The 86 Trillion Dollar World economy is experiencing the most difficult period in its history. The starting point of all economic crises in the past was the “economy”. However, the result of this crisis is the economy.
As countries faced with the situation of coping with their own crises, structures built with big economic dreams like the European Union started to give signs of cracking. He broke the hard game; Countries, especially Germany, left the EU aside and went to the trouble of protecting their own people and recovering their own economies.
a 125-nanometer-long coronavirus; He entered palaces and cabinets. The fact that it can be transmitted rapidly through humans, that it can leave the respiratory systems vulnerable very quickly, that even healthy-looking carriers can spread the virus very easily, etc. The world was suddenly locked for reasons. No global strategy institute, company, government etc. could not predict such a global impact. The coronavirus directly affected production and economic life. The contraction in the US and European Union economies in the first quarter exceeded 10%. The second quarter results are expected to be much more dramatic, with the contraction in the world economy expected to be at least 10 trillion dollars in 2020.
With the transformation of the new type of coronavirus (Kovid-19) epidemic into a Pandemic, the fact that transportation and industry came to a standstill, reduced world oil prices rapidly. This was triggered by a contraction of up to 25% in energy demand. In 2019, 100 million barrels of oil were produced and consumed daily. With the Kovid-19 outbreak, national and international restrictions due to quarantine rapidly reduced demand, and the demand for transportation vehicles almost crashed. This situation caused the demand for oil to decrease by 30 percent in a short time. For example, hundreds of countries continue to impose severe restrictions on flights, and about 9% of the world’s oil consumption is directly fueled by airplanes.
West Texas oil (WTI) futures prices saw negative prices in April. The lack of storage need due to the excess supply left the producers in a very difficult situation. Brent oil began to test prices that could not tolerate production and sales costs such as $ 20. While the world is trying to control the epidemic and its effects, on the other hand, the “economic crisis dimension” has come to threaten even giant economies.
When we look at the remaining 8 months of 2020, it is stated that the global energy demand will continue to decrease and the decrease will reach 6.1%. As a matter of fact, a 6.1% decrease in global energy demand is expressed as a figure equivalent to the total energy demands of France, Germany, Italy and the UK in 2019, and the 6.1% decrease in energy is considered to be a serious rate.
When the 2008 crisis, the biggest economic crisis of the recent period, is compared with the economic crisis caused by the coronavirus; The coronovirus crisis is expected to be at least 7 times more devastating than 2008. This gives an idea of how dramatic the economic consequences of the coronovirus crisis can be. The extraordinary decline in oil and energy demand will result in the world economy regaining its growth in the last year and demand returning to the beginning of 2010.
Production and trade in the world contracted by 40% in March-April 2020,
500 million people in the world may lose their jobs and work environment in 2020
The contraction in production also deeply affects the country’s economy and trade. The United States faced the largest unemployment situation in its history. The number of registered unemployed exceeded 35 million in 2 months. When the hourly wage and the people working in temporary jobs are included, it is considered that the number could be much higher. The United Nations announced that 195 million people could be unemployed in the second quarter, which is expected to see the biggest economic devastating wave of the crisis. The fact that 500 million people in the world are facing the risk of losing their jobs and business environment at the end of 2020 reveals the extent of the crisis. For example, it is evaluated that 25 million people are at risk of losing their jobs in the aviation sector, where flights have decreased by 80% in the world, while the tourism sector may suffer the biggest blow in its history, shrinking by 40% in 2020, and over 80 million people may lose their jobs.
PANDEMIC FACTS: THE KING IS NAKED!
In the USA, the European Union and the UK, which are considered the highest level of welfare, quality living and consumption regions, the collapsed and inadequate health systems with Kovid-19 shocked even their own administrations. Local governments and the public are confused about what to do. In the USA, the central government and the federal states have come face to face. There has been a great panic due to the increasing elderly population in the West and the inadequacy of public services. The elderly are almost left to die in nursing homes. This has led to the conclusion that Europeans who have worked for a lifetime and who want to live a peaceful retirement cannot be safe even in their own country.
