“Increase of interest is not a correct step to take in the fight against inflation”

TIM President Büyükekşi found decision of PPK (Monetary Policy Committee) which did not increase interests:

“Increase of interest is not a correct step to take in the fight against inflation”.

Stating they find it positive that Monetary Policy Committee kept interests fixed, Turkish Exporters Assembly (TIM) President Mehmet Büyükekşi told “While the reason for inflation is not high demand, we think increase of interest that will reduce current demand even more is not the correct step to take in the fight against inflation”.

Having listened to exporters for the permanent increase of export and added value, Minister of Economy Mustafa Elitaş expressed that they would solve existing problems in coordination with sectors.

Hosting Minister of Economy Mustafa Elitaş, Turkish Exporters Assembly (TIM) gathered 60 exporter union presidents and vice presidents. Touching upon the decision of Monetary Policy Committee on the interest, TIM President Mehmet Büyükekşi told “We find positive the decision of keeping interests fixed for two reasons: Firstly, we think that high rates of interest will negatively affect investment and growth. Secondly, we already know that the two main factors behind the increase of inflation are the increase in food prices and rise of exchange rates. Neither of them results from high demand. In other words, while the reason for inflation is not high demand, we think increase of interest that will reduce current demand even more is not the correct step to take in the fight against inflation”.

'Export Support Package' is needed

TIM President Mehmet Büyükekşi shared two files with Minister Elitaş in order to permanently increase added value of export in the short term; one of them covers problems of exporters and consists of 200 clauses and the other consists of recommendations in 22 clauses. Reminding that they are following their works in order to increase export of Turkey and shared their 'Recommendations of Export Support Package' with Ministry of Economy, Büyükekşi continued:

“Why do we need an export support package? Since, one of the reasons behind the decline in our export in the previous year is the decline in parity which we keep mentioning. This is not a problem resulted from exporters. Second reason is the decline in prices of raw materials. This is also not a problem resulting from exporters. Third reason is the problems in surrounding countries. This is not a problem resulting from exporters as well. However, we desire our export to increase, net export to provide constant positive contribution in growth, added value in our export to increase and additionally the number of constant exporter companies to rise.”

Macro recommendations are expected for all sectors

Sharing an evaluation with Minister Elitaş that they do not find right as exporters, Büyükekşi touched upon the fact that it is wrong to perceive the supports given to production as though they are given to exporters. Stating that “However, businesses making production to domestic market are not affected as much as our exporters from parity, decline in raw material prices and instability in foreign countries. On the other hand, while the increase in minimum wage provides companies the flexibility to reflect this increase in wage by enhancing domestic demand, it does not provide this flexibility to our exporters because it does not make a change in foreign demand”, Büyükekşi pointed out that they are looking forward to declaration of the aforementioned package, which covers macro recommendations for all sectors and will ensure a fast increase in export in a short time, by Prime Minister Ahmet Davutoğlu.

Good relations with neighbors are important

Reminding possible problems from the decline in world trade from commodity prices, Büyükekşi told “The growth in our export markets decelerates due to declining commodity prices, countries making direct investment in us are negatively affected and our tourism incomes are in decline. We, as Turkey, left behind a year of political problems in our immediate environment. We suffered 4,5 billion dollar loss only because of this reason in 2015. We know that a permanent improvement and increase of welfare in surrounding countries will avail us the most. When the farmer who grows the best wheat was asked about the secret of his success, he replied the secret is to share the best seeds with neighbors. We have the same principle.”

Number of exporters should rise to 200 thousand

Expressing that the main objective of the meeting is to see the problems experienced by exporters in order to reach 2016 goals and to ensure elimination of international obstacles, Minister of Economy Mustafa Elitaş told “We will strive for solving the problems in coordination.” Touching on that the number of exporters until today is roughly 175 thousand in export history of Turkey, Elitaş told “However, no one was able to sustain. We should make our current number of exporters 200 thousand. We should be able to regain these companies that has previous culture of export but cannot perform export today. We will hold searching conferences for this aim and increase our exporters.”