As the Forum closes, it seems useful to step back from specific issues and consider a longer view of the how the United States and Europe see themselves and the region, and how transatlantic engagement can help to promote success there, as well as the extent to which that engagement will be relevant going forward. Against the backdrop of pre-2012 election campaigning in the United States, what trends seem likely in America’s relationships and role in the world and in the region? How should local leaders think about that and perhaps adapt to it? What about Europe? As new independent states enter their third decade of independence, how have they really done, what key challenges lie ahead, and where should they look for help and support? What about the roles of China, Russia, Turkey, and Iran, all of which are significant regional players? What will the next phase of Caspian basin gas development mean politically, including for European energy security and therefore for Europe’s real interest in the area? Is the West still relevant, and how can it remain so?

INTRODUCTION: The Hon. Ross Wilson, Director, Dinu Patriciu Eurasia Center, Atlantic Council


  • Mr. Sekib Avdagic, Vice President, Istanbul Chamber of Commerce
  • H.E. Taner Yıldız, Minister of Energy and Natural Resources, Republic of Turkey

CHAIR: Mr. Frederick Kempe,** President and Chief Executive Officer, Atlantic Council


  • The Hon. Madeleine K. Albright,** Chair, Albright Stonebridge Group and former US Secretary of State
  • The Hon. Stephen Hadley,** Senior Advisor for International Affairs, US Institute of Peace and former US National Security Advisor


Location: Istanbul, Turkey

Date: Friday, November 18, 2011
Time: 1:30 p.m.

Transcript by
Federal News Service
Washington, D.C.

FREDERICK KEMPE: Welcome to the closing dinner of the 2011 Black Sea Energy and Economic Forum. I hope you’ve all found this to be as fascinating of a two days as I have. Whether it was the sessions, whether it was the private conversations, whether the ideas you’re coming away from or whether it’s just the beauty of Istanbul, I think everyone I’ve talked to is energized by this.

A broad aim of or forum initiative is to build new communities where they are weak or nonexistent and to get going a fuller policy dialogue about issues that the region faces. I think we’ve achieved that. Now, I’ve seen a lot of you also closing business deals. I hope you did notice that the Atlantic Council – if you’ve closed any business deals, just make them public to us and we’ll take a 5 percent cut of any of those. That was a joke.

It is my honor, at this point, to turn the podium over to the chairman of the Atlantic Council, Senator Chuck Hagel. The fact that Senator Hagel is here underscores how crucially important not only this forum is to us but our relationship with Turkey is to us, and the relationship to the broader region. As a senator on the foreign policy committee, as a person who visited here as much or more than any other senator in the Congress, he’s devoted himself to the issues of this region.

He’s now a distinguished professor of Georgetown University. He’s co-chairman of the President’s Intelligence Advisory Board, hugely important body. He’s on the Defense Policy Board, and importantly for this conference and for the issues now occurring, he is on the Department of Energy’s Blue Ribbon Commission on America’s Nuclear Future. It is a great honor for me to turn the podium to Senator Chuck Hagel. (Applause.)

CHUCK HAGEL: Fred, thank you, and add my welcome this evening, as well as, on behalf of the Atlantic Council, our sincere gratitude to all of you, each of you who have participated. Obviously the people of Turkey, the people of Istanbul, in particular, we very much appreciate your hospitality over the last few days to accommodate this conference.

Certainly, Prime Minister Erdoğan and – (audio break) – also deserve great recognition and thanks for their support. I think it was rather clear yesterday, as the prime minister kicked off the conference with so many of his senior ministers in attendance and also giving major addresses. And we have some of the senior members of the government with us tonight. And again, thank you so very much.

Also, to Fred and his people, Ambassador Ross Wilson, the former ambassador here, we thank you, and also recognizing tonight our current U.S. ambassador and his wife, Frank Ricciardone and Mrs. Ricciardone.

And Frank, Mrs. Ricciardone, thank you very, very much for your service to our country and to continuing to strengthen this important relationship.

I need not note any particulars about the importance of the Turkish-U.S. relationship, beyond what you already know and what has been said the last two days. And certainly, evidence is ample of that point with your attendance here, not only tonight but the last few days.

The Atlantic Council is very proud tonight to be able to announce because of the relationship that is very special between our two countries that not only will we soon complete the second annual Atlantic Conference energy and economic conference, but we are announcing tonight that this will be an annual conference here, held in Istanbul, Turkey. And we are very proud of that. This area, this country, this place on Earth is the crossroads of civilizations. It is the right country at the right time for the Atlantic Council to continue to anchor this relationship with the great issues that are the forces of our time that will dominate and dictate the outcome, certainly well into the 21st century.

So with that, I thank you again, and I would also like to acknowledge and ask the distinguished energy minister of the Republic of Turkey, Mr. Yıldız, if he would care to say a few words, and to publicly thank him for his direct involvement and leadership.

Minister Yıldız? Thank you. (Applause.)

TANER YILDIZ (minister of energy and natural resources, Republic of Turkey): (In Turkish.)


