 Dear Deputy Prime Minister, dear panelists, distinguished guests, ladies and gentlemen, Professor Schwab, a warm welcome again to the World Economic Forum, a special meeting on unlocking resources for regional development. After last night's excellent welcome address with President Erdogan and Professor Schwab, it's now on us to be together engaged. And we prepared for you an intense day on deliberating on the theme of unlocking resources. Across four key pillars, we want to engage you and all the key pillars are led by one of our program champions, so thank you very much for this. The first key pillar is the shift in energy dynamics. We focus on different issues and ways to make the most on regional resources. The second pillar is infrastructure as a platform for growth, matching the financial infrastructure, the market infrastructure, as well as physical and more and more crucial the digital infrastructure. The third pillar is the future of Turkey's role in the region. So the question of integration will be raised, question of trade, neighborhood with the European Union, with Asia, Eurasia and Africa. And we will also address humanitarian crisis like refugees and geopolitical issues. The fourth pillar is the inclusive economy and the entrepreneurial spirit. We can discuss innovations, future jobs and empowering of women in the economy. And later in this session, we will award some of our most dynamic companies called global growth companies, who are poised to become economic leaders thanks to the innovation due to the entrepreneurial spirit. And later this day, it's my honor to invite you again to this plenary hall for two special addresses to close our meeting. The special address by Manuel Barroso as the president of the European Commission and the special address by the new prime minister of Turkey, Ahmet Davutoklu. Now we begin what we hope to be an inspiring day with a critical session to give you an overview of our today's issues. And before I hand over to our moderator, Seren Pesin, who will introduce all the panelists, it's now my great honor and pleasure to introduce to you the deputy prime minister responsible for economic and financial affairs, Ali Babacar. One welcome, it's a great honor that you're here. Ladies and gentlemen, distinguished guests, I will be speaking in Turkish for just the beginning. So if you can use your headphones, it will be, I think, easier for you to understand. Distinguished guests, distinguished participants, I would like to start out by welcoming you to Istanbul and to Turkey. The World Economic Forum has now Turkey programs which have become a regular part of WEF events. In that sense, it's an honor for Turkey to host such special events in Turkey. And I would like to extend my gratitude to Professor Schwab and everyone involved in making this possible. The special meeting of the World Economic Forum in Istanbul started yesterday and it will continue until late hours of today. It will take up very important issues for the region and the world. And our topic in this morning are basically is the geography all around us. Turkey being the center, including Caucasia, the Middle East, North Africa and Europe. If you take a look at where we stand and if you take a look at the latest developments, especially taking a trip from West to East between 2008 and 2009, the world underwent a serious economic crisis. And we still see its negative impact on Europe. This year has seen some recovery, but this recovery remains fragile and very different from one country to the other. In the sense that different countries are experiencing different recoveries. Public debt is still at record levels. Unemployment continues to be high. And in the financial sector, some of the challenges still remain. Problems have not been overcome as a whole. If you take a look at the demographics of Europe, the demographics in Europe is not helping with the recovery process either. The aging population in some countries, the burden displaces on social security systems will continue to be a challenge. In the labour market, reforms in the labour market and in the production market have to go hand in hand with social security reforms. This remains a crucial issue for Europe. If you take a look at the European Union, on the other hand, following the Second World War, the European Union managed to become the most important peace project in the world. It brought people together over certain ideals, making it possible the free circulation of goods and people as well as services. The European Union removed barriers. It made borders irrelevant. In that sense, it was an important civilisation project, modernisation project for the whole world. Countries which fought against each other in the Second World War managed to lock together over the same ideals, values and a common ground. And the European Union showed us all how coming together with certain ideals could give benefits for all countries involved. The European Union developed criteria, benchmarks for human rights, for universal values, democracy, rule of law. And when countries respect these values, it's very clear that the people living in those countries benefit the most. We clearly experience this with the EU. If you take a look at the MENA region, Middle East and North Africa, it's a difficult region. A difficult region to maintain stability, where the stability once achieved is not always easy to maintain. And Turkey has certain principles. Whenever it approaches MENA, we continue to respect those principles regardless of developments. First of all, one major principle for Turkey is to ask for a peaceful settlement of disputes and conflicts. In this geography, multiculturalism is the key. Respecting difference, respecting the multiculturality and seeing diversity as richness are our principle values in approaching MENA. In this geography, we have achieved this for centuries. We maintain the right principles and we administered those values with the right type of administration. It happened for centuries and we are very hopeful for the future. We in fact have a vision regarding this for the future. In the Middle East and North Africa, we firmly believe that cooperation can develop and new networks of solidarity and cooperation are possible. That is why we have lifted the visa with many countries. We have undersigned free trade agreements with many countries in the region so as to allow easier circulation of people, goods and services. Turkey has been keenly working on such a geography. We wanted borders to become irrelevant in this geography as well. It was always our claim that this is possible. We take a look both in terms of religion and the ethnic diversity in this region. The borders that were drawn after the Second World War were actually not very meaningful. They were not extremely relevant. And in today's world, going back to borders or emphasizing borders seems even more irrelevant. Just on this principle, we always dwelt on how we could make sure these borders don't become barriers, but just remain an administrative and political fact and nothing more than that. We supported the democratic transformation movements in the Middle East and North Africa. The most important resources in this geography might look like the hydrocarbon or oil or gas resources, but I would like to claim that it's the young people of this geography which remains its most important resource. Many countries in the region need to strengthen their institutional structure. Many countries need to implement economic and political reforms. Reforms that bring to the fore the human dimension, that become more transparent, more accountable in their public administration. If you go more eastwards, more towards the Central Asian region and