ICI July Assembly Meeting Discusses The Presidential Government System

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Istanbul Chamber of Industry (ICI) July ordinary Assembly meeting was held on 25 July 2018 in Odakule with the main agenda of "Outlook on the Presidential Government System in Terms of Legislation, Execution, Economy and Society". The guest of the Assembly meeting chaired by ICI Assembly President Zeynep Bodur Okyay was Prof. Dr. Haluk Alkan, Political Scientist and Dean of the Faculty of Economy in Istanbul University.

While ICI Chairman Erdal Bahçıvan was talking about the latest economical issues during his speech at the meeting, he underlined the challenges of medium scale industrial firms in accessing loans due to the cash squeeze and rise in the loan interests. "Banking industry fell short in managing and ensuring efficient use of large loans. Banks should change their perspectives about the industrialists." said Bahçıvan.

İSO Başkanı Erdal Bahçıvan
ICI Chairman Erdal Bahçıvan

Bahçıvan, also, talked about the Assembly agenda:  "Presidential Government System is based on a result-oriented, high-performance, effective execution structure and expertise. It was a mentality that we had been long talking about. The thing that needs to be done now is to discuss the industrial projects that will make Turkey achieve the goals that it needs and to establish the global competitiveness with spot-on operations."

ICI July ordinary Assembly meeting was opened by ICI Assembly President Zeynep Bodur Okyay. Okyay shared her opinions regarding the agenda with Assembly Members.

ICI July Assembly Meeting Discusses The Presidential Government System 01

"Republic of Turkey that will be an age old country in five years should no longer be remembered with terror, instability, current deficit, macro balance fragility, talent deficit and middle income trap. Our main expectation from the new government system and the governance teams is to rapidly initiate the transformation that will make Turkey the main character of a success story that centers around a quality production economy. We do not have time to lose for the sake of our economy, industry and social welfare. We need to establish a much more stable and stronger economical environment with a great speed in the new term. It's time to reinforce the Turkey perception in the global market and to become a more attractive country for the investors. I hope we can show the ability to use this opportunity together. While this success story will transform the national economy, it should also lead to a more engaging and fair income distribution on the other hand. We are well aware that such a goal is much harder than before in a world of commercial protectionism where the race to attract investment turned into a ruleless fight. But we all know that Turkey's biggest challenge in this century is this."

İSO Meclis Başkanı Zeynep Bodur Okyay
ICI Assembly President
Zeynep Bodur Okyay

Then, Okyay invited ICI Chairman Erdal Bahçıvan to the stage to make his speech about the main agenda item.  Talking first about the latest economical developments, Bahçıvan reminded that ICI Turkey's Second Top 500 Industrial Enterprises study declared last week indicated that a significant part of the operational profits were allocated to financing besides a strong performance in the industry.

ICI Chairman Erdal Bahçıvan underlined that they feel the pressure of high scale fluctuation in interests and exchange rates. Attracting attention to the fact that the development of the production economy is impossible without ensuring financial stability, Bahçıvan mentioned the recent difficulties regarding the banking industry. Bahçıvan stated that efficient use of resources should be prioritized as mentioned in the objective of the Banking Law, and continued:

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"One of the main objectives of the Banking Law regulating the operation of the banking system is to make sure that the loans provided by the banks are offered to the service of our economy in an effective, objective manner that will bring competitive advantage. As you know, especially the medium scale firms recently have difficulty in accessing loans due to the cash squeeze continuing in the market and the rise in the loan interests. In addition to this, we see that the cash squeeze had deepened with the impact of the recent restructuring operations in large loans. In other words, banking industry fell short in managing and ensuring efficient use of large loans. The price of these operations are paid by our medium scale industrial firms. As you know, the size of the loans provided to the firms are subject to various restrictions based on the equity sizes of the banks. We believe that banks should change their perspectives about the industrialists. In short, efficient use of resources should be prioritized as stated in the objective of the Banking Law."

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ICI Chairman Bahçıvan stated that this period that we are living in has a historical significance while talking about the main agenda of the Assembly. Stating that the transition to the Presidential Governance System will redefine the legislation, execution organs and processes, and that this comprehensive change will inevitably have huge impacts on the economical and social life, Bahçıvan said that thus they are trying to learn and understand what changes this system will bring and how these changes will affect our production, economical and social lives. Mentioning that the new system is based on the principle of being fast and effective, Bahçıvan underlined the need to understand the new system rapidly and to adapt themselves to this speed and effectiveness required by the system.

