The High Advisory Council of the Turkish Industry and Business Association (TÜSİAD) convened in Istanbul on June 12, 2024. 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. Opening remarks were delivered by TÜSİAD High Advisory Council President Ömer Aras and TÜSİAD Board of Directors President Orhan Turan.
During the event, TÜSİAD Vice President Can Yücaoğlu chaired a panel discussion on “New Global Dynamics of Competitiveness, the European Union and Türkiye.” The panel featured speeches by the former Prime Minister of Italy and Dean of IE University School of Politics, Economics and Global Affairs, Enrico Letta and the Director General of BusinessEurope Markus J. Beyrer.
The second panel, entitled “Geopolitical Developments and Türkiye,” was moderated by the journalist Afşin Yurdakul and had Özyeğin University Professor Dr. Evren Balta and former Ambassador Selim Kuneralp as speakers.
Excerpts from the opening remarks are below:
Remarks by TÜSİAD High Advisory Council President Ömer Aras
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On the Economy
“When we look at global economic trends, we can anticipate that Türkiye, as long as it avoids internal economic volatility, is likely to be relatively less affected and may even stand out in a positive manner.
“The key factors contributing to this potential outcome are:
· the effects of trade wars on customs tariffs
· relatively low oil and natural gas prices
· increased use of renewable energy sources
· moderate commodity prices
“However, we must not overlook our most pressing economic issue: high inflation.
“As of the end of 2024, Türkiye ranks 7th globally in terms of inflation. By May 2025, inflation stood at 35.4% according to TÜİK (Turkish Statistical Institute). By comparison, inflation is 15% in war-stricken Ukraine, and around 10% in Russia.
“Price stability is our most critical economic challenge, and we must resolve it without delay. Inflation is not merely a rise in prices—it is a deep-rooted instability that penetrates every layer of society. It undermines economic rationality and income distribution, erodes trust, and weakens the social fabric.
“Prolonged exposure to inflation degrades business ethics and institutional resilience. There is no constituency in society that benefits from high inflation. Therefore, we must fight inflation together—as the public and private sectors. We must bring inflation down to single digits as soon as possible.
“While rising real interest rates may hamper economic growth, they play a constructive role in reducing inflation. As inflation falls, interest rates will naturally follow. We recognize the burden this prolonged period places on industry, but we must reiterate: the only path forward is permanently low inflation.
“Türkiye does not face a problem of external debt sustainability. As of end-2024, public external debt stands at 19% of GDP while Total external debt (including the private sector) is 39% of GDP, a reasonable level. Thus, neither the banking sector nor the private sector faces major difficulties accessing external financing.
“The real issue lies in inefficient resource allocation. Alongside fair taxation and effective fiscal discipline, efficient use of resources will enable a primary surplus in the budget and help lower inflation.
“Going forward, we must reinforce the current economic program. In addition to tight monetary policy, we need more impactful fiscal policy. One of the key structural issues in our economy—seen in both public and private sectors—is inefficient resource use.
“In the coming period, we have a unique opportunity to bring inflation down.
Global trade wars and the energy transition are inherently disinflationary.
“To lower inflation, we must:
· Accept a moderate slowdown in economic growth
· Use resources efficiently and control expenditures in both the public and private sectors
· Ensure non-inflationary and fair taxation
· Shape positive expectations
· Avoid creating volatility
· Foster a stable environment.
“The confidence and productivity that come with low inflation will elevate Türkiye in the new global order.”
On Geopolitics and Trade
“The global order no longer revolves around fixed axes. The pillars of the familiar international system are shaking. The old order—defined by multilateral institutions, international law, and reciprocal state responsibilities—is giving way to a more fragmented, competitive, and unpredictable reality.
“From the food crisis to energy transformation, from tech dependency to defense supply chains, today’s geopolitical turbulence directly affects the business world.
“In this complex environment, companies now need geopolitical intelligence just as much as they need sound economic strategy.
“The global economic structure is evolving rapidly. As of 2025, the United States has radically redefined its approach to global trade. It now sidelines multilateral trade regimes in favor of bilateral deals and direct strategic negotiations.
“This shift in the U.S. targets not only strategic rivals like China but also traditional allies like the European Union. Customs tariffs are now used not just as economic instruments, but as foreign policy levers—to apply pressure and steer allies toward specific technology and supply chain policies.