Caucasia, you will see that this geography too has important hydrocarbon resources. On the other hand, it has a unique culture. This geography has a unique culture and a very qualified labor force. Especially after the dissolution of the Soviet Union, the newly independent republics managed to make the best use of the already good education system that remained from the Soviet Union and capitalized on this. In fact, as Turkey we believe, they can even capitalize more on it given the current realities. And once again for this geography, an accountable, transparent public administration remains crucial. Ladies and gentlemen, Middle East, North Africa, Caucasia and Central Asia, if you think holistically, you will see that some countries are rich in terms of their natural resources and the others are actually dependent on others' natural resources. With a firm cooperation between the countries in the region and with more interconnectedness, we will have easier movement of goods and people. And once we achieve this, we will be able to balance out the economic relations between those who have natural resources and those who need natural resources. And such interconnectedness will ensure a lasting peace and stability in the region. Countries are becoming more and more independent economically. And at first sight, you might think this as an impediment on the way to freedom and individual independence. However, if this interconnectedness is managed well and is well balanced, it's actually the guarantee for lasting peace and stability in the region. And finally, I'd like to come to Turkey. In the past 12 years, Turkey has undergone a major economic and political transformation. The Turkey of 2002 is very different from the Turkey of today. They look like two different countries. Our accession process to the EU helped out with the reform process. It increased the quality of democracy, the practice of human rights, fundamental rights. The EU criteria acted as a guide for further reform. These external benchmarks increased the internal implementation of the same principles. So this outside benchmark helped us a lot inside Turkey. Before the 2008 and 2009 crisis, Turkey was already very resilient with its banking sector. Its debt ratios had gone down. It had very low debts compared to many European countries, which is why it was one of the least negatively impacted countries in Europe. And it managed to grow very quickly once the crisis passed. Our growth rates remained high, narrowing down the difference with the developed world. In fact, per capita income in Turkey is at 56% of the developed world. Furthermore, this development also ensured a more egalitarian distribution of income. The distribution of income is becoming better and better in Turkey. And the Jamie coefficient is actually one of the best in Turkey. We still have a lot to do though. We need to improve the quality of democracy. We need to make sure that fundamental rights and freedoms are even more widely practiced. We need to ensure Turkey becomes a real rule of law. In the economic sense, we need to increase savings in Turkey. We need to reduce our dependence on external energy sources. We need to produce more technology. We need to produce better value-added goods. We need to focus on education. In fact, in the coming 10 years, education reform will be a top priority for us. We have a young and dynamic population, but it's only if we can educate them properly and better will we be able to have Turkey which is richer and more prosperous. Finally, I'd like to touch upon the G20 presidency that Turkey will take over. We will be taking over the term presidency, as you know, and will continue with the economic and financial sector regulation, investment, climate change issues on the agenda that previous presidencies have already been very keen to follow up. Turkey will continue to follow up these issues. On the other hand, we will be focusing on SMEs, for instance. We will look at the role of SMEs in terms of providing employment, both in developing countries and in the developed countries. We would like to bring this to the agenda of all G20 countries. We will be working very keenly on the least developed countries. We will try to be a bridge between the G20 and the least developed countries because these countries have a huge potential. And inside the G20, there is already an agenda item, but Turkey, once it becomes the term president, will be focusing very keenly on the least developed countries. And we will be working hand-in-hand with the World Economic Forum. This is a commitment on our side. We would like to remain very much connected with the World Economic Forum throughout. Thank you very much for your patience. Thank you very much, Vice Prime Minister Babacan, for your remarks. I would like to give a warm welcome to all of you, everybody here, and distinguished panelists. Thank you very much for being with us. And also, we are delivering this session live on CNN Turk, so to our viewers also, very warm welcome. I would like to introduce first our panelists for today's session, for this session. Vice Prime Minister Babacan is with us. Thank you very much, again, Vice Prime Minister. Professor Halberstadt, Professor of Economics at Leiden University, and he is also a regular contributor to the World Economic Forum. Thank you very much. And Mr. Uwe Kruger, who is the Chief Executive Officer of one of the world's leading design, engineering, and project management consultancies, W.E.S. Atkins. Thank you for being with us. We have here today Tarik Sultan Elisa, who is the CEO of one of the world's biggest logistic companies, Agility, from Kuwait. Thank you, Mr. Elisa. We have Majid Jafar, CEO, Chief Executive Officer of Crescent, Petroleum from United Arab Emirates. Good morning, sir. Thank you very much for being with us. And finally, I would like to give a warm welcome to my colleague, Afsi Yurdaqul, who is the Chief Foreign Editor for Habertürk Channel. And she is one of the program champions as well. So once again, welcome. We have got to deal with some very important issues today, which concerns not just Turkey, but also our region. In this session, we're going to discuss unlocking resources for regional development. What are the key opportunities and challenges that Turkey, Middle East, North Africa, Europe, and Eurasia are facing? If you permit me, I would like to start with Professor Halberstadt. Mr. Halberstadt, can you kind of describe to us briefly the global economic picture? I know it's a very broad question, but I'm sure that we are in good hands. Just give us a picture. What are the new challenges? At what stage we are in the global economy? That's indeed a big question. Maybe I should preface my summary response by saying that I'm cautiously optimistic, but there is a very strange contradiction in the world. By and large, most regions have overcome the consequences of the financial crisis. There's only one region which is substantially lagging, which is the European Union, the Eurozone. But the strange contradiction is that the real economy seems to be doing quite well across the world, though at the same time the environment, the geopolitical environment, is full of tensions and conflicts which some of them are of a nature and of an intensity which we haven't seen for many decades. As a consequence, one wonders whether there may be a tipping point in the conclusion which I put forward that there is reason for cautious optimism. Now, obviously, there are a number of major challenges for the global economy which were also listed by Minister Babacan. Obviously, employment in many regions, including in these regions around the Mediterranean and Europe, and the climate issues, energy. We may be talking about