The Atlantic Council Of The United States

Black Sea Energy & Economic Forum 2011

Opening of the Forum

Frederick Kempe,
President and Chief Executive Officer,
Atlantic Council

Mirko Cvetkovic,
Prime Minister,
Republic of Serbia

Recep Tayyip Erdogan,
Prime Minister,
Republic of Turkey

Taner Yildiz,
Minister of Energy and Natural Resources,
Republic of Turkey

Rifat Hisarciklioglu,
Union of Chambers and Commodities Exchanges of Turkey

Location: Istanbul, Turkey

Time: 9:00 a.m.
Date: Thursday, November 17, 2011 

Transcript by
Federal News Service
Washington, D.C.

FREDERICK KEMPE: If you could all take your seats please, we’re about to get started.

Ladies and gentlemen and distinguished guests, I’m Fred Kempe. I’m president and chief executive officer of the Atlantic Council, and it’s my great pleasure to welcome you to the 2011 Black Sea Energy and Economic Forum.

We convene for this, the third forum, at a time of turmoil and uncertainty. Financial crises, sovereign debt challenges in Europe and the United States and the developed and the developing world’s economic challenges have developed in ways and with a persistence that we could not have anticipated when we met here a year ago.

Even less anticipated was an Arab awakening that began with a market vendor’s self-immolation in Tunisia. Popular revolts and their reverberations all across the broader Middle East remain unfinished. Many have really only just begun. And they will have significant implications for all of us, particularly in this region.

A historic diffusion of power is under way in the world, as is a relative shift of prosperity, growth and perhaps influence. There are some disturbing trends, an age of uncertainty, some people say; there are some very encouraging trends, and an age of individual empowerment, the rise of a global middle class, and one has seen that nowhere more prominently than in Turkey.

That we are here in Istanbul reflects the Atlantic Council’s commitment to transatlantic engagement with the 30-odd countries represented at this forum and to working with the region’s leaders on ways to address key issues and how one can more deeply, more effectively, and more prosperously cooperate with one another in the Black Sea-Caspian region to promote freedom, security, stability and prosperity in those regions and beyond.

We convene in Istanbul for the second year in a row, in light of Turkey’s increasingly important position in the region and the world. In a moment of instability in this region, Turkey is an anchor of stability. In a moment of great transformation in the region, Turkey may not always be a model, but it is certainly an inspiration. Turkey has a key role in the transit and trade of energy from the Caspian Basin in Iraq to Europe and other international markets. In commerce, Turkish firms are active and energetic investors and market makers throughout the Black and Caspian Seas region and in the Middle East, North Africa and elsewhere. At a time when growth seems anemic in much of the world, the Turkish economy is vibrant. And in politics, Turkey’s role as a shaper and influencer of international affairs is growing in the Balkans, in South Asia, in the Middle East and North Africa.

So convinced are we of Turkey’s importance that the Atlantic Council hired as the director of our Dinu Patriciu Eurasia Center our former U.S. ambassador to Turkey, Ross Wilson, to be its director. And we also opened up our first office ever outside the United States in Istanbul last January, and we are pleased that Zeynep Dereli, a woman with an outstanding background in both the energy business and politics, represents us here as director of this forum.

The Atlantic Council thanks each and every one of you for accepting our invitation to attend this year’s forum. We are especially grateful to the many firms and other organizations noted in your programs that have extended financial and practical support to the forum, who have partnered with us on behalf of this initiative.

I do also want to express my particular gratitude to Prime Minister Erdoğan, and of course to Energy and Natural Resources Minister Taner Yildiz, and the entire Turkish government for their strong support of this forum, both this year and last year, and we hope very much into the future.

We know this is a challenging time for this country and the region. Our hearts go out to the families of those who lost loved ones during the recent earthquakes and their aftershocks in far eastern Turkey. They, and this country as a whole, should know that the international community is with them, and I hope our presence here today in some small way also contributes to that.