ROSS WILSON (director, Dinu Patriciu Eurasia Center; former U.S. ambassador to Turkey): Thank you very much, Mr. Minister, for those very kind words. As a former ambassador to Turkey – American ambassador to Turkey and someone who became fascinated by this wonderful country and a great believer in the important role that it plays in the region and in the world, I’m delighted that we are able to bring the forum and are planning to bring the forum back here, not only in 2012 but also to make this the Black Sea Energy and Economic Forum’s permanent home, which I think befits Turkey’s role in the region; it befits the importance that the United States attaches to it.

Events like this, of course, don’t just happen because people want them to happen. They depend on a whole variety of things, including the ability and the willingness of organizations and corporations to step up and provide support, including financial support, for what we do. We are particularly pleased that the Istanbul Chamber of Commerce is one of our sponsors for this event. The Istanbul Chamber, in fact, is the sponsor of tonight’s dinner.

Murat Yalcintas, the president of the Istanbul Chamber, who is on your programs to speak tonight, unfortunately had a very close friend pass away just in the last day or two. And I met with him just before I came here to talk briefly about the forum and about what we’re trying to do. He asked me to convey his greetings to everyone here.

Representing him here tonight, to accept our strong appreciation for the Istanbul Chamber’s role is the Istanbul Chamber of Commerce’s vice president, Sekib Avdagic. Sekib is someone that I had the pleasure of meeting a number of months ago here. He is a distinguished businessman. He has also been very active in the Istanbul Chamber, very active in the project that promoted Istanbul as a European Capital of Culture in 2010, and someone who is and I think will continue to be an important friend of this forum.

Please join me in welcoming Sekib Avdagic. (Applause.)

SEKIB AVDAGIC: (In Turkish.)


MR. KEMPE: Let me first encourage you all to eat and we are going to start talking. And then at the end of our discussion, we’ll then serve your main courses and you can enjoy the rest of your meal.

Let me say two words about the Atlantic Council, by way of introduction of these two remarkable discussants. The Atlantic Council is in its 50th anniversary year, created by people like Christian Herter, former secretary of State, Dean Acheson, former secretary of State, Henry Cabot Lodge, Lucius Clay, some of the great and good of transatlantic relations of 50 years ago. It was created to be bipartisan. It was created to do something that is very hard to do in Washington these days, which is to create a bipartisan conversation about the crucial issues of the day. Our mission is renewing the Atlantic community for global challenges.

So now I’m going to turn to welcome two of the senior-most members of the Atlantic Council and they will join me in concluding discussion of the broad issues of the region, but really from that perspective. We have a Democrat, Dr. Madeline Albright, who served as U.S. secretary of State throughout the second Clinton administration. And in his first term, she was ambassador and permanent representative to the United Nations. She served at the National Security Council under President Carter in the 1980s (sic).

She’s the author of many books, the last of which was “Read My Pins,” an account of her pin collection. And you’ll see a quite beautiful one on right now. But she made that as interesting as everything else she’s done in her life. She is an honorary director of the Atlantic Council.

Stephen Hadley, a Republican – this is what the Atlantic Council is all about. This is what we bring together. Senator Hagel is one of the people he said once that he didn’t take an oath to his party, he took an oath to the Constitution. That’s what the Atlantic Council is about. Stephen Hadley served as deputy U.S. national security adviser during the first term of President George W. Bush, had many jobs – illustrious jobs – before that. He moved up to become national security adviser himself in the second term.

So Secretary Albright and Steve, thank you for joining me here for this final conversation. (Applause.)

I will ask a question of them, but it’s really in the way that one asks political figures questions, which is whatever I ask they will answer whatever they want their first comment to be. So here’s the question: We’re sitting in Istanbul. You’ve come from Washington. I think this is the time for the global view and it’s for the global view from Washington.

And so I’d like to talk with Secretary Albright. As you look out at the world from your U.S. perspective, but sitting here, what concerns you the most? And what are you encouraged by?

MADELINE ALBRIGHT: Well, first of all, I’m delighted to be here and thank you very much. And I have listened to many of the discussions of the last couple of days and I think they’ve been most informative. And what I think is terrific, and we just heard it in the two speeches that we heard from our Turkish friends, is a great sense of optimism and pride in what Turkey is about.

I have rarely been to a conference where it is so clear that a country is feeling good about itself and feeling that its role is increasingly important. I often quote my grandchildren and what I think is interesting is I brought my grandchildren, two of them, to Istanbul this summer, because I think it’s the most amazing city in the world. And the issue is, where is Turkey in everything? And my youngest granddaughter said: “Isn’t it great? I spent the night in Europe and I had lunch in Asia.” And that’s what it’s all about. I think it’s very interesting that she got the whole thing.

I think that this is a time, however, of great concern. I have spent my entire life following international relations. I am actually probably the oldest person in the room. I’m a child of World War II. And I have watched things change in many different ways and have been a person that both studied and was privileged to operate within an institutional structure that was set up after World War II.

My pin tonight is what I wore all through – I was asked by Secretary Clinton and President Obama to help on a new strategic concept for NATO last year, the 60th anniversary of NATO, so the shield and the bow that holds us together. I think that it is one of the aspects of our institutional structure that is being tested at this moment.

So I think that what worries me the most is that there are so many different aspects of the international system that seems to be in disarray, that we’re unclear as to how the international system is working. My successor at the U.N., Governor Richardson, is here. We know how difficult it is to make the U.N. function. There are issues about how NATO works. Is it operating out of area? I think the EU is a mess. That’s a diplomatic term of art.

