Union of Chambers and Commodity Exchanges of Turkey

Hosted by Hisarcıklıoğlu at the TOBB University of Economics and Technology (ETU), TOBB’s 70^th General Assembly was attended by Prime Minister Recep Tayyip Erdoğan, CHP Chairman Kemal Kılıçdaroğlu, MHP Deputy Chairman Emin Haluk Ayhan in addition to various ministers, delegates and many members of the press.

TOBB President M. Rifat Hisarcıklıoğlu began his speech at the 70^th General Assembly by expressing the anguish felt as a result of the disaster which took place in Soma. Stressing the aid campaign they’ve launched in order to help the families of the workers who perished in Soma, Hisarcıklıoğlu once again invited the business community to support the campaign.

Stating that as the private sector, they have been presented with a promising view of the future in 2013, Hisarcıklıoğlu said, “Together we will realize our dreams,” giving a message of unity and solidarity.

Hisarcıklıoğlu went on to list the necessary structural reforms: “Tax reform, industrial strategy to address the current deficit, incentives for employment, cost reduction and the betterment of business environment between the real sector and banks.”

- Hisarcıklıoğlu’s speech

TOBB President Hisarcıklıoğlu’s 70^th General Assembly speech is as follows:

“I salute you on behalf of myself and the TOBB Board of Directors. Welcome to our 70^th Financial General Assembly. You honor us with your presence.

Unfortunately, we are convening at a time following an event which overwhelmed us in indescribable grief. Three hundred and one of our brothers have been martyred in Soma. I pray for the grace of Allah upon those who’ve lost their lives. May heaven be their abode. I share the grief of the families left behind and extend to hem my condolences.

We were in Soma on day one. We saw people dropping everything to join the rescue teams. We witnessed many stories of heroism. We were given a lesson in humanity. We saw people go right back into the mine so that not a single one of their friends would be left behind.

Our nation felt the pain of Soma as its own. I thank everyone who felt that pain; everyone who tried to provide healing. The families of the martyred marines are now our charges. I would like to take this opportunity to thank the Chambers and Exchanges who have and will support the aid campaign we’ve launched as TOBB. I invite all of the business community to take part in this campaign.

However, sharing the pain of those left behind does not lighten our responsibility. According to our beliefs, creation was made for man. Nothing in creation can be more important than human life. In every field, human life should be our priority. This is a right, this is just.

For this reason, everyone must take up responsibility. Those responsible for Soma, whether they are public administration or private sector, must be found and judged in the most transparent manner.

Dear friends,

Behind us lies a busy year. We worked 24/7. We produced, we exported. We provided our people with employment and sustenance. We have but one goal: To make our country richer and to make our people more prosperous.

You’ve seen in detail our work and Activity Reports pertaining to the last term. A part of that information was also displayed on screen for you.

All of this work was built on two columns. The first: The entrepreneurs filling this room; you, yourselves. You have embodied competition, courage, conviction, determination and willpower. You have become the heroes of production, employment and exportation.

Our Chamber and Exchange presidents have taken up the duty of acting as opinion leaders of the business community admirably. They’ve put effort towards the development of their cities, to achieve brand status; they’ve produced ideas and projects to this end.

All of these activities, successes are your accomplishments; they are the accomplishments of our whole community. I congratulate you all for your efforts and labor and present my gratitude!

The second column on which we’ve based our works on is stability as well as the support provided to the business community by our government and the regulations they’ve enacted. If either one of these columns were absent we would not have been able to achieve all that we have.

For that reason, I would like to extend my gratitude on behalf of my community to the President of the Republic of Turkey, the TBMM Speaker, the Prime Minister, the Chairman of the Opposition Party, the political parties and the TBMM.

Bureaucrats have labored with us. We worked together as public – private sectors, actualizing many works contributing to our country. I would like to extend my gratitude to them as well.

Dear friends,

You well know that businessmen first take stock of the previous term. Afterwards, they look to the future. Just so, I would like to assess the developments taking place in our country, and the world.

When we look back at 2013, as the private sector, we are able to look forward with hope. Despite negative developments domestically and internationally, our private sector has gone on to set new records in various fields.