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Naming another important development regarding ministries as the merger of ministries by putting an end to multi-headed governance in economy as demanded multiple times by ICI, Bahçıvan reminded that Ministry of Science, Industry and Technology and the Ministry of Development are replaced by the Ministry of Industry and Technology. Recording that there are similar mergers besides the field of economy, Bahçıvan gave the example of the Ministry of European Union joining the Ministry of Foreign Affairs. Bahçıvan stated that the total number of ministries decreased to 16 at the end of these mergers and expressed their appreciation for these steps that they had been long demanding of in order to improve the efficiency and executive capacity of ministries. Bahçıvan stated their belief that the future precautions in the fields of economy and industry would be put into practice in a much more effective and rapid manner in line with the spirit of the age.

Bahçıvan continued:

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 "Besides Policy Boards and Ministries, four other Offices are being established to ensure the coordination in other common subjects concerning all ministries. To attract attention to another point that we deem important, let me mention that this system is a performance and expertise based system. It was a mentality that we had been long talking about. It was not in line with the spirit of the age that the failure in private sector had such high costs but failure in the public didn't have any. The manager, who will be responsible before the President from now on, will be subject to a much more effective supervision to ensure that they display the performance expected from them."

Indicating their long desires for an economical mentality centered around production as Istanbul Chamber of Industry, Bahçıvan described this desired production structure as a state-of-the-art and globally competitive production. Bahçıvan wished this mentality to be embraced also in corporate restructuring.

Underlining the action that needs to be taken right away as discussing the industrial projects defined based on right goals for Turkey and to establish global competitive power with spot-on operations, Bahçıvan stated that he has no doubt that concrete steps will be taken towards a production economy as soon as possible under the Presidential Governance System that prioritizes speed, efficacy and performance.

Istanbul University, Faculty of Economy, Dean, Prof. Dr. Haluk Alkan
Istanbul University, Faculty of
Economy, Dean,
Prof. Dr. Haluk Alkan

Political Scientist and Dean of the Faculty of Economy in Istanbul University, Prof. Dr. Haluk Alkan took the stage later and said that the corporate structure should be understood well while analyzing a political system since corporations are the basis of all political systems. Mentioning the interaction of corporations with the surrounding elements, Alkan told that the corporations reveal unique national models in relation to the social structure. Indicating the significant constitution crisis in Turkey, Alkan stated that the previous constitution didn't allow any action that will help overcoming a possible crisis between the President and the Prime Minister.

Stating that there are three elements keeping a political system stable, Alkan named these as the political corporations, system features and legitimacy. Alkan reminded that the governmental systems are divided into two as unity of power and separation of powers, and that the separation of powers began to be fully applied in Turkey with 1961 constitution. Talking about the differences between these systems, Alkan said that parliamentary system is a system based on a single election and assembly, the presidential system divides legislation and execution with different elections, and the semi-presidential system is the hybrid of these two.

ICI July Assembly Meeting 07

Underlining the flexibility that Presidents have in the presidential systems, Alkan stated that Presidents may establish individual administrative units independent of ministries and run suitable flexible organization models. Alkan said that on the other hand, they are balance and audit mechanisms, and named these as the veto right of the President, assembly investigation, authority sharing in assignments, research committees and budget. Explaining the new Presidential Governance System in Turkey, Alkan stated that this system is based on legislation superiority, has the goal of ensuring the effectiveness of execution and owns mechanisms that will prevent deadlock.

Alkan continued:

"The meaning of budget changes in this system. Execution is no longer part of legislation. Thus the budget is a very serious political audit element in the hands of the Assembly within this new system. Moreover, we now select an authority in the field of execution. And this authority is assigned by the public. Our President showed his awareness of this fact by saying 'we no longer have any excuse'."

Following the speeches, ICI Assembly Members took the stage to share their personal opinions regarding the Presidential Governance System and asked questions to the Assembly guest Prof. Dr. Haluk Alkan regarding the elements of the new system that they are most curious about.