M. Rifat Hisarcıklıoğlu, the President of TOBB visited ICI January Assembly
Istanbul Chamber of Industry (ICI) January ordinary Assembly meeting was held on 22 January 2020 in Odakule Fazıl Zobu Assembly Hall with the main agenda of “The Importance of Education, Quality and R&D in Transition into Qualified Production Economy for Sustainable Growth”. M. Rifat Hisarcıklıoğlu, the President of Board of Directors of Union of Chambers and Commodity Exchanges of Turkey (TOBB) participated in the meeting hosted by Zeynep Bodur Okyay, Chairperson of ICI Assembly.
Hisarcıklıoğlu, President of TOBB who shared his opinions and comments on the latest developments in Turkish and world economy in his speech during ICI Assembly with ICI Assembly members explained the risks and opportunities before Turkish economy and tried to clarify the future appearance of our economy. While listing the risks of Turkey; disorder around Turkey, relations with USA and EU, global protectionism, Brexit, cyber security; Hisarcıklıoğlu underlined the term when any election will not be organized but economic reforms will be realized, loose monetary policy of USA and EU Central banks, relaxed global fund flow, recession in CDS risk premium of Turkey, economic growth of our trade partners as our opportunities.
Stating that primary factor of economy which produces prosperity and creates employment is the production, in other words, the industry, Bahçıvan, President of the Board of Directors of Istanbul Chamber of Industry said that: “The qualified growth which we desire to provide is growth by which the share of advanced technological and high added value industrial products has increased within the production and export activities.” in his speech during the Assembly.
Bahçıvan stated that: “Turkey is faced with the obligation of increasing the qualification in the production in the route of becoming a strong industrial country.” The matters of strengthening the human capital by education, ARGE and increasing the technology content in all manufacture and service processes which have been advised as the antidote of low-growth by carrying the science and technology into manufacture should be the point on which they should mainly focus.”
ICI October ordinary Assembly meeting was opened by ICI Assembly President Zeynep Bodur Okyay. While launching the meeting, Okyay briefly mentioned that:
“Transition into qualified production economy is the common will, common desire of all in the route of sustainable growth.” We know that we do not have a magic wand to realize a major transformation thoroughly and completely. Changing and transformation are a long and challenging route. Without falling into the trap of getting engaged with the daily and purposeless agenda, we have to focus on the solution of actual problems. During such hours when we are talking about our problem on growth, the world is looking for answers of the following questions at Davos:
How can we get over the climate and environmental problems which cause harm on our ecology and economy urgently? How can we transform industries into a form by which we can obtain more sustainable and comprehensive business models as new political, economic and social priorities change the trade and consumption habits? How can we manage our future business and labor force by means of the accelerated automation and developments in artificial intelligence along with the technological transformation?
How can we be adapted to demographic, social and technological tendencies reshaping the education, employment and entrepreneurship? Of course, it is not easy for us to realize such major changes thoroughly and completely. However, sustainable growth is the irreplaceable parameter among them. Therefore, we have to prepare and study for this target without ignoring the future and transformation process which the world is going through, on the other hand, we should focus on our problems which we have to solve in the short run. In this regard, implementing industrial policies in a decisive way which will enable us to transform into export-based growth model instead of foreign-debt growth model.
Okyay, Chairperson of ICI Assembly invited Erdal Bahçıvan, President of ICI Board of Directors to the rostrum to present his speech. Bahçıvan, ICI President stated that industrialism is gaining value in all over the world while competition is increasing day by day. Bahçıvan recorded that they have a strong belief that Turkey should focus on a new approach with wider horizon in such process. Stating that they have to realize it because world societies are in the desire of higher level of prosperity, justice and predictable future, Bahçıvan pointed out that qualified and sustainable growth should be provided for this purpose.
Expressing that a production-oriented economy is required to reduce the concerns regarding the future in transformation era and raise the hope instead of concern, Bahçıvan said that the primary factor of economy which produces prosperity, creates employment and provides increase in efficiency is production, in other words, the industry. Bahçıvan underlined that the growth they have desired to provide is qualified growth and by which the share of advanced technological and high added value industrial products has increased within the production and export activities. Telling that it is difficult to say that their production structure which they desire to obtain is at the intended level, Bahçıvan drew attention that they are in need of a comprehensive attempt beyond the current endeavors to provide qualified growth.
