in exports will be surpassed and that the contribution of net external demand to economic growth will increase.
The Trade War May Be an Opportunity for Türkiye
How do the trade wars continuing across the world affect the Turkish economy and the business world? Do you have any studies or measures on this subject?
The stage reached today in global trade, where protectionist policies have gained speed, will be an important field of opportunity for the Turkish economy in the new period if it is assessed correctly. For at the point of transition from a consumption-centred system to a "production-focused" economy, we are passing through a very important juncture in giving weight to our own resources, that is, to our national and domestic industry. For this reason, we must determine very well which kinds of practices in global trade cause the greatest restrictive effect on our country's export products. The contribution that the road map of the new economic structure makes to the movement towards nationalization in production, its emphasis on the sectoral items that directly affect the current account deficit, and the priority given to investment in sectors with high added value are promising on behalf of the business world. In order for this understanding to acquire a sustainable identity in the medium and long term, the comparative advantages arising from our country's technological, human, economic, geographical, historical and other assets must be examined correctly and used in economic policies.
We Are Growing Poorer in Terms of Qualified Personnel
Recently there has been a rise in unemployment figures. Do you have any work for new employment within this scope?
Unfortunately the Turkish economy has a structural unemployment problem. According to the April data, we are faced with an unemployed figure that has risen to the level of %13 and exceeds 4 million. However, alongside an unemployment problem in the regional sense, we also observe that there is a "worker shortage" problem. From unskilled workers to qualified workers, a very serious problem of finding employees is being experienced in the real sector. This in fact means that we are unable to bring labour supply and labour demand together at the right point. The fundamental element that will revive the economy is of course the human being. Yet we are growing steadily poorer in terms of qualified personnel. In this context, as MÜSİAD we have determined our focal point as vocational education and we have developed the concept of the thematic high school. Within this scope we have opened stores inside vocational high schools. We are trying to make a new beginning. We believe that as long as we increase the number of vocational high schools in Türkiye, the problem of human resources and therefore of unemployment and of the shortage of workers will decrease.
Could you tell us about MÜSİAD's activities? You have launched an institutional transformation process to which you have given the name 'Renewal'. What will the new management model bring?
As MÜSİAD we have entered a new structuring that we call renewal. Why did we do this? As MÜSİAD we have completed our 29th year. We have established a new understanding, a new philosophy in Türkiye. We have created a new management model. We have called it the solar system. It is a first in the world. I think it will be a model for Türkiye. There is again a central structure. But it is a more project-focused work that has a philosophy. Here we are under the main philosophy of business development and business environment development. At the same time, under the heading of planning and implementation, with a new structuring model that we divide into assembly and field, in which the high boards are again included but which, connected to them, also carries thematic and semi-thematic names, we have brought a new understanding to Türkiye.