Manouchehr Mottaki

Turkish and Iranian officials signed a protocol at the 20th Turkey-Iran Joint Economic Commission meeting in Tehran on Wednesday, an indication of increased cooperation during the global economic crisis.
Speaking at the signing ceremony, Economy Minister Mehmet Şimşek said the protocol would improve relations between Turkey and Iran. “The two countries should boost bilateral cooperation in order to overcome the global economic crisis,” he said.

The minister noted that Turkey and Iran, as heirs of two deep-rooted neighbor civilizations, have been getting along well and living in peace. Regarding the ongoing global financial turmoil, Şimşek said the crisis has started to affect the two countries but that Turkey and Iran had the potential to overcome the crisis by sharing their experiences. “We should show the determination to cooperate more to unite our powers, increasing trade relations and mutual investments,” he noted, adding that trade volume between Turkey and Iran amounted to $8.3 billion in the first nine months of 2008 and that it would probably reach $11 billion by the end of this year.

Iranian Foreign Affairs Minister Manouchehr Mottaki, also speaking at the meeting, said Turkey and Iran had the potential to boost bilateral relations in every area, underlining that the two countries should take joint steps in transportation, banking, energy, industry and mining. Mottaki said the two countries would carry out joint projects through a joint fund.

Şimşek also met with Iranian President Mahmoud Ahmadinejad in Tehran on Wednesday. Şimşek and Ahmadinejad exchanged their viewpoints on the global financial crisis and what their respective countries can do.

D-8 Secretary General, Dipo Alam, said that the cooperation between Turkey and Iran has set itself as example for the other member countries in D-8 on how to handle the financial crisis. “Turkey and Iran has taken concrete steps to face the turmoil, and we hope that our other member countries will also formulate their steps too,” he said in his office.

Turkey will continue to invest in renewable energy

Energy and Natural Resources Minister Hilmi Güler said yesterday that despite the economic crisis, Turkey will continue to invest in energy, the Anatolia news agency reported.

Speaking at the Wind Energy Workshop, jointly organized by SenterNovem — a Dutch government agency developing sustainable energy — and the Wind Power and Hydropower Plants Businessmen’s Association (RESSİAD) in Ankara, Güler said there was room for cooperation in the area of renewable energy between Turkey and Netherlands. The minister noted that by 2020, Turkey is planning to have built wind turbines with a capacity of around 20,000 megawatts (MW).

“We also need 500 kilowatt [kW] wind turbines for domestic use, which can be installed without any permission, as well as 2.5 MW turbines. We can work together with Netherlands in this area. We are expecting a long-term commitment from them,” he said. Güler said they also wanted to make a big leap in other renewable energy resources like solar power. “Turkey has great potential for solar energy.

The minister asserted that Turkey’s energy needs were increasing by 8 to 8.5 percent annually and that they had completed the legal framework to allow for further investments. He said Turkey’s investment in the energy sector would continue despite the financial crisis. Also speaking at the workshop, Dutch Minister for Foreign Trade Frank Heemskerk said his country had vast experience in the technical and legal aspects of renewable energy. He stated that they were ready to share their knowledge with Turkey.

As a response to the global financial turmoil, D-8 Organization has been seeking ways to increase further investment and industry expansion in the member countries. D-8 has organized and discussed this issues in WG for Industry and WG for Energy earlier in Egypt and Indonesia.

D-8 Secretary General, Dipo Alam, said that Turkey has set itself as example for the other member countries in D-8 on how to handle the financial crisis. “Turkey has taken concrete steps to face the turmoil, and we hope that our other member countries will also formulate their steps too,” he said in his office.

News Contributor: TodaysZaman

Siemens signaling their faith in the Turkish market

Europe’s largest engineering conglomerate, the German firm Siemens, is making a new investment in Turkey, signaling their faith in the Turkish market. Siemens Turkey CEO Hüseyin Gelis said yesterday that the company was investing some 100 million euros in the Gebze district of Kocaeli. “We are establishing a new factory in Gebze because we attach importance to the Turkish market,” Gelis noted.