Production volume, investment amount and employment have increased. Why do entrepreneurs invest, open establishments or provide employment? It is because they have hope for the future.

It is with this hope that we go on to generate more entrepreneurs for our country. Active establishments have reach 1,576,000, having increased by 77,000 to reach the highest in the history of the Republic.

Continuing to provide employment and food to our nation, we have also broken the employment record of the Republic to date. Just the number of recorded employees has increased by 620,000, reaching 12,000,000.

On the other hand, we continued to invest in Turkey’s future. The machinery and equipment investment spending of the private sector has reached 86 billion USD.

Who achieved all of this? You, who are in the hall, and the community you represent did. We are proud of you.

On this occasion, I would like to thank the Prime Minister and the Ministers Ali Babacan, Hayati Yazıcı, Nihat Zeybekçi and Fikri Işık for their support to the efforts of the private sector.

Distinguished guests,

A new, unfamiliar global economic environment awaits us in 2014 and afterwards. I personally see 7 global trends which will redefine the rules of the game and change the world.

The first is that the global financial climate is changing. Following the GEC, a period of monetary expansion and abundant liquidity began. The FED put out nearly 1 trillion USD each year. This made it easy for countries, companies and individuals to take on debt to invest and spend. Economies were growing.

But that period is coming to an end. FED is reducing the currency it is putting out, eventually cutting it off altogether. Both companies and individuals need to be more careful. As the public and private sectors we must focus on how to adapt to the new climate.

Second, global trade and investment environment is changing. Global regionalization is gaining momentum. Leading this trend is the USA. The Transpacific Partnership Agreement with the countries of the Pacific was signed, including major players like the USA, Japan and Korea.

While on the other hand, the USA has accelerated its Transatlantic Trade and Investment Partnership enterprise with the EU. These two agreements together encompass two thirds of the world’s economic power. These partnerships will determine the direction of global trade and investments. Not only that, but will have the power the power to determine production standards.

I would like to give you an important example as to the significance of this situation: All of the goods you produce are built to work with 220v. If these countries decide that 110v should be the standard, we would have to completely change our production structure or forego selling our goods to these markets. In other words, those who are a part of the new global system will have great advantages over those who are not. As Turkey, we must be a party of this new formation.

The third trend is the changing energy map. Shale gas, thanks to advances in technology, is becoming increasingly cheaper and produced in larger amounts. For that reason, the USA’s price for natural gas has been decreasing for the last 5 years, up to 60%.

It is expected that the USA will become an exporter of natural gas soon. This development will effect every decision from investment preference in the world. As an energy-dependent country, we must focus on this issue.

Fourth is the rise of entrepreneurship to become a major component of international competition. All countries are competing to draw in innovative entrepreneurs.

Another poignant example for this is the fact that 52% of the entrepreneurs in Silicon Valley were born outside the US. That means the USA is preparing for the future. It is drawing in entrepreneurs from all over the world. Innovation companies are establishing themselves in the USA.

Why? Because whoever draws in more entrepreneurs; whoever retains more innovation, will win tomorrow. Inventors win. My brothers, we have a young and dynamic population. What is holding us back? Let us make entrepreneurship attractive, direct the youth towards entrepreneurship and support them in order to take our rightful place in the world.

Fifth: The internet has become the backbone of economy. Unfortunately we only view the internet as a social media tool. It is, for example, an opportunity for lowering costs and stepping into the global market for SMEs. Thanks to the internet, every SME can reach the global markets without the need to establish a distribution network. The furniture of İnegöl, the baklava of Gaziantep are being marketed to worldwide via the internet. The world is at your fingertips. What are we waiting for? Let us discover this giant market.

The sixth global trend is the worldwide growth of the middle class. Every year, 150 million people join the middle class. The equivalent of two times our population. The middle class numbers around 2 billion people today. In just 6 years, it will reach 3 billion.

The yearly spending of the global middle class today is 7 trillion USD. In 2020 this figure will triple, reaching 20 trillion USD. In order to address this demand infrastructure, production and reach are necessary. In order to sell more goods, we must reassess our industry policies.