Reminding that they bring the necessity to provide qualified transformation in the production as Istanbul Chamber of Industry into the agenda constantly in different bases, Bahçıvan said that ICI has that vision which supports the qualified transformation. Bahçıvan stated that growth by production, employment creation, increase in export, attaching importance to the competitiveness, increase in prosperity and fair distribution of prosperity are their fundamental priority. Expressing that Turkish industry’s need to transform into high added value and advanced technology intense sectors still maintains its existence, Bahçıvan continued that:
“When we look at the outcome of our study of ‘Top 500 Industrial Institutions of Turkey’, we are faced with this fact obviously. Qualified and sustainable growth is only possible by advanced technology. One of the significant outcomes of ICI 500 study is the data related to the technological occupancy of our industry. We have been witnessing a mobilization which gives us happiness and hope towards the future in the recent period.
We should gain a permanent and sustainable speed for this mobilization. We should leave the position of being the consumer of the technology which has been produced by others and develop our own high national technology. Especially, I want to emphasize that we have a strong belief that the domestic automobile of which launching we witnessed in Gebze-Informatics Valley a few days ago and for which Mr. Rifat Hisarcıklıoğlu, President of TOBB provided great support and contribution will make contribution to the national technology attempt with “local, national but universal understanding.” and continued:
“The matters of strengthening the human capital by education, R&D, increasing the technology content in all manufacture and service processes by integrating the science and technology with manufacture should be the point on which we should mainly focus. Should we mention that this kind of focus will lead the way for a qualified manufacture? We all agreed on this matter: Qualified export in which the high-value-added products’ share has increased is indispensable for us. We have taken and continue to take significant steps for the improvement of our industry regarding such matters as ICI.”
Stating that they realized “Digital Transformation Office in Industry” which is a significant center in terms of Digital Transformation but may be the sole example in Turkey, with the fund of Istanbul Development Agency, Bahçıvan recorded that lead the way for the firms by providing technical trainings in Digital Transformation route map consultations, artificial intelligence with Digital Transformation Mini MBA, big data and Internet of Things, and they try to improve human factor which is the most significant factor which will realize this transformation.
Expressing that they conduct ICI KOZA Start-up Acceleration Program with the support of Istanbul Development Agency, Bahçıvan recorded that they try to prepare Start-ups for business life which are capable of providing faster and more efficient development compared than our in place companies on technology development, R&D and innovation studies.
Drawing attention that the foundation of anything lays within human resource, Bahçıvan stated that they have brought together the trainings under the roof of ICI Academy and increased the number of trainings to 140 and the number of partners to 6.500 by expanding the scope in the last two years.
Reminding that they signed “Cooperation Protocol Concerning Vocational Training” which is the strongest “training cooperation protocol” realized so far with the T.R Ministry of National Education in vocational training, Bahçıvan expressed that they have held more than 200 meetings in 39 schools and provided additional trainings for thousands of students and teachers and organized technical visits to factories so far within the scope of the project.
ICI Assembly Members who took the rostrum following Erdal Bahçıvan, ICI President provided information regarding their sectors and related matters for M. Rifat Hisarcıklıoğlu, President of TOBB and directed various questions after informing Hisarcıklıoğlu about the challenges they have faced with.
Then M. Rifat Hisarcıklıoğlu, President of TOBB took the rostrum and answered the questions of ICI Assembly Members. Expressing that he is assigned for various business organizations in the world, Hisarcıklıoğlu said that the agenda of the world is not different than that of Turkey and subjects on USA-China, EU-China, Brexit and digital economy have been talked mostly.
Telling that the investment made in is investment in the future, Hisarcıklıoğlu said that business people might provide profit or loss in any investment; however, the investment in education cannot be considered as loss. Hisarcıklıoğlu explained that TOBB has made investment for 270 billion dollars totally for 81 provinces in the last period.
