The leader of Turkey’s top business association says that there can be no improvement in the country’s economic situation unless there is an improvement in democracy and the rights to freedom of expression in the country.
Erol Bilecik, chairman of the Turkish Industry and Business Association (TÜSİAD), says that the country’s economic recession would continue well into 2019.
Earlier this month, it was revealed that officially the country’s economic growth had slowed to 1.6 percent for the 3rd quarter, year on year.
Some disputed the government’s measure of the economy, saying that if the methods used to measure the economy in the US and the Netherlands, had been applied to Turkey, the country would have been in a recession.
Bilecik said that economic reforms on their own were insufficient on their own to improve the economy. There needed, he said, to be an improvement in democracy and freedom of expression as well.
Bilecik was speaking at the Sabancı University of İstanbul’s International Center for Energy and Climate (IICEC), which hosted the World Energy Outlook 2018 report Turkey case introductory meetings on December 20. The report was prepared by Dr. Fatih Birol, Executive Director of International Energy Agency(IEA).
As a keynote speaker, Bilecik said that TÜSİAD considered the energy sector one of the most strategical elements in Turkey’s economic and social development.
“The ways of strengthening the economy are by having transparency, reconciliation, a democratic and fair society. Democratic initiatives, ensuring the freedom of speech, extending a climate of freedom are very important, simultaneously together with economic reforms. Together with the public and business world, I have no doubt and sincerely believe that we have the necessary strength to overcome this period with closer dialogue,” said Bilecik.
Bilecik said that the energy sector is the first to be affected by change. He emphasised the need for the investment climate to be improved.
Also speaking at the same event, Güler Sabancı, Chairman and Co-Founder of the Board of Trustee of Sabancı University, said: “There is a very important requirement for this sector to operate more efficiently and create more value for all stakeholders is to ensuring financial durability. Today, our energy sector is going through a challenging process. We need to take our energy sector to a better point in terms of financial sustainability with a holistic approach. The capital structure of the sector needs to be reviewed and restructured.”
In the red by $52 billion
Replying to a question, Sabancı Holding Energy Group President Kıvanç Zaimler said investments in the energy sector had been made by accruing foreign currency debts, which currently stand at about $52 billion dollars.
Stating that financial sustainability is very important in every segment of the sector, Zaimler pointed out that electricity distribution sector is a sector that needs investment.
“In today’s market conditions this sector is really in trouble with increasing interest rates and decreasing liquidity. Turkey has a need of annual investment close to $1 billion (in the energy sector). Today’s financing conditions make it very difficult to realize this,” said Zaimler.
Volatility in oil
As main speaker of the event, Dr. Fatih Birol, Executive Director of IEA said that oil prices had entered an unprecedented period of volatility and that this will continue for some time.
He said shale oil production will shape the international markets. “The total production of the US in 2025 may be equal to the total production of Russia and Saudi Arabia,” he said.
Birol also mentioned that the United States has become a major actor in energy sector as it gradually increases both shale oil and shale gas production.