Organized by TRT since 2017, bringing together the world's leading names and this year at the Istanbul Congress Center, "The World Without a Center: Who Leads When the Rules Are Invalid?" TRT World Forum, held with the theme, has ended.
In his speech at the last session of the event titled "Towards a Painful Recovery Process: National Economies After the Wars in the Middle East", Minister Şimşek evaluated the economic effects of the wars and the future economic outlook of the region.
Stating that the war caused a major energy supply shock in the short term, Şimşek said that it was difficult for the global economy to withstand this situation.
Şimşek explained that the war negatively affected the economies of the countries in the region, and that export and import volumes decreased significantly, especially in the countries on the front line of the conflicts.
Noting that growth has slowed down on a global scale and financial conditions have tightened due to the rise in inflation, Şimşek stated that not all of these developments were caused by the war, but the effect of the war was great.
Pointing out that economic recovery depends on ensuring permanent peace, Şimşek emphasized that conflicts must end for a sustainable recovery.
Şimşek stated that the Gulf Cooperation Council (GCC) countries have financial room for maneuver as they have significant resources and this situation could accelerate the recovery process, and noted that uncertainty continues in Iran.
"ECONOMIC INTEGRATION AND ENERGY SECURITY WILL STAND FORWARD IN THE POST-WAR REGION"
Minister Şimşek stated that war may lead countries to reduce their dependencies and risks, and pointed out the importance of reducing dependence on critical transit points such as the Strait of Hormuz and strengthening regional economic integration.
Stating that the economic structure of the region after the war could be shaped around infrastructure investments, connectivity and energy security, Şimşek said, "In my opinion, investing in regional connectivity is a very high possibility. In fact, it is a clear necessity to do this." he said.
Stating that countries are reviewing their dependencies and developing alternative trade routes, Şimşek emphasized that accelerating the electrification process for countries like Türkiye is no longer a choice but an obligation.
Şimşek stated that intra-regional trade in the Middle East and North Africa is at a low level and noted that economic diversification can contribute to increasing trade in the long term.
"AFTER THE WAR, INVESTMENTS IN ALTERNATIVE CORRIDORS WILL INCREASE"
Minister of Treasury and Finance Şimşek stated that the war in the Middle East could lead the countries in the region to stronger cooperation instead of competition and said, "Partnerships in the field of defense industry and regional security cooperation will gain importance. An example of this is the Mecca Agreement, which was recently approved by the Turkish Grand National Assembly. This agreement covers Pakistan, Saudi Arabia and Türkiye." he said.
Expressing that it is expected that regional capital will turn to the region again after the war to support the recovery process, Şimşek said that it is said that investments in alternative trade corridors could reach approximately 660 billion dollars.
Şimşek noted that these resources could also be used to finance higher defense expenditures, and pointed out that the war could reduce the tendency of some countries to invest for political reasons.
"WE WILL CONTINUE INVESTING IN REGIONAL CONNECTIVITY"
Minister Şimşek pointed out Türkiye's perspective in global trade and continued his words as follows:
"Turkey continues to support rules-based trade despite increasing protectionism on a global scale. We have 54 free trade agreements (FTAs), including the Customs Union countries. These agreements cover approximately 70 percent of our exports. There are currently 3 free trade agreements awaiting approval. We are negotiating for new generation free trade agreements with Japan, Indonesia, Gulf Cooperation Council (GCC) countries and Canada. We also have various preferential trade agreements, mostly with Central Asian countries. Therefore, the current conditions include Turkey." "Türkiye continues to believe in rules-based trade, even though it has made everyone more protectionist."
Referring to Türkiye's investments in regional connectivity, Şimşek said that they are a part of the Central Corridor extending from Beijing to London, and that they encourage the countries in the region to invest in the Development Road Project, which will reach China and Europe from the Persian Gulf via Turkey.
Şimşek stated that in addition to the revitalization of the Ottoman-era railway line with Saudi Arabia, different projects such as electrical connections are also evaluated, and noted that they will continue to invest in regional connectivity.
"Türkiye RECEIVED APPROXIMATELY 18 BILLION DOLLARS OF NEW ORDERS FOR DEFENSE INDUSTRY PRODUCTS LAST YEAR"
Minister Şimşek stated that Türkiye contributes to mediation and peace initiatives in resolving regional and global conflicts.
Pointing out that deterrence capacity should also be strengthened in addition to peace initiatives, Şimşek emphasized that Türkiye has developed important competencies in the defense industry in recent years.
Stating that Türkiye received new orders worth approximately 18 billion dollars for defense industry products last year, Şimşek stated that there are approximately 4 thousand companies in the sector and around 1400-1500 projects with a value of over 1 billion dollars are being carried out.
Stating that they rank second after China in the global contracting industry, Şimşek said that the reconstruction need that will arise due to wars in the nearby geography is expected to reach at least 1 trillion dollars in the next 10 years, and that Turkish companies will take an active role in this process.
"THE REGION WILL NOT BE THE SAME ANYMORE"
Touching on the impact of the war in the Middle East on the countries in the region, Minister of Treasury and Finance Şimşek continued his words as follows:
"I think the war will fundamentally change the region. The region will no longer be the same. Countries will first of all have to invest in their own local and national capabilities. Secondly, it is quite possible that a deeper economic and commercial integration will emerge with defense agreements. We will enter a period in which competition will decrease and cooperation between regional actors will increase. It is high time for this.
We will also see much more focus on how to reduce risks. Countries will have to invest in alternative transit routes, trade corridors, pipelines, roads and railways. Therefore, increasing connectivity and integration and decreasing political and geopolitical competition will be positive developments. That's why I'm optimistic. It is quite likely that Türkiye will also benefit significantly from all these developments. We have invested approximately $260 billion in infrastructure in the last 20 years. So we have a pretty good infrastructure.”
"Türkiye IS ONE OF THE COUNTRIES THAT BENEFITS THE MOST FROM PEACE AND PROSPERITY IN THE REGION"
Stating that Türkiye has the 14th largest industrial infrastructure in the world and that the services sector is growing rapidly, Şimşek reminded that service exports exceeded 120 billion dollars last year.
Emphasizing that the diversified services sector, from tourism to video games and TV series exports, provides an advantage to Türkiye, Şimşek said, "Wars are not in our interest. Turkey is one of the countries that benefits most from stability, peace and prosperity in the region." made his assessment.