“All mid-sized, outward-oriented economies must now adapt to a world that is increasingly fragmented and uncertain. For a country like Türkiye—seeking growth through production and services—this landscape offers both opportunities and vulnerabilities. To turn this era of uncertainty into one of progress, we must build a competitive economic infrastructure.
“Türkiye must derive its competitiveness not from temporary exchange rate advantages or fiscal incentives, but from: high value-added production, efficiency, digital capacity, and green transformation.
“We are now in a phase where resilience is valued as much as productivity. Being a trusted producer is now as critical as being a low-cost one. To ensure this trust, not only market signals but also economic stability and predictability matter.
“A crucial step in reinforcing Türkiye’s long-term economic confidence is the modernization of the Customs Union with the European Union. While the Customs Union was transformative in the 1990s, it is now ill-equipped to address today’s realities. Currently, it does not cover: digital trade, services, the Green Deal, public procurement, government assistance, or dispute resolution.
“This modernization will: Strengthen Türkiye’s institutional integration with Europe, increase predictability for foreign investors, establish the legal and technical framework for alignment with digitalization and green transition.
“Moreover, it should provide Türkiye with a seat at the table in shaping EU trade policy decisions that affect us. This is not merely a technical update — it is a strategic choice, a tool to integrate Türkiye’s developmental state capacity into the global system, and an opportunity to build a multipolar economic position.
“Many countries today are turning toward “strategic autonomy” in response to rising uncertainty. However, this often devolves into isolationism, defensiveness, or withdrawal from the global order.
“Türkiye, by contrast, should leverage its robust economic and geopolitical capacity to: reduce inflation, modernize the Customs Union, provide predictability for investors, and create conditions for export-oriented, productive economic growth and prosperity.
“We have the potential to take on a more active role in value chains and trade corridors through regional and global partnerships.”
On Foreign Policy
“Complex geopolitical dynamics are also reshaping foreign policy. Today, diplomacy is no longer confined to negotiations—it now also involves war, contested borders, and shifting alliances.
“In this new equation where power dynamics override norms, regional instability has direct global security implications. Even Europe, for the first time in decades, is searching for a security-based structure.
“Thanks to its unique geopolitical position, Türkiye can:
· Deepen its ties with Europe while building value chain partnerships across diverse geographies
· Develop joint technology initiatives
· Participate in reconstruction and development projects in conflict-affected regions
· Cooperate with capable countries on energy and security.
“One critical point I want to emphasize is the importance of maintaining a humanitarian perspective in evaluating global events. There is no justification—ethical or otherwise—for the ongoing humanitarian crisis in Gaza or for the obstruction of aid destined for civilians and children. We must oppose all inhumane approaches, wherever they occur.”
Remarks by TÜSİAD Board of Directors President Orhan Turan
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“For nearly 55 years, in accordance with our charter, TÜSİAD has been committed to promoting a societal order grounded in:
· Universal principles of human rights
· Freedoms of thought, belief, and enterprise
· The rule of law and secularism
· Participatory democracy
· Liberal economic policies
· Institutions and rules of a competitive market economy
· Environmental sustainability
“With our international representation and influence in the business world, we work in alignment with Türkiye’s long-term interests. We continue to engage in cooperation with our European Union partners, developing policy proposals both nationally and at the European level. We bring the priorities of the Turkish business community into the dialogue on European integration. To support Turkey’s global integration and enhance its competitiveness, we also carry out comprehensive initiatives focused on new technologies and entrepreneurship networks in the Asia-Pacific, the Gulf Region, Central Asia and the United States.”
On the Economy
“Looking at the economic data from the first quarter of 2025, we observe clear confirmation of a slowdown in growth. While GDP grew by 2% year-on-year, the manufacturing sector contracted by 2.4%. This underperformance in industry is not new — it has been ongoing.
“For some time now, economic growth in Türkiye has been driven largely by non-industrial sectors. Since 2022, while GDP has grown by 4.5%, industrial output has increased by only 1.1%, and agriculture by just 1%. For a country of Türkiye’s size, a growth model without robust industrial production is clearly unsustainable.
“We must ensure that our industrial base strengthens by keeping pace with technological advances. In this, the role of a skilled workforce is critical. We must also recognize the potential of increased female labor force participation.
