Expressing their enthusiasm for the decision included in the Industrial Strategy Document announced by the Ministry of Industry and Technology, regarding the establishment of a board for public procurement and its centralization, OSTİM Board Chairman Orhan Aydın said, “This was a necessary measure to increase the domestic share in public procurement. We believe that this board will accelerate localization.”
Aydın pointed out that there are things that can be done in the short term as well, saying, "For example, public institutions that open letters of credit immediately for foreign products offer 8-month payment terms for domestic products. If domestic producers are to be supported, payments should be made much earlier so that they can develop and produce."
The Industrial Strategy has been announced. Did it meet your expectations?
It's a very good plan. It's truly well-researched. The country's needs, the selection of sectors... Many of the headings there are topics we're already working on. The whole point is to implement this plan. It needs to be treated as a state policy, tied to a timeline, and implemented to the end. What needs to be done, how, when, and by whom? If we can answer these three questions immediately and do it in a stable and sustainable way, that will be the outcome. Otherwise, all the plans written so far just sit there in books.
As industrialists, we contributed greatly to the 11th Development Plan. And in this strategy, many of the quotes and headings are from the 11th Development Plan. It seems that priority is given to and importance is placed on domestic production. Hopefully, it will be for the best.
For example, were you excited about the idea of forming a board for public procurement?
You know, we've done serious work on this. It was something we advocated and brought up. Public procurement shouldn't be done haphazardly by everyone. These procurements should be centralized, and those responsible at that point should match those needs with Turkish industry. They should identify the parts that can be produced domestically and provide flexibility in the specifications for the parts that cannot. For example, municipalities prepare specifications for rail systems. It's impossible for them to understand something they're doing for the first time, but they prepare specifications. If this specification were prepared by someone who knows the job and the sector, it could create great opportunities for our domestic firms. But if you prepare it with the perspective and suggestions of a foreign firm, it goes abroad. In the 1970s, when I worked at the ministry, there were similar practices. Protectionism was very prominent, but a middle ground was found. Public procurements came to a certain section, and you matched it with domestic firms. If it couldn't be done, you issued a document, and it was imported. We always argued that it should go through such an evaluation process, and we wanted a similar structure. Therefore, it turned out well.
We all know, and have been writing for years, that there is an unwritten protectionism in developed countries. Lately, this has become quite commonplace and is now openly discussed. What are your thoughts on our fundamental adherence to world trade rules?
In the 1980s, they convinced us that something called a free market existed. They said, "In a free market, everything regulates itself, everyone prospers, develops, and soars." That's not the case. We understand this better in the new world. There's no free market in China, America, or Germany. The concept of a free market means developed countries telling underdeveloped and developing countries, "Open your doors, let our products circulate in your markets without any obstacles." In their own countries, however, there's a kind of protection and favoritism you don't even know about. Even when we discussed this in the context of rail systems, they said, "The EU is objecting." Okay, we said. But why do we face certain difficulties when selling our goods there? For example, when one of our companies wants to sell subway cars in the US, they say, "You'll come here, you'll invest, you'll produce 60% of it in my country." They do it, so why can't we? One of our companies won a contract, won a tender. He went there, and when he was about to sign the contract, they asked him, "Do you speak Dutch?" When he said, "No," the tender was cancelled. So I said, "Why don't we do it?" You don't write these obstacles on paper, but you can create them in people's minds.
We are going through difficult times in both production and trade. What is the situation like in OSTİM?