There were great problems in the supply of the most basic food and cleaning materials, and people had great difficulty in reaching basic food products, products such as toilet paper and disinfectant, even with their money. It has revealed the fact that mass production, which has rapidly shifted from developed countries to Far East Asia and other developing countries in the last 30 years for the purpose of “cheap labor”, can make countries dependent on others for the supply of their basic needs in crises such as the Pandemic, and this may pose great risks.
40% of the goods produced in the world are produced in China alone. 50% of basic raw materials such as Nickel, Aluminum, Steel, Copper used in production are consumed in China alone. 30% of the cotton produced in the world is processed in China. 15% of the oil produced in the world and 14% of the energy used is used in China alone. 92% of Apple products used in the world are produced in 12 different regions in China. Many worldwide electronics companies have at least 40% of their products manufactured in China. Electric-electronic-based products, automotive supply industry and machinery manufacturing sector products constitute 43.5% of China’s total exports of 2.7 trillion dollars in 2019.
Global companies, which US President Trump had difficulty in getting results with the pressure to “reduce production in China”, which began with very harsh sanctions in 2019, started to plan to shift production due to the coronavirus crisis.
IN 10 YEARS, 1 TRILLION DOLLARS OF INDUSTRIAL INVESTMENT IN CHINA MAY SHIP TO OTHER COUNTRIES
Chinese President Xi Jinping announced the “One Belt One Road Project”, the world’s largest infrastructure project, in 2013. With this breakthrough, which is a kind of “Modern Silk Road” Project, China; It has allocated a budget of 1 trillion dollars in order to develop trade corridors opening to European markets, increase their capacities, and reduce the transportation time of products produced in China to qualified markets under 14 days. It has invested close to 350 billion dollars in the first 7 years.
China, which realizes 40% of the production in the world alone, has created hundreds of billionaire Chinese in the last 15 years with the power it gets from production and technology. Chinese business people were also among the global actors of the capital. Companies such as Huawei, Alibaba and Tencent have started to become the world’s leaders in technology production in their categories.
With the production interruption in China in the January-April 2020 period, the supply chains of western manufacturers, which are dependent on China, have suffered greatly. Companies, especially the industrial and technology producers from Germany and the USA, suffered great losses. Factories closed one after another.
U.S., British and EU manufacturers, who have unwittingly become extraordinarily dependent on China in production, had problems in accessing and producing surgical masks that cost less than 10 cents. “Domestic Respiratory Equipment Production” has become the first item on the agenda in many countries. Giants such as Tesla, GM, Siemens, VW began to manufacture respiratory equipment. As a matter of fact, they could not produce enough N95 masks and overalls for the healthcare personnel in hospitals, and they fell into a dramatic state of incapacity and powerlessness that even they themselves had difficulty accepting.
The global brands that got over the first shock are now calculating how they can transfer the concentrated production in China to other countries and their own countries. It is expected that 500 billion dollars of production in the next 5 years and at least 500 billion dollars in the following 5 years will shift from China to other countries. Although Thailand, Vietnam, Indonesia and India come to the fore as alternative production bases, Turkey seems to have the opportunity to emerge as a winner with its location right next to Europe, its qualified workforce and its ability to manage the coronavirus crisis.
TURKEY CAN BECOME THE COUNTRY THAT WESTERN SOCIETY PEOPLE WILL PRIMARY PREFER TO LIFE AND AGE QUALIFIED IN SUITABLE CONDITIONS
With the adequacy of the health system and equipment, self-sufficient production and capacity utilization power, and the ability to quickly access products and services in case of crisis, Turkey became one of the countries that attracted attention in this crisis. Sending organized healthcare equipment aid to many countries of the world, Turkey drew attention with its performance.
Turkey, which ranks first in the world with its capacity in tourism, has started to make a name for itself in the world with its quality and capacity in health services. With its affordable prices, qualified and sustainable service quality, Turkey can become everyone’s primary choice in “health tourism”.
