Thank you for that kind introduction and thank you to the Caspian Policy Center, to the US Chamber and to Ambassador Hoagland, for the invitation to address this forum.
I am honored to join the many distinguished representatives from Trans-Caspian region nations as well as the private sector.
We are at a very significant moment in history for this region and its engagement with the United States, in particular its economic engagement.
I lead the E line at the State Department, which includes economic and business affairs, energy and natural resources and environment and oceans.
We promote economic security as national security and recognize that strong economic policies will secure a prosperous future for the next generation.
There is great potential to strengthen the partnerships between the U.S. and the countries of the Trans-Caspian.
The region has been an indispensable transit route for thousands of years, used by the original global merchant Marco Polo himself.
It is well positioned, both geographically and culturally to be a strategic passage and corridor between continents for merchants. In the past they carried spices and textiles. Today they might have laptops and mobile phones. The route remains just as important.
A perfect example of this is Georgia’s Anaklia Deep Water Port project which will greatly increase international commerce by sea. Georgia and the U.S. are currently working together to build this port which would handle up to 10,000 TEU vessels. The project is planned to be operational by December 2020. When the port is finished, it will grow Georgia’s economy, make Georgia an even stronger trading partner to the United States, and provide greater connectivity between Europe and the entire Caspian region.
We also see great potential for regional economic cooperation among the Caspian nations. In conjunction with the private sector, we will continue to drive economic connectivity throughout the region.
There are many opportunities for broader economic relationships with the United States. American companies are best suited to build modern, secure, and reliable infrastructure and implement advanced information and communications technology systems.
The prosperity we strongly support depends a great deal on government and the private sector working together. It is the only way to make significant progress in modernizing infrastructure, the only way to provide reliable sources of energy and to advance technology.
One of our goals as policymakers is to better understand private sector perspectives on the challenges and obstacles you face. These perspectives will help us to better enable entrepreneurship and innovation.
A business friendly, creative environment – coupled with a competitive and transparent bidding process on major infrastructure– is a proven avenue to sustainable growth.
Senior State Department officials regularly lead bilateral economic dialogues with counterparts from many of the countries represented today. I was in Almaty last summer for the C5+1 dialogue with our partners in central Asia where we discussed the importance of regional integration. And my principal deputy, Peter Haas, was just in Baku leading a bilateral economic dialogue.
Our partnerships are not only desirable – they are critical. In Central Asia alone, the Asian Development Bank estimates that the average annual investment needed is 38 billion dollars – roughly 7.8% of the combined GDP in the region.
No government nor combination of governments can provide those resources alone. It is the private sector that can mobilize to fill the gap, and in return, we will see opportunities for companies to expand and benefit their workers.
We encourage countries to promote conditions which support private sector engagement, including adherence to the rule of law, transparent procurement practices and respect for intellectual property rights.
Contract enforcement is a fundamental cornerstone of any successful economy. Without respect for these principles, domestic entrepreneurship is driven into the black market and foreign investment is repelled.
We stress that foreign governments should dedicate adequate resources toward fair law enforcement and ensure that courts are independent and free from corruption.
In the United States, intellectual property intensive industries account for nearly 40 percent of our GDP and 28 million jobs. We have seen how improved IP laws lead to increases in foreign investment, innovation, and development. In short, strong IP protections and enforcement have worked for the United States, and we believe they can work for other nations as well.
As you build new roads, rail lines, airports, seaports, and telecommunications infrastructure, I encourage our Trans-Caspian partner nations to look to U.S. companies as valuable partners and trusted vendors.
Goods and services are most able to move seamlessly around the world through well-maintained infrastructure. Almost 90 percent of global commerce by tonnage moves by sea, while some $1 trillion worth of trade moves by air annually.
Add 21st century telecom infrastructure, and those goods and services will move even more rapidly and efficiently. Internet connectivity is revolutionizing contact between nations in the way that the railroad did in the 19th century and air travel did in the 20th century.
Investments in internet connectivity will bring economic opportunities to rural areas so that more citizens can stay in their localities and still have good job opportunities.
We are witnessing a transformational moment in the ICT world with the deployment of 5G technology. It will transform everything from artificial intelligence to telemedicine and affect every part of our lives as it becomes the underlying infrastructure for the critical services we use every day.
With 5G, we will see internet speeds of more than 100 times what we currently have in 4G networks. We are also going to see download delays of only one millisecond, which is critical for innovations such as autonomous vehicles.
THIS is an area where we particularly advise doing business with trusted vendors. Don’t bear the risk of utilizing sources which might compromise the security of your entire cyber-system.
It is not premature for countries with 2G and 3G to think about their strategies for ensuring network security now. Decisions about who builds what and how to secure 4G infrastructure are crucial because the decisions made today will affect the security of 5G networks of tomorrow.
The United States joins many other partner countries interested in seeing a more vibrant and connected Trans-Caspian region. Our vision includes open markets operating on a fair and competitive playing field, with stable and secure infrastructure that meets the highest international standards.
We think that partnerships between countries and their respective private sectors can achieve this vision.
Along with infrastructure development, we would like to see greater energy security. Competitively realizing the region’s abundant resource potential will ultimately enable consumers to pay less for the energy they use every day.
An example of success in natural resources are the South Caucasus and Trans-Anatolian Natural Gas Pipelines, a big part of a $40 billion project bringing gas from the Caspian Sea to European energy markets. Some of the countries here today played a key role in developing this significant energy project.
Gas is now flowing to Turkey via the Southern Gas Corridor, and we look forward to the completion of the Trans Adriatic Pipeline, which will extend to Italy.
There is tremendous potential for further expansion of this pipeline with additional gas from Azerbaijan, Turkmenistan, and the Eastern Mediterranean. The U.S. supports energy projects which create reliable access to resources.
Another example is the Central Asia-South Asia Electricity Transmission and Trade Project, or CASA-1000. With U.S. support, country-led regional energy projects such as CASA will transit Central Asia’s surplus hydropower through Afghanistan to deliver critical electricity to Pakistan. We see enormous opportunities to unlock the region’s renewable energy potential. We would like to modernize and improve the efficiency of existing power generation, transmission, and distribution.
Central Asia has the potential to establish a commercially-viable regional power market that will deploy the lowest-cost energy from across the Central Asian countries to support economic development.
It is vitally important to us that countries create these structures in a way that preserves national security and sovereignty. We encourage clear-eyed assessments of need, feasibility, and quality, while avoiding potential sovereign debt traps which might result from offers from particular sources.
In the US government, we are increasing our resources that will create more extensive platforms for U.S. companies to compete to fill global infrastructure needs.
As many of you know, last fall President Trump signed the Better Utilization of Investment Leading to Development, or BUILD Act, which doubles the capacity of our Overseas Private Investment Corporation, or OPIC to 60 billion dollars and transforms it into an expanded Development Finance Corporation. It is our commitment to ensuring that we increase our agility and resources devoted to empowering American companies to invest globally.
When you do business with them, you will encounter transparent practices, respect for communities and a quality result. Advocating for U.S. business is one of the easiest parts of my job.
Today, leaders are measured by the economic stability and prosperity they create for their citizens. Can an entrepreneur, whether male or female, easily start a business? Can citizens at every end of the economic spectrum grow and prosper? Are there job opportunities and an optimistic future for youth?
The economic bridges we build can be some of the best ways to answer all of these questions with a resounding yes. We look forward to working closely with our Trans-Caspian partners. Let’s consider our conversation here today as one of many to come. Thank you again for time.