And then we also are looking at the formation of new organizations. President Obama has just been at the APEC meetings and talking more about a variety of new structures in Asia. And we are looking at different ways. We also – I am concerned about the fact that in many ways, it’s the end of the nation-state system of how the tools of diplomacy work. We are looking at all of that.

So the world is in a pretty chaotic state. What am I hopeful about, is that there are new countries that are rising, such as Turkey, with an ancient history, that are willing to participate in helping to solve the problems.

One of the books I wrote was a memo to the president-elect, when I didn’t know who the person was going to be. And I laid out some umbrella issues, which the next president was going to have to deal with. One was how to fight terrorism without creating more terrorists. The second was to deal with issues of nuclear proliferation. The third was how to narrow the gap between the rich and the poor. The fourth was how to deal with energy and environment and pandemic disease, and the fifth, how to restore the good name of democracy. I didn’t have the financial crisis, because it wasn’t happening at the time.

But just listing those makes you realize that no country, even the United States, can possibly deal with all those issues alone. And therefore, having partners that are vital and interested and functioning well, such as Turkey, is one of the issues that gives me hope.

MR. KEMPE: Thank you, Secretary Albright.

Steve, I wonder if you can answer the same question but maybe pick up also on Secretary Albright’s five points. And would you agree with those five or do you have a different list?

STEPHEN HADLEY: Yes, but I’d have a little – a different slant on it. I think the big challenge for the United States and Europe is to get our respective houses in order. If we don’t solve our economic problems and get our economies growing again, we will not have the wherewithal to lead and our populations will look inward and not be willing to lead. And there is much for the United States and Europe to do together to help solve the global problems we all face.

It’s interesting, on Europe, we flew to Ankara today and were able to meet with President Gül, and he, with some glee, went through and noted how Turkey meets all the Maastricht criteria and half of the European countries don’t. So I’m not sure whether Turkey should be joining the EU or the EU should be joining Turkey. But in any event, the EU needs to get its house in order and the United States does, as well.

Three opportunities: China and Asia, if you look at growth over the next decade, the projections, it’s all Asia all the time. Our economies and our nations need to participate in that economic growth and to do that, we need to be present in Asia diplomatically, economically, in terms of business, and militarily – huge challenge, huge opportunity.

Second, Middle East – huge opportunity. The United States and Europe need to work together to help these countries not only make a transition to freedom, but to do it in a way that still maintains stability and security and offers the prospect of greater prosperity, because if freedom and democracy do not come with stability and economic prosperity, people will become disillusioned with freedom and democracy and it will be a huge setback for us; so a great challenge, opportunity.

Third opportunity is really reflected, I think, by this conference. And I’m so glad that it is going to be continued year in and year out, because if the next decade is the decade of Asia, the question is whether the next decade after that can be the decade of this region. You know, the junction point between Turkey, the Caucasus and Central Asia and then looking, Central Asia, Afghanistan, Pakistan and India, that cross-section, given the energy, resources and the role it can potentially play in trade, this could be the next great international boom. And I think it’s very important that this conference continue to look at these issues over the next several years.

Finally, I think in a way, bigger than the non-nation-state actor problem is the fact that we are seeing what I think will be a redefinition of the relationship between the individual and the state. Everybody talks about social media and the Internet. And as someone said to me at a conference, they are more than a technological phenomenon. They are a cultural phenomenon. They reflect a new generation, people who are skeptical of authority, who believe that bottom-up solutions have legitimacy, top-down don’t and, because of the technology, can be enormously disruptive but can potentially be very constructive, in terms of new ways of collaborating and change.

So I think long term, the biggest challenge we all face is how to exploit the opportunity and potential of this coalition between cultural change and technological change, which really is a radically democratizing and empowering device of the individual. And I think that’s really going to be the biggest challenge of all over the next couple decades.

MR. KEMPE: Want to pick up on that?

MS. ALBRIGHT: Well, I would agree with what Steve had to say. The only question that I have is, in terms of governance, how you get the people from the street into governance, and so the question, again, for me comes down to some of the institutional structures. I happen to believe in political parties. I’m chairman of the board of the National Democratic Institute and one of the things we talk about, what are the channels of communication of the democratization, in many ways?

Not everybody here will understand this, but I don’t think we want to see the “Californization” of the world, which is where everything is done by referendum, where some item is put up for a vote without people fully understanding all the consequences of it. And while I think Tahrir Square, or wherever, is one of the more inspiring aspects of people wanting to be able to make decisions about their own lives, the question is how it works.

And in some of the discussions we had to day, I found a very interesting point that was made and that is that there is the – I happen to believe we’re all the same and everybody wants to live in a way where he or she can make decisions about their own lives. But you don’t want chaos, because if there’s chaos then there’s a turn to some kind of authority figure. And so the question is how to make sure that what you’re talking about, which is this great growth of technology and individual spirit, actually becomes channeled into the way that the square is turned into popular governance.

And I agree with the other thing is that I believe – there’s always, among academics, which some of us are occasionally, is this big discussion about what comes first: political development or economic development. Clearly, they go together, because people want to vote and eat. And so democracy has to deliver. And I think those are the various aspects that we have to see as challenges.

