Atlantic Council Energy & Economic Summit: “New Opportunities in a Dynamic Region”

Frederick Kempe,
President and CEO,
The Atlantic Council

Ross Wilson,
Director, Dinu Patriciu Eurasia Center,
The Atlantic Council

The Honorable Francis Ricciardone Jr.,
U.S. Ambassador to the Republic of Turkey

Keynote Speakers:
Minister Taner Yildiz,
Minister of Energy and Natural Resources,
Republic of Turkey

Zbigniew Brzezinski,
Former National Security Advisor,
Atlantic Council International Advisory Board

Phillip Rosler, M.D.,
Federal Minister of Economics and Technology,
Vice Chancellor of Germany

Ali Babacan,
Deputy Prime Minister,
Republic of Turkey

Location: Istanbul, Turkey

Date: Thursday, November 15, 2012

Transcript by
Federal News Service
Washington, D.C.

FREDERICK KEMPE: Your – excuse me – your Excellencies, distinguished guests, ladies and gentlemen, I’m Fred Kempe, president and CEO of the Atlantic Council. Welcome to the fourth annual Atlantic Council Energy and Economic Summit. That’s partly true – it is the fourth annual summit of this kind; we renamed it this year the Atlantic Council Energy and Economic Summit. Before, it was called the Black Sea Energy and Economic Forum. We saw that Istanbul in Turkey was painting on a larger canvas, and so we have done the same with this summit.

We convene in Istanbul for the third year in a row here in this beautiful and historic city that has always brought together East and West in very unique ways. And we do it for two reasons. First of all, we do it because of the central role that Turkey is playing both in its region and in the world – the remarkable, remarkable growth of this country both in terms of its economy and in its influence.

We also do it because you all like coming here. This is one of the most delightful cities, to spend some time on the banks of the Bosporus.

We also like what takes place not in these meeting rooms. More and more business deals are being done on the margins. Today, in the afternoon, there will be the signing of a joint declaration on energy cooperation between Germany and Turkey, between Minister Yildiz and Minister Rosler. We’re just delighted that that sort of thing can occur on the margins of this summit. That was always our intention, to use this as a forum to drive closer collaboration, cooperation and integration.

I’m going to turn the podium over briefly to the director of our Dinu Patriciu Eurasia Center, Ambassador Ross Wilson. He was ambassador to Turkey, ambassador to Azerbaijan. He’ll introduce our first two speakers. I’ll then come back and introduce the final three speakers of this opening – of this opening session.

I also want to tip my hat to the director of this summit, Orhan Taner, who has opened up our office here in Istanbul and has just done a magnificent job. I think you’ll all see this year a step forward from the already high level of quality and engagement here very much due to Orhan’s great work.

Ambassador Wilson?

ROSS WILSON: Thank you very much, Fred. Good morning to all of you. Welcome to Istanbul. It’s my honor to be part of this opening. It’s my honor to be part of the Atlantic Council.

Several years ago, Dinu Patriciu, the namesake of the center at the council that I head, had the idea for this initiative that aims across a very large area extending all the way from Central Asia in the east to East Central Europe and the Levant in the west, where common economic, social, cultural and especially historical relationships tie together communities that have been torn apart by the histories of the 19th and 20th centuries. And his idea was to rekindle a sense of community and a sense of common purpose in this part of the world.

The Atlantic Council has taken that idea, has developed it. This is, as Fred noted, the fourth year that we are doing this. And we aim here to promote a full and regional conversation about the energy issues, the business and economic challenges this region faces and of course also about the politics of this part of the world among all these countries centered around Turkey but looking out around the Black Sea, the Caspian, the Eastern Mediterranean, North Africa, Central Asia, Afghanistan, Iraq and many other parts and players who are here.

Let me thank on behalf of the Atlantic Council our many sponsors, partners who have made this possible. They are detailed in our program, and we are very, very grateful to them. We are especially grateful to the Turkish government for its strong support represented here today by Deputy Prime Minister Babacan, who honors us with his presence, as well as the strong support of Turkish Energy Minister Taner Yildiz and his staff that have done an immense amount to help us bring this about.

