As Centre for Policy and Research on Turkey (Research Turkey), we proceed our interview with the Head of Turkey-USA Business Council (DEİK/TAİK), Kamil Ekim Alptekin on the economic and political aspects of Turkish-American relations as well as the changing dynamics of domestic and foreign policy and recent critical developments. In the second part of our interview, we have talked about the improved and deep economic relationship between the US and Turkey, the particulars of American political system, the Turkish lobbying efforts in the US and how these could be improved, how our businessmen contribute to these efforts in the US, (DEİK/TAİK)’s contributions to the commercial and political relations between the US and Turkey as well as his own personal journey as a businessman. We hereby present our readers the summary and the full text of the second part of the interview uncensored as per our publication policy.
Ekim Alptekin is a successful young businessman, specialised on transatlantic trade and the development and maintenance of commercial and political cooperation between Turkey and the US. He was born in Ankara in 1977. He completed his studies in law and economics in Utrecht University in 2001. He speaks Turkish, English, French, German, and Dutch. After completing his studies he moved to the USA and worked in the House Foreign Affairs Committee (HFAC) as well as other international organisations. Alptekin also carries important diplomatic missions. He is the honorary consul of Turkey to Albania and member of the board of the US Newroz Commission. In addition, he is a member of the European Council on Foreign Relations (ECFR) and the Turkish Industry and Business Association (TÜSİAD).
Ekim Alptekin also carries out important activities in trading sector. He is the founder and a principal partner of the Eclipse Aerospace Inc., a New Mexico-based company manufacturing aircrafts. He founded EA Aerospace in Turkey to buy American Eclipse Aerospace, which was re-founded in 2008. EA Aerospace is significant as it is the very first Turkish company that made aircraft industry investment in the USA. In addition to EA Aerospace, Ekim Alptekin owns EA Construction, ATH Defence and One Colony companies active in real estate, construction, defence, security, entertainment, and tourism industries. Alptekin agglomerated his companies under the name of EA Group, where he acts as the Chair of the Executive Board.
Alptekin also worked as the President of the Turkish-American Business Association (TABA/AmCham) between 2012 and 2014, and he was elected as the Young Leader by the American-Turkish Society in 2012. He won the Commercial Leadership Award of American-Turkish Council thanks to the Eclipse Aerospace initiative in 2011. Alptekin’s EA Construction has been active in Istanbul’s construction sector through Beykonak Houses and Kartal Kule projects and his ‘Kartal Kule’ project was awarded the ‘Best Architecture Single Office in Europe” by ‘International Property Awards’.
Since October 2015, Ekim Alptekin is acting as the Chair of the Board of Directors of the Turkish-American Business Council (TAİK), an organisation under the Foreign Economic Relations Board of Turkey (DEİK).
“The investment from Turkey into the US is more in the last 8-9 years than in the 80 years prior”
“The political arm of the Turkish-American relations is traditionally very solid. The economic relations too, has begun to get deeper as per both mutual investments and added commercial value”
“U.S is not a single country with one market. There are 50 States here, all of them are like a smaller country on their own. In this sense when we say the US we are talking about many middle or large sized economies”
“We are facilitating the communication and interaction between people who invested in the US and the people who consider investing in the US. This creates an investment trend and would also contribute for the synergy in political relations as well”
“For example, Fatih & Eren Özmen owns Sierra Nevada Corporation and the income of this company has gone past 2 Billion USD and about three thousand people are working for them. They are serving in a very strategic industry like defence in other words they are providing solutions and products for NASA and Pentagon, working in the space shuttle projects”
“Turkish businessmen like Yalçın Ayaslı is working like Mınister of Foreign Affairs in USA. Turkish Foreign Ministry’s annual budget for lobbying in the US is about 3-4 Million USD. However, Mr. Ayaslı spends about 5-10 Million USD every year for Turkey’s promotion”
“Increasing economic relations between countries is playing an important role in softening and lessening of the crises. If we did not have mutual commercial bonds with Russia, what would this crisis become? If the opportunity of importing Israeli gas wasn’t this close, would our motivation to solve the crisis be this high?”
