The President of the Turkish Industry and Business Association (TÜSİAD) Simone Kaslowski delivered opening remarks at the High Advisory Council meeting, which convened yesterday morning in Ankara. 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.
In his remarks, TÜSİAD President Simone Kaslowski reiterated the Turkish business world’s calls for reforms, strengthening of democratic standards and the rule of law, and reinvigorating the EU accession process.
Excerpts from his remarks are as follows:
On the economy:
“The most recent data show that the Turkish economy has now returned to positive growth on an annual basis. However, the unemployment rate is still at a historically high level. Our calculations show that growth under 5% could increase unemployment further… Although the economy has returned to positive growth, it is not yet possible to say that the investment environment has improved or that the fundamental weaknesses have been addressed. We must rebuild confidence; and for this we must ensure the rule of law, fully support the principles of a competitive market economy, and act consistently and predictably in the implementation of monetary and fiscal policies.
“…While we recognize the rebalancing of the economy, we must also be aware that our external debt stock is at a level never reached before – at 62% of national income. While the private sector has repaid some foreign currency denominated debt, the public sector is now borrowing abroad. The budget deficit now exceeds 5%, when non-recurring revenues are excluded. It is probably for this reason that the new tax bill, which contains regulations that created concern in the economy, was adopted by Parliament without sufficient consultation. This law, which places greater burden on the registered economy, does not include reforms to expand the tax base, ensure tax equity or address the unregistered economy, rather, it only seeks to quickly decrease the budget deficit. However, the destruction of the tax base is a greater problem than the budget deficit.
“We need a concrete road map to secure Turkey’s future in the competitive environment of the 21st century. Democracy, growth, employment, and education will pave the way.
On foreign policy:
“The best way to protect the interests of Turkey and the Turkish business world is to align with direction of the European Union. The European Union seeks to maintain its distinction as an economic power that balances China and the United States. The most important impact of the European Union is its influence as the second largest economy in promoting fair trade practices and combatting climate change. Europe has made the United Nations Sustainable Development Goals a primary focus in global economic relations. Climate change, social justice, the rule of law, and digital transformation are becoming the main criteria for international trade, investment, and finance. If we renew our customs union agreement with the European Union with this shared perspective, it will improve the global competitiveness of our companies and Turkey’s national development. Like the European Union, the United Nations Sustainable Development Goals should guide us as well.
“Europe is acting more independently and taking a stronger stance in foreign policy. Steps towards expanding fundamental human rights, rule of law, and individual freedoms will bring us closer to Europe. We need to bring our relationship with European Union to a stronger, deeper level. We must work to resolve mutual disagreements through negotiations.
“Relations with our close ally, the United States, are at a very tumultuous place. As the Syrian Civil War draws to a close, our country has important decisions to make. The acquisition of the S-400 missile defense system from Russia has created significant friction with our allies. It is in our national interests to overcome disagreements with NATO allies while maintaining good relations with Russia. In turn, our allies should also take steps to repair the loss of trust following the attempted coup of July 15.
“Our education system should be adapted to raise generations that are primed to meet the demands of the 21st century. Fostering intellectual freedom and creativity, increasing digital, social, and emotional skills should be our priority. We must create a social environment that will stop brain drain.On climate change:
“If humanity fails to confront climate change, it will move towards a darker future. We are weakening the power of nature to renew itself. We are on the verge of destroying the planet we owe our existence to. In short, we are depleting our civilization.”
The President of the High Advisory Council of TÜSİAD Tuncay Özilhan echoed these remarks and said:
“While we work to resolve some of Turkey’s short-term acute problems, we must observe a framework of three general principles in order to resolve some of our structural problems:
“The first principle is a commitment to the rules-based international order… Turkey can then be a part of the alliances that will be effective in reforming the liberal democratic system. The perspective of full membership in the European Union is in line with the interests of both Turkey and the EU. We expect progress in this area as well. The Customs Union with the European Union has become outmoded in the 21st century global economy. There have been numerous important changes such as increased interaction between industry and services, the scope of digitalization, the changing position of China, India and Russia, sustainable development goals, and next generation trade deals with counties like Japan and Canada. These developments necessitate the modernization of the 1995 Customs Union agreement.
“The second set of principles are democracy and rule of law. The system of government – following the transformation from a parliamentary system to a presidential system – has not yet been institutionalized and is impeding the resolution of our structural problems… Security is the primary area of concern for any government. However, issues relating to security needs to be addressed within the parameters of a democracy, where freedoms are expanded, not restricted and societal peace is preserved. If our democracy is strong, we can overcome any external challenges in unity.
“The third principle is the effective functioning of a free market system with rules and institutions. Only then can decision makers in the economy see what lies ahead and make effective investment and production choices. A functioning market economy requires the legislative process to involve all relevant stakeholders in a transparent and fulfilling manner. In order to build on the improved economic environment, it is necessary to strengthen the institutional framework of a free market economy, guarantee the independence of regulatory agencies, and balance the roles and responsibilities of institutions.
“We mustn’t forget that in the long term, the peace and prosperity of our citizens depends on democracy, human rights, rule of law, an independent judiciary, gender equality, social justice, fair distribution of income, quality education for all individuals, freedom of expression, and the protection of natural and cultural resources. And as we progress towards these objectives, we must never surrender the principle of secularism.”
In his remarks, Özilhan also briefly commented on the recent municipal elections, stating: “Despite some of the problems before and after the election, the municipal elections confirmed the Turkish people’s commitment to democracy and the legitimacy of the ballot box. We witnessed once again that we must always remain hopeful of Turkish democracy.”
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