To lead off today’s opening ceremonies, we’re very pleased to welcome the American ambassador – the current American ambassador; we have several ex-American ambassadors to Turkey – but the current American ambassador to Turkey, Frank Ricciardone, to make a few remarks.

Ambassador Ricciardone is a graduate of Dartmouth College. He was a Fulbright scholar, a teacher in Iran and the Middle East – and that was all before he joined the Foreign Service, where he’s had an extraordinarily distinguished career that has concluded with three consecutive assignments as ambassador – American ambassador to the Philippines, to Egypt and now here to – here to Turkey.

Please join me in welcoming ambassador of the United States to Turkey, Frank Ricciardone. (Applause.)

AMBASSADOR FRANK RICCIARDONE: Ross, thank you very much. Dr. Kempe, thank you, and the organizers of the North Atlantic Council, for the extraordinary privilege of spending a few minutes with you at the outset. Deputy prime minister, Minister Yildiz – (name inaudible) – Minister Hamli, other ministers and distinguished guests, it is a very special time to be in this very special place. As we all know, it’s a region that is in the throes of dramatic change, turbulence. Change is inevitable. Progress is not. Change is not always positive. But in Turkey, we face change that is dramatic and positive and directed, change that is in the form of renewal. And a good part of that renewal is its focus on the economy and on energy as strategic foci of change and national interest, which brings us all together today.

Dr. Brzezinski spoke last evening very eloquently about what the elections in the United States might mean, and he pointed to what I always cite as my instructions from President Obama. President Obama came here in his first overseas tour as president, the first country that he visited overseas, and he said that our purpose with Turkey is to renew the alliance between our nations and the friendship between our people. And I submit to you that renewal is what we all hope comes from change – purposive change, directed change by governments, by civil society, by businesses all represented here today. So the discussions we will have and the exciting agenda on the strategic energy matters all look at renewing our world through renewing the energy relationships in this region.

We’ve had fair success in renewing Turkish-American relations. We’d love to take the credit for our two governments, our leaders; our pledge to do so at the outset of President Obama’s first term. We have to give a lot of credit though to Turkey’s own dynamic internal renewal. In many of our countries, our legislatures are having a very hard time even passing budgets. In Turkey, the country has set for itself the goal of rewriting its constitution from scratch, a huge ambition that reflects the ambition of a people that is newly confident in its prosperity and in its strength as a democracy. That’s not to gainsay the conflicts, the problems, the issues, the noise, but all of that is part of the great dynamism that we face.

The program today is very exciting. I’m sure it will be illuminating. I’m especially pleased to be here with not only three of my predecessors but some of my longest friends and colleagues in the Foreign Service, Ambassador Parris, Ross Wilson, whom you have met, Jim Jeffrey, who has moved next door and then moved back to the United States. I expect very illuminating discussions. I wish everyone a very successful conference, a very productive one and a wonderful time here in Turkey.

Thank you very much. (Applause.)

MR. KEMPE: Thank you very much, Mr. Ambassador.

A relative handful of people in this room, I think, attended the first Black Sea Energy and Economic Summit in Bucharest in 2009. One of those was Turkish minister of energy and natural resources, Taner Yildiz.

There, it was agreed that this event would be brought to Istanbul. We had our first here in 2010, as Fred Kempe noted. And for the reasons that Fred noted, we’ve gotten stuck here. We like it here, and it’s a very productive place for us.

Minister Yildiz and the ministry as a whole have given exceptional support to us at each of these gatherings – political support, moral support; I think especially the most important support that a government official can give, which is time, the time that he has invested and helped to generate by other senior members of the Turkish government. We are, I think, especially honored to have him here with us. We are honored to have his support in this vision of a community of – a strengthening community of common interests and are very pleased to welcome him.

Taner Yildiz has been a member of the Turkish parliament since 2002, minister of energy and natural resources since 2009. He has, I think, played a critical role in energizing Turkey’s regional and global energy diplomacy and in transforming Turkey’s energy cooperation with the United States.