“I have objected the analysts who kept saying “NATO is not important any more. It has lost its importance”. Putin’s attitude has also confirmed that these analyses were wrong”
“The assumption of having the physical distance as an obstacle in front of the US-Turkey trade is wrong. If this was true there wouldn’t be any trade between the EU and the US”
“When you trade with the US, you learn something new from every single state. However when we trade with Africa, we teach them many things. We have learnt trade thanks to the Customs Union with Europe. Just because we learned competition from Europe, we can compete with Europeans in African market now”
“As trading with African countries or the MENA region we’re learning competition under the circumstances of that region. But the habits our companies acquired in the MENA region backfire in the US. That is to say you can’t export in the US with that region’s habits’’
“Since some Turkish companies come to the US without serious market research and institutional preparation, they can’t be successful. However, the US market is not difficult. We should be afraid of falling outside of Transatlantic Trade and Investment Partnership (TTIP), rather than trade with the US’’
“In order to remedy image problems of Turkey, it is required to drop individual verbal reactions addressing domestic politics without developing a particular strategy”
“We only bring up the topics we complain in the US at the high level missions. We can’t accomplish what we want this way. We need to build a permanent lobbying system on every level. Then we can succeed, I think”
“On the matter of lobbying the high level decision makers in Turkey couldn’t understand and adopt in principle the American system yet. The budget allocated and existing organizational structure are inadequate. The coordination between relevant institutions is insufficient”
“As lobbying in the US the first place we should visit is the Congress, not the President. In this sense at the moment we’re in a weaker position comparing the other groups who particularly don’t like us and do work against Turkey”
“We should construct a system in order to influence the US politics. Primarily, we should increase the budget allocated for lobbying activities. Secondarily, we should work with different institutions which have different areas of expertise. Thirdly, understanding the American system we should arrange NGOs, business organizations and bureaucrats to be engaged with their counterparts in all levels in the US. Fourthly, we should build the coordination between them well”
“When we place 3 Turks in a room 4 ideas come up. We should act according to a country-level constructed, coordinated game plan. The Ministry of Economy can assume this coordination”
“The PR budget of US Embassy in Turkey is only 12,5 million dollars”
“One of the best working lobby organization is AIPAC which lobbies for Israel. Not the institution itself but every member of the institution donates to the Congress”
“The representatives of organizations like TÜSİAD (Turkish Industry and Business Association) and TOBB (The Union of Chambers and Commodity Exchange of Turkey) in foreign countries elected only considering the duty of representation and are lacking competency. They actually don’t construct workforce who can construct, influence, assess and steer relations”
“In recent years I see some developments. There’s a friendlier environment with the business world. In this sense the economic package announced by Binali Yıldırım’s government should be considered as a revolutionary reform”
“Eclipse became a true success of entrepreneurship for me. I wanted to continue the project of private business jet whose different stages Bill Gates, Al Mann, Burt Rutan, Vern Raburn took a part in”
“Turkey’s vision of aviation is not really limited to the first war pilot, especially in the region we have broken several grounds. Thanks to Atatürk’s vision the essentials built during the Ottoman era were assessed”
“If right decision were made the potential and future of Turkish aviation sector is strong. Aviation is one of the most dense budget sectors in the world and is not a sector enabling the first step to be taken without government support”
“Turkey should trust herself. Turkey has already been manufacturing the parts for the most important aircraft manufacturers. The aircraft itself is consisting of these parts. As matter of fact the essential success was being able to manufacture those parts”
“TAİK (Turkey–USA Business Council) is the oldest business council, founded in 1985. It is the largest institution that acts under the framework of DEİK (Foreign Economic Relations Board). When we look at the companies which both directed TAİK and affiliated with the Board of Directors we see that these are the companies and the names that steer Turkish economy. This is a great source of pride for us”
“Example from TAİK, the late Mustafa Koç was President for 7 years”
“TAİK is a crucial place for establishing the Turkish-U.S. commercial relations. Council carries on this mission by holding annual events, conferences and different projects. We’re trying to create awareness. We’re presenting how to overcome structural obstacles. We’re explaining the state incentive systems and guiding them”
“Turkey should trust herself. Domestic political rows should not be employed unsuitably regardless of our image and we shouldn’t drag these topics to abroad. I don’t mean it in the sense of “Don’t let it out of this room”. Turkey has some problems and these problems must be discussed within the actual dimensions of the problems”
“Hard working defeats talent, unless talent doesn’t work hard. My advice to youth is to understand the fact that they have to work hard. If someone looks successful from outside, it is only an illusion”
“Except for very little exception; all the companies that come off great success, to name Facebook, UBER, Twitter, Microsoft, Apple require high level of hard work. Accomplishing without hard work is impossible”
“You should not get into a branch of business only because of profitability; you shall love it and have passion for it. You shall set goals, otherwise there’s no chance for success”
Full Interview Text: the Second Part
Hello once again Mr. Alptekin, in the second part of our interview, I would like to discuss the economic dimension of Turkey and the US relations. What is the situation of economic relations between Turkey and the US? Is there any important developments?