these later this morning. I think that the cautious optimism can only be sustained for the world economy if we indeed make progress in managing the political tensions, the geopolitical tensions, including those in this region and elsewhere in Europe, and of course improve institutions' good governance everywhere because confidence, trust is at the basis of it all. I want to turn to Vice Prime Minister Babacan. Do you share Mr. Halberstadt's views and also what's going on right now in Syria and Iraq? How do you believe that it's affecting the global, political and economic environment? And what kind of effects on Turkey's economy and also effects on regional policies? I think in terms of the global economic outlook, when the crisis hit in 2008-2009, it started in the financial sector. It started as a financial crisis, turned into an economic crisis, then had social consequences because many political crises in many countries. But then when we go to the roots of the problems, I think it was mostly a crisis of confidence. When people don't know what to expect, when predictability is low, then consumers tend to spend less, companies tend to invest less, and banks tend to lend less. And when consumers, corporates and banks slow down, the economy slows down. So what has been happening over the last six, seven years, all the steps that have been taken were okay, but were we really good at creating confidence, regenerating confidence? It has been taking place so slowly and so gradually, and I think that's why the recovery has been also so slow. The central banks have been providing unprecedented amounts of liquidity, but then when there is no trust that liquidity was somehow stuck at the transmission mechanisms and it didn't really work well. For the second part of your question, which is about Syria and Iraq, when we look at threats about the global economy, geopolitical issues is a set of threats and Russia-Ukraine tension and Syria and Iraq are probably right now one of the most important geopolitical risks that is a threat for the global economy. Russia-Ukraine goes all the way back to Cold War time and how the relations between Russia and Western countries will develop into future. Are we really entering a new phase? How is it going to change the nature of the balance that was more or less provided? So this is more of a long-term issue rather than just a tension between two countries. That's how I see it. And then Syria, Iraq, yes, it's a huge humanitarian problem that we are observing. 200,000 people dead already. But then the fact that especially Iraq and the neighboring countries are also natural resource rich countries, any impact of the conflicts in this region on the oil supplies or oil transportation routes could cause a higher oil price picture, which does eventually affect the global growth and so forth. So that's why I think the international community should look at this issue, Syria and Iraq issue, not just a regional local thing, but an issue which does have the potential of global impact. And that's why we are happy that now more and more countries are working together to do something about it. Mr. Kruger, I would like to get your views on this situation in particular. I mean, what Vice Prime Minister Baba John mentioned, do you agree or do you have anything to add? Yeah, well, look, building on what we just heard, first of all, I think it has to be noted that we see a very healthy momentum in general of the economies here in the Eurasian and Central Asian region, despite the political instability that we see emerging around us. I think President Erdogan yesterday rightfully so mentioned the character of the Turkish economy as one of the fastest growing on a worldwide basis, and that is clearly the engine of stability here in the region on which kind of economic recovery is built. If you look at the very basis of what's happening, I would characterize it according to three lines that are important to substantiate this kind of momentum. First of all, we see in general in the Middle East, in Eurasia, also in North Africa, a trend towards an uninterrupted trend to more urbanization. So if there's one figure that I'd like you to keep in mind, then on a worldwide basis, we have crossed this point two years ago that more than 50% of the world population is living in urban centers, and that clearly causes a lot of demand with regard to infrastructure. And again, President Erdogan rightfully yesterday pointed to energy and transportation as the underpinning most important ingredients to healthy and sustainable growth in the region. Energy as being the lifeblood and you here in Turkey made certainly visionary and leadership-driven decisions to have a better balance, not only based on oil and gas, but more nuclear and renewables as well, which is very important and again leading the kind of development in the region as such. On the transportation side, again, visionary projects like the Tunnel and the Bridge here across the Bosporus, the airport. So in general, large-scale public transportation infrastructure certainly extremely important to attract foreign direct investment. The second major trend is technology. Philip Russell was mentioned at the beginning. Digital economy, and that of course dovetails into the third element, which is education and skills. You have a fantastic tradition here in the country of skilled engineers. My company, Atkins, we are partnering with two premier Turkish contractors in building Doha Metro. As we speak, you have a fantastic tradition of exporting engineering know-how. I think it's important that education becomes as much as infrastructure a priority for the development of the country, and if I make the final comment that also that needs to tap into the talent pool of the young and the female population in the country. Yau's unemployment in general is an issue here in the region, and we have a social responsibility, a responsibility for the future of these young people to involve them in education initiatives and make them employable in the engineering and the infrastructure in the general economy as such. There's lots to do, but if we do that right, I think based on where we are today, based on this momentum that the president was characterizing yesterday, there's a fantastic opportunity for Turkey and the region. At this point, before turning to Mr. Alasa, I want to come again to Vice Prime Minister Baba Jan. You mentioned that Turkey has to invest also in technology and young population. In the Global Risks Report, 2014, the World Economic Forum's actual report, lost generation is one of the great risks for the global economy. What's Turkey's short-term and mid-term plans or visions about that? Can you give us some details because you already mentioned, but we don't know the details. Also, what are your opinions about the regional development also in the Middle East? Well, in this part of the world, mainly because of the fact that the population is young and growing, investing in people is actually investing in the future of the country. And since you asked specifically about Turkey what we have been doing, we have been doing a lot of work with our educational infrastructure. So we more than doubled the physical space for education. The number of our universities was about 50 in 2002. Now we have more than 170 universities in Turkey. The teacher-to-student ratio is now 1 to 20 in our primary schools and secondary schools. The starting salary of our teachers is about 130% of per capita GDP, which is much higher than many countries around the world. So we have been doing a lot with quantities. So more education space, more teachers, more universities and so forth. But now it is probably for us the time to invest in quality. And the