The seventh global trend is the rise of cities in the economy. The growing middle class is gathering in cities. I would like to draw your attention to the fact that the 600 largest cities of the world house 1.5 billion people. The contribution of these cities to the global trade volume is almost 50% of total. In 10 years, the number of people living in these cities will have reached 2 billion. Their production will reach 60% of the world’s economy.

This means that not only countries but cities are competing against each other. In order to pull ahead of its competition, a city is building the fastest internet infrastructure in the world in order to draw in advanced technology companies; this is just one of the many examples seen in the world today.

We, too, must increase the attractiveness of our cities. For that we need our cities to achieve brand status, increase environmental awareness and become ‘smart cities’.

Dear friends, the world is abuzz with these developments, making their preparations. Countries which enact policies in accordance with these trends will pull ahead. They will win. We must take all of these developments into account, discuss them and produce ideas.

Distinguished guests,

We have behind us 2 important elections this year. Local elections were completed with due maturity, democracy upheld by our nation to put forth its will.

Before us lies the presidential election. It is especially significant in that it will be the first time the President of the Republic of Turkey will be elected by popular vote. We believe that this election will be completed with due restraint. Hopefully, this result will lead to a new social understanding.

For our greatest need right now is peace. Let us find peace so that we can all focus on our businesses so that we can take part in more production, more investments and more exports.

Our region is becoming more unstable each day. Despite this, we increased the industrial production by 5.3% and exports excepting gold by 4.5% during the first quarter of this year. I believe that this is a good start for growth.

But we need to be able to do better for a better Turkey and a better future. This is because the per capita income has been stuck at 10,000 USD for the last 6 years.

If we want to achieve our goal of reaching 2 trillion USD national income by 2023, we must attain approximately 8% yearly growth. In the last 10 years, we achieved 8% 4 times. This shows that we are capable of achieving this goal.

Now, we must gain greater momentum in the economy and maintain high growth. However, we cannot accomplish this as a country which generates current deficit for production and one which enters into debt to grow.

How can we grow rapidly and maintain our competitive power? How will we overcome the low savings ratio obstacle? How will we establish a public administration structure far removed from arbitrary decision making? Will we regain our competitive power through quality and innovation, previously lost due to employment costs?

The answer to all of these questions is a new model for growth. For that, we need a series of structural reforms. We must work together as politicians, bureaucrats, academics and the business community to design appropriate policy.

The economic reforms enacted by our government in the last 10 years have given the business community courage and confidence. Now, we must reignite the fire of reform and complete the unfinished reforms. Then, Allah willing, we will attain greater goals.

We are making preparations. We keep the pulse of the business community with regular surveys. We see that the business community looks to the future with hope. Without hope there can be no development. There are structural reforms we need. The 5 most important of these are:

·         Tax reform,

·         Industry strategy for reducing current deficit,

·         Incentivizes for employment,

·         Reduction of input costs,

·         Improvement of the business environment between the real sector and banks.

Dear friends,

Tax reform is the highest priority issue of the business community. A better, more just taxation system, which taxes not just the people it catches, should be established with the tax reform. It should not only aim to increase the income of the government, but also to lower high taxes.

We insist that there should be affirmative action taken for those who properly pay taxes in order to incentivize people to pay taxes.

The reduction of current deficit is imperative for healthier and more stable growth. The way forward for this is through strengthening of our industry. Last year, our industrial exports were below that of the year previous to it. The share of mid-level technological products in our exports is increasing. However, the share of high-tech products is decreasing.

This shows us the need for structural transformation in our industry. Our limited resources should be spent on industrial investments instead of lower added-value fields. We should support high added-value industrial activities with special programs. We should not shy away from providing incentives on a product basis.

As we prepare our industrial thrust, we must take into account opportunities not just in Turkey, but the economies of the whole region. We must set up production and value chains around Turkey.

As the TOBB community, we have a dream. We are dreaming of Turkish-speaking industrial zones with our flag flying over them in the region’s countries. Because Turkey is the industry giant of the region.

We can transfer our knowledge and experience to neighboring countries while the Turkish business community can benefit from the opportunities there. The first step for this has been taken in Jenin, Palestine, in coordination with our government. We must be able to increase the number of these industrial zones to 10, even 100.

