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Ladies and Gentleman,
I am pleased to address such distinguished guests, in this year’s Global Summit Meeting, which is the 56th meeting arranged; of the “Consumer Goods Forum” carried out by the largest umbrella organization globally, in the world’s retail industry.
First of all, I would like to say welcome to you all. I thank Mr. Kent and Mr. Olofsson the Co-chairmen of the Forum, for gathering the Managers and Chairmen of retail and manufacturing companies in 400 different sizes, from 150 different countries. I do hope that during your stay in Istanbul, you will not only be discussing the problems of this sector and hope that you will find time for sight-seeing in Istanbul too. Just a few minutes ago Mr. Muhtar Kent said beautiful things about Istanbul and I am sure you will also agree with him on his views.
I find it very important for the leading companies of the consumer goods sector; which is one of the most critical sectors in a medium where in Europe, or in other countries around the world, the economic crisis is continuing; to gather in Istanbul for this summit.
When we consider the fact that the companies who are now participating in this summit, generate an amount of 3 trillion turnovers; jobs to 10 million people directly and at least to 100 million people indirectly; we do understand the significance of this meeting.
On the other hand, the consumer goods industry is a very critically significant sector in terms of the economy of our country too. The reason for this is that Turkey is the tenth largest economy in the world and the seventh largest economy in Europe in terms of total retail size.
By the end of 2011, the Turkish retail sector had a turnover of 175 billion dollars. The turnover of the organized retail sector is this figure is expected to be approximately 75 billion dollars.
With the growth recorded only in 2011, new employment opportunities have been provided for nearly 100 thousand people in the general retail sector and for approximately 5 thousand people in the electronic retail industry.
The retail sector has shown once again, with this performance, that it is the locomotive sector of the Turkish economy. It is clear that many companies represented in this summit today have a great contribution in this success.
Dear Participants, and Distinguished Guests,
As you know, the world economy has been facing serious turbulences since August 2007; and the stagnation and recession have actually been forming the climate of the world economy.
We have witnessed together that none of the countries in the world are immune aginst the negative effects of the economic crisis globally and especially from the effects of the economic crisis in Europe.
The reason for this is that all economies nowadays are inter-dependent. High public debt loads, budget deficits, the negative macro-economic indicators due to the stagnation in the real sector, diminish the positive expectations for the future.
The high rate of unemployment in many countries, also emerge as another critical problem affecting communities. On the other hand, a comprehensive solution to the problems observed in the finance sector as of 2008, unfortunately has not been found yet.
The countries have up to now tried to take some precautions liquidity operations of the central banks in unprecedented volumes. However, as only the central banks have come to the forefront, and as issuing more money has been resorted to as a solution, it has been impossible to provide an environment of confidence.
As a result, “a creeping global crisis perception” negatively affects the expectations of consumers, manufacturers and investors.
At the moment, the world economy is at a “balance of economic terror.” As any one of the largest economies’ failing to find a fund for its public debts; or for a protectionist war to start between the economic blocks, has the potential to destruct the world economy as a whole.
The only way to escape from such a disaster scenario is to carry out a collective action for more trade and investment and manufacturing; with the awareness that all countries; irrespective of those developed, emerging or developing, are on the same board.
I do hope that, the G20 summit, as a good platform, will be a tool which will help us overcome these harsh days. Especially in the last few years, the importance of the G20 summits has been better understood and all of the leaders have started to display candid and mutual efforts.
Everyone acknowledges that those who wanted a privilege for themselves, those who wanted to be cunning, or those who wanted to be prominent and those who tried to be opportunist, not only brought this disaster upon themselves but harmed everyone else too.
This has been realized as a result of long term studies and trials. For this reason we all really have many justifications, to be optimistic and to believe that affirmative things will happen in terms of expectations in the future.
These experiences have shown us that no one can succeed alone. We either have to act collectively or we will all sink in the same ship together. As a result of showing such a collective effort, I believe that we will perceive more positive indications in a very short period of time.
We have witnessed that there have been huge changes in the income distribution between various country groups of the world economy in the last 50 years.
Approximately two thirds of the global economic revenue were generated by the economies of the developed countries between 1960-1985.
This rate has shrunk in time. In 2008 when the effects of the global economic crisis was clearly felt, this rate was 56% and it has been lowered to 50% as of this year.
Furthermore, the share of the global economic revenue which was 17% in the 1960’s within the emerging market economies, is expected to increase to 50% as of 2013.
If this trend continues in this fashion, it is believed that the emerging market economies will generate two thirds of the global revenue as of 2030. The critical role that will be played by the emerging market economies, in terms of the future of the world economy in light of this data, is quite clear.
Turkey has an unusual place among these emerging economies. Our country has a vision and potential that can support both itself and its surrounding critical geographies, with its economy which is gaining more dynamism each day.
Despite the deep economic crisis encountered in Europe, and the great civil uprisings in the Middle East, Turkey has continued to grow and develop.
So what is the secret behind this success?
Today, despite the global economic crisis that has been continuing for the last 4-5 years, what lies behind the economic steadiness, the financial discipline, fast growth and strong banking sector seen in the Turkish economy, is the radical, economic, political and legal reforms carried out since 2002.
In 2008, Turkey was able to achieve a strong public finance and strong banking system.
In 2009, when the global crisis was at its height, many countries were seeking a solution to overcome the crisis by increasing their public expenditures and their budget deficits, whereas Turkey pursued an exact opposite strategy.
In 2009, a three year mid- term program was disclosed and in three years, a perspective regarding on how the financial discipline could be strengthened was put forward.
Actually, what we did here was that we tried to be as transparent as possible. And we announced to the whole world what we would be doing for the future of Turkey and which strategy we would be taking. We did this for a 3 year-term.
Following the end of these 3 years, we are still continuing in the same way. We told everyone that we would not be carrying out our actions with trial and error and said “we will be doing these for the upcoming three years.”
We can now come out and say that this strategy has brought us many advantages. However, many countries became even less transparent during these periods. They acted as if they did not know anything and continued to apply a trial and error method. And as a result, they have been facing even greater problems.
The Turkish economy separated itself positively from primarily the Euro Region and from many developed and developing countries. Our economy grew by 9.2 % in 2010 and by 8.5 % in 2011, and we became the second fastest growing country in the world, following China, to grasp the highest growing rate among the EU and OECD countries.
I think it would be beneficial for me to emphasize a point here. The contribution of the public sector to this impressive growth performance we have realized, is very limited.
The main leading role in our growth has been played by the private sector. We have never abandoned the iron clad budget discipline during this term. As a result, the rate of the total public debt stock as per the national income in Turkey was calculated as 39 % and the rate of the budget deficit as per the national income has declined to 1.4 %.
When we consider the fact that these rates in some economies of the Euro Region are over 100 % and 10 % respectively, it can be understood much more clearly how much the Turkish economy has positively separated itself from other economies.
As a result, as long as the confidence platform was strong, our people continued to spend their daily expenditures. Our banks continued to give out loans and our companies have continued their investments.
The environment of confidence has brought growth together with it. Turkey, which is growing at a rate five times faster than the average of European countries, will continue to grow and progress in the following years.
This is because we clearly declared everything. Maybe we did not make the fiscal rule an article of the constitution, but our government and those dealing with the economy have expressed that we will abide by the fiscal rule so much that it kind of became an article of the constitutional law. As a result, we have guaranteed to the markets and everyone else that we will be continuing to abide by this discipline in the years to come.
By means of clever policies implemented in a timely fashion, this growth has also created room for employment. Since April 2009, when the effects of the crisis on the workforce market was intensively felt, nearly 4 million people have found jobs in Turkey.
Accordingly, the economic growth of Turkey has also been a type of growth that has created employment. When we compare this with other countries, Turkey is at the top of the list amongst countries who have decreased their unemployment rates the fastest and who have provided high rates of unemployment in the recent period. As a result of the economic growth and income growth, we have also made significant progress in alleviating poverty.
The population which earns less than a dollar a day in our country is set to zero. While the population with an income lower than 4.3 dollars a day was 30% in 2002, this year this rate has been decreased to 3.66%.
When we look at the figures, we can see that we have carried out an incredibly positive development in this period.
We are of course proud of our success. But I would like to emphasize immediately, in parenthesis, that no one should think that we are being overconfident. On the contrary, we know that we still need to take more precautions. We still know we are in the middle of a critical process.
We are not the only ones voicing out our success and our gains. We are not trying to market ourselves. Organizations such as OECD and the UN also point to Turkey to be a good example in this respect.
As a result, our income distribution is getting better every day, and the gap between the rich and the poor is narrowing. Thus, the wide middle class that has emerged is one of the main reasons of the market bloom.
This situation, presents golden opportunities for the leading companies of the retail industry.
The most significant area that enables the Turkish economy to stand on its feet strongly today is its quintessential banking sector and a strong regulation and inspection framework.
The weaknesses that the banking sector of many developed countries are facing nowadays, are not an issue for the Turkish banking sector due to the precautions that were timely taken and the new arrangements that were carried out.
During the crisis of the last 5 years, not even 1 lira of public funds were transferred to the Turkish banks, and the capital adequacy ratio is at a high rate of 17%; whereas in many European countries, I know that this rate is around 5 or 6%.
Turkey has recently passed the level beyond being a passive bridge between continents, civilizations and cultures and has become a “regional and global hub”.
In order to prove this reality, it will probably be sufficient for me to express that I have had meetings with 10 Presidents that have visited Turkey and 4 heads of government in only the first 20 days this month.
We are trying to become a country which has a “network” at a global level in order to address the risks and opportunities that have emerged due to “global economic dependencies”.
Due to the Arab Spring and due to the shifting of global economic balances to Asia, the Mediterranean basin, Middle East, China and India, which are ancient civilizations of the world, have again stepped onto the stage of history.
Turkey is at a unique location as it is a country that is located in the intersection point of these above mentioned tectonic shifts.
Actually, Turkey has had multi dimensional relations in the past historically and still continues to have multi dimensional relations today.
The city of Istanbul in which we have gathered today has a history of seven thousand years, and was the capital city for approximately 1600 years for 3 great empires. In this respect, Istanbul functions as a political, economic and cultural hub between Europe, Asia, and Africa.
The Levant region governed in the 19th century from Istanbul, and the cities of this region such as Izmir, Cairo and Beirut had similar functions to those of today’s global cities such as London, New York and Amsterdam. Istanbul is progressing fast in order to gain back its historical function.
On the other hand, this land on which Turkey is located, is a geography in which many firsts have been seen in history and which houses a source of inspiration in each corner.
Anatolia, known as the cradle of civilizations, is the first region wherein the first city civilizations in history were built, where the first international treaty was signed, where money was used for the first time in trade.
In these lands where the historical Silk Road and Spice Road intersect, Turkey is located and it nowadays presents important opportunities for the Turkish economy; known as the “rising crescent” of the Afro-Eurasia axis.
The forecasts regarding the future of the Turkish economy seem even brighter. A recent research carried out by Goldman Sachs, it is predicted that the Turkish economy will be the second largest economy in Europe by 2050 and the 9th largest economy in the world by 2050.
I know there are companies amongst you which have been carrying out business relations in Turkey for many years. I believe it is time for the business operations of these companies to reach out to other regions via Turkey.
Besides being the regional manufacturing, logistics and distribution centres of your companies, Turkey can also be an important supplier in terms of your global operations. In this context, I am sure you will be able to find many partners in Turkey that will become a global company themselves.
I believe that the young and trained workforce and the geopolitical and economic and cultural advantages of our country will present you with significant comparative superiority globally to your companies.
In recent periods, we have brought to life important incentives in order to improve the investment medium in Turkey. Moreover, we provide the necessary support and incentives for the research-development (R&D) activities of companies in Turkey. Within this framework, I believe you will greatly benefit from shifting your regional R&D centres to Turkey.
The consumer goods sector is one that is related to the welfare, happiness and health of everyone in a community. For this reason, your responsibility either as retailers or as manufacturers is crucial.
I also believe that if we act responsibly during these difficult times and if we apply correct policies, we will be able to capture important opportunities. In this vein, I believe that the emerging economies have a significant potential in order to revive production within the world and to end the global economic crisis.
It will not be possible to talk of real peace or tranquillity unless global welfare is distributed as evenly as possible to the world. In this respect, I do believe that the consumer goods sector should assume a responsibility in fighting against malnutrition, hunger and poverty which still can be observed in a major part of the world’s population.
The hunger problems we have been acquainted with more and more in the recent years in Africa and many parts of the world, scare us all. From now on, as the world becomes more transparent to everyone, we will witness such disasters more often.
In some regions, if the gap between the income distributions gets wider, the danger of this situation will be observed more in the future. In this respect, we all need to think of these matters. We need to act together and take precautions as states or as global companies which are now participating in this meeting so that similar crises are not experienced again.
On the other hand, it is obvious that the consumer goods sector also has liabilities in terms of fair trade, environment and food safety and sustainable development.
That the next generations as your future customers can enjoy a healthy life, sustainable income and environmental amenities depend on the steps you will take today.
Distinguished Executives of the World’s Greatest Companies,
I would like to offer my thanks, before I conclude my speech, to those who have provided us with such an opportunity and such a comprehensive meeting.
I hope that the policies you will establish in the summit meeting in Istanbul will serve the welfare and happiness of humanity.
And I also hope that the rest of your meetings will be successful, and that while you are exchanging views regarding your businesses you will also be able to get closely acquainted with the beauties of Istanbul too. I again welcome you all and wish you all success.