quality starts with the quality of the teachers, how to recruit better teachers, how to train them better, how to measure their performance in a fair way and how to make them identify that their performance is good or not. And then curriculum is of course important. Technology is important. We have a project called FATI where we are taking fiber optic lines to every single school in the country, providing tablet PCs to 11 million students around the world, 600,000 smart boards, almost half of it already installed in the classrooms, which are Wi-Fi connected to the students plus the internet and so forth. So we are also investing this $8 billion into technology and education. But again, physical things aside, the non-tangible things, quality, is again most important. And by the way, we also increased the number of compulsory education in Turkey from eight years to 12 years. Now families are obliged to send their kids to school for at least 12 years, which is a new law which we have already enacted. Well, I want to raise the same question to Mr. Elisa. Here's the question, actually, once we are talking about the unlocking resources, can the Gulf and the Middle East countries grow their economies with investment related to industries such as oil, natural gas, and construction? Those are the main areas. Actually, when we talk about Middle East for investing for stakeholders, will this be a sustainable economic growth model for the region? Thank you for that question. I think the short answer is not enough. And the focus needs to be on building an entrepreneurial and inclusive economy. And what does that mean? An economy where people have jobs, where it's easy to start, run, and operate businesses, where women and men are well represented in the workforce, and where young people have hope and opportunity. And it's very important that economies are able to produce enough opportunity so that extremism doesn't pay. When extremism is the best-paying job in town, you have a big problem. And I think, you know, sitting here today, I think this is a very important point that we all need to keep in mind. No amount of politics can overcome a lack of opportunity. So how big is this problem today? If you look at the Middle East and Africa, you're talking 170 million jobs by 2020. And that's, you know, a few things that come to mind about that number. First of all, it's a huge number. Second of all, that number's been around for a while, so it means we're behind the eight-ball. We're already in a deficit. And if we are not able to address that issue going forward, I think we're going to be responsible for creating probably the largest talent pool for extremism going forward. That's something that we need to address, and how do we do that? I think first we need to focus on the low-hanging fruit, and that has to be with making it easier to do business and reducing trade barriers. And the dividend there to the economies is really substantial. If you're talking about MENA or Africa region, you get a one-time or a GDP bump of up to 30% just by making it easier to do business. It's not about investing in roads or new ports or airports. Those are all important things to do, but let's focus on the low-hanging fruit, the things that we can control. I think second of all, we need to make it easy to start and run new businesses as far as the MENA's concerned. And why is that? 9 out of 10, every new jobs in the emerging market is coming from the small and medium-sized enterprise segment. And that's the segment that's the most impacted by the bureaucracy and the difficulty of doing business. Large companies can overcome these difficulties fairly with certain capabilities to do so, but small and medium-sized enterprises, the engine of growth, they're the ones most damaged by having an environment where it's difficult to do business. I think we talked about the need to invest in soft infrastructure. It's critical in education, but in the Middle East there's two types of, I would say, two types of countries. There are countries that are under-investing in education, where a lot more needs to be done. And there's countries that are investing but not getting the return. If you look at standardized testing in certain parts of the Gulf, where the expenditure is very high in education, we're not getting the output that we need to actually drive competitors going forward. You need to look at the broader incentives from the public sector. That's a story for another day, but clearly something that we need to focus on. And I think finally, we need to make sure that as we grow, that the growth all segments of society benefit from the growth. I mean, it can't be one ethnic group that has to be across the board. Women have to be part of that equation. The most educated part of the workforce in the Middle East is women, and they have the highest rate of unemployment. So there's something there that needs to be done. So, thank you. Mr. Jaffer, I would like to forward the same question. What's in your opinion, what's the sustainable growth for Turkey, for Europe, and also for Middle East? Thank you. So echoing a lot of the points of my colleagues and looking to the title of this special meeting, the sustainable, the only sustainable resource and driver of growth is, as we've said, our young people, and how to engage them, employ them. I mean, when you look at the title Unlocking Resources, people may think of energy or other natural resources, but that's our only real driver, the natural resource. Having said that, energy is, you know, the lifeblood. If the young people are the muscles in the brain, you still do need a sustainable energy supply and policy underpinning that. And comparing Europe and the United States, I think the contrast is clear. In the United States, thanks to the energy revolution in the last few years with the shale gas and new technologies and new infrastructure, they've achieved rapidly falling costs of energy. So now industry is competitive with China and the Middle East and other parts of the world, as well as falling emissions. So we've had moving from coal to more natural gas, it's achieved both of those. In Europe, by contrast, and I would say in the United States, that's a major and under-emphasized reason for the economic recovery in the United States. Turning to Europe, I think echoing what the professor said, one of the main reasons why Europe has failed to sustain an economic recovery is the energy policy. And the fact that this mad political dash for renewables, in a sense, although it's an important part of the mix, sometimes they try to leapfrog the ability of technology or the economy to sustain some of that. And so not only have energy prices gone up, but the emissions have gone up. And now Europe is importing coal from the United States and it's causing a rise in emissions. So I think it is a very important aspect, looking at the objectives for Turkey that we heard by 2023, a $2 trillion economy, $25,000 per capita GDP. That's likely to mean another doubling of the energy demand for this country, for Turkey, which has already happened twice in the last two decades. Of course, the energy mix is important, efficiency is important, as we've heard, but oil and gas will remain an important part of the mix and natural gas is about a third of Turkey's needs today, and that will probably increase. Turkey, apart from being a major market, sits at the crossroads, is within pipeline distance of half the world's oil and gas if we're looking east and southeast to the Middle East and Central Asia and Russia. And looking west to Europe, the biggest market potentially for energy is on the doorstep. So Turkey has a key role to play, not only as a transit, but also potentially as a hub and setting the