Turmoil forces a rethink of taboos
Güncelleme Tarihi:
by Jale Özgentürk - Referans
Oluşturulma Tarihi: Mart 17, 2009 00:00
ISTANBUL - The stimulus package announced by the government is a step in the right direction, says Bülent Eczacıbaşı, chairman of Turkey’s Eczacıbaşı Holding. Similar measures that can boost demand should be taken into consideration, he says, adding that the deflationary period the world has entered makes it possible to debate economic taboos.
The stimulus package, which was announced by the prime minister and includes a three-month tax reduction for some sectors, will be an influential step toward preventing economic contraction from reaching high levels, said a top businessman.
"This approach should be pursued continuously with new measures in the upcoming period," said Bülent Eczacıbaşı, chairman of Eczacıbaşı Holding, whose core sectors are building products, health care and consumer products.
"Reaching a successful conclusion in the talks with the International Monetary Fund, or IMF, will build a safety network for our economy. It is more crucial than ever amid the crisis climate to maintain the general balance of economy, including budget balance," he said.
"A possible deal with the IMF is also important in terms of maintaining the balance of budget expenditures. However, I suppose the shift of public investments to areas that are not very productive should be deemed also as an inevitable factor," he said.
Amid the current crisis, in which inflation is no more a problem, economic taboos, including monetary expansion, should be discussed, Eczacıbaşı said.
Critical situation
Eczacıbaşı also referred to a graphic that compares the durations and impacts of four important crises on the Dow Jones Industrial Average and the broader Standard & Poor’s 500 Index. S&P 500 has lost 55 percent of its value since September 2007, and with this loss it reached the same loss rate as the 1929 Great Depression, which lasted 34 months, he said. The duration of the 1929 crisis clearly shows that the situation is critical, he said.
Nearly every businessperson that attended last month’s European Roundtable of Industrialists, or ERT, in Istanbul, said they had never seen such a crisis in their lives, Eczacıbaşı said. "Everyone agreed that a rally might occur in the second half of 2010," he said. The crisis has impacted Turkey in terms of the decline in both domestic demand and exports, according to Eczacıbaşı.
When asked about the Turkish government’s perceived underestimation of the crisis, he said, "I regard this approach as saying this is not a crisis created by Turkey." He also said that contraction in industry is a significant one.
Decline in demand is a reason for any crisis, sometimes manifesting serious outcomes, he said, signaling possible solutions. "These solutions may go beyond the ordinary. It is crucial to be flexible on this issue, including monetary expansion," he said.
Decline in demand is a reason for any crisis, sometimes manifesting serious outcomes, he said, signaling possible solutions.
"These solutions may go beyond the ordinary. It is crucial to be flexible on this issue, including monetary expansion," he said. "We should be distanced from this taboo. Temporary tax reductions to be implemented in the sectors most affected by the crisis Ğ housing, automotive and durable consumer goods Ğ will, undoubtedly, become a very influential initial step in preventing the rise of economic contraction. In order to moderate the impacts of the crisis as much as possible, new measures are likely to take effect in the upcoming period," said Eczacıbaşı.
Resource flow
New measures should be taken continuously to fight against the crisis, he said. "I believe particularly the measures to ameliorate the resource flow between the financial sector and real sector will be positive."
Eczacıbaşı also said he does not like the term "creating opportunities out of the crisis," which has become a motto for many. "We need to focus on not creating opportunities but whether it is possible to ’make the mowed grass stronger.’ A while ago I heard a joke: The light at the end of the tunnel is closed temporarily due to energy saving. However, it will eventually be opened."
Headquartered in Istanbul, Eczacıbaşı is a prominent industrial group with 40 companies, close to 9,300 employees and a combined net turnover of $3.2 billion as of 2007. Eczacıbaşı’s core sectors are building products, pharmaceuticals and consumer products. The group is also active in finance, information technology, welding technology and real estate. Internationally, it is best known for its flagship VitrA brand, a powerful contender in global bathroom and tile markets. Eczacıbaşı has 12 international joint ventures and numerous cooperation agreements with leading global companies.
"This approach should be pursued continuously with new measures in the upcoming period," said Bülent Eczacıbaşı, chairman of Eczacıbaşı Holding, whose core sectors are building products, health care and consumer products.
"Reaching a successful conclusion in the talks with the International Monetary Fund, or IMF, will build a safety network for our economy. It is more crucial than ever amid the crisis climate to maintain the general balance of economy, including budget balance," he said.
"A possible deal with the IMF is also important in terms of maintaining the balance of budget expenditures. However, I suppose the shift of public investments to areas that are not very productive should be deemed also as an inevitable factor," he said.
Amid the current crisis, in which inflation is no more a problem, economic taboos, including monetary expansion, should be discussed, Eczacıbaşı said.
Critical situation
Eczacıbaşı also referred to a graphic that compares the durations and impacts of four important crises on the Dow Jones Industrial Average and the broader Standard & Poor’s 500 Index. S&P 500 has lost 55 percent of its value since September 2007, and with this loss it reached the same loss rate as the 1929 Great Depression, which lasted 34 months, he said. The duration of the 1929 crisis clearly shows that the situation is critical, he said.
Nearly every businessperson that attended last month’s European Roundtable of Industrialists, or ERT, in Istanbul, said they had never seen such a crisis in their lives, Eczacıbaşı said. "Everyone agreed that a rally might occur in the second half of 2010," he said. The crisis has impacted Turkey in terms of the decline in both domestic demand and exports, according to Eczacıbaşı.
When asked about the Turkish government’s perceived underestimation of the crisis, he said, "I regard this approach as saying this is not a crisis created by Turkey." He also said that contraction in industry is a significant one.
Decline in demand is a reason for any crisis, sometimes manifesting serious outcomes, he said, signaling possible solutions. "These solutions may go beyond the ordinary. It is crucial to be flexible on this issue, including monetary expansion," he said.
Decline in demand is a reason for any crisis, sometimes manifesting serious outcomes, he said, signaling possible solutions.
"These solutions may go beyond the ordinary. It is crucial to be flexible on this issue, including monetary expansion," he said. "We should be distanced from this taboo. Temporary tax reductions to be implemented in the sectors most affected by the crisis Ğ housing, automotive and durable consumer goods Ğ will, undoubtedly, become a very influential initial step in preventing the rise of economic contraction. In order to moderate the impacts of the crisis as much as possible, new measures are likely to take effect in the upcoming period," said Eczacıbaşı.
Resource flow
New measures should be taken continuously to fight against the crisis, he said. "I believe particularly the measures to ameliorate the resource flow between the financial sector and real sector will be positive."
Eczacıbaşı also said he does not like the term "creating opportunities out of the crisis," which has become a motto for many. "We need to focus on not creating opportunities but whether it is possible to ’make the mowed grass stronger.’ A while ago I heard a joke: The light at the end of the tunnel is closed temporarily due to energy saving. However, it will eventually be opened."
Headquartered in Istanbul, Eczacıbaşı is a prominent industrial group with 40 companies, close to 9,300 employees and a combined net turnover of $3.2 billion as of 2007. Eczacıbaşı’s core sectors are building products, pharmaceuticals and consumer products. The group is also active in finance, information technology, welding technology and real estate. Internationally, it is best known for its flagship VitrA brand, a powerful contender in global bathroom and tile markets. Eczacıbaşı has 12 international joint ventures and numerous cooperation agreements with leading global companies.