Speeches

Remarks by Ambassador Edelman Before the American Business Forum in Turkey

March 29, 2005, 9:00 PM Istanbul, Turkey

Mr. Neyzi, Distinguished guests, Ladies and Gentlemen -

I am very happy to join the members of the American Business Forum in Turkey in celebrating the first anniversary of your organization. The ABFT has a critical role to play in advancing business and economic relationships between the United States and Turkey. Through the work of organizations like ABFT, Turks and Americans are together building and strengthening U.S.-Turkish friendship for the long term. As we have seen over the past year, your organization is a critical voice for growing trade and investment between our countries. I look forward to continue working closely with all of you.

There has been a striking improvement in Turkey's macroeconomic environment over the past three years. Inflation, run-away government deficit spending, and sky high interest rates appear -- finally -- to be part of Turkey's past, not its future. We applaud the efforts of the Turkish government in creating the basic conditions for business to thrive. These policies are creating jobs for Turkey's young population and contributing to security and prosperity for Turkish citizens. From our own experience, the United States believes in these policies. As a strong supporter of Turkey in the International Monetary Fund, we hope Turkey will soon finalize the IMF stand-by agreement it announced last December.

As Turkish government officials routinely note, Turkey needs to lock-in the reforms it has already made and move forward resolutely with new reforms that will continue to improve the trade and investment environment. This is important because despite the gains, Turkey's government finances, particularly its large short-term domestic debts, remain vulnerable to a negative external shock.

Since fiscal restraint remains necessary to reduce the government's debt burden over time, the work of building a new Turkey will largely fall to the private sector. This will require major amounts of new investment that will come from domestic and foreign sources, often in partnership with each other. Unfortunately, but as is well known, Turkey has not proven able to attract foreign direct investment commensurate with its potential. This has been a great cost to the Turkish economy since FDI is the fastest path to rising living standards through assimilating new technologies and ways of doing business.

Creating an environment that encourages investment is a difficult task. A recent United Nations report identified the major factors that influence today’s investors. These included:

• An enabling environment that is welcoming, with transparent regulations and well-defined ownership rights;

• A dynamic economy with sustainable growth, and a level playing field; and

• An adequate infrastructure within the country in question that includes sufficient human resources.

Perhaps most decisively, the UN report found that foreign investors look at the experience of other investors, both local and foreign, when making their investment decision. Before putting their own capital -- including their intellectual property -- at risk, foreign investors want to see that others, especially the locals who know their own environment best, are ready to take similar risks. The most important factor in attracting FDI is therefore to show that existing investors are doing well. A successful campaign to attract new investment begins with creating more promoters and fewer detractors by troubleshooting and solving issues that arise as foreign companies invest.

We are strong believers in the critical role played by economic growth in building a free and prosperous society. But, unlike the tide, economic growth does not raise all boats equally. The political challenge faced by those with the task of making policy is ensuring that the temporary costs and undeniable hardships of economic change do not distract them from their long-term goals.

Turkey is going through a period of massive change. The private sector, not only the government, needs to pay attention to how individuals are impacted by change and to do what it can to minimize the hardships. The United States recently donated $9 million to the Turkish Government's Social Risk Mitigation Project, which provides small cash payments to families who keep their children enrolled in school and provided with medical care. This program is implemented with the support of the World Bank. I recently had the privilege to visit a school in the Altindağ neighborhood of Ankara and a health clinic in Bursa. I met beneficiaries of the program as well as doctors and teachers who told me about the tangible affect this program is having on the lives of poor people.

At the same time, the American companies are playing their part in the economic and social development of Turkey. Frankly, the positive impact of American companies in their communities often goes unnoticed. I would like to share with you just a couple of community activities that American companies are engaged in Turkey. Several member companies of ABFT including pharmaceuticals and logistics are supporting Ailem Olsun, an umbrella organization concerned with the welfare of children living and or working on streets. They plan to kickoff a major campaign in May for Ailem Olsun. Similarly, Amyway, an American marketing company with 40,000 distributors across Turkey, has been working closely with UNICEF for the last six years to contribute towards the welfare of Turkish children. Next month, Amway, in partnership with UNICEF, will launch a measles vaccination campaign for 14 to 17 years old children who are out of school. Our companies understand that if business is to grow and prosper they must commit resources, volunteers, and leadership on a daunting range of societal issues. They do it because it's the right thing to do!

In conclusion, the United States is committed to broadening its economic and commercial relationship with Turkey. We have already witnessed solid partnerships between American and Turkish companies in third countries – such as in Iraq and Afghanistan reconstruction, and in moving Central Asian and Caspian energy to West European markets.

We want to continue to reduce tariff and non-tariff barriers to expanding our trade. There are issues we need to address bilaterally with Turkey, as well as together in the ongoing Doha Development Round of international trade negotiations, whose successful and early conclusion will increase opportunities for both our countries.

I am convinced that the United States and Turkey have a bright future together. The United States has strongly supported Turkey's accession to the European Union. A strong, prosperous Turkey within a strong, prosperous Europe is good for the United States and good for the world. Both the American and the Turkish business communities will play a major role in achieving this vision, a project I look forward to working on together with ABFT.

At this point I would like to recognize two individuals for their leadership in supporting US-Turkish business ties. May I ask Halim Neyzi and Emine Etilli to come to the podium.

(NOTE: Ambassador Edelman will present Certificates of Appreciation to Mr. Neyzi, Chairman of ABFT and Ms. Etilli, the Executive Director of ABFT.)