TÜRKONFED President Sönmez: Financial Challenges Can Be Overcome, But Without Justice, There Is No Development
Foreks - Turkey's largest independent business organization, the Turkish Business Confederation (TÜRKONFED), held a summit in Diyarbakir to celebrate its twentieth anniversary.
The summit, themed ‘Global Risks and Local Solutions,’ was attended by businesspeople and NGO representatives from across Turkey. The opening speeches were delivered by Aziz Gölbaşı, Deputy Governor of Diyarbakir, Ayşe Serra Bucak Küçük, Mayor of Diyarbakir, Süleyman Sönmez, Chairman of the TÜRKONFED Board, Orhan Turan, Chairman of the TÜSİAD Board, and Devrim Türk, Chairman of DOGÜNSİFED. The honorary guest of the summit was Tuncay Özilhan, Chairman of Anadolu Group and Former President of the TÜSİAD High Advisory Council.
Süleyman Sönmez stated, “A permanent decrease in inflation can only be achieved through an increase in production.” He emphasized that TÜRKONFED, as the voice of Turkey's business community and SMEs, has undertaken more than 100 initiatives in various fields including sustainable development and education over the past 20 years. He noted that they have worked to protect the country’s interests since their establishment while addressing the economic, political, and social developments in Turkey and around the world during this period.
Sönmez pointed out that Turkey is experiencing the pains of having recently overcome a period of intense macroeconomic instability, adding that “the financing needs of SMEs are higher than ever. Access to finance is both difficult and expensive. Export-oriented sectors are facing competitiveness issues due to the appreciation of the Turkish lira. Difficulties in production also negatively affect workers. While job losses are increasing, the ongoing cost of living crisis is making life harder. The wealthiest 20% of the population receives nearly half of the total income, while the poorest 20% can only access 6% of it. We knew that fighting inflation would be difficult and time-consuming, but as the process prolongs, the stress on us has begun to accumulate. We are doing everything we can, and we will continue to do so. However, a permanent decrease in inflation is achieved not by suppressing consumption but by increasing production. To achieve this, it is crucial to alleviate the access to finance issues faced by the real sector and SMEs, thereby ensuring that investment and working capital needs are met without difficulty,” he said.
“Once the management approach is predictable, we will enter a high growth path”
Sönmez highlighted that the issues in the economy would gradually be resolved through monetary policy, and the business community is patiently waiting for this. However, he stressed that the situation is different on the real sector side, stating that “neither the technological structure of production nor income distribution can be corrected by monetary and fiscal policies. Although predictability in the economy has significantly improved compared to the previous period, businesses still find it difficult to foresee next year. We need a more predictable management approach. Because a solid legal framework and a well-functioning justice mechanism are fundamental to a market economy. In an environment where there is no justice or rule of law, permanent improvement and development in the economy is not possible. The path to development for Turkey also lies in strengthening trust in democracy. When we implement a predictable management approach, we will see inflation decrease rapidly, growth revive, and investments and employment increase. We will leave macroeconomic instability behind and enter a path of sustainable high growth,” he stated.
“While the agenda changes in 20 hours, nothing changes in 20 years”
Sönmez expressed a desire to hold the summit in 20 years in a Turkey that has achieved green and digital transformation and escaped the middle-income trap, saying, “We know that it is not a fantasy for Turkey to have rebuilt a social, secular, and democratic state of law; established a system of checks and balances; ensured the complete independence of the judiciary; increased trust in the rule of law; achieved social transformation; and raised per capita income above $15,000. About 10 years ago, we were close enough to touch this dream. However, Turkey is an interesting country. The national agenda can change completely in 20 hours, but nothing changes in 20 years. We have felt the same moral responsibility for 20 years. We are ready to do our best from now on.”
Addressing the new incentive system, Sönmez noted that TÜRKONFED has been working on regional development for many years and that the federations under its umbrella are well aware of the economic conditions in their regions, making them ready to provide support as the incentive system is designed.
Orhan Turan, Chairman of the TÜSİAD Board, stated that there is a continuous need for constructive criticism and contributions from rational, unbiased, and prudent NGOs for participatory democracy. He said, “Our 20-year collaboration with TÜRKONFED is rooted in our belief in the development of civil society in Turkey.” Talking about economic and educational issues, Turan added, “To fight inflation, we will need to maintain a tight monetary policy and continue the cooling of the economy. I believe that stronger steps are needed in the public sector for savings, efficiency, and combating the informal economy. Just as every segment of society bears this burden, it is equally essential for the public sector to significantly cut costs and increase efficiency. The quality of the educational system is directly related to the effective use of the resources allocated for education. Education is an area we must never cut corners on. We must increase the resources dedicated to education, improving its quality and the conditions of schools. The share of education from the central budget has now fallen below 10%. We must increase this figure as soon as possible to around 15%. To overcome the significant social and economic challenges we face, we need to maintain the functionality of democratic processes. The political and economic strength of our country will be determined by the power of democracy and the solidity of the rule of law.”
Tuncay Özilhan stated, “We are increasingly recognizing the importance of mobilizing collective intelligence.” He remarked on the dazzling progress TÜRKONFED has made over its 20-year journey, bringing together businesspeople from every region, sector, and firm model in Turkey on the basis of independence and volunteerism. In his speech at the summit, he said, “I find the TÜRKONFED framework very important for mobilizing collective intelligence. The journey to activate the common wisdom of the business world and raise its voice has involved the efforts of many. Every passing day, we better understand how crucial it is for business representatives from all corners of the country to unite around the principles of independence and voluntarism to pursue the interests of our nation rather than their own commercial benefits.”
Devrim Türk, Chairman of DOGÜNSİFED, which hosted the event, noted that Diyarbakir, which ranked among the top cities in terms of industry and commerce in the early years of the Republic, has now fallen to the 70th place and is now in the second region with the lowest income in Turkey. He pointed out that the region's biggest disadvantage is its distance from consumption markets and ports, emphasizing that they expect policies and logistics infrastructure projects to pave the way for investors. Türk also expressed that Diyarbakir has significant importance for the country's trade, culture, and tourism, as well as for the political and democratization processes, stating, “Contributing to the establishment of a democratic living space is our individual and institutional duty. This is an era of growing together, not fracturing and shrinking.”
Following the opening speeches, a panel titled ‘Global Risks and Local Solutions While Entering 2025’ was held with Sinan Ülgen, Director of EDAM, and Prof. Dr. Hakan Kara, Faculty Member at Bilkent University and Former Chief Economist of the Central Bank.