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OECD Nezdinde T.C. Büyükelçisi Turkish Ambassador A Wold Much Smaller And the Distances Much Shorter I ndeed, the international environment has become one in which market forces are increasingly influencing trade and financial patterns that have less and less to do with geographical and political proximity. These flows are not subject to some kind of global government of regulatory sructure, but this does not, however, exclude different forms of internationally self-accepted rules of the game. Countries are inevitably affected at different levels. One of the most flagrant impact of this development is witnessed at the existing inequalityof power relations among the developed countries, less developed countries and newly emerging market economies. Those flows push governments to adopt more rational relevant economic policies through an improved governance at home and abroad. At the basis of this rapid progress which makes our world much smaller and the distances much shorter, lies post-industrialisation and developments in the field of service relatedindustries such as communication which is still underway. It is connected with the proliferation of information technology and computerisation that affect neraly all the spheres of human activity. This revolution also comprises the immatchable advances in biotechnology and genetic engineering, together with the implementation of their findings in industry, which very soon will translate into new mass-product and mass-consumption technologies. The vast revolutionary development is the expnasion of the internet which is increasingly felt in all spheres of our daily life. The web is changing the world, for it is changing the ways people communicate. Shortly, the formation of a lieralised and integrated worldwide marketplace for goods and capital, and the emergence of a new international institutional order facilitating the expansion of production, trade and financial flows on a worldwide scale, have started to exert and inportant impact in every way. There will soon be practically bo inaccessible places of any economic importance left on earth. There will be no regions where, technically speaking, one could not invest, produce, buy or sell. Other factors such as political and social borders, cultural and mental differences, trade and customs barriers are gradually losing their importance in this revolutionary path. For example, in 1999 alone, international capital flows related to foreign direct investment exceeded 800 billion US Dollars in spite of these factors. However, these massive movements of free capital resources which are mainly controlled by financial intermadiaries of the richest countries occur mostly between them, at a much smaller level from developed to emerging markets and, only occasionally, in the opposite direction. Direct investments, by their nature, enhance competitiveness and increase output in the recipient countries. But this has another impact when portfolio investments come into play. In the face of immature institutions and often faulty financial policies driven also by national populist approaches, fluctating levels of portfolioinvestments may preicipitate regional financial crises as in parts of South-East Asia, South-America and Russia in 1997-99 period, and to some extent, in Turkey recently. Nevertheless, it would be erronous to try to attribute, as is largely the case in these various examples, the reason of the eruption of these crises from time to time to the globalisation alone, since policy errors, in particular the failure to implement necessary reforms on a timely basis so as to take advantage of the opening up and integration, have non-negligeable responsibility in them. Modern theories prove beyond doubt that those economies ehich show greater openness to foreign economic contacts, namely trade, financial transfers and capital movements, coupled with the reformist approaches enabling to catch up with the technologic progress have a better long-term development potential. This applies to Turkey too. Coming more specifically to the financial market situation as contemplated from the OECD side, I may briefly bring forward the following considerations. As you know, financial intermediation is moving away from bank lending towards direct financing by capital markets. The financial modernisation which made them function better prompted flexibility in product and factor markets too. This is providing a greater scope for decision-makers in the private sevtor to make economically more rational decisions. Moreover, the tendency is to focus the governance regimes of banks and other financial institutions more closely on achieving adequate returns for shareholders while maintaining high prudential standarts. In practice, this means that financial officials need to intervene less than in the past in the decisions of market participants and focus more on building a obust and well-supervised framework in which private market participants