price. So I think it's a very interesting dynamic. The barriers are not the economic, they are, as always, the politics and the policy. You know, the distance from here to Berlin is less than from Houston to New York, but there are many more borders from here to Berlin, and political or regulatory hurdles, and if we're looking east, that's even more the case, and as we've heard, there are even some conflict issues. But echoing what the Deputy Prime Minister said, this concept of economic integration leading to development and political stability. And unfortunately, sometimes we think it's the other way around, oh, we have to address these conflicts and we have to achieve the political stability first. The two go hand in hand. If we are only chasing those and not addressing the key topics of this summit meeting from now, we will never get to that level of the stability. Well, since we are talking about untapped resources or unlucky resources, everybody's giving example like investing in technology or young generation, but nobody mentioned women empowerment. So I would like to turn to Afsin, my dear colleague. And what do you think about that? I mean, women empowerment is still very, very important for countries like Turkey, to Arab countries, also even for Europe and for the whole world, actually. But what you want to say about women empowerment in this part of the region? Well, first off, I think we have to represent Syrian, right? Not only as colleagues, but only the two women on the panel. Right, everybody? I think, look, we could go ahead and philosophize about this and say fancy sentences about why it is important to empower women, why in this day and age, 21st century, why are we still talking about this problem, right? But short and clear, it's unfair and it's loss of potential and it's not okay for women to do the same job as men and get paid less and be treated in a different way. If we're talking about democratization of workplace, if we're talking about increasing productivity in all of the three regions that you counted, and if we're talking about just fairness in general, I think the answer is pretty straightforward. So yes, it is something that we should be thinking about and it's something that policymakers should also be incorporating into their policies. And I'm hoping that one day we'll be living in a world where it's not going to be a female panelist, female co-chair, moderator, I'm sorry, raising the question and it's the female co-panelist who has to answer that. It should be a reference that everybody should be thinking about and keeping in mind, I guess, in brief. That's what I have to say. Yeah, but I'm going to raise the same question to West Prime Minister Boba John. Thank you. Countries like South Korea, Poland, those are countries that we are in competition actually, but they made female employment a driving force of their economies. So how about Turkey? How about this region? Arab countries, Middle East countries, even Eurasian countries? Well, I think it is no secret that most of the countries in Middle East, North Africa, including Turkey also, have low workforce participation at labor participation rate for women. In Turkey, what we have done in 2009 was to introduce a set of active labor market policies so that we have provided more advantages to the employers if they hire young people or if they hire women. The law that we introduced in 2009 says that a woman of any age, if she starts a work for the first time in her entire life, then for the first two to four years, the Social Security premium is paid by the state, not by the employer. So in a way, we lowered the cost of entry for women into the job market. And we found out that this incentive worked out very well. When we look at the participation rates, the workforce participation rates, the overall percentage is 30% for women but 70% for men in Turkey. But when we look at the last three years, last three years, when we look at how many people entered the workforce, 46% women, 54% men. So for every 100 newly employed people, we have now 46% women. So this is, I think, a healthy development that has started to happen already. And I think the incentives are playing a key role here. But also the fact that Turkey is becoming more and more of an open country, more and more of an open society is also helping this trend. And I think in the development phase of the countries, there is sometimes a threshold, and after that threshold, all of a sudden the women's participation to workforce and even politics increase. And I think we are right about that threshold right now. The active labour market policies actually helped not just for women but overall. Last 12 months, for example, June 2013 to June 2014, although our growth rate is around 4% or so, the total level of employment in Turkey increased by 1.2 million people. So growth, of course, helps employment, but active labour market policies also play a key role so that with minimal government resources you can actually create a huge number of jobs if you implement the right policies. Well, I would like to raise the same questions for Middle East countries or Arab countries to Mr. Lessa. Would you like to comment on that? Yeah, I think for me it's a pretty straightforward equation. If you're going to play a football match, you want your best players on the field. And in the Middle East, I think in some GCC countries, you have 70% of the graduates are women female and they're only 24% of the workforce, which doesn't really make sense. You have this talented pool of educated women and the side is not able to benefit from them. So clearly it's in no one's interest and we need to do more about addressing that, but also I think more importantly about addressing the overall size of the opportunity. And you have to do that, you have to grow the economy and you have to grow by, I think, reducing a lot of the impediments to trade that we have today. These are self-imposed impediments. I mean, there's things that countries can do on a unilateral basis which may need to be done quickly, but obviously we're also hoping for some more rounds of WTO talks and hopefully we'll be in new agreement because we could help the equation a lot by having a new agreement on God. I think it's up to a trillion dollars of potential additional economic benefit that could come from approaching these trade barriers and facilitating trade from a multilateral basis. So that would help as well. Okay, let's talk about a little bit more about new world order actually. I would like to turn to Professor Halberstadt. We know that the Fed is getting ready for the post-crisis world order. The transition to new normal is, you know, seriously on the desk. How will Turkey and Europe or Middle East will be affected? What's your perspective? I will read it for that. We first say something about my friends at the Federal Reserve. I don't think they would want to be seen as the architects of a new world order. In fact, I think they are not. What they are doing is they are solid, almost conventional, but constructive, monetary policy architects and policymakers. And the current discussion about what's called tapering or lesser liquidity or whatever the terminology is, which is used, is really not about world order, but is about doing repairs to the current financial markets and the financial system in such a way that it becomes sustainable again, because it wasn't sustainable as the Deputy Prime Minister has also indicated after the 2008-2009 crisis, it did become sustainable to a large part also due to the actions of the United States, especially the Federal Reserve. And soon the Federal Reserve, as it has indicated, will lessen the liquidity in the system or raise interest rates whatever way