Turkey’s Fight Against The Pandemic Is Different On A Positive Note

Turkey and the whole world spent 2020 fighting against the COVID-19 pandemic. And economic activities have slowed down, or rather, had to be slowed down all around the world, and even completely stopped in some cases. Liquidity opportunities had to be increased as a consequence as well. Because countries had to find some solutions to increase their economic activities even at minimum levels. In such an environment, we all know that it requires certain responsibilities to keep the economic activity alive and maintain the macro balances. And Turkey is no different or an exception in this regard. The government and administrators have a lot of burden on their shoulders. Because nobody really knows the true impact of COVID-19 or how much it will actually damage the economies. Therefore, we must remember that we do not even know our enemy in this fight.

TURKEY’S FIGHT AGAINST THE PANDEMIC IS DIFFERENT ON A POSITIVE NOTE

Even with all this general panorama, I must say that Turkey’s fight against the pandemic is ongoing on a positive note. Because our country already has structural issues in the economy regardless of the pandemic. We have chronic capital stock and international payment balance issues. What COVID-19 did was to show us these problems. Last year, we had a lot of capital outflow from our country due to the pandemic. Financing inflow was similarly weak when there was not much foreign currency inflow in tourism, export, construction, and service sectors. And all these led us to experience some economic problems, of course. With the dismissal of the Governor of the Central Bank and the resignation of the Minister of Treasury and Finance as the last straw, a new structuring was introduced in the economy. And Mr. President talked about a new roadmap in the upcoming period. It was stated that Turkey was open to all kinds of enterprises for market mechanisms, necessary reforms would be made in areas that disturb investors, and there would even be new “series of reforms in the economy.”

PARTICIPATION BANKING DATA IS PRETTY GOOD EVEN IN THE PANDEMIC

The participation banking industry is going pretty well even in these troubling times. The sectoral figures reveal a very clear picture in this regard. For example, funds raised in participation banking have increased by 51 per cent between January 2020-November 2020. The funds extended have reached up to 54%, and the total assets are 52%. Our total assets in the whole banking industry is over 7.1% and over 9% in the funds raised. All these figures are pretty good for a year overshadowed by the pandemic. And we have also started to revise the Strategy Document that we started in 2015. In this activity that we carry out with an independent external audit and consultancy company, we are holding negotiations on participation banking with institutions such as Banking Regulation and Supervision Agency, Central Bank of the Republic of Turkey, Capital Markets Board, Finance Office of the Presidency of Turkey, and T.R. Ministry of Treasury and Finance. We are maintaining our 15% goal in the sector for 2025 as well.

TKBB Secretary General Osman Akyüz