We must prepare a comprehensive strategy to accomplish this. Our goals should be big. Our goal should be to produce goods for the world and bring in added-value to Turkey.

Distinguished guests,

One of the issues most voiced by our entrepreneurs is the high input costs of production and exporting. Taxes on liquid fuel reduce our competitive power as well as encouraging off the record economy. Let us lower all high taxes on energy in stages.

The employment premium reduction, enacted bravely by the government has increased both recorded employment and premium income. Off the record economy has decreased. Both employees and employers, as well as the government, have benefited from it. Let us continue this.

Let’s lower the tax burden on fuel for domestic transportation of industrialists working in imports.

We should provide freight support for the exports of industrialists. Many transportation projects connecting every part of the country have been actualized in the last term.

Investments into transportation are changing the face of our country. The transportation costs of our traders and industrialists are decreasing. Especially railway investments, with regards to efficiency, should be increased. Railways should be extended to OIZs, ports and logistical centers.

Esteemed friends,

Another issue is the need for affirmative action for SMEs. Globalization, with regards to economy, is advantageous for the big players. If this process isn’t properly managed the competitive environment is disrupted. Markets enter into the control of large companies. Our SMEs and industrialists become relegated to mere outsourcers.

To illustrate the importance of SMEs for the economy, 63% of our exports are conducted by SMEs and just 39% of imports. This means that the solution to the foreign trade deficit is also to be found in SMEs.

An eco-system wherein SMEs will not be wiped out by large companies and where they will be able to compete in fair conditions is necessary. The system adopted worldwide for this should also be put into effect in our country: ‘Development Focused Public Acquisition’.

When we open these acquisitions to foreign products, we endorse foreign companies. If we continue to do so the SMEs of Anatolia will not be able to become the global companies of tomorrow.

Public acquisition should be done with regards to the interests of SMEs. Various parts of the legislation are weak. A decision to provide 15% price advantage to public acquisition of domestic products was instructed by the Prime Minister. Unfortunately, bureaucracy has yet to put it into effect. This decision has not been put into effect in 93% of public acquisition tenders.

Even municipalities buy imported goods. Our government took a step in the right direction with the decision 3 months ago to bring price advantage to domestic goods which we hope will be reflected in practice and we extend our thanks.

A similar regulation should be made for offset procedures as well. This way, our national industry will have opportunity for new employment and technology.

Dear friends,

One of the most telling issues for us recently has been the costs forced on us by banks. The global financial conditions have already increased credit costs for the private sector. Additionally the ever increasing process costs of banks exacerbate the situation.

The real sector is fed up with paying banks through the nose no matter what the charge is called. Already paid exorbitant amounts of interest, are banks so desperate as to need payment for folders? If the real sector sneezes, the banking sector will catch a cold. I urge banks to stop their ‘always me’ approach. Don’t forget that you only exist because of SMEs!

Esteemed entrepreneurs,

We must also look to ourselves and criticize ourselves. Our surveys show that the smaller a company is, the more problems it has. We are still insistent on staying small and not combining our powers.

Whereas we consider moving in unison a cultural trait. Our companies should bring to life this cultural element and combine their powers. If you want to have more power as a company, expand your company. If you don’t have the capital for it, form a partnership or merge. Go public.

Honorable Prime Minister,

Under your direction, work to provide our Chamber-Exchange Presidents and successful businessmen with green passports was conducted. However, as I’ve said time and again, we have been unable to actualize this project. The green passport mentality has prevented it.

Let us not forget that not only bureaucrats represent this country; businessmen do, as well. The prestige of our entrepreneurs is that of our country. Their successes are that of our country. Take these shackles off of our ankles and we will spread Turkish companies worldwide!

One of the important significant problems of the private sector is the fact that the private sector gets pushed to the back at regional development agencies. We put great importance on Development Agencies for local development.

In order to achieve this, we feel that local actors need to be given more active roles. Starting with governors, bureaucrats serve for limited periods of time at their appointed stations. Unable to grasp the part of the province, unable to monitor the precursor conditions or the follow-up to projects.

On the other hand, Chambers and Exchanges are the memory of that city, the primary representative of the business community. They adopt projects for their cities as if they were their own businesses. That is why public administration and private sector should work together in provinces and regions, setting priorities together.

