It is stated that bureaucratic resistance continues against the Prime Ministry circulars issued regarding the use of domestic products in the public sector. In an environment where support for domestic producers, especially in R&D, is increasing day by day and international successes are being achieved, the 'preference for domestic products' in public procurement awaits a clear solution.
Despite the Prime Ministry's circulars dated December 2, 2008 (No. 2008/20) on the Use of Domestic Products, June 5, 2011 (No. 2011/6) on the Principles of the European Small Business Act, and September 6, 2011, as well as the Undersecretariat of Foreign Trade's circular on Offset Applications dated July 27, 2007, urging public institutions and organizations to prioritize domestic products in their procurement and to tailor procurement specifications accordingly, it is clearly evident that these guidelines have not been followed or implemented by any public institution to date.
The circulars were issued during the premiership of our President, Recep Tayyip Erdoğan. They were an important and timely move to encourage the public sector to use domestically produced goods. This wasn't actually new; the regulation had been issued much earlier. At that time, our President, through this circular, was trying to draw the attention of government offices and the bureaucracy to the importance of protecting the balance of foreign trade in public procurement. However, unfortunately, government offices do not comply with and implement these circulars, regulations, and directives.
The rhetoric is always the same: It will be done, it will be implemented…
In reality, it's not just the circulars, communiqués, and regulations issued by the highest levels of government that are gathering dust on shelves and not being implemented; the workshops and council reports from each year are also being wasted. The most interesting aspect is that similar decisions are always made at these workshops and councils for the same sector. So, if the decisions aren't going to be followed, why is time being spent on these workshops and councils? Ultimately, a serious report on the sector emerges, the relevant ministers and highest government officials share it with the media, and the work done remains only in the headlines of the day.
We call this the "Will-Do Policy"; promises will be made, will be implemented. In the end, all we have are empty words, emotionally charged sentences in newspaper headlines, unimplemented circulars, communiqués, and regulations, and council and workshop reports left to gather dust on library shelves. We are very weak in implementation. Europeans do what they write, while we don't; we only talk.
While the whole world is taking steps to support its domestic producers in the post-crisis period, in our country, the Prime Ministry Circular and regulations were forgotten and their results were never followed up. Many of our industrialists state that although they complained to the relevant authorities about the preference for imported products over domestic ones in public procurement, their complaints were ignored due to the tailor-made procurement specifications for imported products.
Despite the fact that goods produced by our domestic manufacturers are 40-50% cheaper than imported goods, and many countries prefer goods produced by Turkish manufacturers, the fact that public institutions disregard the published circulars, communiqués, and regulations and prefer imported products undermines the development of Turkish industry and entrepreneurship and causes serious problems in the country's industry.
THIS UNDERTAKING ACCEPTANCE OF RESPONSIBILITY!
The State Supply Office (DMO) requires commitment letters from public institutions that purchase from it.
We hereby acknowledge and undertake that we are responsible for complying with the Prime Ministry Circular on "using domestic products," published in the Official Gazette dated 06/09/2011 and numbered 28046, regarding vehicle selection.
The commitment emphasizes that all responsibility lies with the public institution making the purchase. However, this practice is insufficient, because public institutions can confidently make import purchases by signing this commitment letter.
WHY IS THE BUREAUCRACY RESISTING PURCHASING DOMESTIC PRODUCTS?
According to EU regulations, the "preference for domestically produced goods," which is at the discretion of public institutions, is not mandatory. Because it is not mandatory, imported products are preferred.
Public Procurement Authority practices are bypassed by obtaining loans from abroad.
Specifications are prepared in a way that is tailored to specific companies.
Since the requirement for at least 51% domestic content in the specifications is given to the administration preparing the specifications, some administrations do not comply and do not include any domestic content requirement at all.
Even if the products produced by our own industrialists are 30-50% cheaper, they are not trusted.
Specifications include requirements such as a certificate of completion and a high number of previous similar projects, thus preventing domestic industrialists from participating in tenders.
The bureaucracy is cumbersome and inefficient.
Bureaucrats are afraid to take risks.
WHAT IS REQUIRED FOR THE BUREAUCRACY TO MAKE DOMESTIC PROCUREMENT?
Circulars should be transformed into laws.
Urgent regulations should be made in the Public Procurement Law to protect Turkish industry and domestic products, and oversight should be ensured.
Every specification should include a minimum 51% domestic content requirement for the sector, and conditions for technology transfer and joint investment in Turkey should be added according to the sector.
A minimum 25% domestic product requirement should be introduced in tenders for medium and high-technology domestic products and R&D-produced products, and a certain percentage of purchase guarantee should be provided.
A mandatory requirement for the purchase of domestic products should be introduced.
The Provincial Bank, which provides financing to municipalities and villages, should act in accordance with the Prime Ministry Circulars supporting domestic products; it should introduce and monitor the mandatory use of domestic products in municipal and village procurements.
In procurements provided by the public sector through the DMO (State Supply Office), the preference for domestic products as stipulated in the Prime Ministry Circulars should be made mandatory and monitored.
Regulations should be made that are not left to the initiative of the bureaucracy.
MINISTER FİKRİ IŞIK HAD ALSO DRAWN ATTENTION TO THIS.
Fikri Işık, the Minister of Science, Industry and Technology, who has taken significant steps regarding the use of domestic products in the public sector, pointed out the 'differences in interpretation' within the bureaucracy in a statement he made in recent months.
Işık stated: “Because Turkey has a necessity to raise its technological level, the Grand National Assembly of Turkey passed a law in February 2014. It stipulated that for medium-high and advanced technology – that is, advanced technology – a price advantage of up to 15% must be applied. Turkey is absolutely obligated to apply a price advantage for advanced technology products.”
When the phrase "up to 15 percent" was mentioned, some of our bureaucrats, unfortunately, deviated from the literal meaning, saying things like, "I'll apply it at 1 percent, or 2 percent," thus losing sight of the essence of the matter. As the Ministry, we are closely monitoring this. We have intervened in these matters. In the R&D reform package, we may even introduce a clarification that eliminates that interpretation altogether.”
The February 2013 issue of OSTİM Newspaper covered the topic in full detail.
Click here to read the February 2013 issue of OSTİM Newspaper
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