Yes, economic side of the relations started to develop. Conventionally, there are already strong relations in political field. Economic relations both in terms of mutual investment and added commercial value started to deepen. It is stated that “the numbers in economy did not rise that much.” Yes, total volume of trade did not increase that much, however something is misinterpreted here: For example, in the 1990’s there were years in which we had 30 million dollars of daily jewellery export. This does not provide significant added value to the Turkish economy. However, the added value and indirect positive effects of exportation are higher today. Actually the numbers also increased, but not at the level that we wish. The second point; the trend in mutual investment is often underestimated. In the last 8-9 years, now it is 2016, the total investment and total investment of Turkey in the USA are higher than the previous 80 years. That is an important data. Here, companies such as Eczacıbaşı, Borusan, Koç Holding, Sabancı, Ülker Group, our EA aviation, and also medium scaled companies such as Er-Bakır and Serkuysan invest in the US. Rather than showing off, we witness serious investment processes including retail; Mavi Jeans, Sarar and also Simit Sarayı and we observe that these investments provide positive outcomes. As the American-Turkish Council or as the Foreign Economic Relations Board (DEİK), we notice an increase in the will to invest in the US. We educate the public to that end and increase communication and interaction with bilateral discussions.
Can you tell us more about the interactions you develop in increasing the mutual investment trend? Can the interactions developed in economic field make a significant impact on political field?
We increase the communication and interaction between people who made investments and who are considering to do so. For example; if someone learns something about an investment here, that person lets his friends and neighbours know about it; “look, we did something like this or someone else did it and the feedback was really good” and by this means a trend emerges. The increase in mutual investment trend also brings a new synergy in political relations. For example, so called Armenian genocide draft, sale of predator jets to Turkey or issues related to PYD; we constantly discuss these issues through political committees, while it may be necessary, it will not be enough. However, if a Turkish investor who is economically important or who provides employment opportunities goes to a policy maker and says “I invested in your country and created employment, however such and such policies of yours are not satisfactory for me” that would make a significant impact. Thanks to increasing mutual investment trend, we started to have such opportunities. Now the doors open when we knock on them. Now we also learned not to approach the American market as a single country. There are 50 states and they are all like different small countries. Therefore, when we discuss the US, we just started to realize that we actually are talking about many middle or big scale economies because of their system. In this sense, investing in different states gives us the opportunity of learning about those states. It creates opportunities to make new networks in each state and also get to know Turkish colleagues there. In the scope of mutual investment trend, now the number of successful Turkish Americans in the US is also rising. There are successful investors who are electors there and some are in very strategic sectors.
Who are among these people that the public does not know?
