for about 28 % of total commercial loans, the highest level of the last 20 years. try - denominated export and investment loans have grown rapidly since the beginning of 2022. between december 2021 and may 2022, try commercial loans increased by try 618 billion, of which try 154 billion stemmed from the rise in export and investment loans. likewise, the share of export and investment loans in total try commercial loans was constant around 10. 1 % before 2022, but reached 13. 9 % as of may 2022 thanks to new regulations. through the rediscount credit facility we offer as the central bank, exporting firms have been provided with financing of usd 106 billion over the last five years. the costs of the rediscount credits extended are well below the market rates, helping firms keep their financing expenses at reasonable levels. thanks to favorable interest rate conditions offered to rediscount credit beneficiary firms by the central bank, a cost advantage of up to usd 250 million per year has been provided since 2017. compared to the first half of the previous year, the number of firms that used rediscount credits in the first six months of 2022 rose to 4, 476 from 2, 199, and the loan utilization amount went up to usd 11. 1 billion from usd 9. 3 billion. the key principle behind our targeted loan policy is to provide funding in a way that will boost investment, employment, production and exports, and on reasonable terms. therefore, we attach great importance to making credits available to a broader population and the easy access to loans by our industrialists. thanks to our efforts to expand the use of rediscount credits, the share of smes in total credit utilization has steadily increased since early 2022. the share of smes was 6 % of rediscount credit utilization at the end of january 2022 ; this exceeded 20 % in july 2022. 4 / 5 bis - central bankers'speeches in this context, the regulations we have made regarding access to export credits have affected smes positively. the share of smes saw an increase to 50 % of try rediscount credit utilization, which reached 90 % on the back of our liraization strategy. the net export status and rediscount credit shares of firms with a rediscount credit balance since the beginning of the year indicate that the share of net - exporting firms in rediscount credits has increased to

this was due to the dominance of the public sector borrowing requirement in the finance sector. furthermore, the factors that slow down the capital accumulation process include the incomplete tax reform and the poor relationship between banking sector and real sector. i will explain tax and banking reforms in more detail in the forthcoming parts of my speech. improving economic productivity is fundamental for achieving price stability and concurrent sustainable growth in the long run, that is to say an increase in real income and welfare. a rise in total factor productivity is expected to be one of the core dynamics of sustainable growth to be attained in the next 10 years in turkey. the manufacturing industry has recently witnessed a boost in productivity. the critical point here is that increases in productivity should be reflected on all sectors and become sustainable. therefore, it is very important that labor education and institutional governance is improved through research and development of technology, which will provide a constant increase in total factor productivity. graph 11 : partial productivity and real earning indices ( 1997 = 100 ) 170. 0 productivity 150. 0 real earning 130. 0 110. 0 90. 0 70. 0 2004q3 2004q1 2003q3 2003q1 2002q3 2002q1 2001q3 2001q1 2000q3 2000q1 1999q3 1999q1 1998q3 1998q1 1997q3 1997q1 50. 0 source : sis. sustainable increase in employment in turkey, sustainable growth depends on the increases in productivity and capital stock as well as on the enhancement of labor supply and labor quality. for this reason, determination of the structural obstacles standing in the way of employment and the establishment of policies aimed at their removal bear much significance. employment differs according to the responses of a country ’ s labor market, the financial structure of its firms and its institutional structure in the changing economic conditions. this diversity causes different rates of natural unemployment in countries with the same potential growth rates. sustainable employment requires sustainable growth along with the adaptation of an institutional structure and labor market to match international standards of competition. in turkey, there has been an increase in the labor flow from the agriculture sector to the industrial and services sectors. hence, the solution to the employment problem is becoming more complex considering the amount of growth in turkey, which leads to a failure to create employment in the medium term. migration from village to city raises the unemployed and unskilled labor supply in the industrial and services sectors. meanwhile, the current production processes in our country are insufficient to switch to high value added products, which can