WE INTEND TO MAKE GLOBAL CONTRIBUTIONS TO A GLOBALIZING WORLD PRIME-MINISTER OF THE TURKISH REPUBLIC RECEP TAYYIP ERDOGAN

Caspian Energy (C.E.): Mr. Prime Minister, could you please sum up last 2005? Was this year effective to Turkey regarding political and economic performance?

Recep Tayyip Erdogan: 2005 was a good year for Turkey both from the political and economic angles. Three important developments represent the crux of 2005 for Turkish Foreign Policy.

First, EU accession negotiations started as of 3 October 2005. This development marks the beginning of the final lap of a road traveled towards the objective of full membership for over 40 years.

Secondly, the Baku-Tbilisi-Ceyhan Main Export Crude Oil Pipeline launched in September 2002 was officially inaugurated on 25 May 2005. The first oil from the pipeline is scheduled to be delivered to world markets from Ceyhan this year.

Thirdly, to prevent the possibilities and falsify the theories of a “Clash of Civilizations” I, together with my Spanish counterpart Mr. Zapatero who is also a dear friend of mine, have launched the new initiative for an Alliance of Civilizations under the auspices of the Secretary General of the United Nations Kofi Annan in July, 2005.

There were many other achievements in 2005, but these three developments highlight the unique character of Turkey. They show that Turkey is the only country with a predominantly Muslim population soon to be a part of the European Union; that it is becoming the regional energy hub of Eurasia and is a symbol of unity among different cultures and traditions.

Our economy is on the right track. Turkey ranks as the 17th largest economy in the world. Our GNP exceeds 350 billion Dollars, and our trade volume has passed 190 billion Dollars. For the last four years we have registered consecutive growth rates. In fact, Turkey has grown by more than 30% during this period. In 2005 alone, we received more than 22 million tourists.

C.E.: How does Turkey feel the process of globalization on itself that taking place in Europe, how are they applicable to Turkey?

Recep Tayyip Erdogan: I agree that globalization is a process. It is not a static phenomenon but a two directional process. Taking it this way, I think, we have to put a more humane phase on the process of globalization as a whole. To this end we had to minimize the side effects of globalization which are manifested in the growing gap between rich and poor societies. Democracy and prosperity are two dynamics that work together and are dependant on one another. This is why we have to take advantage of the globalization process to promote peace, stability, human rights and freedoms as well as democraticvalues. Turkey is an active partner in this process. We are aware of the fact that knowledge is at the heart of our new world. We are trying to contribute to the innovative dimension of globalization and also to support efforts aiming to alleviate the suffering of those who can not benefit from the positive aspects of it.

In such a world, Turkey’s EU membership will be beneficial for the Union as well as Turkey itself. Supported by a dynamism which is demonstrated by the vitality of our businessmen, scientists, workers and other professionals, we are taking confident steps towards membership.

This drive towards the European Union and Turkey’s broadening horizons explain the significant increase in direct foreign investments to my country. The amount of foreign investment received last year is several times higher than the amount received over the last decades.

This confidence and our resolve to bring our unique contributions to the solution of many problems in our region and beyond explain our candidature for a non-permanent seat in the United Nations Security Council for the term 2009-2010. In a globalizing world we intend to make global contributions.

C.E.: How do you estimate today the perspective of Turkey’s joining the EU, what do you think about European and Turkey’s readiness to it from political-economic point of view?

Recep Tayyip Erdogan: The decision taken by the EU on the 3rd of October, 2005 to open accession negotiations with Turkey is, by any measure, a historic step. It will be a historical moment when Turkey joins the EU as a full member. The positive effects of this process are already being felt far beyond the borders of Turkey and Europe. There is not the slightest doubt in my mind that Turkey will make rapid progress in fulfilling all of the EU’s accession criteria to take its rightful place in the Union in the not too distant future. We have the necessary human capital, expertise and, most importantly, political will to achieve this.

Our determination to successfully conclude the accession negotiations is continuing unabated. I have confidence in my country and in my nation above all else in this regard. I am confident that together with our determination and the cooperation of our EU partners we will meet all the requirements and achieve full membership. Turkey’s membership will bring wide-ranging political and economic benefits for the EU.