you want to describe it. For Turkey, just to confine ourselves to that for a moment, it really is a fork in the road. And I don't know whether Deputy Prime Minister will agree with me, but it's a fork in the road. And it's not like the baseball player, Yogi Berra, said, when you come to a fork in the road, take it. You cannot. There is consumption and there are savings. And Turkey has had incredible economic and social achievements in the past decade, but to sustain that, there needs to be a different mix in consumption and savings. And as this country has lived largely on credit growth and consumption and thus on external finance, money coming from abroad, the consequences are that in the short term, soon, there will have to be much more savings and less consumption. Now, that's easily said about the policies of another country. I realize that. But as we are talking here about the impact of the Federal Reserve actions, it's pretty clear that the actions which have been announced and which will be on the table soon, maybe this month, maybe next month, the next few months, will have consequences for the Turkish economy and also for a number of other markets. And that will imply that a larger reliance and increase in domestic savings is required and thus less consumption. And that is politically, in any country, a very difficult message to sell and to digest. Mr. Baba Jan, would you like to comment? Well, actually, that has been a message that we have been giving consistently over the last three-year period. Since 2012, when our growth rate hit 9%, but again, when our current accounts deficit hit 10% of GDP, we started to give the very messages very openly. And we were not really afraid of the political implications and so forth. And I think our citizens really got the idea in a very constructive way. When we talked about the fact that we should consume in line with what we actually earn, I think this is not a very complex message for the consumers. But then borrowing and spending is something which is not very sustainable and that's why we have been taking measures, not only fiscal and monetary policy side, but also on the macro-prudential side, meaning that we have put loan-to-value ratios for not only house credits, mortgages, but also for car credits, for example. Or we limited the number of installments of credit card payments. We put a 25% threshold to the bank's balance sheets so that if the consumer credits are about 25% of the credit mix, then that bank is heavily penalized as vis-à-vis its capital education ratio and so forth. And these are working very well. Last year our credit volume was increasing at 35% and now it dropped to 16% only. And we also played with the mix so that less consumer credits, but more investment credits, more SME credits are being issued. Because we made it more attractive for the banks to give credits to the SMEs rather than to consumers by, again, regulation and macro-prudential measures. Out of 16%, for example, consumer credits grew only 11%, but SME credits grew by 20% during the last 12 month period. And I think across the G20, Turkey is the country which has been using these measures in the most effective way. And we tried many things for the first time. We did good impact analyses, but we have got good results. And when we look at the composition of growth this year, for example, growth is partially coming from domestic consumption but partially coming from exports, which is a very healthy mix, we believe. If the growth comes exclusively from domestic consumption for a country like Turkey with low saving rates and high dependency on oil and gas imports, it is not a healthy outlook. So if we like, we can grow 6%, 7% easily next year, but it will bring more risks. That's why we want to just keep the growth at reasonable rates, at sustainable rates, and we are doing this by short-term policies but also introducing more reforms for less dependency on oil and gas imports for higher saving rates as well as higher technology, higher value-added production. Even the education reforms that we are doing will help our country count deficit because if we have better educated people, those people will have higher value-added production and higher value-added is actually a larger economy with lower external deficit. So these are all actually in our plan for the next four years until 2018. We have already set out the structural reforms that we will be doing and now we are preparing a calendar solid deadlines about what we need to do. Federal reserves, future steps will be definitely very important for the global liquidity conditions and FOMC members have quite a widespread expectations of when and how much the rates will increase but I think sometime in 2015 the rate hike will start and it will probably take until 2017, 3.75 maybe or so but we should also remember that ECB, in a simultaneous way, started easing and Turkey is very well connected to Europe for its financing. So our banks would borrow mostly from European wholesale markets and with ECB's more accommodative policies, we believe that Fed's tightening and ECB's loosening could balance out. We don't know which will be more effective. We don't know if the net effect will be loosening or tightening for us but ECB's recent decisions will definitely help us and somehow level of the Fed's tightening, at least for our banking sector, that's what we expect. I think that the minister and I agree detailing the policy actions in a country is a very delicate process if I may put it like that and in a year or in two years where there are elections, this country both in 2014 and 15, it is all the more complex, every textbook will tell you that and so I'm looking this great interest at what's coming and I agree with the minister that the ECB, the European Central Bank's actions also met a great deal for the financing of the Turkish economy but again that is indeed a rational approach but we should keep in mind that it's not always a rational process. Mr Kruger, we are talking here about the regional investments. Of course Turkey is playing an important role in this part of the region but let's talk about Europe. I mean from your perspective, is still Turkey a good place for stakeholders to invest in? How do Europeans view Turkey lately? Turkey's growth, Turkey's competitiveness and the economic scene here in Turkey? As the Vice Premier mentioned, over the last decade, clearly Turkey has been extremely attractive for foreign direct investment. It's a young population, so both on the consumer product side as well as with regard to capital goods that has been a fertile ground for lots of Western investment initiatives and again if we look at it from a company perspective what we are interested in is stability where we invest and there's no better place in Eurasia than Turkey with regard to political stability of the environment, stability with regard to the tax regime which is extremely important for foreign investors and that is expected to continue from all what we heard after the elections and I think clearly a prudent fiscal policy as the Vice Premier just pointed out is an equally important ingredient to that to provide a stability. So I'm quite optimistic that the strand will continue and that European investors will look favorably at Turkey on a continuous basis. Mr. Jafar, would you like to comment on that too? Well I think that the key lesson particularly for my region, Middle East, North Africa is that the youth bulge, the youth unemployment crisis that we face and everybody sees it as a threat is actually a huge opportunity as well. That's the flip side of the coin. If we can find meaningful employment and engage this young population it will drive the growth and I think the key of course