Gelis said the factory would be one of the most modern factories in Turkey and in all of Europe. “We will continue our growth in Turkey; we are not only growing in Gebze but also in other regions of Turkey,” he said. Regarding the ongoing global financial turmoil, Gelis stated that the crisis would affect short-term investments negatively, but added that Siemens would continue its long-term investments in Turkey. He underlined that they were well prepared for the crisis, having taken precautionary measures, adding that they gave the utmost importance to following a balanced financial policy. With around 400,000 employees, Siemens is a global powerhouse in electronics and electrical engineering, operating in the industrial, energy and healthcare sectors.

The foundations of cooperation, or rather solidarity, between Turkey and Siemens were laid down in the middle of the 19th century, when the rulers of the Ottoman Empire decided to install telegraph facilities in the country. In 1958, Siemens established a company named Simko with Turkish Koç Holding. Simko became a wholly-owned subsidiary of Siemens and changed its name to Siemens San. ve Tic. Corp. on Jan. 1, 2001.

As a response to the global financial turmoil, D-8 Organization has been seeking ways to increase further investment and industry expansion in the member countries. D-8 has organized and discussed this issues in WG for Industry and WG for Energy earlier in Egypt and Indonesia.

D-8 Secretary General, Dipo Alam, said that Turkey has set itself as example for the other member countries in D-8 on how to handle the financial crisis. “Turkey has taken concrete steps to face the turmoil, and we hope that our other member countries will also formulate their steps too,” he said in his office.

Biofuel as an alternative source of energy

Malaysia has urged its private sector to work with its counterpart in Brazil in developing biofuel as an alternative source of energy.

Foreign Minister Datuk Seri Rais Yatim said with the abundant natural resources in Mercosur member states which comprised Brazil, Argentina, Uruguary, Paraguay and Venezuela, Asean countries could work with their counterpart to develop these resources.

He said the proposed joint ventures would also work towards enhancing the prosperity of stakeholders in agriculture and commodity based industries of both groups through stable and remunerative prices.

Rais made the proposal at the Asean-Mercosur inaugural meeting Monday in Brasilia, Brazil, which was attended by ministers of member states of Asean and Mercosur.

In a statement which was faxed here Tuesday, Rais said the proposal was also in line with Malaysia’s National Biofuel Policy, which envisioned the use of environmentally friendly, sustainable and viable sources of energy in order to reduce dependency on depleting fossil fuel.

He also reiterated the need for immediate steps to be taken by the world body to curtail the rising crime of piracy and armed robbery at sea.

On the global food crisis, Rais said Asean-Mercosur needed to analyse all levels of the complex inter-relationship between climate change, increased use of biofuel and increasing price of agricultural products that were affecting today’s food supply.

The meeting also adopted a proposal by Rais for senior officials of Asean-Mercosur to meet in Kuala Lumpur in March next year to discuss issues of mutual interest.

Malaysia has raised its 2008 biodiesel export forecast to 200,000 tonnes, more than double that of last year’s 95,013 tonnes.

The Malaysian Palm Oil Board (MPOB) said Malaysia exported 128,527 tonnes of biofuel in the first nine months of this year.

Malaysia has expressed its interest in biofuel cooperation among D-8 member countries in the Working Group for Energy this year in Cairo, Egypt.

News Contributor: BERNAMA

Islamic finance has continued to grow

Islamic finance has continued to demonstrate its evolution and strong growth during the challenging international financial environment, Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz said Tuesday.

“Islamic finance has now become a new vehicle contributing to increasing the financial linkages not only within Asia but also with the rest of the world, thereby facilitating cross-border allocation of capital globally,” Zeti said.

“Indeed, a number of international financial centres have recognised Islamic finance as an integral part of their financial system in order to complete the suite of financial products and services being offered, and therefore are actively developing this segment,” she said at the launch of HSBC Amanah Malaysia Bhd, the first Islamic Bank within the HSBC group here.

According to Zeti, the Islamic finance industry has not only continued to grow but it has also been able to present a higher level of dynamism.

The key indicators of the Islamic banking sector continued to record a progressive pace of development whereby the Islamic banking assets have expanded by 23 percent to RM234.9 billion compared with a year ago, she said.

The Islamic banking industry now accounted for 16.7 percent of total assets in the industry, she added.