Dear friends,

The European Union is an important tool for developing stability and democracy. The EU process is contributing to our country in regards to the economy as well. Moving forward, the market which will allow us to retain our competitive edge is the EU market. EU is still the most developed global market in terms of buying power and the closest one to us. It will continue to be so.

As the business community, we support EU values. In this process, the lack of vision from EU leaders as well as their prejudiced approach has turned on us. If that wasn’t enough, now we are faced with obstacles such as transportation quotas and extra-tariff costs. This alienating and damaging treatment needs to change.

Distinguished guests,

There is one more issue with regards to the period ahead of us: The new Constitution. It is accepted by all parts of society that a new democratic constitution on par with universal standards and compliant with EU norms.

This will ensure the smooth function of legislative, executive and judicial processes together. Our structure of a democratic, secular and social government under the rule of law will be strengthened. The Republic, entrusted unto us by Mustafa Kemal Atatürk will reach its goal of advanced civilization.

During this process, the parliament, political parties and large institutions have important roles to play. Let us not allow Turkey to regress; to be dragged into chaos and uncertainty through fighting.

Let us ensure that peace, not conflict reigns in our country. Let us stand against all efforts to bring to a halt our democratic process and development. Let us work harder for Turkey and let us make a new constitution with this in mind.

Dear and esteemed friends,

The representatives of all entrepreneurs in Turkey are in this hall! We are a great family working day and night to serve Turkey. We are tradesmen who start the day with a prayer and finish it with gratitude. We are the tigers of Anatolia.

We are dedicated to this country, working from Ardahan to Edirne, in pursuit of lawful gain. We are in 7 regions and 81 provinces. We are of every color, view and creed. Our way is just, our hearts are with god. Our cause, our love is singular. A developed, great and rich Turkey. A globally admired leader with a strong economy and democracy.

That is our goal! That is the side we are on! That is our policy! The dreams of those who think to hold Turkey back will never come to fruition. Turkey will become one of the world’s 10 largest economies.

This will be accomplished by the business community – traders and industrialists – which you represent. The more you invest, produce, employ and export, the more Turkey will develop. Allah willing, we will accomplish this together.

In the words of Necip Fazıl: ‘Don’t think that this wheel will be stuck on a bump; tomorrow is surely, surely ours. The sun, risen and set; eternity is ours.’

We will reach our goals, we will, all together, make our dreams into reality. ‘In order to reach our destination, we will travel day and night.’ Tomorrow is ours. Tomorrow belongs to Turkey, to this nation.

May Allah enrich our hearts, render our labor and earnings prosperous and preserve the unity and solidarity of our nation. Godspeed and may Allah aid us.”

- Prime Minister Erdoğan

Prime Minister Recep Tayyip Erdoğan extended his wishes for the TOBB General Assembly to be beneficent for Turkey and its economy, expressing his gratitude for the contributions to the Turkish economy.

Extending his condolences to the families of those who lost their lives during the mining disaster which took place in Soma and the nation as a whole, praying for the grace of Allah for those martyred, Erdoğan thanked TOBB, President Rifat Hisarcıklıoğlu and his team for their Soma visit as well as the aid campaign they have started. Prime Minister Erdoğan thanked all chambers, exchanges and unions as well as all representatives of the real sector, employers, industrialists and artisans for their material and spiritual support for Soma.

Touching on the extraordinary display of solidarity by the Turkish nation following the disaster in Soma, Erdoğan stated that the grief is shared by everyone.

- Working together

During his speech at TOBB’s 70^th General Assembly, Prime Minister Erdoğan stated that they are working with TOBB towards shared goals and that they’ve grown Turkey’s economy to thrice its size and extended his gratitude for TOBB’s contribution to the economy and putting bread on not just their own table but those of thousands of people. Erdoğan stated that in order to increase Turkey’s prestige during the EU process; to have the crescent-star flag fly free and to promote the country further as well spreading investments all over the world, they are working together with TOBB.

Erdoğan, stating that the events between May 30, 2013 and March 30, 2014 are very significant, especially for the business world, and reported that according to a survey conducted with the attending TOBB delegates, 32% had seen increase in sales, 34% with decrease and 34% with no significant change.

