"Strengthening Partnerships: Turkey's Strategic Importance"

Opening Remarks by
Haruhiko Kuroda, President
Asian Development Bank

At the Republic of Turkey Day Seminar

3 May 2005
Istanbul, Turkey

I.  Introduction

Mr. Chairman, Excellencies, distinguished guests and participants:

It is indeed a pleasure to be here in Istanbul - a city of unparalleled beauty and vibrant, living history.

I would like to take this opportunity to thank the Government and the people of Turkey, for hosting the Asian Development Bank at this year's Annual Meeting.

It is particularly exciting to be in Turkey during a time of such dynamic change and growth. I am pleased to see that today's program features a keynote speech by the Honorable Ali Babacan, Minister of State in charge of Economy, who has done so much to lead Turkey's fiscal and economic turnaround. I know we all look forward to hearing the Minister's views this morning.

Ladies and gentlemen, throughout the ages, Turkey has been viewed by many as a bridge between Europe and Asia.

Although pursuing a formal relationship with Europe to become a member of the European Union (EU), Turkey's geographic and historical ties to Asia are strong and enduring. As a bridge, Turkey plays a unique role in translating and interpreting the interests and issues of both continents, one to the other. It is also an important trading partner with countries across the Asia and Pacific region.

Through trade and, in recent years, through its membership in ADB, Turkey has made substantial contributions to the growth and development of Asia and the Pacific. In addition to its regular shares in ADB, Turkey has contributed to the Asian Development Fund, which is ADB's window for concessional lending to its developing member countries, or DMCs, and to the Technical Assistance Special Fund, which provides grants to DMCs to help prepare projects and undertake technical or policy studies. These are important additional contributions, totaling nearly $108 million, and I want to express ADB's sincere appreciation to the Ministers who are here today.

III.  Turkey and Asia: Shared Challenges and Opportunities

Ladies and gentlemen, Turkey has quickly become one of the world's fastest developing economies. The JP Morgan Chase Bank recently reported that, in 2004, the Turkish economy registered its highest rate of growth in the last forty years, with gross national product increasing by a robust 9.9%. This is quite a remarkable recovery from the 2001 economic crisis.

The return of confidence since the crisis, both within and outside the country, is a tribute to the Government's sound and ambitious agenda of macroeconomic and institutional reforms. These reforms underpin Turkey's strong growth momentum and strengthen its position in relation to the EU.

Like many other countries that have pursued membership in the EU, Turkey's accession depends a great deal on fundamental political, economic and social reforms. It is encouraging to see the progress the Government has already made in strengthening the market economy and improving governance, especially in public administration. Impressive progress has also been made in agriculture and rural development, transportation and energy, and reform of the financial sector, including banking, capital markets and insurance, among others.

Along with this progress, Turkey is developing good relationships with international institutions. In this context, while there are still many challenges ahead, the expected agreement with the International Monetary Fund should reinforce confidence that Turkey will continue to make progress in reducing deficit, lowering inflation, enhancing stability in the financial sector and promoting continued economic growth.

ADB will be following Turkey's progress with great interest, for several reasons.

First, as you know, the reforms being undertaken in Turkey are also areas where ADB provides assistance to its DMCs. Thus, Turkey's experience will be most valuable to us as we work with economies in transition, and with countries that are tackling similar reforms. Today's presentations and discussions will also give us an opportunity to view our work and role in the Asia Pacific region through a different lens.

Second, ADB has a unique mandate to promote regional cooperation and integration within Asia and the Pacific. While the drivers of economic integration in Asia and the Pacific are different from those in Europe, the European Union nevertheless has many lessons that Asia can draw on in fostering regional integration. As Turkey works through its own transition toward becoming part of a larger regional body, it can play an important role as a conduit for sharing experiences and knowledge in this area.

Third, cooperation and integration within a region, be it Europe or Asia, should serve as stepping stone for deeper integration with the global economy. In Asia, much progress has been made in strengthening financial integration, although we are decades away from realizing the full potential of these efforts through, for example, a common currency arrangement. Trade within the region has also grown substantially. Intraregional exports increased by almost 28% last year to September. And intraregional trade now accounts for half of all trade in Asia.

Ultimately, of course, the goal for developing countries is closer alignment and integration with all regions of the world. To this end, ADB is keenly interested in strengthening relations between Asia and Europe. With its unique geographic location and its understanding of cultures across both continents, Turkey is clearly well positioned to play a lead role in this process.

IV.  Concluding Remarks

Ladies and gentlemen:

As you know, ADB's developing member countries include a number of the Central Asian Republics. And, we have seen the influence of Turkish entrepreneurs in bringing ideas, business and development to the countries of this region - building housing and other infrastructure, and opening and enlarging markets.

I would like to conclude my remarks today by strongly encouraging Turkish entrepreneurs to look beyond Central Asia and bring their expertise and energy to countries across Asia and the Pacific. Like Turkey, developing Asia is growing rapidly. If we seize the opportunity to share our success and help one another to meet common challenges, the benefits will be significant for all of us.

Thank you, and best wishes for a successful seminar.