MR. KEMPE: I think you’ve both picked up on what a historic inflection point this is, both in terms of geopolitical change, but also in technological change. And there is a big debate of whether despots can also use technology. But without going into that, let me ask – I took a peek at the news today, before coming down, and I saw two events that were quite interesting.

One of them were protests in Tahrir Square against the reassertion of the military of control over Egypt. And this gets to your point about the street and how does one get – make this transition. The other was Syria, the army deserters taking arms against pro-government protestors, which is also interesting, which tells us we’ve got a long time to go.

So my question to both of you is, particularly sitting here, put this into the context, you passed through the fall of the Berlin Wall, the end of the Cold War. This isn’t that, but what is it? And then what is the role of the transatlantic community in this? And then obviously, one has to put Turkey right at the forefront of that, but it’s basically Europe, the United States and then including within Europe, as we at the Atlantic Council always do, Turkey. How do you see what’s going on there, with the Arab Awakening? And is it turning into an Arab winter or are you more optimistic than that?

MR. HADLEY: Well, I think someone – it’s not original with me; I think it was Marwan Muasher, former deputy prime minister of Jordan – said, this is not the Arab Spring; this is the Arab Awakening. And we’re going to go through some springs, some winters, some falls, some summers. It’s going to be up and down and it’s going to take a long time.

But I thought it was interesting, Foreign Minister Davutoglu said last night, “While the situations in the countries vary, the phenomenon of Arab peoples reaching out for democracy and freedom cuts across.” And that’s, of course, how it relates to the developments in Central and Eastern Europe after the fall of the Berlin Wall and the end of communism. It is people wanting to be free, wanting to control their own destinies.

And the terrific opportunity for the United States and Europe is that we did work together in Central and Eastern Europe to help those countries successfully make the transition. We helped them develop the infrastructure, political democracy, election laws, political party laws, all the rest. We helped them with the economic transition.

There was a lot more to work with, in terms of institutions, history and culture in Central and Eastern Europe. That makes the challenge in the Arab World more difficult. But the challenge is essentially the same and we know how to do this. We did it in Central and Eastern Europe. The United States did it working with Japan and Germany and Europe at the end of the Second World War.

So it is a task we know something about, something that we can help on. And I think the great contribution of Turkey is it already has what a lot of people in the Arab World want. It is a democratic, free society and it is doing well – very well, economically, thank you very much. And it is stable. It has some terrorism problems it is working with. And finally, it has struck an understanding in the society about the relationship between religion and the state, which is also one of the things that the Arab states need to sort out for themselves.

So I think Turkey has an enormous role, as an example and, secondly, to be engaging with these states and help them work through the challenges they face, because Turkey has, in some sense, made the voyage successfully.

MR. KEMPE: Secretary Albright, let me pose the question a little bit differently to you and that is from the context of at the end of the Cold War, Europe and the U.S. looked like pretty good models. Is there a problem at the moment in the Arab Awakening with the double crisis of the West, economic and political, Europe and U.S., where our economies are in trouble and, to a certain extent, there’s some political dysfunction in our systems? Is the model broken, particularly in the United States? And does that pose a problem for us now?

MS. ALBRIGHT: Well, it’s interesting that you put it that way, because I do think there are some major differences between what happened at the end of the Cold War and what is happening here. Some of it is the context and I’ll get to that in a minute. But I’ve spent my life studying changing communist systems, so the whole issue about looking at Central and Eastern Europe, what is different is that each of those countries wanted to be in Europe. They wanted to be Europeans and they wanted to really assume all the aspects of, quote, “Western living.”

I think the thing that we’ve learned – and I was born in Czechoslovakia and that was a country that was a democracy in the interwar period. Even in a country like that, it was much harder and still is hard to have full-blown democracy and free market systems, because the 50 years of communism really weighed heavily. There are questions about how the safety net works, retirement, a variety of things. And the model, does it really work?

It is 20 years next month that the Soviet Union broke up. And I’ve just been involved in a survey, which I did 20 years ago, and now again, in Russia. And people want a leader with a strong hand, it’s very interesting, because of what I mentioned before, the kind of chaos that develops without proper institutional structure.

So there are lots of ways to look at this, but I think – and then to a point that I was just – I won’t mention who this was, but I was in a discussion with an Arab and I said, “Well, we can’t call it Arab Spring anymore, so we’re calling it Arab Awakening.” And he said: “Wait a minute. That’s insulting. We haven’t been asleep all this time.” So I said, “Well, what would you call it?” And he said, “Arab troubles.” And I said, “Well, I would call it Arab opportunities.” So there are all kinds of differences in nomenclature and what it all means.

What clearly is going on is – and I think Steve, you’re absolutely right, it’s the technology. I mean, this was a Twitter or Yahoo or whatever revolution of young people that are technologically savvy and are able to spread news. But each one of them is a little bit different.

To go to your point, first of all, democracy is not an event. Democracy is a process. And I think that you never quite arrive there. And your question about the model, what I find really hard at the moment – as I said, the National Democratic Institute is everywhere in the various Arab countries, and we say that one of the elements of democracy is the existence of an opposition party. It is something that really does allow for accountability and change and provides a way for voters to make a choice. The other is compromise.

So they look at me and they say, “Yeah, like what’s happening in Washington?” So the bottom line is, at the moment, our democracy is in an evolutionary process. There are issues about how the free market system works. And so I think we need a little humility. We also need to figure out how to work with countries such as Turkey, that are able to present a different picture, as they say, a center of influence.

