Thank you for that introduction. Your Excellencies Ambassador Kilic and Ambassador Bass, ladies and gentlemen... I am thrilled to join you, as we kick off this important forum. And I would like to thank The American Turkish Council and the Turkey-US Business Council for bringing us together tonight.
I know we agree that the relationship between the U.S. and Turkey has long made both countries safer, more innovative, and more prosperous. The conversations we will have in the coming days can help strengthen that relationship going forward.
And can there be a better place to begin this forum that right here, in the Turkish Ambassador’s Residence? Some of you may know that this building has a storied – and rather unexpected – history.
In the 1930s, the first Turkish Ambassador’s two sons, Ahmet and Nesuhi Ertegun, started hosting private jazz sessions in this very house. They would welcome all people, black and white, to play and to listen to some of the most famous jazz musicians of the day. Washington D.C. was still highly segregated at the time, so these events were groundbreaking. One jazz journalist described them as "Washington's most famous private jam sessions." The Washington Post said they reached “near-mythic status.”
Those two brothers would go on to start Atlantic Records – and change the face of popular music.
Now, jazz, of course, is not quintessentially Turkish. But in a way, those jazz sessions were. People from a country at the crossroads of Europe and Asia brought together people of different backgrounds… to listen to music derived from West African, European, and American musical traditions.
is exactly what you might expect from a country whose identity draws heavily on its position at the intersections – of continents, of religions, of cultures.
eed, Turkey’s position at the intersections has long been an incredible source of strength. Since the days of the Silk Road, it has made Turkey a natural center of commerce – and, just as crucially, a hub of innovation. After all, in fields from science to the arts to politics, we have seen that the most exciting and inventive developments occur where different ways of thinking intermingle or even collide.
And Turkey’s position at the intersections is rising further in value as the world continues to globalize – as trade volumes increase, and as increased competitiveness puts a higher premium on innovative thinking. That is why the first decade of this century brought the so-called “Turkish Economic Miracle,” in spite of the global financial crisis – with substantial GDP growth and improvements in quality of life for the Turkish people.
Yet we know that Turkey’s location also brings challenges. As is the case in other parts of the world, this region has experienced a great deal of instability and volatility in recent years. We have seen an extremist insurgency in Iraq. We have seen a civil war in Syria cause terrible loss of life and massive displacement of families – leading Turkey to open its doors to nearly three million refugees. And, of course, we have seen instability in Turkey itself, from acts of terrorism to last year’s attempted coup to the ongoing political unrest.
Against this backdrop – and in some ways because of it – the economic progress that characterized the beginning of the millennium has slowed substantially.
I still believe that Turkey’s position at the intersections is far more a source of value than a source of risk. But harnessing that value will require smart policy and strong partnerships.
I have some thoughts on what some of those policies might look like, as I have recently been working hard with the new administration in Washington to shape a pro-growth approach here in the U.S. And while the U.S. and Turkey differ, of course, in a number of ways, many of our economic needs are shared: We both need greater investment on our shores. We need the slow growth that has characterized recent years to be both stronger and better distributed across our populations. And we need to make sure that our economies are prepared for the sweeping changes of the 21st century.
I would like to briefly suggest three areas of focus for both the U.S. and Turkey as we work toward these goals.
BUILDING A BETTER BUSINESS CLIMATE
First, we must focus on building the best possible business climate.
In an increasingly globalized world, where companies can set up shop virtually anywhere in the world, countries are having to compete for investment like companies do. The countries that are the most successful are the ones who roll out the red carpet for business – not the red tape.
In the U.S., our biggest barriers to investment are a tax code and regulatory environment that are overly complex, and in some cases impose an unreasonable burden on businesses. By streamlining regulations, and grounding them in science, we can keep people and the environment safe while, at the same time, allowing businesses to grow. And by making U.S. corporate tax rates competitive globally, we can make the U.S. an attractive place to invest, to build, and to expand.