Please join me in welcoming Minister Taner Yildiz. (Applause.)

MINISTER TANER YILDIZ: (Speaks in Turkish.) (Applause.) (Music plays.)

MR. KEMPE: Thank you, Minister Yildiz.

I also recall the conversation we had four years ago and the vision you showed for your country that is reflected in these amazing statistics of tripling of energy – excuse me – tripling of GDP, doubling of energy. I want to thank you personally on behalf of the Atlantic Council, because this in a very real sense is also your summit, Mr. Minister. And without you, we really couldn’t be doing what we’re doing now and we couldn’t have built what we’ve built.

Let me say two words about the Atlantic Council and the context. The Atlantic Council was established 50 years ago by the great and good of American foreign policy, Dean Acheson, Henry Cabot Lodge, Lucius Clay, as a society organized to promote and advance transatlantic ties.

An organization that lasts for 50 years is an organization that has to adjust to the times, just as this summit has to adjust to the times addressing common challenges. And if you look at the agenda for the next two days, we are taking on what’s happened and what’s happening now: The re-election of President Barack Obama, driven by some dramatic demographic changes in the United States, among other impacts; a stronger mandate than many had hoped on one side but not as strong as many had hoped on the other side.

But we’re not only talking about U.S. politics. We’re talking about a conventional gas revolution that’s going to affect the United States, Europe and geopolitics. We’re talking about China, this morning, has chosen its leader potentially for the next decade. And in a session this morning, global trends; we’ll talk about the trends through 2030 driving issues. And of course, I was talking to the minister and the deputy minister earlier this morning about issues of Syria, about Iraq, about Kurdistan and Turkey’s growing role in the region and the world. Questions of NATO, questions of patriot missiles, these are all there. And of course, Europe facing its most existential challenge since the creation of the coal and steel community – and we’ll hear about that at our lunch today from Deputy Prime Minister Babacan and also Deputy Prime Minister of Kazakhstan Kelimbetov. So just a rich, rich agenda. Now, it’s – and we’ll keep moving every year with the – with the events of the day.

Now, it’s my great pleasure to introduce Dr. Zbigniew Brzezinski, who served as national security adviser to President Jimmy Carter and is a member of the Atlantic Council’s International Advisory Board. On a personal note, he was very much an inspiration to me for the course that I’ve taken in my life toward transatlantic relations and, at that time, dealing with questions of the Soviet Union, but he’s been an inspiration to thousands of others through his – through his career.

He was awarded the Presidential Medal of Freedom for his role in the normalization of U.S.-China relations, for his contributions to American policy on human rights and national security. He’s a prominent member of the – he has been a prominent member of the faculties of Columbia and Harvard Universities and the Johns Hopkins University School of Advanced International Studies. His latest book, called “Strategic Vision,” actually should be his middle name, because he embodies strategic vision. Please join me in welcoming one of the great strategic thinkers of our time to the podium, Dr. Zbigniew Brzezinski. (Applause.)

ZBIGNIEW BRZEZINSKI: Thank you very much, Fred, distinguished guests and ladies and gentlemen. First of all, let me say how enormously delighted I am to be here in this magnificent city in this – such an important country, and to revel in the symbolic Turkish and European cultural dimensions of our environment here. It’s a genuine cultural political pleasure.

I’m very mindful of the fact that nearly four years ago in Ankara, the president of the United States, the newly-elected-then president of the United States, President Obama, on his first trip abroad, unequivocally stated that Turkey is a vital ally, an important part of Europe, and that America and Turkey must stand together. I was particularly taken by one phrase in his speech in which he said – and I quote – “Turkey’s greatness lies in your ability to be at the center of things. This is not where East and West collide. This is where they come together in the beauty of your culture, in the richness of your history, in the strength of your democracy.”

In endorsing his view, I today want to share with you my very condensed assessment of the – (inaudible) – global and also regional geostrategic context in which our respective countries find themselves. To put it most succinctly: Globally, we are live in a post-hegemonic world. The 200 years of conflict for world supremacy have come to an end. Nuclear weapons will transform a hegemonic war into a collective suicide. Worldwide political awakening of the masses make the quest for political hegemony by a single power futile, and the rise of China, India, Japan, Indonesia, Brazil, preclude global domination by any single region.