And so, for me the 21st century is one – I am the one – President Clinton said it first, but I get tagged with it all the time – that the United States is an indispensible nation. I fully believe that. I sat in enough meetings to know that if the U.S. doesn’t do something, something doesn’t happen. But there is nothing about the word “indispensible” that is alone. And therefore, I see this period where we try to kind of have force multipliers of the different experiences and recognize that things are different and that maybe, in this evolutionary process, there’s not just one model.

MR. KEMPE: Fascinating. I’m going to turn to the audience and give as many people a chance as possible to ask questions. Please identify yourself and make your question brief, please. Thank you.

Q: Hi, Graham Johnson (sp), from Montreal. Drilling for oil in Armenia is why I’m here. But I want to challenge a thesis that’s been in a lot of conversations, which is that the Western model is broken. It’s not broken in Scandinavia. It’s not broken in Germany. It’s not broken in Canada. It’s not broken in Australia. There are a lot of places where it’s working just fine.

And what I think is an interesting way to look at it is this idea of leverage. And if you look over the last 30 years or so in the United States and you compare the levels of debt to GDP and you look at that in the countries in Europe that have gotten into trouble, the consistent theme has been one of leverage, in terms of overall debt, consumer and government debt, corporate debt, particularly consumer and government to production. And what’s encouraging, I think, is that there are a lot of places that continue to just go back to these basic principles, which are a part of the Western model: work hard, save, treat your neighbor well, all those kind of things.

And the protests that we’re seeing now in many cities, particular in the West, this Occupy Wall Street protest, go back to something that we seem to have lost, which is the idea of fairness. Somebody that doesn’t take an equity risk and earns $50 million a year at a Wall Street institution, a public franchise, to have commercial and corporate banking, that lack of fairness I think goes against the city on the hill, which is the United States, which is, in that sense, the indispensible nation. And I think we all admire the U.S. for that.

So it’s the values that we see that I think the Muslim world has, which are traditional conservative values that maybe we can pick up again in how we’re thinking about things, to refocus the Western model, in terms of what it should be. And the Germans and others are doing it very well.

MR. KEMPE: Interesting notion. Do either one of you want to pick up on that or should we take that as a comment?

MR. HADLEY: I think that’s right. I guess I would say it’s true what you say, the model, I think, is not broken. It is working very well in some places. But for good or ill, when people think about that model, they look generally to the United States as the – if you will, the proponent of that model, historically, over decades.

And it’s why the United States needs to fix its economy. People, I think, accept the proposition that freedom is an expression of the highest aspirations of the human spirit. But they also want to see and believe that freedom, democracy and free markets makes for a more prosperous, better life; that it delivers, in terms of prosperity in raising people up out of poverty. And that’s what’s being questioned. And I think it’s very important for the United States to get its own house in order and to be able to say it still works, it’s still the best model around.

MR. KEMPE: So Secretary –

MS. ALBRIGHT: And could I just say, I definitely want to be on record as saying I think the American model works. I don’t think it is being worked properly at the moment, for whatever reason. But the model itself I think does have that fairness aspect to it. And the question is, what is happening in those who are driving the model or working it?

MR. KEMPE: Do you have an answer for that? Do you have an idea of why –

MS. ALBRIGHT: Well, I mean I think – I really do believe that a major aspect of democracy is compromise and putting yourself into the other person’s shoes and trying to find some common ground. And so we are here, one, we’re very good friends, but also we were trying to show something, which is Democrats and Republicans can work together.

I worked on the Hill for a Democratic – Senator Muskie, who spent a great deal of time with a Republican senator, Henry Bellmon, from Oklahoma, in order to develop the budget process. That was the way people operated. And I think that when any of us have been in office, what you try to do is find some common ground.

Can you believe that I was friends with Jesse Helms? We actually managed to expand NATO. So I think that there are any number of ways – that there has to be a way to use the model, which works, is based on compromise and make those people think about that.

MR. KEMPE: Yeah, we, of course, at the Atlantic Council think that bipartisanship and compromise will become trendy again and then we’ll be right in the right spot.

Q: David Goldwyn. My question concerns Iran. Right now there are two highly destructive options on the global table for Iran. One is a country which might consider military action. Another is an act by the U.S. Congress to – (off mike) – system, deal with Iran or deal with us, but not both.

Is this the time for that kind of a step change, in terms of dealing with Iran? Or is there a diplomatic path forward, which is going to be acceptable to the countries in this region, as well as the United States?

MR. KEMPE: Secretary Albright, let’s start with you and then –

MS. ALBRIGHT: I just spoke. No, I mean, let me just say I do think that Iran is a major issue for the international community to deal with. I think that, as a former decision maker, you usually leave all options on the table. But I do think that there are – I was just reading that the IAEA board has come out with a resolution that, in fact, reflects their report.

I think that there are steps that still can be taken, diplomatic and economic, which would work in order to make it clearer and clearer to the Iranian leaders that they are increasingly isolated. So smart sanctions, a variety of different ways, but I wouldn’t take any tool off the table.

MR. KEMPE: Steve?