is achieving inclusive growth as the Deputy Prime Minister mentioned not just economic growth but economic growth with the Gini coefficient heading in the right way the discrepancies, disparities and income actually shrinking. That's what the most developed economies in the world are struggling with today. Even when they do achieve a recovery it's maybe at the expense of the less well off and only the better off and that's not going to address our issue in our region. What are the key challenges? They're not unique. Everybody looks at Middle East, somehow it's a different region, it's got problems but that underlying issue of youth unemployment is caused by the same drivers as anywhere else like in Southern Europe like anywhere else which is insufficient growth and that's very important as the first requirement is sufficient economic growth and we mentioned infrastructure investments and key sectors and secondly the education and skills gap Deputy Prime Minister mentioned the focus on the next phase for Turkey much of the Middle East, North Africa has some fundamental reforms in that area at the basic level which are still required and the third aspect is the labour markets which are rigid or which create some strange incentives to limit new hires and create obstacles to penetration by young people into the market. Again not unique to the Middle East a lot of countries in Southern Europe suffer from these issues and haven't yet resolved them despite the economic crisis. The difference between Europe and the Middle East is for the young people there's a social safety net in Europe and by and large the youth unemployment in many of these countries is a more recent phenomenon whereas in the Middle East it's been a crisis for decades already and we have imposed upon that a world economic crisis in the last five years plus now conflicts across the region in the Middle East of course those issues are related but that has made what has been a chronic problem in our region into an acute crisis now and unfortunately is not receiving enough attention. And also Tahrir Square and the Arab Springs it was a big hope actually for the young generation in the whole region I guess but this political instability is unfortunately affecting directly the young generation or creating jobs. How do you see the future or the short future? Well this is why I think the world attention is of course on conflict and extremism and these are obviously huge issues and we cannot underplay the humanitarian crisis and millions of refugees these are major major issues but underlying a lot of the instability are some of these fundamental economic issues as well and we cannot wait another decade or even generation to start addressing some of these in the proper manner otherwise we're going to be continuing firefighting the next crisis the next conflict and it will never end unless we start addressing some of these root causes if we do create more open economies more inclusive growth more regional integration as Deputy Prime Minister said the European Union was to prevent war and to prevent political instability people sometimes forget that in my generation that's why the previous generation embarked upon such an ambitious at the time unthinkable objective and those are the kind of things that we need in our region more economic integration shared interests and above all creating future potential and opportunity for our young generation. Since you mentioned the humanitarian crisis I feel that Afshin would like to say some words about it Afshin Sure and if you don't mind Shun I just wanted to add one thing to what Majid had to say especially about the youth here there are two things that he referred to number one the fact that we really don't have that much time to address these issues it is urgent and it's also the fact that Middle East does not have to it's not the region's destiny to be framed in such a way that it's a place where mad conflicts happen and people don't know how to talk or agree this place has a very promising youth potential and if addressed in the right way it could really lead to sustainable growth and it would be immense potential unleashed not only for the countries in the region but also for the entire region itself and since you made reference to the Arab Spring and the Arab uprisings it's also important to keep in mind what set it off it was the self-immolation of a 26-year-old man named Mohammed Boazizi in the city of Buzid in Tunisia he was a fruit vendor he dropped out of school at 19 because he had to support his siblings who were at school so he didn't have the opportunity himself I think that story itself it encapsulates the desperation that leads to these conversations which we had at the theoretical level here but this is the human element of it so I think those are the stories that we should pay attention to because in the end all of this policy talk goes back to real life and it affects real people so that's why I think it's very important to understand why it is urgent it's about real young people and it's about real people who are the future of this region and speaking of the future of the region I think we could combine those two questions now it's... I cover the Middle East mostly I work as chief foreign editor in this country and these days it mostly means crises on holding Iraq and Syria it means refugee crises it means people who need help it means people who have to leave everything they have behind and run for their lives Turkey is hosting 1.5 million Syrian refugees and most of them are also young by the way and speaking of how to make best use of the youth potential here we have to also keep in mind that these are the people who will be rebuilding their countries we will have to talk about how to rebuild Syria at some point same thing in Iraq, same thing in Libya, same thing in Tunisia what are we going to do with these countries and what kind of future we're imagining for them and most importantly what kind of future are young generations in these countries thinking about and I think we are at a critical juncture because what happened was that pre-Arab spring there was this demand for a better life that... and on top of it you have unemployment you have lack of access to education or even if you're educated you don't have access to good jobs that led this young population to the streets but what we see now is an added layer of uncertainty on top of it because you don't really have answers to the questions that pushed you to the streets to begin with so that's yet another question mark in their minds I think the reason that we're at a critical juncture is because if we also lose that opportunity the fact that these people need an answer they want to know what kind of a future they're going to have what kind of schools they can go to or if they can afford a wedding I could tell you many stories that I had interviews with from different countries who had these uprisings more or less similar stories they cannot afford getting married because it's too expensive they cannot afford going to college because it's too expensive I just thought of the story of a Syrian musician that I met in Istanbul he told me that Syria is no longer the place where you could play this kind of happy music that's something to keep in mind and yes it is loss of economic potential but it's also another big question mark that we have to think about because if these young people lose faith in their own future then that's a bigger crisis it's a crisis of faith in terms of the way they envision their own futures and where they want to be and where they want their governments to be and where they want their countries to be and I think the whole question whose political and economic dimensions we've