Furthermore – and it is quite striking – each of the major powers in the world, including the richest, militarily most powerful, America, suffers from severe domestic weaknesses. This is not only the case with America and particularly its war fatigue but of the European Union with its financial crisis, of China with its potential social unrest, of Japan with its recession, of Russia with its stagnation and of India with its internal gridlock. These powers can still quarrel, but they can no longer afford to try to unilateral dominate the world. And so increasingly now, they have no choice but to accommodate.

At the same time, Turkey, one of the principal members of NATO, is on the edge of the region that, today, from Suez to (Sichuan ?), from the Caspian Sea to the Indian Ocean is the most combustible part of the world. An explosion in it – be it because of military action against Iran or because of wider violence in Syria – could ignite conflicts in Iraq, Lebanon, Jordan or, because of lack of a willingness to compromise, ignite the Israeli-Palestinian conflict. And that in turn could further radicalize politically and religiously the Egyptian masses. All of that cumulatively could be catastrophic for the world’s political and economic stability.

In that dual global regional context, Turkey today is the key pivotal power. Its success as a European-type democratic state is vital to Europe’s security and also to the future fate of this unstable region. This unique geostrategic role of Turkey can perhaps be illustrated and even dramatized by two very hypothetical questions, both involving scenarios that I listen to emphasize today are not likely.

But just consider what would the region be like if Iran suddenly became like Turkey, an impressively modernizing democracy? The region would become dramatically more stable and more promising. That in itself illustrates the significance of Turkey’s historical undertakings. But conversely and even far more unlikely, let me pose a truly excessive hypothesis simply for purposes of illustration. What would this region be like if Turkey, because of spreading regional, ethnic and religious violence, became like Iran? It would become a transmission belt of violence and unrest to Europe. One also has to wonder how secure would be both Georgia and Azerbaijan from a Russia that currently still resents the dissolution of the Soviet empire.

Thus today, Turkey, the pivotal power in a vitally important region and as a major source of Europe’s security and America share a common interest in reaffirming the vitality of the Atlantic Community. And that makes me recall how important, in the most threatening, ominous days of World War II – specifically in 1942 – was the proclamation of the Atlantic Charter. Its brief statement, issued by the leaders of Great Britain and of America contained a shared vision for the democratic world. It lifted spirits and served as a beacon in the very darkest of days. I actually even remember the impact on my own household, my parents and myself, when I was just a child, when that Atlantic Charter was promulgated.

So let us perhaps consider something which might seem today premature. Perhaps it might be time, given the difficulties that the European Union is now facing and that this region is now confronting for a new Atlantic Charter – the reaffirmation by the American and European democracies and of all NATO members of our common mission and destiny.

Thank you very much. (Applause.)

MR. KEMPE: Thank you, Dr. Brzezinski, for those brilliant comments and some provocative and very positive ideas. Certainly, we would much prefer seeing that Iran go the way of Turkey. What an interesting notion, to imagine that kind of world. The idea of a new Atlantic Charter – this is the kind of thing we want to take up at meetings like this because this may actually be the time for a reaffirmation and a broadening of the Atlantic community, which you’ve written about yourself. We are beginning to talk ourselves about a global Atlantic where Atlantic is a set of ideas.

Next, I would like to welcome His Excellency Philipp Rosler, Germany’s vice chancellor and federal minister of economics and technology as well as federal chairman of the Free Democratic Party. Minister Rosler, your country has been a pillar of stability in some difficult economic and financial winds. We’re so delighted that this declaration of cooperation with Turkey will be signed today because we also see the relationship between Germany and Turkey as also something that could be a real relationship of stability in this difficult region and Europe.

