H.E. President Abdullah Gül's Adress at the Working Luncheon Hosted by the American-Turkish Business Council

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Distinguished Guests,

Ladies and Gentlemen,

It is a pleasure for me to speak at this wonderful event hosted by the Turkish-American Business Council. I would like to thank you for organizing this luncheon.

I know that many in this audience have worked with enthusiasm and dedication for years to forge closer ties between Turkey and United States. Both countries have benefited from your able efforts. You are indeed very much appreciated.

Distinguished Participants,

Let me start out with a brief outline of Turkish-American relations.

You all know that we are close allies and partners. We remained vital to each other’s security for many decades. We stood together in the face of many challenges during the Cold War. We became even closer in its aftermath.Our partnership has proved its worth at times of great difficulty and distress.

Today, this relationship is based on shared values and an agenda for positive change at the regional and global levels. It is what President Obama called a “model partnership” in his first ever overseas bilateral visit to Turkey. Indeed, while our two countries are continents and oceans apart, they are bound together by a common commitment to democracy, human rights, and freedom.

Obviously, our partnership has to reflect the realities of our day. Today’s international environment has been shaped by an unprecedented pace of change, globalization, and increased interdependence. This is a world where democracy, human rights, the rule of law, accountability, transparency, good governance and a free market economy remain the best recipe for enduring stability and prosperity.

Yet putting words into action is not easy. The rapid pace of global transformation is accompanied by uncertainties, risks, and instability factors. In such a world, our relationship cannot simply remain a strategic one. It needs to be broad, multifaceted, and adaptable.

Distinguished Guests,

The progress in this regard is slow but steady. We already began seeing signs of significant improvement.

In 2012, the trade volume between the US and Turkey surpassed 20 billion dollars. This marks a 30 percent increase compared to two years ago. Yet, despite being our greatest ally, the US is still not our biggest trading partner.

Regarding investments, American companies have invested 8.4 billion dollars in Turkey over the last decade. The US now stands the third-largest investor in Turkey after the Netherlands and Austria. Here too, there is room for more.

In terms of tourism, neither of our countries is currently among the most frequent destinations for our travellers.

I am sure that you will agree with me when I say that the current economic relations between our two countries are only operating at a small fraction of their actual potential. Indeed, the disparity between Turkish-US strategic relations and economic relations is striking.

For instance, Turkey’s trade volume with Russia, our Cold War rival, exceeds 40 billion dollars.And yet the potential is absolutely huge. The US is the largest economy in the world. Turkey is a fast-developing economy and a booming industrial outlet. It ranks 17th in economic size globally and 6th in Europe.

We have every reason to create incentives for American and Turkish companies in each other’s countries.  Let’s start with trade volume. We must pool our efforts to build on what we have in the decade to follow.  Promoting investments in both countries is also a must. Joint ventures in third countries are another area of immense potential.

To this end, we aim to increase awareness among Turkish and American business people through intensive dialogue.

That is why we launched a Ministerial mechanism called the “Framework for Strategic Economic and Commercial Cooperation” in 2011. It convenes twice a year.

The mechanism covers a wide portfolio, including bilateral trade and investment, sectoral collaboration, third country cooperation, energy, agriculture, finance, health, infrastructure, IT and intellectual property rights. The full yields are yet to come.

I call upon the distinguished business people here to redouble their efforts to take our relationship further and reap the benefits of enhanced cooperation.

We, as statesmen on both sides of the Atlantic, have an obligation to make your job easier.We welcome Turkey’s designation as one of the six preferential markets for the United States. We must capitalize on that.

I am sure you are all following very closely the preparations for the Transatlantic Trade and Investment Partnership Agreement between the EU and the US. Once concluded, this will create the largest free trade zone in the world.

Some are frown on this development. I personally am not. I am among those who see here an opportunity. Turkey has enjoyed customs union with the EU since 1996. I strongly believe Turkey, the US and the EU belong in the same economic partnership area.

That is why I also believe the Free Trade Agreement between Turkey and the US, to be concluded simultaneously with TTIP, is a real opportunity. We will push for this idea. But we need you on board. Work with us so that we can make this a reality. The synergies we will unleash together will bear benefits for Turks and Americans alike.

