Turkish businesses on alert over global crisis

The United States credit crisis, which is having an increasing impact upon the global financial community with each day, has recently become a top priority on the Turkish business world's agenda.Businessmen are closely monitoring the crisis, which has become even more rigorous with the collapse of 158-year-old Lehman Brothers, one of the oldest investment banks in the world, and the Bank of America's purchase of Merrill Lynch for $50 billion, Turkish Daily News (TDN) reported.As the U.S.-born crisis spreads through Europe, officials are also keeping a close eye on the Istanbul Stock Exchange, which has lost approximately 15 percent of its value in the last five days."Turkey has a very strong banking system, however, it should not be overcome by sluggishness," Ahmet Nazif Zorlu, chairman of Zorlu Holding, told TDN adding that he does not expect a setback as strong as the one felt in the 2001 economic crisis."Our companies should orient toward savings, and try to increase productivity. We may experience problems in external borrowing, in the medium term.""The financial world is undergoing the most severe crisis of the last 50 years," Tuncay ?zilhan, chairman of Anadolu Holding, who expects a difficult year ahead, also said. "It is a misfortune that local elections overlap with the global crisis. We will have to abstain from political fluctuations during the process," he added. "The rise of inflation is likely to continue, just like the rest of the world. However, it will be an advantage for us that raw material prices will decline. It is crucial to take measures that increase productivity and reduce circulating capital demands in the upcoming period."LOW GROWTH EXPECTATIONS

"Turkey's private sector has a considerable amount of external debts. We are unable to expect a 7.5 percent growth now. We will consider ourselves lucky if we attain 5 percent growth this year," TDN quoted Mustafa Boydak, vice chairman of Boydak Holding as saying.

"Economic management should remain very alert about the global crisis. We have been unable to see that just yet. The government authorities should shift their focus from political debates to economic. It is inconceivable to see what the aim is in attacking groups that provide enormous employment during this period."

A 10 percent deterioration in the exchange rate, along with the impact of the crisis, may 'undermine' the incentive law prepared for the ready wear and leather sector, said Ahmet Akbalık, vice chairman of the Istanbul Ready Wear and Apparel Exporters' Union (IHKIB) also told TDN.

Small and medium size enterprises, or SMEs, have begun to feel the impact of the crisis, Hazim Sesli, head of the Young Businessmen Confederation of Turkey, (TUGIK) said. "Many of the small enterprises in Anatolia are being shut down."

MONEY OUTFLOW
Foreigners, who own approximately 60 percent of Turkey's banking sector, will not be able to easily provide a money supply to our country from now on, said Cetin Nuhoglu, chairman of Tirsan, an Istanbul-based trailer company said. "With the current budget deficit, we may witness problems in finding money, no matter how high the interest rates are."In the short and medium term, Turkey may see significant amounts of hot money outflow, said Ali Dumankaya, board member of Dumankaya Insaat, a construction firm told TDN. "However, what is crucial is to strengthen political stability in Turkey and ensure peace. The impacts of the crisis will not be severe, if there is no political tension."