IBF to solve Islamic states' problems

Economic integration among Islamic states will led political and diplomatic problems to be solved, says Dr. Ömer Bolat, chairman of MUSIAD, a Turkish businessmen association.

IBF to solve Islamic states' problems
Dr. Ömer Bolat *

I would like to begin my address by expressing my wish that this Congress with the themes "Global Trade Center of the Future" and "The Gulf: Great Business Potential" brings about beneficial outcomes for all participants. IBF Congresses have always been the address of global gatherings where government representatives, businessmen, bureaucrats and academics discuss tools, methods and visions aimed at developing multilateral economic and commercial relations and promote common awareness and consciousness around these ideals. We are realizing today one of the most important gatherings, where international organizations of the Islamic world such as Organization of the Islamic Conference, Islamic Development Bank and Islamic Chamber of Trade and Industry demonstrate union of power and cooperation among themselves.

As Afro-Eurasia region grows rapidly, global imperial powers continue the tough struggle to penetrate into and take control of the region, which possesses world's energy resources and major transportation routes. As the world goes through the globalization process identified with rapid change, development and race of competition, Islamic world, which we are proud to be part of, is slowly overcoming former worries. Islamic world now takes meaningful steps, but unfortunately these efforts are not at the desired level.

Muslims constitute 20 % of the world population and represent 5 % of the world output, 8 % of the world trade and 6 % of the world foreign capital inflows. Trade among Islamic countries has a share of 13,5 % in their total exports, and 16 % in their total imports. Investments by the OIC countries in other OIC countries has only a share of 1% in total world foreign direct investments. Struggle between global powers about domination and control over world energy resources, which is the engine of their economic power, takes place on Islamic soil. Despite this power struggle, influence of people living on this land upon world trade and economy is increasing.

40 % of the world raw material resources and 65 % of the energy resources are on the Islamic lands. For instance, combined national incomes of the 6 Gulf countries have doubled in the last 5 years and reached a level of 900 billion dollars. Oil revenues of these 6 countries climbed to 370 billion dollars in 2006, up from 157 billion dollars in 2003. This offers a good opportunity to develop multilateral trade and investment relations. As developed countries try to heal the wounds of the fluctuations in the financial markets as a result of credit tightness, Middle Eastern countries posessing natural resources should attach more importance to cooperation in order to boost their growth rates.

Total investments of the members of the Gulf Cooperation Council that comprise Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates in oil, natural gas, infrastructure and real estate sectors will sum up to 800 billion dollars in the next 5 years. Infrastructure investments will be undertaken by public-private sector partnerships, while the real estate investments are expected to be financed by the private sector. But we should not ignore the fact that investments in the oil and related industries will at large be undertaken by multinational corporations. In Turkey, foreign direct investments has reached 15 billion dollars in the first 8 months of 2007. Investments by Arab countries into neighboring countries amounted to 25 billion dollars in 2005 and the figure keeps increasing exponentially. Arabic investments in Turkey in the financial and real estate sectors has attained remarkable levels. To survive global competition and to have desired level of share in world eceonomy, it is inevitable to be active in the changing and growing sectors, which include petro-chemicals, telecommunications, real estate development and construction, investment and participative banking, tourism, health, airport operation, shopping malls, energy distribution networks, cement production and technoparks. Similarly, by investing our power in the financial sector, we should develope Islamic banking.

This time, we must turn opportunity into cooperation, mutual growth and wealth creation. For this reason, coordination and guidance of our common international organizations like Organization of Islamic Conference, Islamic Development Bank, Islamic Chamber of Trade and COMCEC are of vital importance. If we can remove visa barriers that hinder free movement of people and customs barriers that hinder free movement of goods and services, and overcome financial and logistic difficulties; multilateral trade and investments will soar, and this in turn will raise the wealth and freedom standards. Increased economic integration will smooth the way for resolution of political and diplomatic disputes, and will catalyze social integration as well. The answer to the question about the direction of the world system is hidden in the economy. Yet, in 85% of Islamic countries, income per capita is below 2,000 dollars. Unemployment raises concerns in Algeria, Libya, Mauritania, Morocco and Tunisia. Growth rates in these countries are expected to remain around 5-6%.

Today when we say "Islamic world", we mean 57 member countries of the OIC and about 80 Muslim societies dispersed to an area reaching 30 million sqm, with a population of 1 billion 200 million people. Yet, today no conscious Muslim, be him an intellectual or an ordinary citizen, is pleased with the state of Muslims. We should diagnose the problems and underlying reasons thoroughly, and take precise steps. Our civilization has become the focus of interest in all corners of the world. If some people perceive our civilization as a camp of conflicts, it is about lack of self confidence. Our duty is to hold fest to the roots of our civilization, and at the same time establish a rational and balanced relation with global powers. Wealth creation in Islamic countries can be attained by providing equal and just access to information. States should unite with their people around principles of balance, moderation and understanding. Muslim intellectuals and Muslim societies should exhibit their own criterion, norms, values and quality standards in distinct, specific and specialized areas. We should head towards success in highly specialized fields. Before going after big ideals, we should seek small but concrete successes.