And think of the outcomes it will bring: Free access to a vibrant market of 75 million customers, and from which you can reach 50 countries and 1.5 billion people by a four-hour flight. Make no mistake; this is about access to one fourth of the world population and a combined GDP of 23 trillion dollars.

Distinguished Guests,

I would like to share with you a few more reasons why you should do more business in Turkey.

Today, Turkey is one of the world’s emerging centres of attraction and a regional powerhouse aiming to serve as a force for good in its part of the world. It is a stable economic and commercial outlet with access to Europe, the Caucasus, Central Asia, the Middle East and North Africa. Currently, Turkey is one of the most dynamic, vibrant and resilient economies in the world. It is expected to be the fastest growing OECD member between 2011 and 2017, with an average annual growth rate of 6.7%.

All of that is thanks to the structural reforms we instigated after the last economic crisis in 2001. In today’s Turkey, political and macroeconomic stability is strong. Economic growth is steady. The banking and financial sectors are well supervised and well governed. The Turkish economy has proven its resilience in the face of global economic turmoil.

In a nutshell, Turkey today is a country where risk premium is low and business potential huge.

We also have a young and dynamic population. The average age in Turkey is just 29.7 years. The active workforce is around 26 million strong; the 5th largest in the EU. Yet it is not just about sheer numbers: our workers are well-educated and highly motivated.

Moreover, in the past decade the Turkish economy has gone through a “silent revolution,” transforming itself into an emerging knowledge-based economy. We have increasingly been investing in education, science, and innovation and supporting research and development efforts.

To highlight some figures of interest, roughly 20 million of our population uses smartphones which puts us near the top of the list in Central and Eastern Europe. The penetration rate of broadband internet connections and subscription rates of social media are really very impressive.

There has been a significant increase in online shopping in recent years, while traditional shopping habits remain equally common. This vibrancy has not gone unnoticed by American companies. Microsoft, Google, Apple, Facebook, and Twitter all benefit from the lucrative business opportunities in Turkey

E-Bay purchased “gittigidiyor.com,” a similar shopping site, in 2011. Amazon took over “çiçeksepeti.com,” an online florist, in the same year.

In manufacturing, Turkey today is the 16th largest automotive producer in the world and the largest producer of commercial vehicles in Europe. Exports in this field reached 19 billion US dollars in 2012. In fact, two of the three models that competed to be “the New York city cab” were produced in Turkey, including the winning model from Ford.

Last year, despite the global economic downturn, Turkey hosted a record 31.7 million tourists. According to the World Tourism Organization, Turkey is the sixth-most visited destination in the world. Tourism revenues in 2012 reached 29 billion US dollars.

These statistics are not exhaustive but offer just a hint. They indicate the entrepreneurial capacity of the Turkish business community and the environment of good governance that has been achieved over the last decade.

Dear Participants,

Of course, you are entitled to ask about what impact the Gezi Park protests and the ongoing turbulence in the Middle East and North Africa have had on the Turkish economy. It is indeed hard to quantify, as these events coincided with adverse conditions in global markets.

They came amidst the famous remarks by the FED Chairman in May about a possibility of change in US monetary policy. This has no doubt affected us all. Turkey was no exception.

But, like elsewhere, the outflows from Turkey amounted to only a small percentage of GDP. Markets did not substantially shrink. There was simply a re-pricing of assets. That’s why the stock, bond, and foreign exchange markets improved in a few weeks’ time.

Does this mean volatility is over? I suspect not. When things will stabilize, nobody knows. But the fiscal policy of the Turkish government, the debt and diversity of the real sector, and the strong banking and financial system are all crucial defences against global fluctuations. The low political risk is an extra asset.

Furthermore, the macro indicators and fundamentals of the Turkish economy are strong and healthy. Turkey remains among the least affected by the global economic downturn. The Turkish economy grew 9.2 % in 2010 and 8.8 % in 2011, outperformed only by China.

Most importantly, this growth has translated into 5 million new jobs since 2009.

I believe these numbers speak for themselves. Of course, such a vibrant economy offers vibrant business opportunities to our partners.

Dear Guests,

I am also pleased to see a growing interest in the United States among Turkish business people. I hope this renewed interest opens new avenues for further cooperation between the two business communities.

I once again invite you all to consider Turkey for business, trade, investment, or other transactions. We are optimistic about the future of our bilateral ties. And it is with you that we wish to build and share that bright future.

Thank you.

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