can make better informed decisions. This expansionist and sophisticated situation in the capital markets, and related improvements as a consequence in the corporate governance, have forced the administrations of the corporations to substantial internal transformations by vastly increasing the power of the shareholders and the accountability of the managements. The development of so?histicated financial techniques is now increasingly considered as a significant factor to deal with structural problems. For example, the development of venture capital has supported the growth of high-technology sectors with potential for expanded employment in industries using larger inputs of human capital. Diversification of the range of instruments available to savers, the emergence of new techniques to better manage and reduce risks, and greater reliance on practices that align the investors and management, have made it possible for many new and innovative companies to obtain the financing required for their development and growth. Information and Communication Technologies (ICT) have played an important role in the recent growth of the financial markets as well as in the overall global growth. But these technologies are naturally not the only answer since ICT use human capital and the development of financial markets depend on it too. It is also worth mentioning that stable macro-economic conditions are fundamental for the smooth development of the financial markets in emerging economies like Turkey. On the other hand, as I shortly underlines above, an expanding part of international investment capital has enlarged the volume of resources that are potentially available to emerging markets. However, while the development of modern market-based systems has plainly improved efficiency and welfare on balance, modernisation undeniably brings special strains. In the past few years, increasingly globalised, sophisticated and deregulated markets have proven susceptible to systemic shocks that have adversly affected a number of countries. There have also been instances when, by over-funding inherently apeculative or unsound activities, financial markets have led to a waste of resources. IN addition, deregulation and a growing international mobility of investment have opened up new avenues for various forms of criminal activity involving financial markets and bribery, and tax evasion. As the capital markets begin to play a dominant role in the allocation of resources, there is a natural pressure on corporate boards and managements to act more transparently and to subject a broader range of their operations to market scrunity. The appropriate role for financial officials is evolving, then, towards enhancing the functioning of the marketplace by ensureing that disclosure standards cover all issues of interest to investors and that adequate legal and institutional mechanisms are in place enabling investors and that adequate legal and institutional mechanisms are in olace enablinf investors to influence corporate behaviour. Therefore, an even closer collaboration between the private and the public sectors become more important than ever in order not to hinder through excessive regulation, sometimes, the ongoing modernisation process as a whole., the ongoing modernisation process as a whole. ULUÇ ÖZÜLKER: "KÜÇÜLEN DÜNYA VE KISALAN MESAFELER" Dünyamızı ufaltan ve mesafeleri kısaltan hızlı ilerlemenin temelinde, endüstrileşmeyi izleyen dönem ve iletişim gibi hizmet dallarında yaşanan gelişmeler yatıyor. Çok yakında dünyada erişilemeyecek herhangi bir ekonomik merkez, yatırım, üretim veya ticaret yapılamayacak herhangi bir bölge kalmayacak. Bu yolda, sosyal ve siyasi sınırlar, kültür ve düşünce farkları ve ticaret ve gümrük engelleri gibi etkenler de giderek önemlerini yitirmekte. Çağdaş kuramlar, Türkiye gibi hem dış ilişkilere, hem de teknolojik yeniliklere açık ekonomilerin daha büyük bir gelişme potansiyeline sahip olduğunu açıkça ortaya koyuyor. Finans pazarına OECD açısından bakıldığında, ortaya çıkan manzara şöyle: Finansal aracılık, banka kredisinden, sermaye piyasaları tarafından doğrudan sağlanan finansmana doğru kaymakta. Ayrıca, banka ve diğer finans kurumlarının yönetim biçiminde, hissedarlara yeterli getiri sağlama eğilimi gözlenmekte. Sermaye piyasalarında izlenen bu genişlemeci tutumun şirket yönetimine getirdiği yenilikler, yöneticileri hissedarların gücünü artırmaya yöneltti. Giderek küreselleşen pazarlarda, bazı ülkeleri olumsuz etkileyen şoklar yaşandı. Zaman zaman da, finans piyasalarının spekülatif nitelikli faaliyetlere aşırı yatırım yapması sonucunda, kaynak ziyanına uğrandı. Diğer yandan, yatırım araçlarının giderek uluslararası nitelik kazanması, rüşvet ve vergi kaçakçılığı gibi suçlara yol açtı. Çağdaşlaşma sürecinin katı kurallarla engellenmemesi açısından, kamu sektörüyle özel sektör arasında yakın bir işbirliği kurulması, her zamankinden daha önemli hale gelmiş bulunuyor. spot: The web is changing the world, for it is changing the ways people communicate |