Bahçıvan: "Istanbul Will Play Key Role in Defense Industry"

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The Istanbul Chamber of Industry (ICI) convened its monthly ordinary meeting with the main agenda item entitled "A Self-Sufficient Vision for Turkey in Defense Industry and the Contributions of the Developments in this Field in our Economy and Future". Also present at the meeting in which ICI Chairman Erdal Bahçıvan made the opening speech were guest participantss Minister of National Defense İsmet Yılmaz and Assembly Members of Sivas Chamber of Commerce and Industry.

During the meeting, ICI Chairman Erdal Bahçıvan and H. Osman Yıldırım, Chairman of Sivas Chamber of Commerce and Industry signed a "Cooperation Protocol" in the presence of Minister Yılmaz in an effort to reinforce friendship and fraternity between the two chambers.

Minister of National Defense İsmet Yılmaz took the floor at the meeting moderated by ICI President of Assembly Zeynep Bodur Okyay and touched upon wars and problems across the globe with an emphasis on peace, trust and stability. Yılmaz stated that a strong defense industry was an essential condition for freedom and added: "Turkey cannot have a strong army unless it has a strong economy."

Yılmaz' remarks were as follows: "Turkish middle class has grown stronger. The rise of middle class indicates a rising democracy. We paid off the IMF debts. It is unthinkable for a country to be free while being an IMF debtor nation." He also mentioned that Turkey was referred to as the sick man for a certain period in history and added: "Those days are long gone. We are working for the future generations. We will have far better days ahead of us. New Turkey is a new vision for our country. It's a Turkey looking out to the future with hope."

ICI Chairman Erdal Bahçıvan gave a speech at the assembly meeting during which he stated that in an age where concerns for security and new wars expand both on a global scale and in the region which Turkey is a part of, our defense industry demonstrates great achievements including national tank project ALTAY, the attack helicopter ATAK, the warship project MİL-GEM, and our domestic unmanned aerial vehicle ANKA. Bahçıvan also pointed out to how domestic production in the defense industry continued to grow in the international arena with leading companies such as ASELSAN and TUSAŞ that are among the 100 largest defense companies of the world as well as the strategically important State-Owned Enterprises and private companies. He drew attention to the role played by the use of domestic and quality products in this growth.

"Defense industry has had a turnover growth rate of more than 65% in the last four years, nearing 5.1 billion dollars in 2013 with exports in the sector nearing 1.6 billion dollars also in 2013. The industry is now a net exporter and creates positive results for the current account deficit. 15 years ago, domestic production in the defense industry was below 25% whereas this rate is as high as 55% today. It is highly crucial that the bureaucracy within our defense industry and the private sector engage in a strong cooperation and communication, complementing each other. When we take a look at the Budget for the Ministry of National Defense; we observe that purchase of goods and services constitutes 41% of the budget of nearly 22 billion TL in 2014. There is a need for correct and informed guidance in order for our industrialists to benefit well from the opportunities in this area."

İstanbul will play key role in defense industry

Bahçıvan also stressed the importance of defense industry in Turkey's industrial development, adding: "We shouldn't regard the industry only in terms of weapons and ammunition or military vehicle manufacturing but as an organism with a far wider scope including commercial activities to meet defense needs, R&D activities for defense systems, building construction; foods, clothing, health and logistics. In this sense, Istanbul will play a major role for the defense industry in the coming years with its qualified workforce, more than 40 universities and as a city with the highest number of R&D centers. We as ICI continue to work on turning Istanbul and its hinterland into the most important production center. Our companies have the potential to meet the needs of our Turkish Armed Forces and our defense industry in a wide range of areas including cold-proof, sweat-proof and waterproof apparels; boots and other products resistant to all climates and geographical conditions; food; health, chemistry, furniture and textile."

Sound public finance should bolster investments

Bahçıvan also evaluated Turkish and world economy during his speech in which he described the decline in oil prices as the most important development of 2014 referring to the expectation that it will support global growth. Bahçıvan stated that budget deficit of Turkey rose to 22.7 billion TL in 2014 while staying within the budget deficit target of 33.3 billion TL. He added: "Budget data of 2014 prove public finance as one of the healthiest aspects of Turkish economy. Benefiting from the soundness and advantage of public finance in support of our industry and investments in the upcoming term will yield fruitful results for our economy and our country."

Bahçıvan reminded that the The Global Economic Prospects 2015 Report of the World Bank mentions the need for developing countries to adapt their monetary policies and exchange rate policies to the new and harsher financial conditions: "Turkish industrialists should cast aside conservative tendencies as well. They should look into ways to benefit from different instruments such as bonds and bills, public offering, long-term financing, partnerships, risk management and hedging."

Bahçıvan drew attention to the reasonable expectation of approximately 3.5% growth rate for Turkey with gradually recovering domestic demands as a result of the relative improvement in the inflation outlook for 2015 as well as in purchasing power. He also added that excessive depreciation of the Euro would have repercussions in exports and current account deficit while the quantitative easing programme based on asset purchasing announced by the European Central Bank might possibly lead to an increase in hot money flows.

Bahçıvan also echoed the Global Risks Report issued by the World Economic Forum touching upon increasing tensions across the world: "Global defense industry is going through a massive change in terms of security, the nature of wars and war strategies. What's significant here is that traditional definitions fail to account for the fundamental dynamics of conflicts extending from the North Caucasus to Afghanistan, from Nigeria to Gaza as well as the attacks on Twin Towers and the latest inhuman terrorist attacks in Paris."

H. Osman Yıldırım, Chairman of Sivas Chamber of Commerce and Industry, guest of the ICI Assembly Meeting for January was also given the floor:

"We are trying to do everything in our power to draw businesspersons to Sivas. Today, Sivas is both a city to live and invest in." Yıldırım's remarks were as follows:

"We now have a ski center in Sivas. I would like you to especially visit our Great Mosque of Divriği and hot springs. Sivas will also have access to the sea with the connection route between Ordu and Sivas. Distances will be further narrowed with the high-speed train project between Sivas and Istanbul."

ICI Chairman of the Board of Directors, Erdal Bahçıvan's Speech Text Attach