THE GLOBAL FLUCTUATION HAS MADE REFORMS MORE URGENT THAN EVER

The Istanbul Chamber of Industry held its monthly Assembly meeting around an agenda titled, “Assessing Production, Exports, Jobs and Growth in the Light of Global Developments”. Speaking at the meeting, the Chairman of the Chamber’s Board of Directors, C. Tanıl Küçük, drew attention to the recent negative developments in the global markets. Pointing out that a major part of the world’s economies have been affected by the fluctuations, Küçük reminded listeners that institutions such as the International Labor Organization (ILO) had warned against developing risks: “We must be prepared for fluctuations. Yes, we have our gains, we are stronger than we used to be. But there is still a lot of fragility in our economy and a lot of areas in which no improvement has been made. As we point out at every opportunity, problems with our competitiveness head the list. To enhance our resistance to external shocks, to fortify our position, and to avoid experiencing palpitations at every blip, it is imperative that Turkey solve these problems. Measures that will shore up competitiveness, exports, jobs, investments and production and facilitate continued growth should be brought into play as soon as possible. The difficult economic period we are entering has made reforms that will improve our competitiveness more urgent than ever.”

The machinery manufacturing business will see a significant jump over the next five years, with its eyes set on dethroning the current leader — the automotive industry — the Central Anatolian Machinery and Accessories Exporters’ Union (OAMAİB) Chairman Adnan Dalgakıran said.

Dalgakıran was sharing his opinions on current conditions and developments in the machinery business with the Anatolia news agency. There is no new production of technology in Turkey; instead, Turkish industrialists are importing technology from developed nations, he noted, adding that the machinery industry will soon become the actor undertaking the task of generating technology in the country.
In 2007 the machinery field achieved $9 billion in exports, a 37 percent increase over the previous year. In the same year, machinery imports increased by only 19 percent, “That means we are gradually bridging the gap between the imports and exports,” Dalgakıran commented.

He said the industry has so far made a bright entry into 2008, estimating that this year exports would show a surge of between 20 and 40 percent. But the growth will largely depend on external demand, as contraction in the domestic market will continue, he predicted.

Developed nations count the machinery industry as among their major businesses and use considerable financial resources to support it, Dalgakıran said, adding: “This is exactly what the problem is in Turkey. Turkish industrialists prefer imported machinery, not because of their quality but because of the five to seven years of payment installments foreign machinery producers make available to their customers.” If the support problems are solved, the industry could easily reach $50 billion in annual exports, Dalgakıran believes.

Another problem, he noted, is the fragmented structure of the machinery industry itself. There are too many firms operating in the market, and their sizes are extremely small relative to their competitors in the world, he said. He estimated that there would be a serious wave of consolidation, mergers and acquisitions within the industry since the companies have to reach to a certain size in order to survive the ever-toughening competition. “They will either merge to form larger companies or will transform affiliated industries, or they will wither away from the competition. This is what happened elsewhere before, and the same will be experienced here in Turkey as well,” Dalgakıran noted.

Source:Today’s Zaman