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Ambassador Mark R. Parris Address at TESEV/ATAA Conference, Istanbul, Turkey, June 21, 1999

THE U.S. TURKISH PARTNERSHIP IN THE YEAR 2000 AND BEYOND

Thank you very much for your kind introduction. And thanks to the Turkish Economic and Social Studies Foundation (TESEV) and Assembly of the Turkish American Association (ATAA) for organizing this important and timely gathering. It highlights TESEV's continuing role on the cutting edge of public policy debate here in Turkey. And it is testimony to the increasing influence and effectiveness within the United States of the ATAA.

2000 and Beyond

I ve been asked to speak today on the subject of the U.S.-Turkish partnership in the year 2000 and beyond. In fact, I'm really going to address only part of that formula -- the part about the year 2000, for two reasons:

First, because when you're dealing with Turkey, trying to look too far ahead is dangerous. Too many things happen too fast. That's why journalists love the place.

But, second, because I sincerely believe that the next year is going to be an unusually important one in U.S.-Turkish relations. If we get it right, we will have put in place a foundation that will carry our relations well and successfully into the next century. What we do by 2000, in short, will largely define what lies beyond.

So what can we expect in the year ahead?

Questions and Answers

The answer to that question, like so many others, depends on your assumptions. And until very recently, it was difficult, particularly on the Turkish side of the equation, to know what some of the basic assumptions should be.

That is why, when I addressed the annual conference of the American Turkish Council (ATC) on May 6 in Washington, I didn't even try to predict what might lie ahead in U.S.-Turkish relations. It was only a couple weeks after the national elections. Mr. Ecevit was only beginning the task of forming his next government. There were far more questions than answers.

And so I made a virtue of necessity, and laid out in my presentation a series of questions.

The answers to some of those questions, I submitted, would determine such things as how quickly and effectively Turkey would be able to attract essential foreign investment, line up meaningful IMF support, generate revenues for social investment in areas such as the southeast, meet its burgeoning energy needs, increase productivity, and accelerate out of the doldrums resulting from last year's global slowdown.

The answers to others, I said, would determine the extent to which Turkey can tap the potential of its rich, multi-ethnic society and traditions; exploit the recent, favorable turn of events resulting from Ocalan's capture; and focus international attention on Turkey's assets rather than perceived liabilities.

And the answers to a third set of questions, I argued, would determine the effectiveness of Turkey s approach to the ring of regional issues it must contend with by virtue of its geography and history.

It has been just a little over a month since the ATC conference. But -- true to form -- a lot has happened in Turkey in the meantime.

A new government has been formed -- on the first try. It will enjoy a sizeable majority in Parliament; indeed, with more than three-fifths of the votes, it is very close to what it needs to pass amendments to the Constitution. The government's program has impressed most observers as a sound one, relevant to the issues confronting Turkey today. The Ocalan trial has begun on schedule, in full accordance with Turkish law and with the press and international representatives in attendance. Many of the questions I posed in Washington either have either been answered already or have begun to be. And this gives a somewhat better basis than on May 6 for looking ahead to where the relationship will be in the year 2000.

U.S. Policy

But before I do that, let me repeat one thing that I emphasized in Washington, because it is as valid now as then. And that is this: While much may have changed in and for Turkey over the past few months, there has been no change in U.S. policy toward Turkey.

Our goals are the same as they have been throughout the Clinton Administration:

We want a democratic, stable Turkey, with its territorial integrity uncompromised in any way.

We want a prosperous, dynamic Turkey that can be an engine for economic development in the region.

We want a Turkey that is firmly grounded in the West, and that will continue to play a responsible, constructive role in a turbulent, vitally important region.

In pursuit of these goals, we have defined with our Turkish partners in recent years a five-part agenda that reflects our common interests and real or potential challenges to those interests. As many of you know, our agenda comprises energy, economic reform and trade, regional cooperation, security cooperation, and a final basket of issues relating to Cyprus and the Aegean.