MR. HADLEY: We’ve all, for at least three administrations, have tried to find a way to avoid presenting us all with some – two very unhappy choices. One is that Iran gets a nuclear weapon and the other is that we have to use military force to prevent Iran from getting a nuclear weapon. Those are two unhappy options. And I think it’s also true that, at least through the Obama and Bush administrations, the strategy was the same: to try to push out the date when Iran has a clear path to getting a nuclear weapon and bring forward the date when pressure on that regime will either change its policies or change the regime. That’s what we’ve tried to do.

And the question is, have we run out of time? And I think that in order – we’re going to have to be even more creative and even put more effort into it, to buy ourselves more time, to push out that date when Iran has a clear path to a nuclear weapon. It’s one of the reasons why I think bringing the end to Bashar Assad in Syria, sooner rather than later, is important, because I think that will also put pressure on the Iranian regime.

And I think at some point the Iranian people who did rise up in 2009 are going to look around the region and say, “If everybody else can get rid of their dictators and have democracy and freedom, why can’t the great Iranian people?” And at that point, I think you’re going to get some leverage on the regime in this problem.

But I think the point is if we are going to stay with that strategy, pushing out the time they have the clear path, bringing forward political change, we’re going to have to be much more aggressive than we have on things, in terms of sanctions and also things that we can do, both overtly and covertly, to delay that program and to encourage and facilitate pressure on that regime that will either change its policies or change the regime. But we are not being aggressive enough to achieve those objectives at this point.

MR. KEMPE: I think that’s a very strong statement. Both of you have been in positions of power where you’ve had to decide these sorts of things. Both of you, Republican and Democrat, say you wouldn’t take any tools off the table, meaning you wouldn’t take potential military action off the table, I assume. Is that right? Or is any outcome of military action worse than the cure?

MR. HADLEY: I think we’re having a faux debate on this issue. I think there are two elements of that. One, the debate of, can you deter Iran? And people say you can deter Iran, so what’s the problem? You can deter Iran, I believe, from using a nuclear weapon against any of us. That I think you can deter. But can you deter the proliferation that will occur in the region and the instability that will cause if Iran gets a clear path to a nuclear weapon?

Can you deter what Iran, with a nuclear weapon, will feel confident in doing, in terms of promoting terror and disrupting its neighbors? I would say you cannot deter those things. And that’s why it’s so important they not get a clear path to a nuclear weapon.

The other thing is that the only military option or the only options to set back the program is a massive bombing campaign over, you know, three weeks, where you take out all their – all the air defense, you can take out all their nuclear facilities. I think there are other options, more limited. I think there are non-kinetic options that you can use, maybe even non-attributable non-kinetic options that can be used to push out the date when Iran can get that program going. And I think we are not being aggressive enough in pursuing those. And I think we need a much more sophisticated debate on Iran policy and I think we need a more aggressive policy.

MR. KEMPE: Secretary Albright? Where do you agree, where do you differ?

MS. ALBRIGHT: I agree about the pushing out the date. I think that that’s very important. What’s interesting is all – well, the Clinton and Bush and now the Obama administration have basically said that Iran – it’s unacceptable for Iran to have a nuclear weapon. That’s pretty clear. I think the question is obviously military always have contingency plans, but one has to figure out what can happen as a result of it. What are the ways that Iran can retaliate? Are there other ways to do this?

I do think that there are more aggressive ways to use both diplomacy and economic tools, and to get the region into this more, to understand that this is not just an American problem. This is not just us telling them what to do. And I have found very interesting, in fact, other times that I’ve been here having discussion with Turkish leaders about what their input is into what is going on in Iran. What influence do they have? What is the way to do this?

And then also, how the Iran-Iraq equation works and the Syria part. This is a very – those of us that have been in these jobs, you sit there and you try to look at the overall context and try to figure out what cost-benefit ratios are and what are the kind of nuance tools, versus what you’re talking about.

I mean Steve, you’re right. People talk about this is one option or another and there are things in between.

MR. KEMPE: Thank you.


Q: Thank you. John Roberts from Platts. You mentioned, quite naturally, the impact that U.S. democracy has had in the past and the damage and fear that might come from crisis. What about the European Union? (Off mike) – have a situation in which you have two – (off mike) – both the European individual countries’ reputations – (off mike) – which are a part of the concept – (off mike) – democracy abroad, but also perhaps the greater part: the idea economics is cooperating of countries which are in a common region, working together to create common markets?

How much does the current crisis, do you think, damage European credibility abroad, and what do you think the repercussions are? Is this something that – (off mike) – on American foreign relations and America’s (side of the world ?).

MR. HADLEY: It’s why I started out and said that I thought the first challenge was for Europe and the United States to get their respective houses in order. I think it’s very important for the European project to succeed. It’s had American support for 40, 50 years. It’s terribly important that it succeeds. And it has been, as Secretary Albright described, a huge magnet for good behavior and reform for countries that want to join, you know, the European Union; that is to say the European community. And it is very important that that magnet continue, I think.

And I think one of the real challenges – and Secretary Albright put her finger on it – the lack of a similar organization in the Arab world that all those countries want to join that can be a similar incentive for them to make the hard choices that reform requires. And I think one of the challenges for policymakers is what can we create that will provide the same kind of incentive for reform in the Arab world, that the prospect of joining the EU and NATO provided for Europe and for that part of Europe that became free after the end of the Cold War and the fall of the Soviet Union. That is a real challenge for creating institutions that meet the challenges of the day. And I think we’re a long way from having thought that one through.