Now, let me do what I’m really here to do, which is to introduce the chairman of the Atlantic Council. He is a great American; he embodies for a lot of us at the Atlantic Council what we stand for: the Atlantic Council chairman, Senator Chuck Hagel. Senator Hagel served for many years in the United States Senate. As a member of the Committee of (sic) Foreign Relations, he was a regular visitor to most, if not all, of the countries represented at this forum, and his office was a regular stop for any leader from this region going to the United States looking for clues as to American foreign policy and relationship with this region.

Senator Hagel presently serves as chairman of the President’s Foreign Intelligence Advisory Board. He’s on advisory boards at the U.S. departments of Defense and Energy. And he serves as a distinguished professor at Georgetown University School of Foreign Service. Please join me in welcoming Senator Chuck Hagel. (Applause.)

CHUCK HAGEL: Fred, thank you. Good morning; welcome.

I add my thanks to each of you who have committed a couple of days to this conference. Thank you. Also, I add my thanks to what Fred has expressed on behalf of the Atlantic Council to our host, the Erdoğan government, the people of Turkey, certainly the people of Istanbul and all those who have facilitated the fact that we are back and are proud to be back in Istanbul for a second annual Black Sea Economic and Energy Conference.

And as Fred said, it is for the reasons that Fred noted and other reasons you will hear throughout the day and tomorrow as to why we chose this venue once again this year for some of the most pressing issues that, in fact, are realigning world affairs, influencing early 21st century geopolitics in ways that are unprecedented. And as has been noted before, we are living at a time truly historic from every perspective, but probably none more so than the fact that we are living at an unprecedented time in the diffusion of economic power, which is driving so much of the influences that are realigning alliances and relationships as we begin this early part of this new century. None of those alignments and relationships are more important than those in this part of the world, and Turkey represents very much the anchor of that dimension.

I also wanted to note, in case you were not all aware, of the fact that the United States ambassador to Turkey, who is an old friend, who is one who is no stranger to this part of the world, Ambassador Frank Ricciardone is here with us for this conference.

And Frank, thank you. I know you have many important duties to attend to. We are grateful that you would take your time to spend with us, as is the case with many other not just American senior officials but officials from other governments. So thank you all very much.

Now, let me introduce the organizer of this conference. Fred mentioned Ross Wilson before. Ross Wilson has been for the United States government one of the preeminent Foreign Service officers, selfless public officials over his 30-year career in the Foreign Service of the United States government. As was noted by Fred, he is a former ambassador here to Turkey, has many friends in this audience and throughout this country. He was also United States ambassador to Azerbaijan, held many key posts over his years. Currently, one of the responsibilities he has with the Atlantic Council is director of our Dinu Patriciu Eurasia Center, as well as being called upon to attend to other important issues, and not just within the Atlantic Council but in the current administration that is also part of his overall portfolio of responsibilities.

Ross has done another magnificent job of putting together, we think, what is going to be one of the best conferences the Atlantic Council has hosted over the years, and I hope after your two days here you will agree with that as well.

Ladies and gentleman, Ambassador Ross Wilson. Thank you. (Applause.)

ROSS WILSON (Director, Dinu Patriciu Eurasia Center): Thank you very much, Senator Hagel, for those very kind words. Please let me add my own welcome to all of you. I am committed to this forum because I care deeply about the success in this part of the world, and because, of course, I love coming back to Turkey after my tenure here.

We envision this forum as an ongoing set of activities, not just an annual conference, intended to promote cooperation and integration. The Patriciu Center team and I welcome your ideas and input on how to accomplish those objectives. We look forward to working with our many partners in this room over the coming year.

It’s my pleasure to welcome here Ümit Boyner, the president of the Turkish Industry and Business Association. TÜSİAD is among the most influential independent business associations in Turkey. It plays a particularly active role now in working to expand trade and investment relations with a number of countries, including the United States, and we were pleased to welcome Mrs. Boyner to Washington just a few weeks ago. TÜSİAD will honor the forum by hosting later today our luncheon in honor of its 40th anniversary. Thank you very, very much for this.