Similar trends could be observed in the growth of deposits that have reached RM180.4 billion, up by 27.7 percent from a year ago, while total financing increased by 24.5 percent to RM143.4 billion, Zeti said.

“This growth has also accompanied by an increase in the number of full-fledged Islamic banking branches,” she said.

From January to September this year, 93 new branches were opened, thereby enhancing the outreach of Islamic financial products and services.

Another area that has seen significant growth is the sukuk or Islamic bond market, Zeti said.

The Malaysian sukuk market has expanded significantly with an average annual growth rate of 22 percent since 2001, she said.

“Despite the current market conditions that have affected the volume of new bond and sukuk issuance, the Islamic capital market has continued to structure innovative Islamic financial instruments,” Zeti said.

By the first half of 2008, the composition of the more innovative sukuk musharakah had increased to 84 percent as compared to 58 percent of the total sukuk issuance in 2007, she said.

Touching on the potential role of foreign Islamic banking subsidiaries, Zeti said the policy for establishment of the subsidiaries was also part of the initiative to enhance the outreach of Islamic finance and to strengthen international linkages.

“It reflects part of the further liberalisation of the Islamic financial services industry in Malaysia,” she said.

Zeti said the foreign subsidiaries have the potential to promote innovative product development and enhanced international integration of the Islamic financial system.

“By leveraging on the global networks available, the foreign subsidiaries are well positioned to engage in innovative product development in a more cost-effective manner,” she said.

The foreign subsidiaries also have an important role in enhancing the international linkages of the Islamic finance industry regionally and internationally, Zeti said.

“Reinforced by a well-developed legal, regulatory and Syariah framework and with three decades of experience, our Islamic financial system offers a unique platform as a meeting place between those that require funds and those with surplus funds,” she said.

Several years ago, the development of Islamic finance was regarded as an infant industry and considered concentrated only in countries where the Muslim population was significant. “But in recent years, Islamic finance has made a rapid growth and is present in more than 75 countries both in Muslim and non-Muslim dominated communities,” said D-8 Economist, Esen Gonen.

She said that there is a growing number of the international financial centers that are beginning to offer Islamic financial products and services such as in London, Singapore and Hong Kong. The number of Islamic banking institutions worldwide including conventional banks that are offering Islamic banking services have doubled to more than 300. She noted the total Islamic financial assets under their management are now estimated to exceed one trillion US dollars, about fivefold its magnitude five years ago.

“Therefore Islamic finance, I believe, has a bright future prospects within the globe, especially D-8 countries that also represented major population and economy of OIC member countries,” she added.

News contributor: BERNAMA

Gold as important investment

Jeremy Charles, the global head of precious metals for HSBC, spoke with the Turkish English Newspaper, Today’s Zaman, briefly about the status of the gold market ahead of the Active ACADEMY 1st International Gold Summit being held today in İstanbul.

In the interview, Charles drew attention to İstanbul’s centuries-old status as an important center for gold and called it “natural” for there to be increased interest in the physical gold market at a time of global financial turmoil. “Investors have historically turned to gold in times of financial uncertainty,” he said. “Gold has shown real strength during the financial crisis as investors search for safety.”

The veteran trader, who has over a quarter century of experience in the market, emphasized the importance of the timing of the İstanbul conference: “It is important to gather at a time of turmoil for understanding the financial situation and forecasting about the future. Dialogue, understanding and education can all be applied to ensure the further development of the local market here.”

Jeremy Charles

Charles also shared his predictions with regard to the trajectory of the gold market, predicting volatility for the next five years: “My personal belief is that gold prices will continue to be volatile albeit within a higher trending range. Difficulty of extraction coupled with growing global demand is likely to keep prices relatively high for the foreseeable future.”

However, he was optimistic about the continuation of demand for gold despite the crisis that has enveloped world markets, causing recessions and gloomy outlooks for economy after economy. “Even [though] the trends in retail investment demand and jewelry demand differ significantly from market to market by concerns over the general economic climate, inflation and stock market falls, I do not expect demand to decrease,” he said.

The reason for his optimism is gold’s versatility. “Gold is many things to many people, from being a luxury good in one country to the most important investment in another. Since the start of the current turmoil there is considerable evidence to suggest that demand for gold will continue in one form or another,” Charles said.