Vice Chancellor Rosler has a fascinating life story. Born in Vietnam, he was taken as an infant into a Catholic orphanage during the war there. He came to Germany, received medical training – medical training as a heart and chest surgeon – maybe not bad training for the current economic situation we’re in – and served as a doctor and medical officer in the federal armed forces. He was elected to the state parliament of Lower Saxony and joined Germany’s federal government in 2009.

Please join me in welcoming the vice chancellor of Germany, Dr. Philipp Rosler. (Applause.)

DR. PHILIPP ROSLER: President Kempe, Prime Minister Babacan Ali, Mr. Yildiz, Mr. Brzezinski, Mr. Poneman, members of parliament – (inaudible) – Excellencies, ladies and gentlemen, thank you very much for the invitation to attend the Atlantic Council energy and economic summit. I would like to say a particular thank you to the Turkish government for its hospitality. There is probably no better location for the energy and economic summit than Istanbul. The city is a merging part of East and West, a bridge between the Occident and the Orient. There is really is an enormous economic and urban dynamic here and, at the same time, the city is representative of many of global and bigger trends.

This year, your summit is taking place at a time of many economic uncertainties. I share the concerns of the IMF that we could face a serious global economic slowdown. Among the particular burdens are the debt crisis and lack of growth in some of European countries. This crisis is primarily a crisis of confidence triggered by increasing level of government borrowing and a lack of competitiveness in certain European countries.

We have already started to address both of these issues. We in Europe have agreed on new basic rules for a union of stability and growth. Many member states have clearly improved their level of competitiveness. Portugal and Ireland are good examples here. It is now crucial for us to continue to implement the new rules resolutely. The USA, also, is also facing big challenges in budget consolidation. If the U.S. Congress fails to agree by the end of the year, the country is at risk of huge budgetary cuts and tax rises. If the U.S. were to fall off the edge of this fiscal cliff, America’s economy and labor market could be considerably damaged. This would also impact upon the global economic situation. The Asian dragon is also lacking fire. The past few months, China’s growth has fallen to levels that we haven’t seen since the beginning the financial crisis.

In spite of the difficult international environment, the German economy remains robust. In fact, we are anticipating total growth of 0.8 percent of this year. And for next year, we project the economy to grow by 1 percent. Such growth are only possible thanks to the solid structural basis of the German economy. Among Germany’s particular strength, our highly productive, small and medium-sized enterprises. The German Mittelstand is regionally rooted and makes exports to countries right around the world. It is famous for both closeness to the customer and for quality. It also stands for innovation. One such example is German engineers, who use modern information and communication technologies to develop new appliances, production processes and factories. Many people are already speaking of “Industry 4.0” as the future global language of production.

Germany and Turkey are linked by close trade relations in all of these areas. Last year, our bilateral trade reached the record figure of almost 30 billion euros, and we are also strong partners in investment. Germany remains one of the biggest foreign investors in Turkey. There is particularly strong bilateral integration between our countries in the area of manufacturing. The expansion of the Turkish energy industry also offers tremendous opportunities. A prime example of this is Evonik’s coal-fired power station in Iskanderkul, which with an investment volume of 1.5 billion U.S. dollars is the largest German investment project in Turkey. And when it comes it energy, German company offer high level of expertise as well as innovative technologies.

This is an area which is spawning new markets and business opportunities for industry and trade. And for its part, Turkey has enormous potential in renewable energy – hydropower, solar and wind. This is in addition to the growing importance of Turkey as an energy supply hub, which is also a topic that will be discussed at this summit. This means that there are very good opportunities for even closer cooperation between our two countries. We therefore intend to set up a joint energy forum focused on energy security in Germany and Turkey. There is no other E.U. country that maintains closer economic relations with Turkey than Germany.

We therefore have a strong interest in close relations between Turkey and Europe. The beginning of the Turkish constitutional reforms marks a further step in Turkey’s movement towards Europe. I fully support the continuation of E.U. accession negotiations. As you know, this is an open-ended process that will not lead to a lose conclusion automatically, but we should conduct these negotiations diligently in an atmosphere of trust and of utmost honesty.

