TURKEY’S POSITION AS A EUROPEAN AND REGIONAL HUB WAS ASSESSED DURING JOINT IKV-CIDOB-ELEC CONFERENCE
Turkey’s position and potential as a European and Regional energy, finance, logistics and transports, production and service hub were assessed during a conference organized by IKV, held in Istanbul on February 5-6, 2016. The event, co-organized by the Barcelona Centre for International Affairs (CIDOB) and the European League of Economic Cooperation (ELEC) with the support of La Caixa Foundation featured a great number of participants including government officials, private sector representatives and the academia.
Opening speeches by CIDOB and ELEC President Carles A. Gasòliba; IKV Chairman Ayhan Zeytinoğlu; Head of the EU Delegation to Turkey, H.E. Hansjörg Haber; and Undersecretary of the Ministry for EU Affairs, H.E. R. Engin Soysal conveyed messages focusing on the influential role that Turkey plays in Europe and the Mediterranean region. Speakers underscored that Turkey increased its competitiveness and manufacturing capability through expertise gained in the EU market. Adding that socio-economic development and technological progress also made it possible for Turkey to take advantage of its geographic location, experts warned that urgent reforms and further progress are still required if Turkey wants to become fully effective as a European and Regional hub. Besides reforms needed in the areas of democratic rights and rule of law, Turkey needs to improve its regulations, further invest in the education of its workforce, and enhance cooperation in the field of innovation to fulfill its potential as a hub. Last but not least, key messages also highlighted the need for mutual embrace between Europe and Turkey in the near future. While Turkey’s EU membership objective relies on a strategic and sustainable approach based on reforms, transformation and communication, a joint assessment of future risks and opportunities is of paramount importance, according to guest speakers.
Turkey as an Energy Hub
The first session of the conference, moderated by Prof. Halûk Kabaalioğlu, IKV Board member and Dean of the Yeditepe University Law School, dealt with Turkey’s potential as an Energy Hub.
Sohbet Karbuz, from the Paris-based Observatoire Méditerranéen de l’Energie, spoke about Turkey’s potential to become a liquid natural gas transit platform between the Middle East and Europe. According to Sohbet Karbuz, Turkey could become an energy hub but has still a long way to go. Lack of gas storage capacity is part of the problem that Turkey faces at the moment. Once these obstacles are swept away, Turkey could become the desired energy hub between East and West. Sohbet Karbuz listed success factors for gas hubs, mentioning: transparency, deregulatory gas markets, interconnectivity, non-discriminatory access to storage, flexibility and access to multiple gas supplies, and political will among others. Upon a careful examination of challenges, he concluded that the development of a liquid natural gas trading hub will be difficult but is not impossible. Sohbet Karbuz believes that if Turkey manages to increase its competitiveness, it has the potential to get wherever it wants to.
General Manager of Aygaz Natural Gas Wholesale Trade, Rıdvan Uçar, raised the question of whether Turkey should become a transit or a training hub. He argued that Turkey must first determine which hub it wants to be and needs to take the steps to be ready for the future. Ridvan Uçar warned that if Turkey does not take any action, it will develop into a transit hub by default. A strong believer in Turkey’s potential to become an energy hub, he stressed the importance of choosing to become a trading hub between Europe and the Middle-East.
Project Manager at the Secretariat of the Union for the Mediterranean (UfM), Olgu Okumuş, tackled the question of how being an Energy hub can help Turkey seize other great opportunities. Stressing that the goal for UfM is to deliver projects that enhance cooperation and partnership within the Mediterranean Region, Olgu Okumuş listed Water and Environment, Transport and Urban Development, and Social and Civil Affairs as priority areas for action. She presented energy efficiency and renewable energy as key elements that Turkey should strive to develop.
Turkey as a Financial Hub
The second panel was chaired by Director of Multilateral Trade Relations Centre (TEPAV) H.E Ambassador Bozkurt Aran, Discussions focused on the potential for Turkey to develop itself into a financial hub and perform better on international rankings.
Fabian Briegel, Economist at the Rabobank, the second largest bank in The Netherlands, presented Turkey as a bridge between Eurasia, Europe and the Middle East with Istanbul operating as its financial centre. According to Fabian Briegel, some radical changes are needed in the Turkish financial system, which is, for the time being, mainly dominated by banks. He argues that strong cooperation between companies is required for Turkey to become a hub.