The executive also thinks people will continue to purchase gold as a vehicle for storing their wealth. “I believe this will always be the case. Investors intend to buy gold for its safe-haven qualities. Those who traditionally have shied away from gold as part of an investment portfolio can no longer afford to ignore this unique asset. I think the institutional investors and private banks in particular will all be reconsidering their strategy. My belief is they are likely to want to own some gold again.”

The increase in the price of gold will not deter consumers from buying gold, either, even if their money cannot purchase as much as in the past, he said. “Despite the continued high and volatile gold price, together with economies across the globe witnessing inflationary pressures and a tightening of consumer wallets, consumers are continuing to spend more money on gold, even if they no longer get as much of it. This reinforces the positive attitude and buying intentions of consumers, and indicates that, despite price increases, gold demand remains robust.”

Charles is also chairman of the London Bullion Market Association and will be a keynote speaker at the İstanbul summit.

Responding to the news, D-8 Director, Amb. Kia Tabatabaee said that Turkey is doubtlessly a very active player of D-8 organization and its status as the important center for gold market has further show signs of resistance toward global financial crisis. He brought to mind that Turkish precious stones’ big player such as Goldaş, currently exports to 48 countries and has determined for expansion to continental and eastern Europe as primary growth areas for the next three years.

“Development such as this hopefully will encourage more similar expansion by other companies of D-8 countries to reach the global economic player status within their sectors,” Tabatabaee said. D-8 is very keen in supporting efforts by its member countries to intensify business expansion among D-8, through a set of agreements to ensure smooth facilitation in boosting the intra-trade.

“We believe that once D-8 has put Preferential Trade Agreement, Visa Agreement, Custom Agreement, and other trade facilitations in place soon, joint investment and investment by private sectors will significantly increased within D-8 countries,” he said in his office on Thursday.

An agreement between Ankara University’s Civil Aviation School and Turkish Airlines will enable foreign students to study in the Turkish city of Eskişehir for careers in aviation. The director of Ankara University’s (AU) Civil Aviation School, Professor Mustafa Cavcar, has said his school currently meets only 30 percent of Turkey’s total pilot needs but aims to raise this figure.

D-8 to boost cooperation in Civil Aviation

The aviation training school was established in 1986 to produce employees for the Turkish civil aviation sector trained to international aviation standards. The school has trained 2,500 students over the 22 years that it has been open, Cavcar noted. The training program lasts five years, including one full year of English language preparation. Courses cover aviation electronics, airplane engine maintenance, civil aviation transportation management, air traffic control and piloting.

“The Civil Aviation School has one airport open to international air traffic, one JAR-145-approved maintenance plant, 26 airplanes, 28 laboratories and one flight simulator, tower control simulator and radar simulator each. The maintenance plant at the training school can service six airplanes weighing up to 5,700 kilograms. Students are trained in airport management, air traffic control and flight and airplane maintenance. They can immediately put into practice what they learn. The integrated structure we have here means that this civil aviation school maintains a partnership with both national and international aviation institutions and industries. Thanks to its staff, equipment and training, our school is one of the world’s prestigious aviation training schools,” Professor Cavcar said.

Professor Cavcar also noted that the AU Civil Aviation School produces around 100 people for the Turkish civil aviation sector every year, saying: “As part of an agreement we have with Turkish Airlines [THY], they send 15 of their employees from their engineering and technical assistance and we educate and train them. Additionally, we produce 25 pilots a year. In the coming years, the number of people we train for Turkish civil aviation careers will increase. Now that THY is really growing, it needs more and more pilots. We meet about 30 percent of the demand for pilots in Turkey but want to raise that percentage.”
THY reportedly plans to purchase 100 airplanes over the coming decade. Addressing this, Professor Cavcar said each new plane will require a team of people to fly it. “The airplanes to be purchased will open up a great need for pilots. Turkey should be producing between 100 and 150 pilots every year. Many of our students receive grants from private companies to study and, after they graduate, these students often work for the companies that sponsored them. There are many places in Turkey that offer courses on piloting, but those places don’t offer an academic education. The only institute offering academic training as well is our AU Civil Aviation School. Furthermore, flight-training centers exist and are run by the Turkish Aviation Board [THK]. It produces around 10-15 pilots a year. THY also sends around 15 people a year to the THK for training.”

