% 8 on march 30, 2009, before being raised back to the initial rate of % 18 on october 1, 2009. bis central bankers ’ speeches dear participants, so far i have touched on the impacts of movements in commodity prices on inflation and economic growth. now i will talk about the impact of fluctuations in commodity prices on foreign trade balances. the dependency of the turkish economy on energy imports makes the current accounts balance more sensitive to changes in commodity prices. uncertainties regarding the global economy in recent years and the exceptionally loose monetary policies adopted by advanced economies, such as the united states, japan and the euro area, foreshadow the high probability of continued excess volatility in commodity prices. in the face of these developments, we welcome the recent concrete steps, as part of the medium term program in turkey, towards reducing the dependence on energy imports by shifting to domestically produced and renewable energy sources. these measures will hopefully ease the susceptibility of the current account to commodity prices in the long run. the key question in the short - run is how to smooth out the impact of the commodity prices on the domestic economy in the short to medium term, while there is a heightened degree of uncertainty regarding financial and real factors. in turkey, ex - refinery fuel prices, in addition to the 18 percent - value added tax ( vat ), are also subject to the special consumption tax ( sct ). special consumption tax, which is not only a fixed tax but also comprises a major part of the final prices of fuel products, helps to smooth out significant fluctuations in crude oil import prices. thus, consumers are less affected by such fluctuations. esteemed guests, it seems that uncertainties regarding commodity prices will continue to be an important factor to be considered carefully in policy implementations in the forthcoming period, too. i believe that the papers presented in this conference will guide us in overcoming the policy challenges we will face along the road. thank you very much for your interest and participation. bis central bankers ’ speeches

the turkish manufacturing industry. this is the case in sectors populated by firms with high market shares and thus with high concentration ratios. it is observed that in sectors lacking a well - established competition environment, the competition pressure exerted by imports is relatively low and the downward pressure exerted by imports on domestic prices is not strong enough despite the high share of imports. another example revealing the significance of the competition policy for the central bank is related to the unregistered economy. as you all know, unregistered employment is about 50 % in our country. this rate is higher in agriculture, construction and the services sector, where inflation is relatively higher. unregistered economic activities prevent firms from attaining the most efficient scale of production and producing at the lowest unit cost. firms failing to attain the lowest cost scale price their products at a relatively higher level. one of the factors influential in this is the financial burden brought about by registration procedures. in order to remain unregistered, firms are not willing to grow in scale. they also abstain from applying for bank credits and delay technological renovations due to financial hardship. on the other hand, the competitive power of registered firms is eroded against their competitors, which take advantage of remaining unregistered. besides, growing in scale becomes harder for these registered firms. major reforms were made in turkey in 2003 to improve the business environment. the most remarkable of these are the regulations to reduce the procedures in starting businesses and to ensure that all the required transactions are carried out under the body of a sole authority. as a matter of fact, the results of the “ doing business ” report by the world bank reveals that our country ranks fairly high compared to other countries in terms of the duration for starting businesses, reservation of ownership, enforcing contracts and paying taxes. the concrete consequences of these reforms are apparent in the number of newly launched businesses in the period following the year 2003. however, as pointed out in the same report, turkey is at the bottom of the list in terms of costs for starting businesses ( issuing licenses and permits after starting the business ), regulations for firms exiting the industry, licensing procedures, ease of recruiting and employing workers. we can list transport vehicles, white goods and consumer - oriented electronic products such as radio and television as the sectors where turkey ’ s competitive power is relatively high at present. the increased market share of china and india in these sectors poses a potential risk for the turkish economy. in response to these risks, some structural reforms