Business group slams gov’t policy
Güncelleme Tarihi:
Hürriyet Daily News
Oluşturulma Tarihi: Ocak 23, 2009 00:00
ISTANBUL - Criticizing the government on ’forming a relationship with the global crisis by ignoring it,’ Mustafa Koç of Turkish Industrialists’ and Businessmen’s Association, or TÜSİAD, says the political leadership is delaying an accord with the IMF. TÜSİAD members re-elect Arzuhan Doğan Yalçındağ
The government’s first approach to the global financial crisis was based on denial, while now it insists on delaying an accord with the International Monetary Fund, or IMF, said a top business representative, delivering one of the harshest statements against the Justice and Development Party government.
Criticizing the government’s policies on being "too focused on vague and particular measures" instead of "those that could establish confidence in the markets." Speaking at the opening ceremony of the 39th General Assembly of the Turkish Industrialists’ and Businessmen’s Association, or TÜSİAD, in Istanbul yesterday, Mustafa Koç said the government’s steps in the economical sphere are "confused." Koç is the chairman of TÜSİAD’s Supreme Advisory Board.
"As we all know, the government first established its stance on the crisis by ignoring it," Koç, also the chief executive of Koç Holding, said. "While declaring that Turkey’s economy is firm in the sense of the financial system, they could not see how the real economy bottlenecked."
"Now the consumer confidence index stands at the lowest level, while unemployment is at its highest level. As there is a major decline in production, the current account gap may close but financing it would be harder than ever, especially while foreign currency-based debts of the private sector is quite high," Koç said.
Foreign currency debt
According to a September 2008 statement by Tevfik Bilgin, head of the Banking Regulation and Supervision Agency, private sector’s foreign-currency debt to foreign players stood at $120 billion. As the U.S. dollar gains against the Turkish Lira, this debt has become one of the "soft-bellies" of the economy. The greenback traded at above 1.65 liras yesterday afternoon, representing a gain of nearly 8 percent since the start of the year.
Recalling the 2000-2001 crisis, Koç said: "In 2001, we could compensate the contraction in certain sectors with exports but because we are talking about a global-scale contraction today, we may face a shock decline in exports." Noting that future-oriented action is much more important than the "save-the-day" approach, Koç said waiting for the [March] local elections before putting forward solutions would cause "irreparable losses."
The government should have been more in touch with different sections of society, Koç added. "We must think about the future ... because the future becomes today very rapidly."
The economy had already started to cool down due to structural deficiencies before the crisis, said Koç. "Even if we fix everything and overcome the effects of the global crisis, Turkey cannot attain a 7-8 percent growth rate anyway," he said. "The best thing would be focusing on reforms," Koç added.
TÜSİAD Chairwoman Arzuhan Doğan Yalçındağ, meanwhile, urged the government to outline a plan that would solve the liquidity problem in the short term, stimulate demand and prevent competitive power from being harmed in the long term.
Reducing taxes is one of the basic measures that could be taken in a bid to boost demand, Yalçındağ said.
Reminding that 2009 is a crucial year for European Union membership, Yalçındağ said a solution acceptable for Turkey on the Cyprus issue will "make us happy."
"Otherwise, our whole membership may be opened to discussion again," she warned. Commenting on Barack Obama’s presidency in the United States, the TÜSİAD Chairwoman said if Obama delivers his promises, positive results will resonate through the global economy, peace and security realms.
Yalçındağ was once again elected as the chairwoman of TÜSİAD at the general assembly. Her term will last two years and she will be accompanied by board members Ferit F. Şahenk, Ümit Boyner, Haluk Dinçer, Hamdi Akın, Tayfun Bayazıt, Erdal Karamercan, Ali Kibar and Zafer A. Yavan. With 41 new members accepted last year, the membership of Turkey’s top business group increased to 578, while the number of female members reached to 60.
Criticizing the government’s policies on being "too focused on vague and particular measures" instead of "those that could establish confidence in the markets." Speaking at the opening ceremony of the 39th General Assembly of the Turkish Industrialists’ and Businessmen’s Association, or TÜSİAD, in Istanbul yesterday, Mustafa Koç said the government’s steps in the economical sphere are "confused." Koç is the chairman of TÜSİAD’s Supreme Advisory Board.
"As we all know, the government first established its stance on the crisis by ignoring it," Koç, also the chief executive of Koç Holding, said. "While declaring that Turkey’s economy is firm in the sense of the financial system, they could not see how the real economy bottlenecked."
"Now the consumer confidence index stands at the lowest level, while unemployment is at its highest level. As there is a major decline in production, the current account gap may close but financing it would be harder than ever, especially while foreign currency-based debts of the private sector is quite high," Koç said.
Foreign currency debt
According to a September 2008 statement by Tevfik Bilgin, head of the Banking Regulation and Supervision Agency, private sector’s foreign-currency debt to foreign players stood at $120 billion. As the U.S. dollar gains against the Turkish Lira, this debt has become one of the "soft-bellies" of the economy. The greenback traded at above 1.65 liras yesterday afternoon, representing a gain of nearly 8 percent since the start of the year.
Recalling the 2000-2001 crisis, Koç said: "In 2001, we could compensate the contraction in certain sectors with exports but because we are talking about a global-scale contraction today, we may face a shock decline in exports." Noting that future-oriented action is much more important than the "save-the-day" approach, Koç said waiting for the [March] local elections before putting forward solutions would cause "irreparable losses."
The government should have been more in touch with different sections of society, Koç added. "We must think about the future ... because the future becomes today very rapidly."
The economy had already started to cool down due to structural deficiencies before the crisis, said Koç. "Even if we fix everything and overcome the effects of the global crisis, Turkey cannot attain a 7-8 percent growth rate anyway," he said. "The best thing would be focusing on reforms," Koç added.
TÜSİAD Chairwoman Arzuhan Doğan Yalçındağ, meanwhile, urged the government to outline a plan that would solve the liquidity problem in the short term, stimulate demand and prevent competitive power from being harmed in the long term.
Reducing taxes is one of the basic measures that could be taken in a bid to boost demand, Yalçındağ said.
Reminding that 2009 is a crucial year for European Union membership, Yalçındağ said a solution acceptable for Turkey on the Cyprus issue will "make us happy."
"Otherwise, our whole membership may be opened to discussion again," she warned. Commenting on Barack Obama’s presidency in the United States, the TÜSİAD Chairwoman said if Obama delivers his promises, positive results will resonate through the global economy, peace and security realms.
Yalçındağ was once again elected as the chairwoman of TÜSİAD at the general assembly. Her term will last two years and she will be accompanied by board members Ferit F. Şahenk, Ümit Boyner, Haluk Dinçer, Hamdi Akın, Tayfun Bayazıt, Erdal Karamercan, Ali Kibar and Zafer A. Yavan. With 41 new members accepted last year, the membership of Turkey’s top business group increased to 578, while the number of female members reached to 60.