Foreign students part of program

Professor Cavcar touched on problems being experienced by China, India and Russia in finding an adequate number of trained pilots. “These countries need to close their pilot gaps. Otherwise not only will the aviation sectors in these countries slow down, but so will their economies. They do not have enough resources — which is why they need to see to it that some of their staff receive training outside the country.”

Explaining further, Professor Cavcar said starting in 2009, within the framework of an agreement between AU’s Civil Aviation School and THY, foreign students will be educated in the Turkish city of Eskişehir for careers in aviation. “Foreign students will be able to study for between 18 and 20 months in Eskişehir. Students who have completed their education will be able to pilot Airbus and Boeing airplanes in their own countries.”

Pointing to a recent 40 percent increase in national air transport in Turkey, Professor Cavcar added: “I have a feeling this increase will stop at 40 percent because of the global financial crisis. At the very least, Turkey will maintain the percentage of passengers being transported by airplane nationally. We might even see an annual increase of 3-4 percent.”

Commenting on the news, D-8 Secretary General, Dipo Alam, said that he cherished the news and believe that this cooperation program in Ankara University could set a model for the similar cooperation within D-8 in terms of training and supply for professional pilot for D-8 aviation. “We also have agreed during the 3rd D-8 WGCA in Bali, that we will established a task force in civil aviation training which will be led by Turkey,” he added.

the 5th Turkish Commerce Industry Consultation Meeting

Economy-related ministers and a number of representatives of the business world discuss possible measures against the crisis in the Fifth Turkish Commerce and Industry Consultation Meeting.

Despite incessant calls from businessmen to take measures to head off the probable effects of the global financial crisis before they spread to Turkish markets, the government waited until the very last moment to make a move, with Prime Minister Recep Tayyip Erdoğan equating early steps to “damaging the house rather than dousing it with water before it is engulfed by the fire.”

On his way to India on Friday for an official visit, Erdoğan for the first time mentioned a comprehensive economic package, or action plan, to provide extra strength to non-financial businesses in particular to help them survive the worst of the crisis. The prime minister said economy bureaucrats are currently working on the plan and that its details will probably be disclosed to the public at a press conference on Wednesday. The backbone of the plan, or the financial resources to back attempts to provide shelter to Turkey’s industries, will be funds to be acquired from international organizations, including the World Bank, the Islamic Development Bank and the European Bank for Reconstruction and Development (EBRD) at low costs and acceptable conditions. Among the major articles to be included in the action plan, as reported by a number of wire stories on Friday from anonymous bureaucrats, is delineating the steps to help new employment or at least halt job dismissals. With this aim, the government will ready several billion lira during 2008 and 2009 for the use of small and medium-sized enterprises (SMEs). Up to $250 million in loans will be obtained from the EBRD to be especially extended to the food and energy industries. European Investment Bank (EIB) funds will primarily go to large enterprises and partially to SMEs, which are thought to sustain more damage. Executives at the EIB said they had planned on granting Turkey a 2.2 billion euro loan in 2009 under normal circumstances but that they could increase this amount for special projects. The executives said the loan could be increased to 3 billion euros and that 1 billion euros of this would be transferred to banks to be used for loans to SMEs. In addition to this, Turkey will receive a $150 million project loan from the World Bank. This figure could also be increased threefold in the coming year. Industry and Trade Minister Zafer Çağlayan also spoke on the issue as he prepared to leave for India, accompanying the prime minister.

It seems, however, that the banking industry will be left outside of the coverage of the economic package. Economy Minister Mehmet Şimşek said on Friday, “If it’s not broken, why fix it?” The banking sector has shown good performance so far and appears to not be affected by the current crisis at all thanks to its well-regulated structure. The Turkish banking sector’s revenue increased to $11 billion in the first nine months of this year.

Negative comments, however, were not completely absent as some claimed the situation may not always be so good for Turkish banks. Fitch Ratings warned on Wednesday that the Turkish banking sector is likely to face a challenging short-term outlook.