C.E.: Which relations with neighbor states are more prior to Turkey?

Recep Tayyip Erdogan: We look at our relations with neighboring states from a holistic perspective. Political and economic aspects have an equal share. If one part is improving, it is inevitable that the other part follows suit.

Turkey has been contributing to a culture of conciliation and cooperation with its neighbors by promoting closer political and economic ties in its region.

Progress in political relations and the steady rise in the trade volume with our neighbors is proof of the momentum that we have created in this sphere.

We will continue to aim at eliminating possible sources of tension and cultivate stronger relations based on a win-win approach.

C.E.: How do you estimate the Turkish relations with the Caspian nations, in particular with Azerbaijan, Russia and Kazakhstan?

Recep Tayyip Erdogan: The Turkish people and other Caspian nations are bound by close cultural ties. Maintenance of stability and security, enhancing prosperity, upgrading living standards, promoting democracy in the Caspian region are among the Turkish foreign policy priorities.

After the demise of the Soviet Union, the Caspian nations have reconsidered their perception of regional and global affairs in light of the new realities. They have undertaken intense efforts in such fields as institution and capacity building, democratization, respect for human rights and freedoms, and transition to market economy. Turkey has always stood by these nations. Our relations have developed in many fields to the mutual benefit of our nations, and there is still room for deepening the relations.

As I pointed out earlier, the Turkish foreign policy toward the Caspian basin is all inclusive. However, in response to your specific question, I will try to confine my comments to our relations with Azerbaijan, Russia and Kazakhstan.

Turkey and Azerbaijan, as once described by Haydar Aliyev, the late President of Azerbaijan, may he rest in peace, are “the two states of the same nation”. We wholeheartedly share this vision. Indeed, the same understanding applies to our relations with other Central Asian states as well. We

remain committed to further enhancing our close ties and co-operation with all of them. We, on the other hand, encourage them to develop a common regional vision and to further integrate with the international community.

The conflicts in the Caspian region, however, stand as the major obstacles before regional co-operation and development. Resolution of the Nagorno Karabakh conflict is the most urgent issue and should receive priority treatment from the international community. Turkey supports and contributes to the efforts aiming to resolve this conflict through peaceful means, on the basis of Azerbaijan’s territorial integrity, and principles of the international law.

Turkey and Russia are neighbouring countries that share similar experiences emanating from history and common geography. Our relations have developed considerably in the last decade. Both countries have been successful in overcoming the prejudices and lack of mutual confidence that are the remnants of the cold war era. Today, we are happy to observe our cooperation gaining further momentum in all areas. Our political dialogue and mutual high level visits have intensified especially in the last couple of years. Both countries have the political will to raise the relations to the level of multidimensional enhanced partnership. Economic and commercial relations have reached an outstanding level. Today with a trade volume of 15 billion Dollars, Russia has become one of Turkey’s largest trade partners. Cooperation in the energy sector is an important aspect of Turkish-Russian relations. Projects such as the Blue Stream Natural Gas Pipeline have brought energy cooperation to a new level and indicate that both countries perceive the relations in a long perspective.

Turkey considers Russia as an influential actor both at regional and global level. As one of the main oil and natural gas exporter to Europe, Russia is also a very significant country in terms of energy supply. Russia’s contribution is needed in solving “frozen conflicts” in the region, as well as in combating new threats to peace and security such as international terrorism. We believe that partnership between Turkey and Russia will positively contribute to the consolidation of peace and stability in the region.

Our brotherly and multifaceted relations with Kazakhstan have acquired an institutional basis and led to a solid partnership. Our outstanding economic growth and locations on the strategic energy corridors have in recent years consolidated positions of Turkey and Kazakhstan in the Caspian region. Kazakhstan’s impressive political and economic reforms have set good examples and high standards for other countries in the region. It took the lead in promoting the region wide cooperation. Kazakhstan’s close involvement in regional projects will ensure their success. Thanks to its inclusive regional vision, this country will continue to play a significant role in shaping the future of Eurasia.