There are good reasons why Turkey can be seen as a very positive example for Arab spring countries, and this is also true when it comes to the combining of democracy and Islam. I am confident that Turkey will continue to act as a role model and successfully continue its process of reform.

A strong and modern Turkey is also important for the North Atlantic family of nations. Considering the current conflicts in its direct neighborhoods, Turkey can rely on the solidarity of both the E.U. and of NATO. This is of vital importance, especially as we are currently experiencing a fundamental paradigm shift in the region.

Ladies and gentlemen, the Atlantic Council brings together an impressive group of decision-makers and experts to discuss all of these subjects with one another. Your summit focuses upon the major economic and energy policy issues for both the region and the world. And this is exactly the right approach. The economic prosperity and a reliable energy supply are of vital importance not least for modern security policy. So let us continue to work together closely for prosperity, growth and a bright future.

So thank you very much for your attention. (Applause.)

MR. KEMPE: Dr. Rosler, thank you so much for that important statement – the endorsement of deeper Turkish-German relations and also some words about the accession efforts of Turkey to the European Union.

To close this opening session, I am pleased to introduce His Excellency Ali Babacan, deputy prime minister of Turkey and three-term member of the Turkish Grand National Assembly.

Mr. Deputy Prime Minister, I have been coming to Turkey over 25 years. In fact, at the Wall Street Journal Europe, we were among the first to push very hard when I was editor for E.U. membership of Turkey. Steve Hadley, our national security – former national security adviser, last year at this summit wondered whether the E.U. now had to decide whether it was going to join Turkey rather than the other way around, but that will be something for a later session.

But in those 25 years, I have seen changes in Turkey that are just mind boggling. This country was inflation-rate ridden and often ill-managed. It was inward-looking very often. It has changed so much for the better as all of us see who visit Istanbul. That change has many fathers, but few of them have been as important as the strongly pro-market, pro-sound management, pro-global integration hand of Deputy Prime Minister Babacan.

The council was pleased to host the deputy prime minister in Washington last April where he gave an insightful presentation on the global economy that included important ideas for growth, sound financial management, and steps that needed to be taken by European and G-20 leaders to put the world economy right. It was statesmanlike – a statesmanlike performance that reflected your experience of 10 years in government, economics minister, foreign minister and now deputy prime minister. We’re extraordinarily grateful to you, Mr. Deputy Prime Minister, for your leadership, for honoring us today and for supporting this important Atlantic Council initiative.

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

DEPUTY PRIME MINISTER ALI BABACAN: (Speaks in Turkish.) (Applause.)

MR. KEMPE: Mr. Deputy Prime Minister, thank you for those – for those very important remarks really setting the scene for the two days – the two days ahead: Europe at the heart of the problem, a bit of a warning about the U.S. and where it’s going to steer economically in a very fragile situation. Given what you’re facing very nearby in Syria, very nearby with the eurozone crisis, et cetera, it’s all the more remarkable Turkey’s success at the moment.

Before I conclude this opening, let me just say a couple of words about the next two days – and I’ll be very, very brief. As you can see by the agenda, it’s very rich. As the deputy prime minister also noted, very high level of speakers. Except for the lunches and the dinners, most of the 18 sessions are going to be parallel. That means usually one on energy in one of the rooms and then another one on economics or politics, typically, on the other. There’s plenty to spark your interest.

The next sessions – and we’re running a little bit behind; I think that was expected with this important session. But we hope out of respect for the speakers that you’ll get to these next meetings. Their schedules start at 10:30, so if you can get there in 10 minutes.

The first is “New Gas and Europe’s Energy Security,” which takes place in Fuji Ballroom I, which is right next to this room; and then “Global Trends 2030,” that reviews forecasting work by and with the U.S. National Intelligence Council in the Lausanne Room down the hall. This is a very important session because you’ll be able to receive a sneak preview from the long-term planning chief of the National Intelligence Council. They don’t do much in an unclassified way, and this will be a sneak preview of the quadrennial report they do for the newly elected president of the United States – re-elected president of the United States, which will be released in Washington December 10th and 11th.

Thank you all for coming. We hope you all have a great summit. (Applause.)


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