In a special report, it said that although Turkey’s banks were not reliant on wholesale international funding and foreign exchange risks are well contained, there are some significant risks for Turkish banks in this period of global de-leveraging, a deteriorating global economic growth outlook and scarce funding.

Calls answered

Almost not a single day went by in which representatives of the private sector did not send messages to the government, calling them to arms. In the meantime, these representatives already began taking their own measures.

A good example of this is when the İstanbul Chamber of Commerce (İTO) and the İstanbul Metropolitan Municipality urged close to 14,000 companies to offer discounts in an attempt to increase consumption, which had waned dramatically due to the crisis. The discounts will continue until the end of the year and participating companies will announce the discount with signs on store windows reading “Today is the best day for shopping.”

İTO Chairman Murat Yalçıntaş believes negativities in the Turkish economy did not stem from structural problems but from a decrease in consumption largely due to psychological motives. Domestic demand fell considerably in October and November, he underlined, identifying this situation as “very dangerous for the economy and for trade.”

Indeed, the government has already taken a number of small steps, though far from systematic. The latest was announced last week when Minister Çağlayan sent manufacturing SMEs news that the government would extend YTL 350 million in loans at zero interest. The loans are to be paid back in 12 months, with no payment for the first three months. Companies have been able to apply for these loans since Oct. 26, 2008. A company will be entitled to YTL 2,000 for every worker it employs. Speaking at a conference to announce the initiative, Çağlayan said the initial aim is to protect employment levels and prevent them from slipping further.

Similarly, the Turkish Union of Chambers and Commodity Exchanges (TOBB) also presented a YTL 1.5 billion loan package with low interest rates in cooperation with Halkbank. TOBB President Rifat Hisarcıklıoğlu announced the decision at a ceremony during which he and Halkbank representatives signed the deal. The move is expected to relieve SMEs. According to the deal, TOBB will deposit YTL 100 million, with Halkbank adding another YTL 1.4 billion. Small companies will be able to take out loans from the pool of money that TOBB and Halkbank will create. Some 240 Turkish trade and industry chambers have already agreed to have their member companies take out loans.

The most-often voiced demand by business circles from the government is a new stand-by deal with the International Monetary Fund (IMF). The government deliberately dragged its feet for a handshake with the IMF despite all pressure, citing significant differences between the government and the IMF as the basic reason for the reluctance. The fund was asking the government to adopt a more modest growth target for 2008 and 2009 and to curtail public spending accordingly. The government, on the other hand, claimed that the crisis would not be averted unless more state money was poured into the markets; the private sector in particular grew less willing to invest.

The IMF last week took one step toward Turkey, saying it had readied a loan package of up to $40 billion for Turkey if it chooses to ask for one. The government also moved closer to the IMF but without mentioning the exact amount of the loan to be drawn from IMF coffers.

Economy Minister Mehmet Şimşek on Friday said there is still disagreement with the IMF and the government should wait for a solution before signing a deal with the organization. “We need to protect our national interests. If the IMF takes our priorities into consideration, we can sign a precautionary or ordinary stand-by deal with them,” he noted.

Another major demand from businessmen is a reduction in costs. İstanbul Textile and Raw Materials Exporters’ Union (İTHİB) Chairman İsmail Gülle was one of the many businessmen who called on the government to stop increasing energy prices. At a press conference last week, he said he had started to use coal in his manufacturing plants after recent prices hikes in natural gas that rendered coal usage three times cheaper than using gas for the same purpose. He further wanted a discount of at least 25 percent in 2009 for all social insurance costs.

Sectors ready for appointment with crisis

Without waiting for a move from the government, companies from all sectors have started to take care of their own business themselves while developing strategies to survive before the approaching wave hits.

Automobile Distributors’ Union (ODD) General Manager Işık Dikmen said the Turkish automotive sector has made itself accepted in global markets and that it achieved this success with no risks that could increase the current account deficit. She emphasized that the auto sector had a key role in the Turkish economy.

Dikmen argued that the balance of the public finance was a top priority but that, in addition, the domestic market should also be revived. The state banks should take responsibility, and it is important that they introduce solutions for the benefit of the consumers. He noted that car dealers and distributors had made many sacrifices to help ease the concerns of their customers, recalling that the industry’s discount campaigns are ongoing.

