ITO Chairman Şekib Avdagiç Offers Recommendations

Chairman of İTO Advises on Turning Global Crisis into Opportunity İTO Chairman Şekib Avdagiç stated: "If we make good use of our supply advantage that stands out in global trade, we can provide our country with a positive differentiation opportunity in this period. Secondly, what we need to do in this period is to diversify markets and products. Thirdly, approaches aimed at restricting credit use could turn into a negative cycle. This could also prevent us from achieving positive differentiation in the global recession." Istanbul Chamber of Commerce (İTO) Chairman Şekib Avdagiç, noting that the world economy is on the threshold of a new economic recession, stated: "We foresee that the expected crisis in the global economy will present important opportunities for Turkey alongside threats. At this point, we need to pay attention to certain matters." Avdagiç made assessments regarding recent economic developments during the Chamber's August Board meeting. Avdagiç noted that Turkey's positive export trend captured after the pandemic continues. "If we make good use of our supply advantage that stands out in global trade following the pandemic, we can provide our country with a positive differentiation opportunity in this period. What we need to do is to be affected as little as possible by the global recession in this period; to maintain a competitive advantage by keeping production costs in balance and not stopping there, but to diversify markets and products," he said.

"Any policy aimed at restricting credit use could create the risk of turning into a negative cycle"

İTO Chairman Avdagiç emphasized the importance of quickly overcoming the difficulties experienced in access to financing. He stated that together with the increase in interest rates, the adjusted annual growth rate of commercial loans extended by the banking sector has declined by 50 percent compared to two months ago. Noting that deterioration of the credit mechanism would mean a contraction in production, trade and exports, Avdagiç warned: "Therefore, any kind of policy aimed at restricting credit use could create a risk of turning into a negative cycle that spreads not only to the economy but to all areas through chain effects. This could also prevent us from achieving positive differentiation in the global recession and could leave us facing larger mid-term problems." Avdagiç, drawing attention to the importance of export-oriented credits, stated: "Determining whether export-oriented credits are used in accordance with their purpose is neither a difficult nor a complex process. Our companies' inputs needed for exports in their respective production areas, the related financing needs and the timeframe in which the said exports are realized can be monitored on a document-based basis." İTO Chairman Şekib Avdagiç said that in this context, rediscount credits granted to our exporting companies especially must not be reduced.

"It is clear that inflation accounting must be applied"

Emphasizing that combating inflation is an important issue that needs to be focused on, Avdagiç called for the implementation of inflation accounting. Avdagiç spoke as follows: "The issue of taxing fictitious profits created by high inflation will be one of the important topics in the coming period. In this context, it is clear that inflation accounting must be applied. We must prevent our companies, whose working capital needs are increasingly growing, from being subject to capital taxation due to high inflation and suffering additional capital erosion." In his Board remarks, Avdagiç also drew attention to the cost pressure created by rising energy prices. "In the global economy where we are heading towards stagnation and problems continue, we as Turkey must spend a large portion of our energy on 'energy.' As a country, we face an urgent task such as accelerating policies that will permanently reduce energy import dependency," he said.

"Turkey has determined the price of grain in global markets"

Avdagiç said that Turkey has demonstrated regional leadership in the last two weeks and has been the architect of opening the grain corridor. Drawing attention to the importance of the grain corridor opened from Ukrainian ports through the initiatives of President Recep Tayyip Erdoğan, Avdagiç stated: "Turkey, so to speak, has determined the price of grain in global markets. With just the announcement of the first shipment date, grain prices in global markets declined by around 20 percent. Before the war, a large portion of African countries met more than 30 percent of their wheat needs through imports from Russia and Ukraine. We hope that this agreement will serve as a starting point for resolving issues between Ukraine and Russia and will serve as an example for resolving similar problems."