“The economy is not driven by monetary policy alone. While the gains achievable through monetary policy are necessary, they are not sufficient. We must implement structural reforms that will enhance Türkiye’s competitiveness.
“As we continue the fight against inflation, it is essential to ease pressures on the real sector and improve household welfare. Ensuring price stability while initiating inclusive and sustainable growth, embracing technological transformation, boosting competitiveness, and broadening the distribution of prosperity are difficult but achievable goals.
“To support this effort, TÜSİAD will launch its Cost-Based Competitiveness Index on June 26. This tool will allow us to better assess Türkiye’s position in the global competitiveness landscape.”
On Geopolitics & Trade
“The developments in the United States—long the most influential architect of the post-WWII global system—are impacting the entire world order. The world we once knew is undergoing fundamental transformation. The new tariff measures announced by the U.S. point to the highest levels in 80 years. The new global trade order that will emerge from these measures may take years to crystallize. In the interim, uncertainty will dominate.
“Countries will be compelled to reassess and restructure their: Export strategies, reciprocal trade relations, production chains and financial frameworks.
“This realignment in trade is layering atop other profound structural shifts we have long been observing: the rise of green economies, transformative technologies, the artificial intelligence revolution, and demographic shifts—all of which significantly impact economic structures.
“Added to these are geopolitical realignments, the rise of populism, the replacement of shared values with transactional relationships in international affairs, and the weakening effectiveness of supranational institutions such as the UN, NATO, and WTO. The war in Ukraine and the humanitarian tragedy in Gaza are among the most striking manifestations of these changes.
“Among the few institutions adopting a systematic, data-driven, and inclusive approach to navigating risks and opportunities is the European Union. The EU’s ongoing restructuring process merits Türkiye’s close attention.
“The EU’s agenda on technological transformation and innovation also presents meaningful opportunities for Türkiye. Importantly, the EU is not retreating from its green goals. Rather, it views green and digital transitions as the core drivers of reindustrialization, competitiveness, and economic security.
“The EU’s new competitiveness strategy is not limited to its member states. It increasingly includes core partners, particularly candidate countries and economies deeply integrated into the Single Market. In this regard, the modernization of the Customs Union, now 30 years old, has become an urgent necessity.
“The global context in which the Customs Union was originally conceived has changed drastically. In the past three decades, developments such as the circular economy, renewable energy, and digital technologies have rendered the Union’s existing framework increasingly outdated.
“Updating the Customs Union—still shaped by the principles of a previous technological era—is not only in Türkiye’s interest but also essential for the EU to face current threats and seize emerging opportunities.
On Foreign Policy
“The EU is undergoing a shift in its historically underdeveloped security and defense policies. As defense and security take on more prominence, they will shape all policy domains. In this context, Türkiye’s advanced defense industry capabilities make it a valuable partner. Cooperation with Türkiye within institutional, legal, and financial frameworks can provide shared benefits in strengthening security and resilience.
“For both Türkiye and the EU, there is clear mutual benefit in moving the relationship beyond technical cooperation toward a comprehensive and principled framework.
“Shared priorities between the EU and Türkiye now include:
· Green economy
· Aging populations
· Artificial intelligence
· Innovation
· Skills development
· Strengthening R&D ecosystems
“To enhance global competitiveness, both Türkiye and the EU need a value-driven, rules-based, stable, and trustworthy partnership. We believe that revitalizing Türkiye’s EU accession process—especially the Association Council and full membership perspective—offers the most effective path toward mutual trust and predictability.
“In a world where global dynamics are being reshuffled, Türkiye’s strategic interests clearly point toward closer integration with the European Union.
On Domestic Policy
“We have long emphasized our hope for a permanent resolution to terrorism. The progress made during the Terror-Free Türkiye process is a valuable step toward lasting peace. We also hope this process will have positive implications for Türkiye’s economic development and democratic environment.
“As the global system undergoes radical change, now is the time to draw upon our long-standing national virtues of solidarity and unity—qualities we have displayed throughout difficult times. Today, more than ever, we need: Common sense, collective wisdom, trust, and solidarity.
“In line with Atatürk’s vision of modern civilization, we will continue to work, produce, invest, create employment, generate ideas, and contribute toward building a globally competitive and prosperous Türkiye—one that serves as a model of social welfare and economic success in its region and beyond.”