The High Advisory Council of the Turkish Industry and Business Association (TÜSİAD) convened in Istanbul on June 15, 2022. The High Advisory Council is a biannual deliberative conference where the business world takes stock of domestic and global political and economic developments and offers suggestions to policy makers from a business perspective.
Orhan Turan, President of the Board of Directors, and Tuncay Özilhan, President of the High Advisory Council, delivered opening remarks at the event.
In his opening remarks, President Turan reiterated the Turkish business world’s calls for reforms, strengthening of democratic standards and the rule of law, and reinvigorating the EU accession process. Below are excerpts of his remarks:
On the economy…
“The uncertainty triggered by the war in Ukraine is prolonging supply change problems and raising prices of raw materials. We are at the beginning of a period of higher inflation, while growth is expected to come under greater pressure. Moreover, food and water supplies are under greater threat due to war and climate change. These new realities clearly demonstrate that the current monetary policy is no longer sustainable. To be even more clear: The period of expansionary monetary policy that has characterized the last 14 years has come to an end. At certain times, these policies allowed Turkey to emerge from cyclical crises, however, global conditions present a significant headwind. The current global conditions are no longer advantageous. Achieving growth based on a policy of competitive exchange rates, high exports and a current account surplus is an outdated approach and has not delivered its intended results. In fact, growth is no longer sufficient for development—quite the contrary—we are becoming poorer as we grow.
“Under these difficult global conditions, inflation in Turkey reminiscent of the 1970s, is moving toward a three-digit level. While the entire world is applying the brakes by raising rates, we are implementing a monetary policy that causes the exchange rate to rise, making planning increasingly difficult and punishing savers. As a result, tax payers and the treasury have to bear this unnecessary burden.
“Turkey’s share of global production increased from 0.60% to 1.24% between 2000 and 2013. Over the last seven or eight years, however, this has declined to 0.8%. This is unacceptable for a country with Turkey’s potential. Incomes are evaporating under the conditions created by current economic policies. Those who live paycheck to paycheck feel the burden of inflation most. The incomes of the urban, educated middle class are eroding as well. Let us not forget, democracy is weakened in countries that do not have a strong middle class. An inequitable distribution of income further erodes trust in the democratic system.”
On foreign policy…
“Russia’s invasion of Ukraine has ushered in a new era in global politics and European security. The security structure that has defined Europe for 30 years has collapsed. Russia has decoupled from Europe. This war has generated more incentives and momentum for European energy independence and has bolstered the Atlantic alliance by reinforcing NATO as the dominant security institution in the West.
“Turkey has always been a country that has played an important role in these issues within the European system. However, this important position must be managed appropriately. It will be easier to protect our national interests by implementing policies that take into account diplomatic nuances, with a view towards deepening alliances and diminishing enmity.
“Turkey has suffered a great deal from terrorism, and therefore it is justified in expecting friends and allies to be sensitive to its concerns. However, we must approach all issues in a manner that will yield our intended results. In this context, we hope that the issue of Sweden and Finland’s application for NATO membership can be resolved by dialogue over Turkey’s stated concerns, by increasing mutual understanding within the spirit of an alliance.
“As it is widely known, our relationship with the EU remains problematic. The current scenario, where this relationship is reduced to managing a refugee deal, must be reversed. Transactionalism on every single issue must be abandoned, and relations must be reinvigorated by rebuilding trust. This is even more important when global supply chains are being restructured and capital is searching for a safe haven.
“In order for Turkey to reach its potential, we must govern based on the principles enshrined in our constitution, which establishes a democratic, social, and secular state based on the rule of law. The independence of the judiciary, adherence to international commitments, and freedom of thought and expression are not luxuries, they are fundamental necessities for our people and our economy. The lack of confidence in the judiciary is a result of the erosion of judicial independence. Justice is the foundation of state. And that foundation must be strong.”
“The green transformation should not only be understood in economic terms. It is also a transformation in perspective that will affect our environment, nature, and our lives. There is a great deal we can do right now. I have long believed that we must mobilize to achieve greater energy efficiency. We must end our dependence on fossil fuels. At the same time, we need to become more conscious about energy consumption, and we must use energy more efficiently in industry and at home.”
On Turkey’s future…
“If Turkey wants to become a developed and prosperous country, it must prioritize improvement in human development and competency; science, technology, and innovation; political, social, and economic institutions and rules. If we do this, we will realize a Turkey that is economically developed, reputable internationally, able to promote equality and justice, and has succeeded in implementing the green transformation. That is the future we strive towards, and we are hopeful for the future.”
The President of the High Advisory Council Tuncay Özilhan echoed these remarks:
On the economy…
“The current rise in inflation has been faster than in previous inflationary periods. It is completely upending the pricing structure, as companies are unable to set prices, and consumers are unable to predict it. Inflation is eroding the purchasing power of the people. The most important objective in economic policy should be to control inflation and sustainably lower it. Otherwise, Turkey risks entering a vicious cycle of high inflation, which would be great burden on the people. Measures to ease the burden as opposed to solving the root problem will backfire. After all, economic problems cannot be resolved by frequently altering regulations. Quite the contrary: Regulations that are frequently changed and repeated interventions in market mechanisms will make decision-making for businesses even more difficult, further harming the economy. If imbalances continue to rise and we lose control, we will pay the price for many years to come. Therefore, we must pay attention to the recommendations of experts, technicians, and academia to set the economy on a stable and sustainable path.”
On the rule of law…
“The justice system must be fair and effective. If there are doubts about the strength of rule of law and judicial independence, the risk premium for investments will rise unnecessarily. Uncertainty, lack of predictability, and insecurity not only hinders economic activity but also negatively affects people’s lives.”
On foreign policy…
“We must compare the effects of a transactional foreign policy and the effects of a foreign policy based on shared values and principles. We must compare the effects of ending uncertainty and rebuilding trust with allies versus short term tactical wins.”
On the new social media legislation…
“We doubt that the new social media law that has been under recent scrutiny promotes confidence in the future among young people. On the contrary, this legislation increases concerns about freedom of expression, which further erodes confidence.”
Full texts of their speeches can be accessed here: