EXPAT CAPITAL

EXPAT CAPITAL

Business world should focus on production

TÜSİAD has undergone significant changes through its 40-year history.

It has expanded its fields of operation. It has opened up to the world as part of the EU accession process. It has continually renewed itself. TÜSİAD President ÜMİT BOYNER says: "TÜSİAD is evolving as the world evolves." She says that the methods by which the economy was managed 20 years ago are no longer valid and that the future will be different again. We spoke with TÜSİAD President Ümit Boyner about the direction of the global economy, about the opportunities and risks for Turkey, the new direction of the Turkish business world and TÜSİAD's operations.

Capital: How do you evaluate the recent global turbulence? Is the global economy heading for another crisis?
- The 2008 crisis brought out many problems that the world had been trying to brush under the carpet. In fact, at the moment, we are experiencing the labour pains of globalization. The entire economic and political management are having to grapple with structural reforms. While there is such a significant globalization, it is not possible to manage the world with the same methods. Today we are experiencing two problems. There has been relative globalization on the markets for goods, but on the financial and money markets there has been no such adjustment. As a result of this, we were faced with a crisis in 2008. The economies of the developed world tried to overcome the crisis through their central banks. This was an important step, but developed countries also need to establish a new form of coordination. It is clear that temporary measures will not solve the world's problems.

Capital: How do you see the process playing out in the future?
- The point that has been reached over the last three years on the G20 platform is insufficient. For this reason, I regard the meeting of the G20 in November this year as a platform on which, rather than going back to the beginning, decisions can be taken so that countries can work in closer cooperation. America continually applies financing easing but it is unable to solve the problems of either unemployment or growth. Europe has a productivity problem. With the exception of Germany, countries are losing competitiveness. The EU needs to look at the industrial policies that have been applied in Turkey and how to increase its productivity. Countries which create monetary reserves need to reduce their domineering behaviour. This will take time and will not be easy. There is a shift in reserves towards the East. The West should evaluate this well and restructure itself.

Capital: What strategy should Turkey follow in the future?
- Turkey has been very successful in terms of public finance and public deficits. Today, at a time when many countries have problems with public sector debts, Turkey has become a country which is recording a budgetary surplus. We have followed a monetary policy which emphasizes price stability. This is an important success. What Turkey needs most to focus on in the future is preserving all of these and applying productivity policies. It needs to take measures to increase Turkey's competitiveness and focus on micro reforms to improve the investment environment. There may be a consolidation in public finance. Improvement can only come with a broader tax reform and policies to tackle the unregistered economy. All of these need to be implemented urgently.

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