Everyone knows Chobani; however, Sierra Nevada Corporation is not known by many. The company belongs to the couple; Fatih and Eren Özmen. The company is not open for public ownership yet. It has a turnover of more than 2 billion dollars and around 3 thousand employees. A first generation Turkish American couple achieves this success in such a strategic sector; defence. I mean providing direct solutions and products for NASA, Pentagon, providing services within space shuttle program, all these are incredible. This is also an opportunity for the promotion of our country. Maybe you know about Yalçın Ayaslı. He works like the Ministry of Foreign Affairs himself. I am not sure about the exact budget; however, he is an entrepreneur that spends at least 5-10 million dollars for Turkey’s promotion. That is very important. Currently our Ministry of Foreign Affairs’ budget for lobby companies in the US is 3 or maybe 4 million dollars. Therefore, while the Ministry of Foreign Affairs spends 3-4 million for lobbying, an individual; Yalçın Ayaslı spends 10 million dollars. This has important outcomes and we see that. Thus, we need to be aware of this self-confidence especially on the matters such as PYD. The US has strategic relations with us and this cannot be compared with a temporary tactical relation in the region. The US would never stand us up or ignore our red lines.
We used to turn our back to Middle Eastern countries in the past. We were not able to utilize economic opportunities there. Of course, as you mentioned previously, the conditions of cold war could have an impact on it as well. As a result of globalization, the relations between the countries become more intense and quick in every sense. I think you provided some important examples; as the changing dynamics of developing relations with Middle Eastern countries and a government that claims to have high sensibility regarding Islam does not let its economic relations decay with Israel. You actually point out to an understanding of developing and settling rationality. Do you still think that rationality is there or do the authorized officials deviate from this rationality now? Recently, growing number of articles written abroad, statements of foreign officials, and certain practices create an image that does not confirm your statements. I would like to discuss this more.
I think despite certain images pointing out to a deviation due to domestic politics, this rationality is still there. It should, otherwise we cannot keep going on in this field. If we are sincere and I believe we are; if we invite the invertors here, then we should not be harming the first principle of an investment which is sustainability, predictability. In this region, there are significant developments and therefore, anything may happen anytime. We all just witnessed it. We used to have very good relations with Russia. A plane was taken down and actually we did not even know it was a Russian plane, but the relations went badly. However, if we take a look at the outcomes, this incident did not block economic relations. A bid won by a Russian company or mutual trade and finally even the tourism were not affected negatively. The political problems with Israel have been going on for a longer time; however, trade has not been prevented there as well and actually it increased. If long-lasting obstacles were to emerge, then we could not be talking about an investment heaven. Then we would turn the negative perception you discussed into reality and would have nothing to say.
In this context, do you highlight that economic interactions have an aspect of reducing and moderating political crisis or that they are supposed to moderate? Do you define this in the context of globalization and interdependent relationship which is rising among countries or as a matter of political and economic rationality?
I actually think that both are important. What would happen to this crisis if we don’t have a reciprocal trade relationship, a gas trade with Russia? In this case, it is obvious that the crisis would deepen further. Similarly, would we have such an intense motivation for resolving the political crisis, if we did not have the potential of increasing the commercial relationship with Israel to a great extent or if the opportunity of importing gas from Israel was not that possible? Here, we should also emphasize the significance of NATO. For many years, we have been opposing those analysts saying “NATO is not that important at all, NATO lost its previous significance.” Thanks to Putin, he seemed to show that it wasn’t so. If we had no bonds with NATO, what would be the reactions of Russia? Or, what would happen if there was not a reciprocal economic relationship? As you intend to pounder your fist on the table in a rage, this economic relationship makes you reconsider that many people earn their own living from here, and makes you put your hands back into your pocket. The relationship between European Union (EU) and US can be the most obvious example here. There is such a great extent of reciprocal investment that they have become partners with each other. The US and Europe will never turn against each other because they have such a partnership in which they seem almost the same. Europe damaging this relationship with the US means that it damages itself. This intense interdependence actually provides an advantage in its political relations.
How do you evaluate the trading volume of Turkey and the US? Is it in an adequate level? What should we do? Here I would like to ask you to make clear a subject on which there are two common views in these days. Firstly, there is a policy on Turkey’s opening to the Middle Eastern and African countries, especially during the AKP government, aiming to increase foreign trade. Surely, this opening has political reasons and goals either. There is a view stating that this opening policy is so significant in terms of its economic returns. According to the second view, the total returns of increasing commercial relationships with African and Middle Eastern countries is very low since their trading volumes are obvious. However, increasing the available trading volume with Europe and US even just a little bit will bring much more economic income compared to African and Middle Eastern countries. For instance, even if we increased the trading volume with Iraq by 400%, the return was only 400 million dollars because the volume was zero after the war. In the same period, though, even if we increased the trading volume with EU by 1%, the return would be 1 billion dollars. How do you evaluate these comparisons?