Turkey showed itself to the world in the field of health with its capacity management in the fight against coronovirus. This situation may attract 50 billion Dollars of direct investment in the field of health in the next 10 years to Turkey, and at least an additional 25-30 billion Dollars from pension insurance funds may be directed towards the establishment of living centers and health villages for elderly western workers. This situation may create direct job environments for at least 400 thousand people for Turkey. On the ecosystem side that will support these structures, more than 1.5 million jobs can create new incomes that can exceed 60 billion dollars annually. In summary, Turkey may become the country that people of western society will primarily prefer to live and grow old in appropriate conditions.
Turkey is still one of the most popular tourism centers in the world. With a bed capacity of more than 600 thousand and facilities over 2 thousand, Antalya is one of the 3 cities that host the most tourists in the world. Tourism in Turkey, which will increase its attractiveness, can spread homogeneously throughout the country and Turkey can be a safe and stable port of tourism for 12 months. From China alone, 300 million Chinese travel the world every year. Every year, 20 million Chinese may prefer Turkey for cultural tourism. Increasing Turkey’s tourism revenues to over $150 billion in 10 years is not a distant goal at all.
Turkey’s health capacity may be the favorite country where global insurance funds and sector companies want to develop their investments and make on-site production, because increased health care capacity will increase the attractiveness.
WE CAN ATTRACT 100 BILLION DOLLARS OF INVESTMENT IN 5 YEARS FROM CHINA SHIPPING PRODUCTION
China has become the world’s “manufacturing base” in the last 20 years. Thanks to this power, per capita income increased rapidly from $ 1,000 to $ 10,000. China has produced over a thousand billionaires and has a good sourcing experience. We should invite those investors to production in Turkey. While some of the production in China will shift to third countries in the next 10 years, Chinese manufacturers, who have acquired serious capital in China with those investments, will this time want to be in the business they know in new countries as an “investor”. This may be an opportunity for developing countries such as Turkey.
Turkey alone can attract 100 billion USD out of the 500 billion USD investment that is likely to shift from China to other parts of the world in the next 5 years. Turkey is right next to Europe, which is the center of qualified consumption in the world, and is at a high level in terms of production competence with its young and qualified workforce. It has the largest logistics facilities in Europe, its storage capacity and products are intermodeled and so on. It also has many attractive advantages with its power to reach target markets rapidly with hybrid methods.
Which sectors can come from the investment that will shift from China to other regions?
All of 1-100 Billion USD is the manufacturing sector where mass production is done directly. The majority of this may be computer, TV, Monitor and mobile phone/accessories based electronic products, automotive supply industry products, white goods, small kitchen appliances, air-conditioning sector products in China and of course direct machinery and equipment production.
2- 20-25% textile, toys, shoes etc. There may be productions.
3- 5% may be medical technologies, biotechnology products, jewelery products.
It is expected that around 4-10% of the production of home furniture, paper and timber products, insulation products will shift to other countries.
As a matter of fact, heavy industry (steel, iron processing), finished-semi-finished mines, glass and glass products, petroleum derivative products will still remain predominantly in China.
What does attracting 100 Billion USD production-based industrial investment to Turkey mean for Turkey?
100 BILLION DOLLARS DIRECT INDUSTRIAL INVESTMENT IN TURKEY;
1- The direct employment of approximately 1 million people will create an opportunity for the indirect employment of at least 4.5 million people.
2- It will gradually contribute approximately 500 billion dollars to Turkey’s production power and GNP.
3- This investment will pave the way for at least twice as much investment to come to Turkey in the following 10 years.
4- It will be able to put Turkey in the top 15 economies of the world.
Turkey can be the new normal, the new “global production power”. To take advantage of this opportunity; It is time to cooperate with politicians, the state, industrialists, local administrations, universities and the public. It is time to rapidly increase the quality and competence in university and vocational education, and to focus on technology and production power. It is time to move the per capita income to 15 thousand dollars in the first stage and 20 thousand dollars in the second stage.
We must make Turkey a “place to live” in the world with its social state, natural beauties and quality of life. This approach will take us to a completely different place. While the 2023 targets may be technically distant at the moment, if we make the right moves, we can reach targets beyond it by the end of 2025.
Remember! There is always a solution, what matters is how close you are to the solution. Crisis also contains opportunities. Turkey can turn the coronavirus crisis into a global opportunity.