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ICI April Assembly Convened with the Agenda of "An Overview of the Impact of Changes and Trends Observed in the Population of Türkiye and Istanbul on Our Industry and Economy"

28.04.2021
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Istanbul Chamber of Industry's (ICI) April Assembly was held on April 28, 2021 via video conferencing. Chaired by Ayhan Yavrucu, Vice President of ICI Assembly, ICI Assembly's main agenda was “an Overview of the Impact of Changes and Trends Observed in the Population of Türkiye and Istanbul on Our Industry and Economy." The guest speaker on the agenda was Prof. Dr. Murat Şeker, the Director of Istanbul University, Center for Research and Practice in City Policies.

In his speech at the ICI Assembly, ICI Chairman Erdal Bahçıvan pointed out the concerns of industrialists regarding the priority given to some sectors in the vaccination calendar for the Covid-19 outbreak. “Employees of our industrial sector who have been working hard during the outbreak, contributing to the country's exports, production and tax resources and who have contributed greatly to it, do not deserve such discrimination. I strongly request correction of this unfair practice for the sake of our industrial sector" said Bahçıvan.

Bahçıvan also emphasized the impact of full lockdowns on industrial enterprises and said: "In order for our companies to manage the full lockdown process with minimal damage, tax and SSI premium payments must be deferred for a reasonable period. In this process, rent deferral or rent support has become much more important, especially for the retail sector."

The April Assembly was called to order by Ayhan Yavrucu, the Vice Chairman of the ICI Assembly. Yavrucu made the following statement regarding the agenda of the meeting:

“The main agenda of our assembly this month has been chosen as "An Overview of the Impact of Changes and Trends Observed in the Population of Türkiye and Istanbul on Our Industry and Economy". Prof. Dr. Murat Şeker, the Director of Istanbul University, Center for Research and Practice in City Policies is here with us to share his views on our topic. I would like to thank him in advance for his participation and contribution, and welcome him."

Yavrucu then left the floor to the ICI Chairman Erdal Bahçıvan to talk on the agenda. In his speech, Erdal Bahçıvan, Chairman of ICI Board, stated that the discrimination made in favor of some sectors in the vaccination calendar hurt our industrialists. "Our sector employees who have been working hard for our country's economy since the beginning of the outbreak, contributing to the country's exports, production, and tax resources have never deserved such discrimination" said Bahçıvan. "I strongly request correction of this unfair practice for the sake of our industrial sector.

“With the full lockdown measures to be applied from Thursday to May 17, it is inevitable to experience some problems in different sectors of the industry. Not only our key industries, but also sub-industries that supply raw materials and intermediate goods to these industries and our retail industry will be affected with this process. Taxes and SSI premiums must be deferred for a reasonable period in order for our companies to manage this process with minimal damage. In this process, rent deferral or rent support has become much more important, especially for the retail sector."

Bahçıvan also stated that there will be significant disruptions in the cash flow of the industry as many industries cease to operate. He said: "At a time when interest rates are so high and exchange rate mobility is so difficult to foresee, the KGF secured credit mechanism should be put into practice urgently in order to meet the funding needs of our industry under favorable conditions. Furthermore, it is vital to ensure deferring the due dates of the checks that our industry must pay during the lockdown. It is also crucial for the future of our production life that the relevant ministries take immediate steps in these matters. It is impossible for any industry to eliminate the problems caused by the pandemic process throughout the world by using its own resources and to remove this burden. For this reason, all countries provide serious financial support to their sectors and citizens. Unfortunately, it is not possible to say that our country provides these supports at a sufficient level compared to other countries. To this end, we must be in an effort to increase the support as a country.”

In his speech, Bahçıvan also pointed out the aging trend in the world population, which also applies to Türkiye. “In the last 20 years, average life expectancy has increased by nearly 9 years, from 70 to 78.6 years. And the fertility rate dropped to 1.9 from 2.5" he said. "Thus, our society’s median age increased to nearly 33 years in 2020 from 30 years in 2010 and 25 years in 2000. In other words, we see that our country's so-called "young population" is starting to fade away, whether we like it or not. When we look at projections for the future, it is predicted that our median age will increase to 36 in 2030, 42 in 2060 and 45 in 2080. Therefore, it is clear that some of the structural problems that the developed countries experience due to the aging population await us in the future. Another remarkable point is that the population growth rate dropped significantly in 2020, perhaps due to the outbreak. Our population growth rate dropped to 5 per thousand in 2020 from 13.5 per thousand in 2019. Considering all of these elements together, we should keep in mind that the aging trend in the population may be faster than predicted in the coming years. If we live this aging process under the risk of a "middle-income trap," it is clear that significant disadvantages are waiting for us.

"On the other hand, Istanbul is the largest migration destination and external migration in our country is not a one-way destination. As for the migration to other countries, unfortunately, our highly educated, young and productive population is migrating more and the process we know as "brain drain" is continuing at full pace. Especially in middle and elderly population, it is also a known fact that with the effect of the pandemic, the tendency to move away from the chaos of Istanbul and move to other provinces has increased. With the impact of this development, the share of young and dynamic population, known as Generation Z, in the major regions of our city is increasing. In other words, young people will have more say in Istanbul’s future in the coming period. However, given the rise in youth unemployment, this may turn into a risk factor as well. Then, it is critical for the future of our country to equip the young population with a desire to produce and direct them into production life. Vocational high schools are perhaps one of the most important opportunities to use resources properly. As you know, we are in close and strong cooperation with the Ministry of National Education as this is the most important issue for us."