Federation of Food and Drink Industry Associations of Turkey (TGDF) Chairman Şemsi Kopuz asserted that the current global financial turmoil would affect Turkish sectors one way or another, stressing that it was impossible not to be anxious about the negative effects of the crisis. Regarding the measures that the Turkish food sector had taken, he noted that food companies will try not to buy goods but to sell from stock. He added that the companies will endeavor to pay their debts as soon as possible or extend the terms of their loans. He said the crisis would lead to contraction in the domestic market and that demand will, therefore, decline. “As such, production will also fall and the companies will have no choice but to dismiss employees in the end,” he said. He stressed that it was more likely that the companies would choose to lay off employees than to lower production. He noted that customer behaviors have changed in accordance with the crisis, adding that customers now tend to only meet their essential needs, and delaying any extra expenditures.

Turkish Chamber of Shoe Manufacturers President Ali Murad Kızıltaş said the shoe trade sector was also uneasy with the current negative developments in the markets, stressing that the most critical problem was that the sector had been caught unprepared. Noting that many shoe companies have tried to increase their productivity, he said the companies would quickly end any operation that does not bring profits. Kızıltaş said they had started inspecting unprofitable operations, adding that they had detected all the stores in the market with relatively lower profits and that they were contemplating shutting those stores down. “We are not at the point of dismissing employees right now. However, we have to make some decisions in the short term, following the developments closely,” he explained, signaling that anything was possible in such uncertainty.

Turkish Clothing Industrialists Association (TGSD) President Ahmet Nakkaş said growth and development plans should be made rapidly, adding that it was of the utmost importance that the crisis be managed well. He noted that the non-financial sector, which is based on exports, production and employment, should be protected from the crisis. He asserted that they had contemplated taking advantage of the market, which they expect will recover in the near future, by getting rid of burdens causing them to lose ground. “Companies will endeavor to maintain their current position, since the crisis will have extensive effects. Thus, we are most likely to have a static economy with a very low growth rate in Turkey in 2009,” he noted.

Ekrem Akyiğit, chairman of the United Brands Association (BMD), said they had studied every crisis scenario in detail, developed strategy plans accordingly and endeavored to find a way out of the crisis, rather than saying “just leave well enough alone.” “When you have a look at the shrinking market and declining market shares, it is likely that the crisis will effect the retail sector, albeit indirectly,” he said, adding that they should follow a disciplined monetary policy, keeping expenditures balanced. “We will do market research and analyze the developments in the market more frequently than before. You should have alternative emergency plans for all contingencies,” he explained. He also noted that people should avoid sending messages that may drain public confidence, apparently in reference to some representatives of the Turkish business world.

Turkish Association of Capital Market Intermediary Institutions (TSPAKB) President Nevzat Öztangut said many leading banks in the US have changed their institutional structure and that some banks in Europe have been made public. “Many foreign intermediary institutions have participants in Turkey. Thus, some of our members are obliged to reorganize,” he said. Öztangut said the profits of intermediary institutions have declined, adding that the total revenue of these institutions decreased by 15 percent in the first six months of 2008 compared to the same period last year and that their operating costs had increased by 15 percent in the same period. “The number of people working in this business has also decreased by 250 since the beginning of the year,” he added, stressing that the institutions have already started taking precautionary measures. He also noted that since January 2008, the number of intermediary institution offices in the country had decreased to 250 from 280.

Mobile Communication Systems and Tools Businessmen’s Association (MOBİSAD) General Manager Murat Dursun said there were no problems, given that everybody in Turkey had done what it takes to withstand the crisis. “The sectors that will be affected by the crisis in the first place are those that sell imported goods,” he predicted. He noted that communication device sales have decreased 80 percent over the last 10 days. He stressed that all companies are being forced to take measures and reorganize to face the crisis. “Those companies that are well prepared and taking the necessary steps will, in the end, be the ones to overcome the financial turmoil safe and sound.”

D-8 Secretary General, Dipo Alam, said that Turkey has set itself as example for the other member countries in D-8 on how to handle the financial crisis. “These concrete steps are panacea to face the turmoil, and we hope that our other member countries will also formulate their steps too,” he said in his office yesterday.