been addressing is going to be exacerbated if we also lose that potential so I think I took a long way to give an answer to your simple and straightforward question but I think it combines how the youth feels here and what can be done in order to talk about a crisis-free Middle East I think that's where it starts I think democracy is one of the most important resources for the whole region I saw Mr. Alessar agreeing with Afshin would you like to add? I would just say if you think about the future I think there's a very maybe simple proxy for what is likely to come if you look at the statistics out of 189 countries that the World Bank tracks for ease of doing business and you take a look at Saudi Arabia the countries are the meaner between 55 and 170 so if you're telling me in four or five years those numbers can change I think we have a chance but there's no amount of I would say even democracy is clearly an issue but the real issue is how do we make it easier for people to find opportunity and I think there's more than one answer there's no way to get there but if we focus on that I think we'll be further along than focusing perhaps on the political ideas I think the problem in the Middle East is we spent too much time the last 20 years focusing on politics and not about actually addressing opportunity and I'd rather focus on there I think you get further in the long run Before I will turn to the floor Mr. Kruger I think I said that before that I fully agree with what has been said with regard to the focus we need to have on the Yao's unemployment issue across the region and I think there are lots of initiatives on the way that make me a little bit more optimistic that we really can have a change here just this morning discussed also specifically on scientific education what additional support can be given also from the private sector to make that happen and I think if we get joint initiatives going then probably the outlook is a little bit more optimistic Now at this point I would like to turn to the floor and I would like to get some questions from the audience if you have any questions but please introduce yourself very briefly and I would like to ask you to keep your questions also as brief as possible I'm Zeynep Dalle Global Shaper from the Istanbul Hub and my question is to the Deputy Prime Minister We as the Turkish youth are very proud of the economic advancements that have taken place in Turkey in the last decade coupled with the political stability and these advancements a lot of things were possible now that weren't possible before but nowadays when we go abroad to represent our country in meetings and ask about the events of last June how should we look at those events and do you think they pose any challenge towards unlocking resources for regional development Well actually when we look at international media coverage of Turkey since last year May June there has been an overwhelming amount of negative news and also negative comments we went through some events that's true May June was an important set of events but then we responded this by a comprehensive democratic scheme package that our president announced last October and when you look at that package which consists of more than 20 steps I think it is very clear that there is a strong political will to improve our practices in many fields but also I think it is important to understand that the events of last May June was not just voluntary natural flow of events but there were some plans directed some organizations I would say which are already categorized as illegal in Turkey were also in the process so it was not easy to understand and it was a whole set of heterogeneous group of people actually on the streets but I think we analyzed it we learned what is needed and we answered partially our democratization package but the package that we announced is actually just a part of the bigger preparation and we already declared that there are going to be more steps coming and then we went through the December events which caused another set of negative news and comments about Turkey but then did it really have a big impact on our economic outcome growth FTI inflow maybe not that much it could have been probably better we could have better FTI inflow we could have better financial flows if we didn't have those events but for most of the business circles who do business with Turkey they prefer to come and see the events on the spot but the perception through media versus reality is most of the time quite different and that is what I have been hearing from many many investors who are dedicated to Turkey and especially when they have a long term view if they don't just look at today's market indicators or tomorrow's market indicators but future potential of the country the concern is probably but on the other hand I think we learned a lot from what we went through from last May June then December last year but then we have gone through two elections March elections and then presidential elections both elections were quite a big success for the ruling party for our president Erdogan and I think our citizens knew what was going on pretty much but on the other hand we do know that we have to do more we have to have higher and higher quality democracy in Turkey we have to have better practices of freedoms and human rights we have to make sure that rule of law really reigns in the country and we are very open to say this and when you look at our reform program for future we have been covering the period until 2018 these are very clearly and openly listed so we know our drawbacks we know what is missing but as Professor Haberstadt just mentioned the right timing for the reforms is the key and we have to take the political calendar into account about what to do and when to deliver it Thank you Vice Prime Minister I'm sure that you have many other questions but unfortunately we are running out of time at this point I would like to invite Mr Helena Laurent who is the managing director of World Economic Forum to the stage she has an announcement to make Good morning ladies and gentlemen today the World Economic Forum is very proud to acknowledge nine companies which we feel are the resources in the three regions that we are celebrating here today these companies are selected by the World Economic Forum's global growth company community and they are selected on the basis of three things not only are they exceeding industry standards in terms of growth they are also innovators and they are leaders in corporate citizenship I think as you will see the names of these companies that they actually reflect the themes we've heard during the panel today from education and health to alternative technologies and the value of technology I'm going to call them to the stage one by one and I invite you to congratulate them with us as we call their names after which we will have a swift photo opportunity so please could I call to the stage Hussam Raidan of Air Arabia and Saif Al-Dahari from Al-Hilal Bank Mathias Kröner from Fidor Bank in Germany Mohamed Rashid Al-Bala from National Technology Group in Saudi Arabia Minna Ayla from Uttatec in Finland Yal Seven from Owen Mumford in the United Kingdom please welcome Sergei Solonin of Kiwi from the Russian Federation Sobi Batagie who is the CEO of Saudi German Hospitals Group in Saudi Arabia and finally Eric Sieber from Vella Oates he is the Chairman of Vella from the Russian Federation and if I can invite the group to take a step down onto the steps and invite our panelists to join for a photograph and before we finish I would like to thank the Vice Prime Minister Babajan to join us and also all our distinguished panelists for your comments and for your participation Thank you very much again