Minister Şimşek: Economic tension has now become our new normal

The 14th "Turkish-Arab Economic Forum," held this year under the theme "A New Era in Cooperation" and hosted by Treasury and Finance Minister Şimşek with the support of the Ministry of Foreign Affairs and the Presidential Investment Office, and in cooperation with the Union of Chambers and Commodity Exchanges of Türkiye (TOBB), has begun in Istanbul.

Within the framework of the forum, the panel titled "Overcoming Global Challenges and Seizing New Opportunities," moderated by Treasury and Finance Minister Şimşek, was attended by Kuwaiti Deputy Prime Minister and Minister of Oil Saad Hamad Nasser Al-Barrak, Egyptian Minister of Finance Mohamed Maait, and Qatari Minister of State and Chairman of the Free Zones Authority Ahmad Al-Sayed.

At the beginning of the event, Minister Şimşek commemorated those who lost their lives and faced oppression in Gaza. Pointing to the uncertainty in the world as well as the challenges in the geography where Türkiye is located, Şimşek drew attention to the pressures stemming from the global background for doing business.

Şimşek stated that the competition between the current superpower, the USA, and the rising power, China, has led to fragmentation in trade, protectionism, and geopolitical tensions, and continued as follows:

"Economic tension globally has now become our new normal. At such a time, it is generally observed that regional trade integration happens faster, but when we look at our region, trade and trade integration within the region are the lowest in the world. If you exclude oil, our regional trade is 11 percent of all trade; with oil, it is 14 percent in our region. This figure is 70 percent in Europe and 50 percent in Asia.

We do not need to reinvent the wheel; it would be beneficial to provide a positive environment in terms of politics and legislation. Free trade agreements are another thing that would be beneficial. If we do this, we will have established standards and make the background for doing business much more positive, remove obstacles, and facilitate not only investments but also trade more rapidly."

Evaluating the opportunities and developments hosted by the participating countries, Şimşek expressed that the current challenges would not constitute an obstacle and that they could be overcome through collective work.

Minister Şimşek, pointing to the developments and expectations in the global economy, said the following:

"We are going through a challenging period, and when we look at the global economy, we see moderate growth. According to IMF forecasts, the global growth rate will be only 2.9 percent next year. If we exclude India and China, we see that the global growth rate will drop to 1.6 percent, which almost means recession in terms of per capita income. The problem is not just next year; when we look at growth forecasts for the next 5 years, it is thought that growth will be at the level of 3 or 3.1 percent. We clearly see that developing regional trade and regional integration will become important. That is why we need to start with a common theme. Trade is one of the main engines of growth. We currently see that growth is slowing down globally. By working more closely, we can strengthen regional trade and at the same time overcome the obstacle of slow growth together."

"We all need to work in better cooperation in the region"

Emphasizing that financial conditions are challenging worldwide, Şimşek stated that by evaluating the opportunities held by the countries in the region well and using resources effectively, a very serious transformation process could be initiated, and growth beneficial for the entire region could emerge.

"The only way to progress, both for the region and for our country, is primarily to carry out reforms," said Minister Şimşek, and expressed the following:

"These are countries that need to increase their credibility. Capital flow should be attracted to the country through structural reforms, and growth should be supported. Such an approach should be adopted. There is serious uncertainty regarding energy prices. Little investment is being made in energy, especially in natural gas and oil, which makes this supply limited; as a result, we see that energy prices will continue to remain higher in the long term. The situation with global interest rates also applies here. This is a situation that will affect the region as a whole. That is why we all need to work in better cooperation with each other. The suffering in Palestine is not an event happening far away. There is a general loss of credibility for humanity here. If 70 to 80 percent of those who lost their lives are children, women, and the elderly, anyone with the slightest conscience should not be able to sleep comfortably at night, should not be able to sit back and relax. That is why we need to work together. We need to work together not only in terms of the business world or economic integration but also in terms of solving political and geopolitical problems."

"Our duty is to create the right environment and support free enterprise"

Kuwaiti Deputy Prime Minister and Minister of Oil Saad Hamad Nasser Al-Barrak, in response to the question of what needs to be done for the integration of trade in the region, made an assessment regarding where the protectionist structure that has settled in the development process of humanity has evolved over time.

Al-Barrak said, "Free enterprise has been the flagship of economic development. Our duty is to create the right environment and support free enterprise. The real role of the state is to carry out an organization and enable businesses to progress by making governance possible. The economy is in the hands of businesses; economic development happens with free enterprise, and this is what we need to do."

Providing information about the investment environment in Kuwait, Al-Barrak said that they started thinking about what could be done to improve the investment environment in Kuwait about 15 years ago. Al-Barrak said, "We have provided a more positive legislative environment by revising all our laws in terms of trade and finance."

"While intra-European trade is 70 percent, we must examine why trade between us is so low"

Egyptian Minister of Finance Mohamed Maait said that trade between regional countries is very low. Maait spoke as follows:

"While intra-European trade is 70 percent, we need to think about why trade between us is so low and why we are at this stage. We also need to look at the tools we have and compare our own tools with the tools that allowed other regions to reach this stage. We need to examine the role of the state and the role of the private sector in the economy well.

It will be much better if we give the private sector the task of leadership and integration. In addition, it is necessary to ensure that the private sector can move towards certain goals in the region and help it fulfill our objectives. The environment in which the private sector operates must also be a positive environment for this. As a government, our duty is to facilitate and enable this. We need to ensure cooperation between the private sector and various institutions and organizations, and remove the obstacles in front of the private sector."

Pointing out that the Free Trade Agreement between Türkiye and Egypt is working very well, Maait stated that bringing the right institutions and partnerships together would yield very productive results for increasing trade.

Providing information about investment opportunities in Egypt, Maait noted that they have focused especially on infrastructure in recent years.

"The mentioned 11 percent rate is far behind what both governments and people can achieve"

Qatari Minister of State and Chairman of the Free Zones Authority Ahmad Al-Sayed also drew attention to the massive potential in the region and said, "This potential should enable us to conduct trade between countries and international trade very easily. The mentioned 11 percent rate is far behind what both governments and people can achieve. Therefore, we need to identify the obstacles that prevent this percentage from being higher. The private sector needs to take the lead here. We need to prepare a clear plan. There are some sectors that are basic needs between countries, such as health, agriculture, and food; if we start with these and move to more advanced stages step by step, we will get a better result."

Pointing to investment opportunities in Qatar, Al-Sayed said, "There is an integrated economy in the free zone and across Qatar, and there is an investment-friendly environment. We have very close ties with the rest of the world, and we have institutions like Qatar Airways; we are very advanced in freight transport, and we are also very advanced in logistics, and we have improved even further over time. We look at everything from an investor's perspective, see the challenges and obstacles, and improve them. We are working to make the investor journey better. When you invest in Qatar, you get closer to Asian markets."

The panelists also provided information about what has been done regarding the diversification of energy resources in their countries.