MS. ALBRIGHT: I think on the issue of the European Union is, first of all, it evolved in a natural way, from the coal and steel community, but the bottom line is, in many ways it goes back to – if you’re going to call me secretary I have to call you Mr. Hadley – said that, in fact, there was the question about the relationship of the individual to the state.

As somebody who watched the European Union evolve, I think that there were discussions among political leaders about what the Lisbon Treaty should look like. Giscard d’Estaing elegantly would discuss it. Nobody managed to really talk to the people. So when you get votes on are they for the Lisbon Treaty, they kind of – yeah, like what is it and, you know, how many thousands of pages is it? And so here, the major democracies of the world forgot the major part, which is that relationship.

And I also think it, in many ways, is a half-baked project, in terms of the financial aspect of it. I mean, you’re talking about the economic part. So it isn’t monetary, it isn’t the fiscal, various parts of it are missing because it kind of came out of rooms of decision makers that weren’t, I think, all in the same wavelength about what needed to be done.

I think a very important point that has been made is there are people who have believed that the U.S. does not want a strong Europe. The Atlantic Council, I think, has made a huge point of explaining our common Atlantic goals. The Atlantic is a very large place. But I think that America wants a strong Europe. We need partners, in terms of the various things that have to happen.

So we are sitting there and it’s contagion. You listen to – at least in the United States I listen to the radio. I know what’s going to happen in our markets once I hear what’s happened in Europe in the morning. So we are linked in this together, and yet, the mechanism for making it work, the people have not been brought into it enough.

MR. KEMPE: I saw the two last questions and we’re going to have to go to these and then close. Governor Richardson and then Obie Moore. Please?

And we’ll take both of the questions before we come back to you.

Q: You hear from participants in the Arab Spring, leaders and some of the dissidents throughout the Arab Spring countries, that they are lacking faith in the existing institutions: United Nations, the World Bank, EU, the IMF. They claim that their movements are basically countries and coalitions of the willing, NGOs, citizens. There seems to be a lessening of respect for the existing order.

And I’d like to ask both of you – and I think, Secretary Albright, I recall you 12 years ago noticed this at the United Nations, that we needed to expand membership in the Security Council with certain conditions. And my point is, is this a time to reassess existing institutions that have not necessarily been changed since World War II? I’m not saying replace them. I’m saying reinvigorate them, find ways to make them more relevant.

European unity, I don’t think anybody’s saying this, but Steve, you touched on it: Turkey should be a member of the EU. They want to be a member of the EU. They would help the EU, but there are EU countries blocking them. Now how can that happen? It makes no sense.

So I guess my question is this social media revolution, this Arab Spring, if we’re going to get ahead of it, if we’re going to be a part of it, shouldn’t we be looking at, once again, major efforts at the United Nations, which is basically a beacon to the Third World, to expand it, to recognize that the Indians and Brazils, Pakistans and Turkey and Brazil and Mexico? Turkey deserves some kind of a new role.

MR. KEMPE: So time for – is it time for a fundamental reassessment of these institutions?

And Obie Moore, please, last question?

Q: Yeah, my –

MR. : Start talking, please.

MR. MOORE: Yeah, my question is really following up on Stephen Hadley’s comment that the U.S. does not have its economic house in order. And to follow onto Bill Richardson’s comment about the Arab Spring, my concern is where do we develop a real, meaningful, financially backed assistance program? I say this from the perspective of having launched, in 1994, the Romanian-American Enterprise Fund and managed that; it made a true difference and providing the seed capital for young entrepreneurs. The U.S. government was there in a big way, demonstration effect – all those types of development assistance programs. I’ve lived that on fast forward. It really was a success. And the other countries maybe had mixed results. Poland was launched with $242 million in 1991. Romania was $50 million in 1994. But this was a real meaningful effort by the United States government that still has a legacy today. And these countries – particularly these young people, who want opportunities and jobs that are really based upon free market, democratic capitalism.

I was at an Atlantic Council event in New York with Thomas Mirow, the president of the EBRD. The EBRD already has a mandate and a clear direction of assistance and track record. But where does the capitalization come from to expand to additional countries, beyond their current 27? Plus, the Central, East European countries still have knock-on problems from the EBRD investments in those countries that really have to be addressed and you can’t walk away from those.

So my biggest concern is that just because of the financial debt crisis, where governments are so burdened with public finances, not being able to develop – put finances behind these great ideas that these people are going to languish and we’re not going to be able to seize the opportunity.

MR. HADLEY: Let me respond to both of those briefly and then turn it over to Madeline, who’s actually doing some of these things. Yes, yes, but.

Yes, we need to be relooking at these institutions, and not just moving the pieces around but a fundamental relook, in light of both the changed geopolitics, but also the kind of generational change I talked about. And it’s a huge challenge.

You know, the movement, I was in on the debate from moving from the G-7 to G-10, which was, you might be surprised, a raging debate. And we won the argument to go to the G-20 and it was transformative, in terms of dealing with the financial crisis, absolutely transformative. So, yes.