C.E.: How do you find the development of relations between Turkey and Azerbaijan regarding large-scale investment projects? Are you satisfied with the speed of these projects? Do you think that Turkish presence in Azerbaijan’s economy is enough?

Recep Tayyip Erdogan: Turkey, with a share of 45%, is the leading investor in Azerbaijan’s economy outside the energy sector. The total of Turkish companies’ investments outside the energy sector exceed 2 billion Dollars. These investments are contributing to the development of new areas of economic activity and to the creation of employment opportunities. Turkish companies also play an important part in promoting the establishment of a competitive free market economy in Azerbaijan. Turkish investments’ share in Azerbaijan’s energy sector is also significant. Turkish Petroleum’s investments in Azerbaijan totaled 1.6 billion Dollars. The said company plans to increase such investment in Azerbaijan to 4.5 billion Dollars.l am convinced that investments between the two countries can grow much faster in the near future. Turkish companies operating in Azerbaijan are mostly SME’s. Our mutual aim is to increase the amount of direct capital investments of large scale Turkish companies in Azerbaijan. Reforms towards improving foreign investment climate in Azerbaijan will accelerate this process.Baku-Tbilisi-Ceyhan petroleum and Baku-Tbilisi-Erzurum natural gas pipelines, as well as Kars-Akhalkalaki-Tbilisi-Baku rail-

way connection, all to be operational in the near future, will also contribute to the increase of mutual investments.

C.E.: When do you plan together with the president of Azerbaijan, llham Aliyev open Ceyhan terminal for launching of the first Azerbaijan oil?

Recep Tayyip Erdogan: We are planning to load the first tanker with Azeri oil at Ceyhan terminal on May 27th and will soon set the date for the openning ceremony. Most probably, it will take place during the second half of June 2006.

C.E.: Is Turkey ready to enlarge the contracted (6,6 bcm/year during 15 years) gas supplies from Azerbaijan?

Recep Tayyip Erdogan: Having completed the BTC, the time has come to focus on the Baku-Tbilisi-Erzurum (BTE) natural gas pipeline project. The project is planned to become operational towards the end of 2006. We are prepared to consider the extension of contracted gas with Azerbaijan provided that there is additional volumes available.

C.E.: Do not you think that Turkey fixed more gas pipelines in its territory than it is able to use for its domestic demands or re-export gas to Europe through constructing corridors?

Recep Tayyip Erdogan: Latest developments in the energy market proved that dependency on the Middle East and Greater Caspian oil and natural gas will continue to grow in the United States, EU and developing Asia in the decades to come. The natural gas crisis between the Russian Federation and Ukraine, demonstrated the vulnerability of the energy market. In this context, with its geostrategic position, Turkey is trying to strengthen its role as an energy hub, aggregator and transit country in the region. By doing so, we believe we can substantially contribute to the global energy security of supplies.

Concrete steps such as the Turkish-Greek-Italian Inter-connector project as well as Nabucco Natural Gas Pipeline Project have been developed to connect BTE through Turkish national grid to Europe.

The transit role of Turkey has been recognized by the EU. We pursue our efforts in line with our objective to become Europe’s fourth main artery of natural gas supply following Norway, Russia and Algeria.

C.E.: Will Turkey further insist on limitation of movement of the big cargoes via Istanbul and Canakkale Straits? Is it possible to name the ecology situation as critical?

Recep Tayyip Erdogan: Heavy tanker traffic in the Turkish Straits is a matter of serious concern for us. A collision and as a result, an explosion in the Turkish Straits will not only endanger the lives of thousands of people, but may also cause irreversible damages to the environment. Such a disaster means interruption of oil flow to world markets.

The solution lies at the use of alternative oil export options that by-pass the Turkish Straits. Among the by-pass options, we consider Samsun-Ceyhan by-pass oil pipeline project as an economically viable as well as environmentally sustainable project. We are pleased to observe that there has been a growing interest for this project.

The Samsun-Ceyhan by-pass oil pipeline will not only safely transport Russian and Caspian oil directly to western markets but will also contribute, through lessening the burden of oil tankers on the Turkish Straits, to the safety of navigation, environment and the inhabitants of Istanbul.