Kindly requesting ICI members to participate in TOBB studies more actively, Hisarcıklıoğlu expressed that the Assembly members are the leader of their own sector. Stating that the members are elected in a demographic way in ascending order, Hisarcıklıoğlu expressed that they provided education for 4 thousands of assembly members. Hisarcıklıoğlu underlined that TOBB is the institution of Assembly members.
Making explanations on the developments experienced in the world economy, Hisarcıklıoğlu expressed that they expect to experience growth in all economies excluding three countries in the world. On the other hand, drawing attention that the increase in the indebtedness rate constitutes a risk, Hisarcıklıoğlu said that the world has never had that kind of debt before. Underlying that the growing danger for the future of the world is the increasing inequality, Hisarcıklıoğlu said that the capitalism should redefine itself.
Mentioning about the risks and opportunities for Turkey, Hisarcıklıoğlu listed the chaos existing in the neighbor geographies, relations with USA and EU, global protectionism, Brexit and cyber security as the risks and listed the term when any election will not be organized and focus of governments on reforms, loose monetary policies of USA-EU central banks, increase in global fund flow, recession in interest-inflation-CDS risk premiums, economic growth of our main trade partners as the opportunities.
Providing the information that they increased to 33rd rank in 2020 from 73rd in 2010 as Turkey in the Ease of doing business index of World Bank, Hisarcıklıoğlu said that they have worked in cooperation with T.R Ministries in this regard and their aim is to enable Turkey to have place in the top 20 just like it has taken place in the Top 20 economies. Telling that they have listened the problems of business people and tried to find solution for them in Ankara as TOBB, Hisarcıklıoğlu emphasized that his duty as the President of TOBB is to find solutions for the sectoral problems in 81 provinces.
Providing information about the studies they have conducted about KGF, Hisarcıklıoğlu stated that any business organization does not provide guarantee for the members but they provide guarantee for KGF and business people. Explaining that they provided guarantee for 165 thousands of members in 2019 and provided credit in the value of 74 billion TRY for guarantee in the value of 59 billion TRY, Hisarcıklıoğlu notified that they have provided credit in the value of 23 billion TRY under guarantee of 18 billion TRY for 42 thousands of members in Istanbul.
Stating that there was a difficulty of accessing finance throughout Turkey in the last year, Hisarcıklıoğlu told that rate of guarantee letter has been reduced to 1 percent for public while 2 percent for private banks. Hisarcıklıoğlu said that POS commission rates have been limited to 1,6 percent and government-supported trade receivables insurance has entered into force. Reminding that taxes on automotive, white appliances, furniture and residential buildings were reduced in 2018, such discounts were expanded for the first 6 months in 2019, Hisarcıklıoğlu added that VAT in furniture in 2020 decreased 8 percent from 18 percent.
Expressing that commercial issues were handled in the long-run in the past, Hisarcıklıoğlu said that mediation has become compulsory between employee and employer since 2018 and in commercial conflicts since 2019. Pointing out that they provide this service with the contributions of TOBB within Istanbul Arbitration Center, Hisarcıklıoğlu kindly requested industrialists to look after for arbitration center.
Mentioning about the presence of unemployment on the one hand and industrialists who are seeking for job on the other hand, Hisarcıklıoğlu said that they transferred 81 vocational high schools in 81 provinces to the chambers of commodity exchanges by means of vocational training model developed. Stating that employees have the control over and manage the principals, teachers and syllabus through this model, Hisarcıklıoğlu expressed that they have provided highly significant developments in the vocational training.
Providing information about the domestic automobile of Turkey which was launched in the leadership of TOBB stated that it is of a crucial importance in terms of national economy and prestige of Turkey. Telling that they launched the project with investment in the value of 22 billion TRY and capital in the value of 3.5 billion TRY minimum, Hisarcıklıoğlu said that project partners will not receive any dividend for 15 years.
Stating that domestic automobile will provide 20 thousands of additional employment and reduce current deficit for 7.5 billion dollars and make contribution to national income for 50 billion dollars, Hisarcıklıoğlu added that Turkey will experience developments in new industrial policy, incentive approach, new creative partnership model and ecosystem development and transformation mission thanks to this project.
Following the speech of Hisarcıklıoğlu, the Assembly meeting continued and ended as an active conversation with the members for a while.