The United States is proud of what we have achieved by working with the Yilmaz and Ecevit governments over the past year-and-a-half. We think the five-part agenda remains a useful construct for organizing our work in the period ahead. And there remains much to do. For last fall's government crisis and this spring's elections and their aftermath left plenty of important work in progress.

Getting that work done, getting it done right, getting it done in a timely manner will largely determine the shape, scope, and direction of the U.S.-Turkish partnership in the year 2000 and beyond. Let me now look ahead and try to identify what, with decisive leadership on both sides, that partnership could achieve by June of next year, and what that might mean for the years ahead.

Looking Ahead

Let me start with an area in which U.S.-Turkish cooperation has made a vital difference in the last 18 months -- Caspian energy. Negotiations on a Baku-Ceyhan main oil export pipeline and a Trans-Caspian natural gas pipeline linking Turkmenistan and Turkey have made remarkable progress this spring and are approaching a decisive stage. World energy prices have improved from their historic lows a year ago, dispelling fears that there will be insufficient Caspian investment to justify Baku-Ceyhan. Problems with alternative routes are confirming the wisdom of the Turkish-American concept of an east-west energy transportation corridor.

Based on current trends, there is every reason to expect that by next summer, commercial agreements on both projects can be signed, financing secured, and final engineering studies well advanced. By 2002, the first Turkmen gas should reach Erzurum via the Caspian, and by 2004, Ceyhan could be shipping Caspian oil. In the process, the U.S. and Turkey will have taken a major step toward assuring the independence and prosperity of the newly independent states of Central Asia, and preserving the historical and cultural treasure that Istanbul represents for all mankind.

A related area, and one that both sides have identified as a priority, is meeting Turkey's urgent and growing need for electrical power. Mr. Ecevit s new government has expressed its intention to pass legislation or -- if necessary -- a constitutional amendment, to resolve the so-called concessions issue.

Once access to third party arbitration is reliably assured and related issues resolved, the bottleneck in realized foreign investment that has brought Turkey perilously close to the edge of electrical power insuffiency will open. As many as 20 major projects, representing $5 billion in new investment and now stalled due to inability to obtain financing, can finally move forward. Movement on this first tranche of projects will establish momentum that will help meet Turkey s power needs well into the next century.

Equally important to Turkey's long-term economic well-being are a series of macro-economic issues that the new government has signaled it will address over the next year. These include priority passage of a long-overdue state budget, regulatory reforms to enhance confidence in Turkey's banking sector, an overhaul of the social security system, and market-oriented agricultural policies. The government has also recommitted itself to a vigorous privatization program, and we have urged that it press forward with amendments to the copyright, music, and cinema law that will bring Turkish protections for intellectual property rights up to world standards.

By following through on this agenda, Turkey will deal a substantial blow to inflation and strengthen its case for an IMF standby agreement. Such an agreement would open the door to new inflows of foreign capital. That money spells hope for Turkey's private sector, which today finds it hard to compete with the government for funds, even at today's high interest rates. Cheaper access to funds, in turn, will mean more profitable investments for businesses, more employment for Turkey's citizens, and bigger tax revenues -- with smaller budget deficits. Putting its economic house in order, in short, will put Turkey firmly on track for vigorous growth and broad-based prosperity in the opening decade of the next century.

The United States expects to be a full partner in that process. To the extent the new government carries out its economic reform program, our ability to support ongoing Turkish discussions with the IMF and other international lending institutions will grow. And as one of 10 countries formally designated as Big Emerging Markets by our Department of Commerce, Turkey will continue to be the focus of efforts to expand bilateral trade beyond the record $6.2 billion of 1998.

Another source of hope for those who want to see the U.S.-Turkish partnership achieve its full potential is the emphasis that the new government's program gives to human rights and the expansion of democracy. Through steps such as restructuring state security courts, early passage of a repentance law, ending the state of emergency in provinces where the security situation warrants, and concrete action to improve socio-economic conditions in the southeast, Turkey will launch a process of healing that can begin to close the chapter of its long struggle with terrorist separatism. And by heeding the calls of organizations such as TUSIAD to broaden the scope for free debate of outstanding issues and to increase the accountability of civil servants, it will harness the full potential of its diverse and talented people to meet, with the United States and other Western democracies, the challenges of a new century.

