The Syrians became the China of the shoe industry

High While production costs and high export prices undermined the competition of the Turkish shoe industry with countries such as Vietnam and China, there was a 20 percent loss in production. While it is noted that the informal economy and production, which has been growing for the last 2 years and especially led by Syrian operators, threatens the formal economy, it is claimed that the business is at a point where it can no longer be ignored . Noting that the shift to the informal economy will accelerate with the latest minimum wage increase, industry representatives claimed that a ‘China’ has formed within the industry itself.

OPENING OF CLOSED STORE IN SYRIA

Berke İçten, President of the Turkish Footwear Industry Association, stated that Syrians came to replace closed businesses and opened shops and participated in production with their large family members, stating that the state lost as much as income tax he received from the registered. Stating that these companies priced 50 percent below the market, İçten summed up the situation in the sector as follows: “The number of production has reached such a level that it has become a threat even for registered production . It is no longer a structure to be ignored. Unfair competition must be eliminated by registering the informal economy, both Syrian and otherwise, as soon as possible. The Syrians come and open shops instead of the closed businesses. They are already large families. Friends and relatives offer the shoes they produce to companies without registration, SSI, without taxes. The shoes are beautiful, clean shoes. The price is almost half. Now that this is the case, we have created a China within ourselves.”

The sustained exchange rate exploded imports

Emphasizing that the capacity of the shoe industry is not at a point where it can be filled by the domestic market, Berke İçten said that exports are the key here. İçten continued: “When it comes to 27-28 TL, maybe the dollar becomes more competitive. However, if food and housing inflation goes unchecked, it creates temporary relief. Imports are booming. The flat and low course of exchange rates strengthened the import side. If no action is taken, factories close. We see that production has decreased by 15-20 percent.”

Europe returns to the old markets

Stating that the cost has reached a level of $700 with the increase in the minimum wage and the addition of items such as severance pay and notice pay at today’s exchange rates, Berke İçten explained that the employee cannot live with the minimum wage, but that inflation must be controlled to stop rising costs. “Our exports have reached a horizontal level. We are going backwards especially in terms of menstruation. “Europe made purchases from Turkey while Vietnam and Indonesia were closed,” İçten said, noting that European buyers returned to these markets with the opening of the markets.