The situation in Turkey is a bit different. There has actually been substantial progress on the tax front there, particularly with government’s most recent tax incentives initiative. As I conveyed to President Erdogan at his CEO Roundtable in September, this is smart, forward-thinking policy, and I can tell you that it is already changing our decision-making calculus at Dow: we plan to invest more in Turkey because of it.
This is no small thing. By the middle of the next decade, our investment in our carbon fiber joint venture, DowAksa, should approach $1 billion.
There remain, in our view, two big priorities for Turkey to improve its business climate. First, it can strengthen its trade relationships and broaden its access to necessary inputs. This will require eliminating import restrictions, furthering Turkey’s economic integration with Europe by deepening the Customs Union, and pushing for international regulatory standards based on sound science and transparent, risk-assessment based approaches.
Turkey also has progress to make on ensuring that businesses have access to affordable energy. The industries of the future – for example, advanced manufacturing that is highly innovative and focused on sustainability – are being deterred from investing in Turkey because electricity prices there are simply not competitive. We need to make sure that the producers that add value to energy domestically have access to a competitively priced supply of energy. That way, they can foster ecosystems of innovation that will pay enormous dividends as the world’s sustainability challenges mount.
As the U.S. has demonstrated in recent years, this is something we can do while investing heavily in developing clean, diversified, domestic energy sources – sources that we absolutely must develop now, but that may take some time to become fully price-competitive.
SUSTAINABLE INFRASTRUCTURE INVESTMENT
And that brings me to my second area of focus: sustainable infrastructure investment.
This is an area where the U.S. is looking to follow Turkey’s example, as Turkey ranks amongst the top countries in the world for infrastructure investments. As many of you know, the next decade will bring in excess of $250 billion in investments like the Kanal Istanbul, a high-speed train network, a third Istanbul airport, and major energy projects.
This will be an enormous incentive for companies to become part of Turkey’s future. Turkey can make itself an even more attractive environment for investment if it designs this new infrastructure in line with the goals developed during its own G20 Leadership, and if it prioritizes the latest sustainable technologies. Companies can work with the Turkish government and the leadership of Turkey’s Sovereign Wealth Fund to design infrastructure that will add value over its entire life cycle, so construction today is literally building a safer, more sustainable, and more economically competitive future.
Those steps will help innovative companies from around the world to see a market for their solutions in Turkey – and will surely draw some to develop a presence there. To compete, local companies will become more innovative, driving Turkey’s economic engines and fueling prosperity.
In time, Turkey will be able to establish itself as a global sustainability leader… not a bad thing to be in a world economy that, over the coming decades, will be increasingly defined by the way it meets the sustainability challenge.
EDUCATION AND SKILLS TRAINING
Finally, perhaps our single most important work stream in the U.S. is developing skills training to prepare our workers for the jobs of the 21st century. And I believe this must be a top priority for Turkey, as well.
There is no denying that, over recent years, we have seen increasing unrest amongst people who have been left behind by the global economy. At the same time, more and more technical jobs are going unfilled because people lack the requisite skills. This is untenable. It is bad for communities ravaged by unemployment, bad for businesses who cannot get the talent they need to thrive, bad for countries who see economic growth suffer as a result.
And it must be a particular focus for Turkey, which has one of the youngest populations in Europe.
Businesses have a role to play in developing this talent. My own company, for example, launched a project we call Chemistry of Teachers that supports high school teachers with new STEM training, providing them with examples from groundbreaking new processes and products.
But the government must lead as well. Recently, it has taken important steps, like increasing the number of years of schooling required. But it is not only the time spent in school that counts – it is the content. Science, technology, engineering and math are essential subjects if Turkey is to bring its workforce into the future.
After all, the talent and creativity of young people is one of our greatest resources – both in Turkey and in the U.S. They should not simply be included in our economic growth. They should be driving it.
So these, I believe, are our most urgent priorities. But they are by no means comprehensive. I am sure the next two days will bring further considerations and, most importantly, further ideas.
Indeed, this forum – like those jazz workshops so many years ago – is another meeting at the intersections. In this case, the intersections between nationalities, and intersections between business, government, and civil society.
This exciting mix of perspectives is sure to result in real and sustained progress.
So, with that, let us begin!