Part of doing things differently and recognizing that the Arab Awakening is a different sort of animal is, a, there isn’t the money to do a major Marshall Plan. I’m not sure there’s the desire in the region for governments to do it in the traditional way. And for both of those reasons, I think the real opportunity, and Madeline can talk about it, is for what the private sector can do, what the voluntary sector can do, what universities can do. And part of it is just keeping hope alive until economic reforms can begin to be in place and produce a better outcome.

And my favorite example is what if in Egypt, someone could go around and get 15 collections of major universities and major high-tech companies to announce that they were each going to build 15 individually, one each, centers in Egypt to train young people, in conjunction with Egyptian institutions on the skills and technologies of the 21st century and then commit to hiring a portion of the people they train in their own operations?

Now, it’s a little pie-in-the-sky, but companies are doing training all over the globe to train the work force they need to hire to produce the projects they need. I think that would have a transformative effect on Egyptian youth, to say the international community is coming to your aid. You’re going to have an opportunity. You’re going to have an opportunity to participate in the 21st century.

We need to do these kinds of creative things in a way I think we haven’t in the past.

MR. KEMPE: Thank you.

Secretary Albright?

MS. ALBRIGHT: Well, I do think that we need to adjust the institutions, but it’s difficult, Bill. I mean, you know, one of the things I taught – when I was ambassador at the U.N., the U.S. had proposed that Germany and Japan be made permanent members of the Security Council. So the first country to come to me to say this is impossible were the Italians. They said, “We have lost the war, too,” which is a strange campaign slogan. (Laughter.) So it’s a little bit like a Rubik’s cube.

Then I would go to a European ambassador, and there were five always on the Security Council, for their help in a vote. And one of them would say, “I’m so sorry I can’t help you; the EU does not yet have a common position.” So then I’d go to the person two days later and I’d say, “Can you help me?” And he’d say, “So sorry I can’t help you; the EU does have a common position,” which means the EU should have one permanent seat. But can you see either the French or the British giving up their veto? No.

So it’s a Rubik’s cube aspect and you have to figure out some way to get around it, because I mean, how many hours did we spend on this issue?

I do think that something that is more reflective of the world – and I don’t know whether it can work or not, but it goes a little bit to what you were setting me up for.

But basically, I think that there are huge multinational corporations, or nongovernmental organizations, that have as much influence on the international system as – and I won’t name any country but some small country that has one vote in the U.N. I would try to figure out how to have a table that actually involved some private sector, both corporations as well as NGOs, and to reflect what is really going on, in terms of the distribution of power.

The thing that Steve has set me up to talk about, and it’s very germane to Turkey, is that President Obama gave a speech in Cairo, then he came here later and gave a speech about having a different relationship with a number of different countries, primarily those that have Muslim majorities, but just generally. And so, they set up – Secretary Clinton asked me to run this, called Partners for a New Beginning. And it is a public-private partnership.

It is getting the private sector to partner with governments in order to do the following things: economic empowerment, science and technology, education, and people-to-people exchanges. Those are kind of the vertical pillars. And the horizontal ones are how to get youth and women involved. And it does mean creating jobs and various – we have an American steering committee made up of CEOs of major corporations.

The vice chair of this whole operation is Muhtar Kent of Coca-Cola and Walter Isaacson of the Aspen Institute, a corporation as well as a think tank, and then local chapters in each of the countries. Turkey is one of our lead countries, in terms of showing how this can work. And I do think that bringing more stakeholders into it – and to go back to what we both started out saying, there’s a real question at the moment about the role of the nation-state. It obviously still is the basic unit of our international system, but there are all kinds of forces outside of it. And the question is how to mobilize them to try to help solve some of these issues that we’re talking about. There are other players and we need to get them into the system.

MR. KEMPE: And just for the record, the Atlantic Council is running the Young Maghreb Entrepreneurs portion of this partnership, so we’re very involved in this very valuable effort as well.

Before I thank these two, I hope you’ll be just patient while I just say one thing. I’m not going to name everyone here who was responsible for the success of this forum. Obviously I don’t call them sponsors, at the forum they’re really members and partners. But they’ve been hugely helpful.

The Turkish government – you saw the level of participation we had. We couldn’t have been so successful without them, particularly the minister of economy. I do want to tip my hat to Atlantic Council staff, people, directors. By name, Ambassador Ross Wilson, who has really made the Eurasia Center – the Patriciu Eurasia Center sing. And then Zeynep Dereli – (interrupted by applause).

If you want to know how to succeed in a quote-unquote, “foreign environment,” just hire someone like Zeynep to run your – no, don’t, please don’t. (Laughter.) But she’s just done a wonderful job here and Ross has just been a terrific leader. And let me tip my hat to both of them.

And I want to close by saying we had Zbig Brzezinski and Brent Scowcroft last year, with this sort of a round. And there’s nothing like having people sitting in these chairs talking to you about the world who have sat in some of the most responsible positions of power in the world. And when you hear stuff from them, you just know they’ve worked the problems. And it just – first of all, both highly conceptual, two of them the most powerful foreign policy minds in America. But I think what really gives it the vibrance is the fact that these are real actors from two sides of the aisle in the United States.

So let me, on behalf of the audience, first of all, close the forum, let you get to your dinners and table conversations, but really thank the two of you very much for this terrific conversation.

MS. ALBRIGHT: Well, thank you. (Applause.)


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