IKV Board member, Chairman of Turkish Economy Bank and Former Governor of the Turkish Central Bank, Yavuz Canevi, insisted on the need for Turkey to take necessary actions with regard to pursuing compliance with EU standards and the accession process, while undertaking required reforms. A combination of increased competitiveness and visionary approach were presented as essential factors in fulfilling Turkey’s economic and financial potential.
Key messages by the Chief Economist for Cross Emerging Markets at BBVA Research, Alvaro Ortiz pinpointed that Turkey’s Financial sector proved to be strong, especially throughout the 2007-2009 global financial crisis. Nevertheless, Alvaro Ortiz argued that there is still room for improving the business environment and the business law system in Turkey before it can turn into a Financial Hub.
Turkey as an Infrastructure, Communications and Logistics Hub
The third panel, moderated by IKV Secretary General, Assoc. Prof. Çiğdem NAS, dealt with Turkey’s potential as an Infrastructure, Communication and Logistics Hub.
Deputy Secretary General of the Union for the Mediterranean, Yiğit Alpogan gave a presentation about their various South-South connections and hub projects planned by 2025.
Vice-Chairman of the Executive Committee of the International Transporters Association (UND), Evren Bingöl, spoke about the border problems linked to quotas and fees Turkey faces and how transit barriers damage trade with the EU. Major obstacles at the Turkish-Bulgarian and Turkish Greek borders include long queues, discriminatory practices, lack of matching staffing capacity at the Turkish border with Greece at Ipsala border crossing point. Referring to the Global Logistics Performance Index, Evren Bingöl drew participants’ attention to the fact that Turkey ranks 30 out of 160 countries. She presented some solutions and alternatives which could help ease the trade over land. One of the best ways to boost trade would include signing a separate agreement on road transportation between Turkey and the EU, easing quotas and reconsidering drivers’ visa restrictions.
Turkey as a Production and Service Hub
Panelists assessed Turkey’s potential as a production and service hub during the fourth session, under the chairmanship of Eduard Soler i Lecha from CIDOB.
H.E Ambassador Antonio Martins da Cruz, Former Portuguese Minister for Foreign Affairs, indicated that it impossible to become a hub - or even a corridor- in a context of political tensions and foreign obstacles in neighbouring countries. Threats to Turley’s ambitions include the refugee crisis, terrorism, and the removal of sanctions to Iran. Commenting on the situation in Iran, Ambassador Martins da Cruz warned against the substantial consequences that Turkey faces in terms of energy trade and international investments. He urged Turkey to monitor the strategic and political moves of Iran while maintaining good relations with its new competitor. Participants were also invited to consider the risks associated with becoming a peripheral EU country such as Spain, Romania, or Portugal as this situation is accompanied by many challenges when it comes to defending their positions in Brussels. Turkey’s opening towards Africa was acknowledged to be a very important move for Turkey as this opens new avenues for enlarging the country’s potential as a hub.
In this session, H.E Ambassador Bozkurt Aran talked about the transformation of the Turkish economy and its rapid urbanization. Turkey was presented as the largest industrial hub between Italy and China and was urged to seize opportunities to adapt itself to the future of international trade.
In his speech, IKV Brussel Representative Haluk Nuray concluded that Turkey’s dynamism started to slow down in the Mid 2000s. Underscoring the importance of preparing the country for future opportunities, Haluk Nuray encouraged the audience to consider crucial questions as to the kind of demands that Turkey and the private sector may face in the next 5-10 years, the goals that Turkey and the private sector must set themselves, and the steps that need to be taken now to be ready in the near future. According to Haluk Nuray, key factors in becoming a production and service hub include increasing competitiveness while offering cost-effective yet high-quality products and services.
You can reach some of the presentations here below:
Sohbet Karbuz, Observatoire Méditerranéen de l’Energie, Paris
Rıdvan Uçar, General Manager of Aygaz Natural Gas Wholesale Trade
Olgu Okumuş, UfM, Energy Section
Yavuz Canevi, IKV Board member, Chairman of Turkish Economy Bank and Former Governor of the Turkish Central Bank
Yiğit Alpogan, UfM Deputy Secretary General
Evren Bingöl UND Vice Chairman of the Executive Committee