- Work on the new constitution

Prime Minister Recep Tayyip Erdoğan stated that the Constitution Negotiation Commission has come to agreement in regards to 60 clauses, “The Chairman [Kılıçdaroğlu] told us that they were ready to bring the issue to resolution.” Stating that CHP did object to signing off without the participation of the other two parties in parliament – MHP and HDP – the Prime Minister stated that he is a man of his word and will bring the issue to a resolution and that there is no need to wait for the last 2 parties.

- “He has successfully held office for the last 7 years despite obstacles”

Touched on the subject of presidential elections, Prime Minister Erdoğan spoke in regards to CHP Chairman Kemal Kılıçdaroğlu’s “civilian president” quote and stressed the definition of civilian, emphasizing that they represent national will and that it is perfectly suitable for a political party leader or member to be a candidate, “President Abdullah Gül, formerly the Minister of Foreign Affairs, has successfully held office for the last 7 years despite obstacles.”

- CHP Chairman Kılıçdaroğlu

CHP Chairman Kemal Kılıçdaroğlu called to mind CHP’s public awareness campaign with the motto: “If the citizens are paying taxes, the government will be called to account.” Stating that the State Court of Accounts keeps track of where taxes are spent on behalf of TBMM, Kılıçdaroğlu reported that these reports never reach the TBMM.

CHP Chairman Kemal Kılıçdaroğlu said, “The President of the Republic must be independent and impartial. The President must ensure that all institutions of the government work together. The President must be a part of the people. That is the President we want. We are arguing over the wrong issues. We should first ascertain what we consider to be the definition of President of the Republic.”

- “The President must be a part of the people”

Emphasizing that they want the people to vote for their president, Kılıçdaroğlu said, “The President should not be a shady person, should not invoke doubt. The president should not wield anger as an art form. The President should embrace the people, should be modest, should speak eloquently and treat everyone equally.”

- “A lesson needs to be taught”

Reporting that Turkey is first in regards to work accidents in Europe, third worldwide, Kılıçdaroğlu said:

“Who will supervise? The government? Its bureaucrats? Will they go down the mineshaft? Why does nobody ask who is responsible? A minister came forward, for which I thank him, and said, ‘If there are this many people dead, there has to be some sort of oversight.’ Now, I would request that the said minister hand in his resignation if he has even the slimmest bit of respect for those who died. That is my greatest wish. A lesson needs to be taught.”

- Constitution talks

Emphasizing that a new, modern constitution is needed, Hisarcıklıoğlu said, “A negotiation commission was established with each political party having equal say. Was this government the first to try something like this? No; the first architect of such a project was the late Ecevit. This is because the constitution must only be altered through social agreement. All political parties prepared a work procedure and signed it. It was decided that if the clauses which were agreed upon were to be passed on to the assembly, they would only be passed on through unanimous agreement of all parties. Are we bound by this? We are. We are bound, in effect, to the AKP representatives’ statements. Do you know what the fundamental problem is? It is not the constitution. It is the coup legislation.”

Kılıçdaroğlu finished with a quote from Mustafa Kemal Atatürk, “Those societies which hope to live comfortably without working, tiring and producing must first lose their dignity, then their freedoms, followed by their liberty and future.”

- Deputy Prime Minister Babacan

Deputy Prime Minister Ali Babacan stated that everything is facilitated in the country once trust and stability are established, “Without trust, people don’t trade, banks don’t give out credit.”

Stating that Turkey has been undergoing an incredible transformation in the last 12 years, Babacan said that the Turkey of 2002 completely different than that of today.

- Customs and Commerce Minister Yazıcı

Customs and Commerce Minister Hayati Yazıcı stated that populism could not ever be adopted by them and said, “We looked to the core of the nation. We set our priorities accordingly.”

Stating that they view law and justice as the highest power in public administration, Minister Yazıcı said that ruling the country with this perspective in mind, they are forming the basis of social, economic and legislative security.

Following the speeches, January 1^st – December 31^st 2013 budgetary term spending and audits as well as the January 1^st – December 31^st 2015 term budgetary proposals were ratified.