Statement of H.E. Mr. Ali Babacan, Minister of Foreign Affairs of the Republic of Turkey at the 18th Council of Ministers Meeting of the ECO, 9 March 2009, Tehran

Mr. Chairman,
Honourable Ministers,
Ladies and Gentlemen,

It is a great pleasure for me to participate in the 18th Council of Ministers of the Economic Cooperation Organization. I would also like to express my appreciation for the endeavors of the friendly and brotherly government and people of the Islamic Republic of Iran in hosting this significant meeting and thank them for the warm hospitality shown to myself and the members of my delegation. I am confident that during this important meeting, we will hold informative and fruitful discussions on the issues placed on our agenda.

I would also like to congratulate Mr. Manucehr Mottaki, the Honorable Minister of Foreign Affairs of the Islamic Republic of Iran for his election as Chairman of the present meeting, as well as of the ECO Council of Ministers.

I should also like to thank our distinguished Secretary-General, Mr. Khurshid Anwar for the excellent way in which he has steered the Secretariat during his term in office.

Distinguished colleagues,

The Economic Cooperation Organization (ECO) has a unique geo-strategic location and is a linking point between East and the West. Our organization has a significant economic power. The member countries have a land surface of nearly 8 million square kilometers and a population of nearly four hundred million people. Our region, with its vast natural resources, and dynamic work force has a big development potential which we should harness in the interest of all our nations.

By pursuing the goal of regional integration, enhancing existing relations and strengthening economic ties among member countries we are today much more hopeful that this organization will achieve its fundamental objectives.

Moreover, there is no doubt that if we cooperate efficiently, in the priority areas of ECO, this will greatly contribute to the development of our national economies and facilitate our countries’ integration into the global economy.

Mr. Chairman, Dear colleagues,

Within the context of the globalization process, Turkey believes that free trade among the member states is essential. We, therefore, need to place free trade at the center of our activities. Elimination of all trade barriers is the main instrument for increasing trade between the member states of ECO. This will bring us results by which we will all win.

In this regard, ECO members crossed an important milestone with the ECO Trade Agreement (ECOTA) taking effect last year. We have to create a free trade area by 2015 and I am glad to see that we are setting up important landmarks towards that end.

With this understanding, we call upon all States that are party to this Agreement, to expedite the completion of necessary formalities to implement tariff concessions without further delay. The 2nd Meeting of the ECO Trade Agreement Cooperation Council will be held in Ankara as soon as the Contracting Parties provide their Offer Lists to the Secretariat. I also would like to urge other Members that have not yet signed the Agreement, to consider doing so at an earlier date.

Another way for boosting our cooperation with concrete results is, encouraging and engaging the private sector and businessmen in the ECO activities. We cannot reach our goals without the involvement of private business. In this vein, we appreciate the fact that the Secretariat of ECO Chambers of Commerce and Industry started functioning.

Likewise, the establishment of ECO Trade and Development Bank (ECOBANK) with its headquarters in Istanbul, and the forthcoming establishment of the ECO Reinsurance Company, are also important concrete achievements of our Organization in recent years.

There are currently 3 countries who participated in ECOBANK. We highly appreciate the interest of other Member States in joining the ECOBANK and would like to call on the Bank to evolve the necessary mechanism for the participation in the activities of the ECOBANK.

Despite all these important developments, the objective of enhancing regional trade will remain elusive in the absence of a well-developed system of transport in the region. Moreover, the majority of ECO members are land-locked countries and they require facilitation of transit traffic. Therefore, we believe that full implementation of the Transit Transportation Framework Agreement (TTFA) will facilitate establishment of viable region-wide corridors of trade and investment, transport and communications. TTFA is essential for the free flow of goods, services and investments in the ECO region.

The enhancement of regional trade and private sector initiatives among ECO member countries will contribute to the prosperity and stability of the region as a whole. Within this context, we note with appreciation the activities conducted by the ECO Chamber of Commerce and Industry (ECO CCI). The Presidency of ECO CCI has been assumed by the Union of Chambers and Commodity Exchanges of Turkey (TOBB) since November 2007.

ECO CCI promotes bilateral and multilateral economic relations among the member countries, facilitates private sector development in the ECO region, and contributes in the economic policy making processes. Within this framework, ECO CCI Women Entrepreneurs Council has been established that will contribute to the encouragement of women entrepreneurs in the ECO region; the ECO CCI website is online and provides a substantial database for business enterprises as a Trade Portal; committees in the fields of industry, trade, transportation, tourism and arbitration have been built up. I strongly believe that ECO CCI will become an indispensable institution in the ECO region with its professional structure, accumulation of know-how and wide international network.

Distinguished colleagues,

Our meeting is being convened at a time when the global crisis has made extraordinary impact on national economies. The major advanced economies are already in recession. The emerging and developing economies are also slowing down.

The world faces a global financial crisis on a scale, which we have not seen in modern times. The extent of the problems has been so severe that some of world’s largest financial institutions have collapsed. The governments of the wealthiest nations in the world have resorted to extensive bail-out and rescue packages for the remaining large banks and financial institutions.

The financial crisis sweeping world markets is a far-reaching problem that affects all countries. The ECO region is no exception. In an increasingly inter-connected world, the global credit crunch is spreading throughout the entire global economy.

There is now a general call for fundamental reforms of the financial systems and institutions. Part of the reform suggestions also include giving more voice and power to developing countries, which generally do not have much influence on how the global economy is shaped. It is imperative that the international financial institutions should be reformed and become more representative of changing global economic realities. If the mistake of one country has costs for others, then others should have a say. Regulation and supervision should be done in more of a supra-national setting and no country should be left out of this new architecture.

Turkey is a member of G-20. I actually represented Turkey in the G-20 Ministerial Meetings for 5 years in a row in my former capacity as the Minister of Treasury. My Prime Minister participated in the G-20 Summit held in Washington last November. A follow-up Summit will be held in London at the beginning of April. The G-20 Summits aim to reach consensus on coordinated measures, to tackle in the international financial and economic crisis, restore worldwide financial stability, lead the international economic recovery and secure a sustainable future for all countries. The first G-20 Summit was successful in bringing countries together to reach consensus on basic principles and measures. Now those measures need to be implemented. Without international cooperation and solidarity, national measures will not be sufficient. In our participation to the G-20 Summits, we also try to be the voice of developing countries and also to be the voice of the ECO countries.

There is a need for concerted action to overcome this global problem. While it is imperative that better regulation is required in the international financial markets to bring back trust in the system, we have our own responsibilities in our region to cooperate more in times of economic difficulties.

I welcome the decision to establish a Working Group comprising experts of the member states and ECO Secretariat to study the implications of the global financial crisis on the economies of the ECO member states. This Working Group will contribute to our work for adopting coordinated measures among our countries.

In times of crisis, the external resources we need for our development will be scarce and costly. We have to mobilize our own resources to the extent possible.

Dear colleagues,
Ladies and Gentleman,

Before I finish my statement, I would like to reiterate my profound thanks to the representatives of the Government of the Islamic Republic of Iran and the Secretariat for their generous hospitality and also excellent arrangements made for this meeting.

I hope that 18th Session of the Council of ECO Foreign Ministers will play an important role to achieve our objectives to further regional economic cooperation.

Thank you for your kind attention.