It is in our hands to turn risks that we face on the Islamic geography into potential opportunities. We should ensure the unity between state, people, and intellectuals in our countries. In accordance with specific needs of countries, economical and social regulations based on participation, accountability and transparence should be introduced. Along with these lines, property rights and foreign investments should be protected and promoted, precautions should be taken to give confidence to private sector; SMEs that provide the highest portion of employment should be supported by specific incentives, and human and financial management should be based on contemporary norms. We should pave the way for participation of people in the administrative process through NGO's and speed up the liberalization in economy, trade, science, thinking and politics. Globalization and internationalization intensified competition virtually in all sectors, and compel companies to be more profit-oriented. In that regard, it is important to attune to the underlying motives of the global competition. To be able to stand firm in the competition race of the future, and to have dynamic and innovative sectors that are technology - and value - oriented, it is crucial to review and revise our comparative advantages.

Islamic world has been the region most adversely affected by this chaotic system promoted under the label "new world order." Muslim countries have to act with prudence, and, by uniting around common values, should outline a common roadmap. There is no justice and equity in the world. Islamic countries have to support each other in such a world. Muslim traits of cooperation and solidarity should be revived in social, psychological and economical fields. Our country could overcome the devestating impact of deep economic crisis in recent years through this spirit of solidarity. For both countries and organizations, increase of internal and external savings and improvement of efficiency and productivity are crucial factors behind a competitive economic structure. Economic interdependency will bring political integration and resolution of disputes. For this reason, oil and gas reserves which the Islamic world possesses, and raw material resources, pipelines and transportation corridors will be the key to permanent peace, stability, integration and enrichment for our countries.

While global capitalism removes barriers to high interest gains by urging us to liberate movement of capital, ironically it restricts physical movement of citizens of the other world due to a security paranoia. If Muslims want to take precautions against negative effects of capitalism and financial terrorism, they should implement new investment plans and organizations in diverse areas that will use funds which are only accessible to Muslims. Islamic Union should be seen as a quest to promote common conciousness about sharing information, implementing reforms and developing new technologies. On the other hand, adopting the example of the European Union, Islamic countries should remove the barriers that discourage multilateral trade and circulation of goods and services, such as tariffs, quotas, and barriers in bank transactions, including L/C confirmations, and air-maritime-rail transportation. Free movement of people is generally restricted through implementation of visas. Visa practices should initially be simplified as much as possible, and totally eliminated in later stages. To increase trade volume and enhance economic integration, all effective barries that hinder movement of people, goods and capital should be removed. We can achieve higher ranks in the race for development and competitiveness by thorough organization and continuous renovation. As Muslims improve their self confidence and strength, develope innovative abilities and create economic value, the desired unity will be achieved. In brief, "unity will bring power."

Turkey, being one of the center of the developing countries of the Afro-Eurasia region, attaches special importance to the region in these years, in order to establish and sustain this unity. New regional initiatives of our government, and its efforts to implement the notion of "zero problematic issue – diplomatic solution" in Turkey's relations with her neighbors, as well as having balanced relations with global powers, have created an enthusiasm and prestige in the Afro-Eurasia region. We hope that the hand of peace that Turkey extends in the region will find its echo and will unite with hands of other countries.

Turkey, with a population of 73 millions, has a very unique geographical location between East and West, where Asia and Europe meet and which gives her geo-political advantages in her region thanks to the strategic passages. Turkey offers diverse opportunities to investors from all around the world, with speacial features which she posseses. These include population, geographical location, political and economical stability, qualified workforce and suitable life standards, high tourism potential, modern infrastructure, and a tax regime at world standards, all of which make her a rising star.

In the last 5 years, Turkey has achieved an average sustainable growth rate of 7,5 % on annual basis, as accumulated growth reached 43% over the same period. In recent years, Turkey has become a predictable country, with its stable economic outlook, and a safe haven in its region. Turkey's attitude towards international investors is based on the recognition of their valuable contribution to the economy. Foreign investments seek safe environment in countries which they enter. Towards realizing this objective, Turkey has launched the Investment Support and Promotion Agency, directly accountable to the Prime Ministry, in order to support foreign investments. Turkey is known with her qualified workforce with a high learning capacity in manufacturing sectors like metals, machinery, automotives, durable goods, finance, construction, infrastructure and energy lines. This adds value to foreign investments in Turkey by contributing to their competitive power and providing them advantages as to the quality and cost of goods. Turkey has an incomparably younger population than Europe with a workforce of 50 millions. She has a young market, which still offers opportunities in technology, science and innovative initiatives.

Similar to Turkey, many of the Gulf countries have implemented considerable reforms in economic, political and social fields in recent years. The United Arab Emirates, Bahrain, Qatar, Kuwait, Saudi Arabia, Umman and Iran have pursued successful policies in order not to miss the opportunities presented by this process. And Abu Dhabi has a distinctly important role in the region with her resources and strategic geographical location.