We want to be optimistic. Entering a self-destructive process is not right. At the beginning of each month, I rush to my computer to check, "What's our electricity consumption like?" Last month, our electricity consumption fell below that of 2014. That shows the pulse of our economy and the Turkish economy. It used to increase by 5-10 percent every year. The number of companies in the region doesn't change much, but while production, machinery, and electricity consumption used to increase by 5-10 percent compared to the same month of the previous year, suddenly we fell below 2014 levels. When machinery isn't working, the number of employees decreases, money decreases, and banks slow down. So, we can only get out of this by keeping the machinery running, by producing, by selling what we produce, and by exporting. That's the way out for us. Why did we get to this point? If you spend money in Ankara on building parks instead of factories that produce technology and generate foreign currency, you won't have money left for what's really needed. With the money currently spent on unused parks in Ankara, we could double our exports. We need to spend the first money we find on production.
There is a negative perception regarding the ineffectiveness of the loan packages that have been launched. What are your thoughts on this?
I believe that protecting and supporting producers should not be abandoned. That's the case all over the world. If you can't do it, shut it down. If you can't do it, shut it down. Building something new might cost 3-5 times more. Destroying the existing ecosystem and creating a new one is much more difficult. It might cost 10-20 times more, meaning new expenses. Saying "Let everyone live, productive or unproductive!" can also lead to waste.
Our region is fortunate in this regard. For example, since a significant part of the defense and aerospace ecosystem is located here, it's impossible not to develop or research. Inefficiency is impossible. Those who are inefficient simply cannot succeed.
Are there any factories or shops that have closed down in OSTİM?
A shop on OSTİM's main street is worth its weight in gold. I've been in OSTİM for years and I haven't seen a single shop close. Lately, I've been seeing rental advertisements, but there's no sign of "we're ruined, we're finished." Our producers and traders are resilient and patient. They strive to keep themselves and those around them afloat.
It is stated that payment terms are being extended in both the private and public sectors. And it is emphasized that this negatively affects production and the economy. What should be done?
Public institutions that open letters of credit immediately for foreign products, i.e., imports, offer payment terms to domestic producers, with payment periods exceeding 240 days. It's like saying, "I'll give you my product, and I'll get paid eight months later. I'll produce this product, spend money, take out a bank loan, deliver the product to you, and get paid eight months later." If the aim is to develop production and sectors through domestic procurement and support for domestic producers, then producers should be supported before they even start production. Otherwise, this support cannot be effective.
Can we learn lessons from what we are experiencing in the economy today? It has shown something to everyone, those who produce, those who don't, those who work, those who don't work, hasn't it?
There are many lessons to be learned from this. When the winds of crisis blow, some dig shelters, others build windmills. We must consider these lessons. For example, we sat down and asked ourselves, "What can we do during and after this process?" The first thing that came to mind was exports. And we immediately made a plan.
We hired 30 foreign trade professionals who had graduated from foreign trade departments, possessed expertise in the field, spoke foreign languages, and were seeking employment. Then we spoke with companies. We identified firms that wanted to increase their export potential. We matched them with our team. We also assigned a retired expert from the Ministry of Trade to lead the project. We told him, "You and your team are responsible for these companies and increasing their exports."
"When you say, 'Let's train the company owner and their employees,' it doesn't create a sustainable system. We placed one of our employees from the region at the requesting company and said, 'You are the expert of this company's foreign trade department; you will increase this company's exports. Read and listen accordingly.' We started a results-oriented project, and now we've started with the second group. We also included OSTİM Technical University's continuing education center in this project. We also included the university's foreign trade students in the system."
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Ferit Parlak
Despite free market/trade rhetoric, developed countries that have come this far by supporting/protecting their producers are now openly doing what they did discreetly in the past... It is known from examples in these countries that public procurement opens the way for production and development...
The fact that this approach can bear fruit is also demonstrated by the concrete results of our R&D efforts, supported by "public procurement," which were initiated in the defense industry 14 years ago... The necessity of following the same path in the civilian industry has been emphasized for years...
OSTİM President Orhan Aydın stated, "We can produce everything. All we need is for the government to prioritize domestic production and thus support its development," and then reminded, "For imported products, those who open letters of credit before purchasing goods, setting a minimum 8-month payment term when buying from domestic producers, is not supporting domestic production."
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