Please join me in welcoming TÜSİAD President Ümit Boyner. (Applause.)

ÜMIT BOYNER (President, TÜSİAD): (In Turkish.)


MR. WILSON: Thank you, Mrs. Boyner.

It’s now my pleasure to introduce Rıfat Hisarcıklıoğlu, president of the Union of Chambers and Commodity Exchanges of Turkey. TOBB’s membership here numbers some 1.3 million businesses and other organizations, and this gives TOBB and Mr. Hisarcıklıoğlu a major role in shaping Turkish policy on commercial, economic and other matters.

Under Rıfat-bey’s leadership, TOBB played a crucial role in confronting the effects of the global financial crisis in Turkey, through initiatives aimed at stimulating domestic consumption at a time when foreign demand had dropped significantly. TOBB is one of the forum’s principal sponsors and partners, for which we are very grateful.

Please join me in welcoming Rıfat Hisarcıklıoğlu. (Applause.)

RIFAT HISARCIKLIOGLU: Mr. Ambassador, when you leave Turkey, 100,000 (enterprise?), that includes our members. Now the members is 1.4 million.

(In Turkish.)


MR. WILSON: Thank you very much, Mr. Hisarcıklıoğlu.

Our next speaker is a particular friend of mine, of the forum, and of the Atlantic Council. Taner Yıldız became Turkey’s minister of energy and natural resources in April 2009. An electrical engineer by training, Minister Yıldız has served as a member of the Turkish Grand National Assembly since 2002. In his present position, he is the key player in shaping the Turkish government’s energy policy, including with respect to a new southern corridor gas pipeline that we will be discussing here in the next two days, the development of a new Turkish nuclear power industry, as well as new wind, solar, geothermal and hydro resources, and the privatization of the power sector.

In two and a half years in office, his performance has been impressive. Minister Yıldız, as I’ve noted, has been a friend and supporter of this forum since he attended its first gathering at Bucharest in 2009.

Mr. Minister, we are deeply grateful for the advice and assistance and other support that you and your minister have given and helped to mobilize toward making the Black Sea Energy and Economic Forum a success.

Please join me in welcoming Minister Yıldız. (Applause.)

TANER YILDIZ (Minister, energy and natural resources): (In Turkish.)


MR. WILSON: Thank you very much, Minister Yıldız.

It is now my pleasure to introduce Deputy Prime Minister Ali Babacan of the Republic of Turkey. Very few, perhaps no other finance minister in Europe can claim a record of success over the past decade as impressive of that of Turkey’s, in which Ali Babacan has played a decisive role, first as minister of state for the economy in 2002 to 2007, and since his appointment as deputy prime minister in April 2009, with a two-year stint as foreign minister in between. A Fulbright scholar, Ali Babacan is a graduate of Northwestern University, of Northwestern University’s Kellogg School of Management.

Mr. Minister, thank you for your friendship and for your support of this forum. We are very pleased to have you with us again this year.

Please join me in welcoming Deputy Prime Minister Babacan. (Applause.)

ALI BABACAN (Deputy Prime Minister, Republic of Turkey): (In Turkish.)


MR. HAGEL: Thank you. Mr. Babacan, thank you. We are always grateful to hear from you. And your presentation last night at dinner was particularly welcome and insightful.

Ladies and gentlemen, I have the honor and the privilege to introduce you to the prime minister of Turkey. It has been said here this morning and it has been many times noted over the years that Turkey is the democratic and economic anchor of stability in a very important region of the world. One of the main reasons that is so is because of the leadership of Prime Minister Erdoğan.

Prime Minister Erdoğan’s government came into existence in early 2003. On a personal note, in December of 2002, then the chairman of the Senate Foreign Relations Committee, now Vice President Joe Biden and I were traveling around the Middle East for a 10-day visit. And I believe it was then-Chairman Biden and I who were the first American officials to greet the new incoming Erdoğan government that was about to take power after an historic election that had occurred a couple weeks before Biden and I arrived in Ankara.