Newssource: Today’sZaman Daily.

The ministers of the world’s leading gas producers discusssed in Moscow on December 23 the founding charter of the Gas Exporting Countries Forum (GECF), according to the Russian Energy Ministry.

“The final draft of the GECF charter should be agreed on at a high-level Gas Exporting Countries Forum commission due on November 26,” the ministry said.

Russia will be represented at the meeting by Energy Minister Sergei Shmatko. The GECF was established in Tehran in 2001. It comprises Algeria, Bolivia, Brunei, Egypt, Indonesia, Iran, Libya, Malaysia, Nigeria, Qatar, Russia, Trinidad and Tobago, the UAE, and Venezuela. Equatorial Guinea and Norway have observer status.

The member countries currently control about 73% of the world’s gas reserves and 42% of its production.

Russian Prime Minister Vladimir Putin said on Tuesday that fears by Western consumers over price manipulation by the group were ungrounded.

“We are aware of the concerns and fears expressed by some energy consumers,” Putin said. “There are absolutely no grounds for such fears. We are not establishing a cartel, nor are we striking any cartel deals.”

“However, energy producers, as well as consumers, have the right to and must coordinate their decisions, exchange information, and do their best to ensure uninterrupted hydrocarbon supplies on global markets,” Putin said, adding that uninterrupted supplies and reasonable prices were the main objective of the grouping.

Speakers at a seminar said yesterday high fees charged by financial institutions and low level of banking penetration among rural people prompted non-residents Bangladeshis (NRBs) to use informal channels to remit money from abroad. They also identified an insufficient number of ATM booths and lack of confidence in banks as the setbacks that discouraged people from using the banking channel in remitting money.

“The reasons why a large part of remittance transactions takes place through informal channels instead of financial institutions, include high fees charged by banks and financial institutions and low-level of bank penetration among the rural poor,” said Jamaluddin Ahmed, treasurer of Bangladesh Economic Association.

The seminar, held at the Bangladesh Economic Association (BEA) auditorium, focused on migrant remittance. The association’s president Dr Quazi Kholiquzzaman Ahmed and General Secretary Prof Abul Barkat also spoke at the seminar.

AKM Shameem, head of Corporate Banking for Mutual Trust Bank, said expatriate workers prefer unofficial channels mainly because of better exchange rates and faster receipt of the remitted money by the beneficiaries.

According to a survey, 46 percent of remittance is channeled through official sources, 40 percent through hundi, 8 percent by migrant workers themselves and 4 percent through friends and relatives.

Since 1976, about 8.5 million Bangladeshis have been working abroad. Saudi Arabia, USA, UAE, Kuwait, Oman and Bahrain top the list of countries where most Bangladeshis are working. The speakers suggested formation of a cell under Bangladesh Bank to centrally control remittance transactions of all the banks.

D-8 Secretary General, Dipo Alam, recently led discussion on remittance issue in the APEC Seminar theming “Securing Remittance and Cross Border Payment form Terrorist Use” in Jakarta, Indonesia, on 22-23 October 2008.

D-8 countries, with their 930 millions people, are countries whose large populations are working abroad as migrant workers. Their money/remittances send to their families (parts of $ 251billions remittances in 2007) have proven to reduce poverty and also contribute significantly to the economy of the countries.

However, recently these migrant workers’ remittances are being potentially suspected by some international banks’ policies that discriminated simply because they are Muslims/or have Muslims names, and connect to the misuse issues of financial for terrorism. Therefore in this opportunity at the APEC Seminar, D-8 Organization - standing side by side with other international organization such as APEC, IDB, and OIC - plan to discuss thoroughly the issue, and will seek better way to cooperate together to avoid moslem migrant workers being suspected exageratively and treated discriminatively.

D-8 Secretariat has been taking a concentrated initiative to set up a D-8 working group on remittance issue since last year to help member countries to better route this potential remittance for the development of the D-8 member countries. Secretariat had contacted some participants who attended International Meeting on Migrant Workers in Brussels, Belgium, to work with D-8 Organization on ideas to set up a Working Group on Migrant Workers and Remittances. This would also include cooperation of international organization such as ADB, World Bank and IMF.