Among those challenges will be a growing agenda of regional issues. Our cooperation on Caspian energy transportation is but the most visible of increasingly significant joint efforts to deal with such transnational problems as terrorism, drug trafficking, and organized crime. Turkey's far-sighted policy of expanding bilateral ties with Israel has meanwhile opened up new prospects for constructive, multilateral interaction with the United States and other countries interested in a peaceful, prosperous Eastern Mediterranean. We anticipate Turkey will have a major role to play with its NATO allies and other regional countries in reintegrating Kosovo and the rest of Yugoslavia into a broader southeast European framework once the military phase of the crisis is definitively over. And Turkey's status as a bulwark against adventuristic countries on its borders will continue to place Turkey at the center of international efforts to maintain regional peace and stability.

Clearly, the neighborhood in which Turkey finds itself will in many respects remain as problematic in the year 2000 and beyond as it has for the last 2 millennia. But as we prepare together to meet the regional challenges ahead, we will inevitably find ourselves encumbered by failures to deal with two legacies from the past.

The first is Cyprus, where the continuing insistence by one party on preconditions for negotiations has stymied the best opportunity the Turkish side is likely to have in a long time to secure its legitimate objectives. I would hope that by this time next year, a way will have been found to get both sides to the table and serious negotiations started. Finding a way to move this problem off dead center remains a high priority for the United States, for we remain convinced that time is not a friend for Turkish interests on Cyprus.

A second area of concern is Armenia, where the continuing closure of the border with Turkey is hurting both sides economically and retarding the development and integration of the region as a whole. We look forward to working with the new Turkish Government -- as well as with the governments of Azerbaijan and Armenia -- to find ways to address the complex of issues at the root of this unnatural, universally unsatisfactory situation. It would be a fine thing if a century that has brought so much suffering to the Turkish, Armenian, and Azeri peoples could end with bold steps toward more normal, neighborly relations.

Finally, ladies and gentlemen, if recent events are any guide, the final months of the 20th century will underscore that the importance of a strong U.S.-Turkish defense relationship will not diminish in the 21st. The vitality and strategic importance of our military alliance is manifest in the presence as we meet today of thousands of U.S. military personnel at bases in Balikeshir, Bandirma and Incirlik. Had President Milosevic not blinked, they would have been engaged, with their Turkish counterparts, in intensive air operations over Yugoslavia.

By June of next year, God willing, we should be able to add Kosovo to the list of world crises that together the Turkish and American armed forces have helped resolve. And in the process I am confident both sides will gain a new appreciation of the importance of ensuring that our defense relationship is as reliable and mutually advantageous in the future as it has been in the past.

Summing Up

In summing up, let me be clear that I fully realize many of the things I have been talking about will be difficult to make happen, some of them more so for Turkey, some of them more so for the United States. No surprises there. Had they been easy, they would have been done a long time ago.

But I believe the vision of a U.S.-Turkish partnership for the next century that I have shared with you today is a realistic one. Thanks to the hard, sustained work of committed people on both sides, the U.S.-Turkish partnership has been a remarkably productive, vital one in recent years.

Indeed, as I said in Washington a few weeks ago, the fact is that U.S.-Turkish relations today are better founded, more comprehensive, more mutually rewarding, and more realistic than they have been at any time since the founding of the Turkish Republic. And this has been achieved under circumstances less favorable, in many respects, than those likely to prevail in the months and years ahead.

Of one thing I am absolutely convinced. With the kind of leadership, energy, and vision on both sides that has made our bilateral relations what they are today, the U.S.-Turkish partnership in the year 2000 -- and beyond -- will remain a compelling force for peace, stability, and prosperity. I look forward to working with all of you to make it so.

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