This was the beginning of my understanding of what was about to take place and truly transform a great culture, a great country in many important ways. For the West, Turkey has been one of those indispensible allies since the early 1950s as one of its most reliable NATO partners, a country with relations with its countries all over the region, positioned in a critically important way for not just the geopolitical realities of our time but the two main issues that we explore in this conference, energy and economics. Driving these alignments and realignments and new geopolitical dynamics that influence the early part of the 21st century are represented here in this region. And none represent it in a more comprehensive, insightful, forceful way than here in Turkey under the leadership of Prime Minister Erdoğan.

Ladies and gentlemen, we have thanked the prime minister and his government and the people of Turkey this morning. But once again, on behalf of the Atlantic Council let me thank the prime minister for taking time this morning as well as many of his distinguished members of – leading members of his Cabinet and those who are changing a world that is not just sometimes unpredictable but many times dangerous and volatile. And for your leadership we are grateful.

Ladies and gentlemen, Prime Minister Erdoğan.

RECEP TAYYIP ERDOĞAN (Prime Minister, Republic of Turkey): (In Turkish.)


MR. HAGEL: Prime Minister Erdoğan, thank you.

Ladies and gentleman, now allow me to introduce the prime minister of Serbia, Mirko Cvetković.

We are most grateful, sir, that you are with us this morning. The prime minister’s government took effect in Serbia in 2008. Under his leadership, calling upon his extensive experience in his country’s government, Serbia is well on its way to integrating itself into the European economy, playing a significant role in helping stabilize his region of the world. Of course, energy, like all parts of the world and all economies and all nations, plays a significant part and has a tremendous influence on the future of his country.

We are particularly grateful that he would make time and come to our conference this morning. Ladies and gentlemen, the prime minister of the Republic of Serbia, Mirko Cvetković. (Applause.)

MIRKO CVETKOVIĆ: Dear Prime Minister Erdoğan, esteemed excellencies, ladies and gentlemen, it gives me a great pleasure to be here in Istanbul today and to address you at the Black Sea Energy and Economic Forum.

At the outset, I would wish to express my gratitude to all those who have organized this forum, which comes at the right point in time. The security of energy sources and supply routes is among the most important issues for the governments of the countries in the region, international export community, and politicians. Severe economic crises of international proportions has not diminished the global significance of energy security. And assuring accessible and reliable energy sources and security of supply are the necessary prerequisites for economic development. In the last couple of years, we have experienced fluctuations in energy prices, which had the strong effect on the national economies. All of this has once again brought the energy stability into the focus.

On the other hand, the stability and cyclic changes, inherent energy prices on the global market, the drop in all-world demand due to the reduction of primary production and financial constraints, as well as regional problems in security of supply and delivered quantities of energy have all given the particular issue not only an economic but a political dimension too. Insufficient energy interconnectedness between neighboring countries, dated or nonexistent transmission infrastructure, and lack of natural interconnections are all issues which have surfaced and gained particular significance as the need for strengthening regional dialogue and developing energy networking mechanisms grows.

This is the reason why it is important to define energy strategies, which would reinforce the strengthening of international energy capacities, turning to renewable energy sources, increasing energy efficiency, energy sources diversification, and energy transformation of routes as its top priorities. As a member of the European Energy Community, Serbia is firmly committed to giving its full contribution to regional energy networking.

For this reason, Serbia initiated the development of the Regional Energy Development Strategy last year. The proposal met with approval of all contracting parties, and in 2011, the Energy Community Secretariat has developed a document containing basic guidelines for the development of the regional strategy. I would wish to remind you that the main goals of the Energy Community are establishing an integrated energy market in the region of Southeast Europe, thus enabling closed-border trade and links with the international market of the European Union, strengthening security of supply, attracting investments into power generation sector, rehabilitation and construction of energy transmission network, and improving environmental protection.