Economic stability and improved investment environment in Turkey of recent years have attracted attention of Gulf countries to telecommunications, banking and real estate sectors. For Muslim Arab businessmen, investments in Turkey mean opening gates to Europe and Central Asia. Turkey offers matchless business opportunities to businessmen, with her unique position between East and West at the crossroads of three continents, and with her proximity to Balkans, European Union, Black Sea region, Central Asia and Middle East. By taking advantage of these opportunities, trade volume between Turkey and OIC couuntries was boosted to 35 billion dollars in 2006. In the first three quarters of 2007, Turkey has already surpassed the exports in 2006 of 15 billion dollars by 30%. Likewise, imports in the first three quarters increased by 10 %. We can expect trade volume between Turkey and OIC members to test the level of 50 billion dollars by the end of 2007.

Besides this outlook, Turkey, which has the 7th largest economy of the EU and 19th largest of the world, will attain a GDP of 488 billion dollars and a trade volume of 270 billion dollars in 2007. Turkish economy grows at an average rate of 7 % since 2002. Turkey ranks 22th in world exports by 103 billion dollars and 16th in world imports by 167 billion dollars. International research institutions show Turkey among 10 largest economies of the world in their projections for the next 20 years. Turkey is now considered to be one of the ten emerging markets of the world with China, Brazil, Russia, India, Mexico, Argentina, Indonesia, Thailand and Pakistan, which are dubbed as the "new giants."

Turkey is represented by 25 companies among top 100 companies of the 57 members of the Organization of the Islamic Conference in terms of revenues, according to a research in 2006. That means while Turkey constitutes 5 % of the Islamic world's population of 1.3 billions with 73 millions, one in four in the top 100 companies of the Islamic world is a Turkish company. This is a clear indication of Turkey's economic dynamism.

We have the desire to share these positive developments and potential with MUSLIM businesmen, and carve out a permanent and effective environment of cooperation. Trade among our countries has always been low, lacking diversity in range of trade items. Geographical proximity and resultant transportation facilities, volume of the market, and complementary nature of economies present us the means for rapid enhancement of relations. I believe businessmen should take advantage of these opportunities offered by our countries. Turkey alone performs 65 % of the industrial exports of the countries in the Middle East and North Africa. Before the end of 2007, Turkish exports outreached the level of 100 billion dollars. 65 % of this figure is directed towards Europe and the US. This demonstrates the quality of Turkish products and competitive power of Turkish companies.

Turkey is one of the most strategic energy passages of the reigon and the world, as she is an energy corridor between Middle East, Black Sea and Europe and most secure path of energy transportation from Black Sea region and Middle East to western countries. Bilateral agreements with Egypt, Iraq, Iran, Turkmenistan and Azerbaijan are best examples of Turkey's position. Turkey's investment needs in the energy sector will accumulate to 128 billion dollars in the next ten years. And this offers a good opportunity for cooperation between Turkey and Arabic countries.

By the end of 2007, Turkish contracting sector abroad will have undertaken about 3500 projects in 65 countries, totalling an amount of 100 billion dollars with 20 billion dollars only in 2007. Turkish contracting abroad that started mainly in North Africa and Russia, now carries out projects in all parts of the world. Total value of contracts undertaken by Turkish companies up until now has reached 594 billion dollars. Turkish contractors has recently been exporting technology too, by winning prestige projects that require use of high technologies. Turkish contractors also invest abroad as they undertake operation of the facilities which they construct. Inadequacy and high cost of air transportation hinders trade with Gulf countries. Therefore, further investments in maritime and land transportation will help boost trade.

Turkey's trade and investment relations with Islamic countries has gained momentum, thanks to intensive efforts and reforms towards this objective. MÜSİAD, which has been exerting extraordinary efforts to support relations with the Islamic world since its foundation in 1990, is pleased with the current outlook of relations today. But we are also aware that this picture is not sufficient and we have to invest more efforts. We continue our operations without hesitation by taking advantage of every opportunity towards enhancing our relations, with the consciousness of the hundreds of steps that should be taken in order to attain our civilization ideal. We are so pleased to witness that the IBF fire that was lit 12 years ago, has now turned into a splendid torch with such an intensive participation.

I would like to take this occasion to extend my sincere thanks to MÜSİAD's Foreign Relations Commission, Abu Dhabi Chamber of Trade and Industry and Kenzay. As I come to end of my address, I also would like to happily inform you that 12th IBF International Business Forum will be held simultaneously with MÜSİAD International Trade Fair in Istanbul between 22-26 October 2008. I would like to invite all of you to IBF Congress and MÜSİAD Trade Fairs next year, which will gather Muslim businessmen. I wish that the Forum and the subsequent business matching sessions will be efficient and beneficial for all businessmen. Finally, I extend my warm regards to all participants.

*Dr. Ömer Bolat, Chairman of MUSIAD

Güncelleme Tarihi: 28 Kasım 2007, 13:39