After Bahçıvan, Prof. Dr. Murat Şeker, the Director of Istanbul University, Center for Research and Practice in City Policies, took the floor. Şeker began his speech by stating that the ICI is a highly supportive institution for his academic studies. He gave a presentation about the Interstate Competition Index, which is published every three years since 2012. “In terms of competition, Istanbul is at the top, at a level that other cities can never reach” said Şeker. "Gaziantep comes after Istanbul and Ankara in infrastructure. But Istanbul is not at the top 20 in educational infrastructure, and Denizli, Edirne and Ankara are at the forefront."

Referring to the statistics on the population in Istanbul, Şeker said that micro-analyzes related to Istanbul should be conducted as there are socioeconomic differences even in the neighborhoods within the district. "While 17.1 percent of the total population was in Istanbul in 2000, it rose to 18.5 in 2020. The increase trend of Istanbul population decreased in 2020 for the first time. The outbreak had an impact on this and people had their residential registration moved out of Istanbul. This is also affected with the universities being closed and students not coming, plus those working remotely go out of town or move to other cities due to cost of living and unemployment.

Şeker listed Esenyurt, Başakşehir and Sancaktepe as the districts with the highest population growth between 2010 and 2020, and Fatih, Kadıköy, Şişli and Üsküdar with dropping population. "Istanbul has lost its educated population, which has changed its economic and social habits. Istanbul is ahead in Türkiye with a highly educated population, but experiencing shortcomings in its human capital; therefore, it receives unskilled migration while losing skilled people. The most damaging issue of the demographic transformation in Istanbul is the loss of social capital.

“There was an increase in the proportion of single-occupants in both Türkiye and Istanbul and the rate of fertility dropped to 1.75 in 2020 from 2.38 in 2001. And the elderly population is increasing, which requires due action".

Şeker also gave information about the Generation Z: "The population of the Generation Z in Istanbul increased to 36 from 9 percent between 2000 and 2020. It is normal for each generation to describe the previous generation as narrow-minded and conservative, and the next generation as irresponsible and disrespectful.

"Generation Z is socially weak, having difficulty in expressing themselves outside the digital world, and meeting the outside world very early. They can do more than one job at a time and their motor skills synchronization is very high. They get bored quickly by their work and know no rules. They are unable to discipline their lives and are individual and consumption-oriented. But it should be pointed out that they are much more creative as they are individual and independent. They have more entrepreneurial spirit than their predecessor, and they demand a colorful business life and fewer hierarchies, where the difference is celebrated as opposed to being suppressed.

"Unfaithfulness and giving up easily may cause problems for companies in talent retention. Being an individual may cause excessive problems in work that requires teamwork. Being in the expectation of constantly rising can make the competition even harder. Expecting to do creative and fun things can make it difficult to get standard jobs done. Being hasty and impatient can depreciate professions that require time and effort. The desire to get rich quickly is overwhelming. Z's are children of generations of X and Y. They are the children and students of today, but they will be the rulers and leaders of the future."

Şeker described Generation Z as follows:

“It is the generation that has the fewest siblings of all times. Children of older mothers (average age 33) who often have had to postpone having children. The parents of this generation are usually one or two children and working parents. The generation that has begun to receive the earliest education in history and is expected to have the longest educational life. The group that understands and uses technology best in comparison to previous generations. Since they are usually the only children in the family, they have a lot of technological products introduced. They are very early consumers compared to other generations. They have an important place in household consumption, they provide guidance. They access information very easily and quickly. "

Şeker said that the Generation Z does not have a dream of becoming a doctor when they grow up. "They want to earn money not to save it, but to spend it, and they do not have a saving perspective like previous generations. Long-term plans and borrowings do not attract Generation Z at all. They do not have any thoughts like “I shall leave a house, a real estate for them” for the next generation, for their children. They live the moment and prefer areas that can give them flexible time in working life since they live in the moment. They question authority, and they see the state no longer as a ‘father’ but an organ that needs to serve them. Since it is a country that has been ruled by one and the same party since their birth, comparisons with previous periods do not make any sense for them. They seem to be apolitical, but in fact, they can be politicized, especially on social media. They have no prejudices, they are open to different thoughts and lifestyles. They don't really feel close to an ideology. They are more concerned with universal principles than their religion and belief-centered teachings. They are not a 'grateful' generation. They act individually and not socially."

Şeker also talked about the decrease in the population and employment in Istanbul. "The drop in employment in 2020 hit most the age group of 15-24, the low education group, those in the workplace with less than 10 people and the informal workers. The number of young people who are neither in education nor in employment is 552 thousand and the official unemployment rate of young people is 25.3 percent while the high- definition unemployment rate is 30.8 percent. 415,000 people lost their jobs in one year, and the number of people who were not registered with the SSI and who lost their jobs was 284,000.

“Gini coefficient in Istanbul is 0.405. The top 20 percent of income group is 7.7 times that of the lowest 20 percent, while the top 10 percent is 10.3 times of the lowest 10 percent. The top 5 percent with the highest income received 21 percent of the income and the top 10 percent received 35 percent of the income. The highest segment corresponding to 20 percent received 52.6 percent of the income.

"The share of Istanbul in terms of established companies rose to 39.8 percent in 2020 from 35 percent in 2010. And as for the companies that were closed down, his rate rose to 47.1 from 27.6 between 2010 and 2020. 1 million households applied for social assistance from the Istanbul Metropolitan Municipality during the outbreak and 1.2 million households were provided with social assistance by the Governorship of Istanbul. Istanbul is a city with high financial capital but low social capital."

Following Şeker's speech, ICI Assembly Members took the floor and shared their views. The questions of ICI Council Members were answered by Prof.Dr. Murat Şeker, the Director of Istanbul University, Center for Research and Practice in City Policies.