By signing the Agreement on the Energy Community, the countries of the Southeast Europe have confirmed the significance of establishing an integrated energy market as well as their readiness to jointly face challenges on the way to a full integration of the whole region into a single European Union energy market. The challenges include the following: strengthening institutional capacities, implementing energy market integration reforms, strengthening energy security, increasing energy efficiency, and environmental protection. The countries of this region have particular geostrategic importance due to the fact that they are located on the transit road between central Europe, Caspian Basin, and near east, which is critical for the construction of the European energy infrastructure.

Serbia is strongly in favor of identifying concrete projects which would be implemented through cooperation between regional countries, such as the construction of reversible hydropower plants, interconnections between the Republic of Srpska in Bosnia and Hercegovina, Serbia and Italy renewable energy sources, installing telecommunication cables in parallel with gas infrastructure construction of regional gas storage facilities, and implementation of the South Stream project. Owing to its participation in South Stream gas pipeline construction project, Serbia now plays an important role and is gaining regional importance.

The signing of the agreement with Russia for the (ratio?) which pertains to the construction of a section of the South Stream international gas pipeline through Serbia and the construction of Banatski Dvor underground gas storage facility has given Serbia a prominent place with growing responsibility as it is now part of the main transit route to the European market. At the same time, the development of the main gas infrastructure is an opportunity to engage economic service, providing capacities of the Republic of Serbia to enhance the growth of the national economy, reduce unemployment and strengthen the social component of market economy. This is yet another window of opportunity for Serbia to become a bridge between different countries which are not directly involved in the project, and to establish itself a valuable and a reliable regional partner.

Being original center located at the crossroads of strategic energy and transportation routes, Serbia is open for participation in other projects and plans, geared towards strengthening security of energy supply, technological streamlining and expansion of transport and storage capacities, and regional networking. Increased interdependence between end users and producers of energy in Europe and Asia also requires that the governments of all the countries involved assume great responsibility, with the Black Sea region having particular importance.

The energy potential of the Black Sea region has brought about the adoption of the EU strategy for the Black Sea by the European Parliament in January of this year. The objective of cooperation is to achieve sustainable production and consumption of energy in the region, which requires close cooperation between member states, multinational companies, and international organizations. The segment of an environmental protection which includes effort exerted towards finding alternative energy sources and reducing consumption should also be stressed.

Serbia actively participates in the organization of the Black Sea Economic Cooperation, in particular with the Energy Working Group. In view of the significant energy potential of the Black Sea region, we intend to organize during our BSEC chairmanship starting in January and ending in June 2012 an energy-related ministerial meeting.

I see this forum as well as the cooperation between our countries within the Black Sea Energy and Economic Forum not only as a mechanism for pursuing and strengthening our joint energy policy but also as yet another pillar supporting the development of long-term and friendly economic relations which are conductive to the stability of the region.

Thank you very much. (Applause.)

MR. WILSON: (Name inaudible) – Prime Minister Cvetković, other distinguished speakers, thank you very much for opening the 2011 Black Sea Energy and Economic Forum. Your remarks have helped set the stage for the next two days and given us plenty to reflect upon.

To complete our opening ceremonies, we are very proud and honored to welcome here the Tekfen Philharmonic Orchestra. We’re grateful to the players that I hope will be assembling now, to enter the orchestra’s backers, especially to my friend – (name inaudible) – for making this piece of the forum available.

Originally called the Black Sea Chamber Orchestra, this group was founded 19 years ago with the sponsorship of Tekfen Holding, with the aim of improving and enriching culture relations in the region. There are players originally from 17, now I understand 23 countries; each individual brings his own style and interpretation to the music that we will hear. We’ll have a brief pause to let the group, let some of our distinguished guests step out, and to let our musicians come in. Thank you all very much for your participation this morning. (Applause.)



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