There are two wrong assumptions in terms of increasing the volume of trade between Turkey and the US. Firstly, it is assumed that the distance is a structural obstacle, and this has been the prevailing view. Secondly, it is assumed that the US is a monolithic country. According to this assumption, 30 countries in Africa are visible and it is better to increase the trade with these countries which are much closer rather than increasing the trade with US as a monolithic country which is considered a structural obstacle. However, this assumption is wrong. First of all, the US is not a monolithic country. Considering the economic capacity of US, each of the 50 states should be individually considered as a big economy. For instance, the economy of Texas itself is much bigger than Turkey’s economy. Therefore, the US should be seen as 50 different countries. And, why is the assumption that considers the distance as a structural obstacle wrong? If the distance is really a structural obstacle, then EU would never have trade with the US. While Poland as a member of EU has a trading relation with the US to a great extent, why don’t we have? In today’s world and conditions, the distance is actually not such a big deal. The distance is surely a factor but not a determinant, and its importance has been gradually decreasing as it happens to the flights which are now much cheaper and faster. In this context, if we wish to see Turkey reaching the 2023 goals and to realize a jump in our trading activities, we definitely have to develop our trading with the US.
Are there any other advantages of developing Turkey’s trade with US?
Yes, exactly… The trade with the US would have many spill-over effects in terms of both investment and exportation. We would have the capacity and opportunity of accessing to more different markets other than the US by much more different ways. You can learn various things from trading with each of the US states. In Africa, we have been teaching them something in a way. We have prepared a substructure, provided Turkish Airlines flights to there, and therefore increased the accessibility of that country. This is also important and should certainly be done so as we have already been doing. However, the Customs Union Agreement with EU has contributed a lot to Turkey. They kept saying ‘our trade with EU is just limited; they don’t need what we produce so that we can’t produce in their quality standard or it may be due to distance etc.’ But what happened? We have learned about trading through this agreement, and from their experiences as the trade with them has improved. Consequently, we have linked to their networks, and increased our exportation more and more. Let me tell you something more important: If we are able to trade with Africa now, it stems from what we learned through trading with Europe. Who do we compete with in Africa? We are competing with European countries. Therefore, since we have learned how to compete in Europe, we can confront European countries in Africa as well.
Are there any differences between the way of competing in African countries and that in US or European countries? Things may be achieved in different ways for different countries so it leads companies to develop certain habits in certain regions. While trying to trade in different regions, these habits may turn into an obstacle or a disadvantage. What do you think about it?
That’s definitely right. This is actually the adverse effect of the advantages that I have just told. We are developing trade with the countries in the MENA region or African countries but companies of these MENA or African nations could get the benefits of it more than us, and we could find ourselves under negative influences. For instance, we have learned the competitiveness in MENA region’s own conditions, and become quite successful. However, our exporting companies are basically SMEs. The habits formed by these SMEs in the MENA region usually backlash. Therefore, you can’t trade in the US through the habits of this region. It is needed to do different preparations and to change your previous habits in order to trade with the US or any other regions; otherwise you can’t be successful in the developed markets. And, these companies also make such a mistake; they maximize the local production capacity under available investments. Let’s say that they can produce 100 products, and they do marketing and sell these products firstly in the MENA region that they are used to know. For instance, they sell 80 products in all in the MENA region, bring the rest 20 products to the US, and try to take their chances there by commercializing the products in a very adventurous manner with no preparations. Then, they fail, get disappointed and go back.
Even the countries like the US also don’t manage the marketing process in an institutional way, but by means of either 2-3 marketing teams or freelancers who work as agents in these countries. Is that true?
Exactly… It is so that the US seems to be equal to New York which is the first place taken into consideration. Then, they fail, and go back without analysing its reasons. There are many states and cities in the US that you have to conduct a market research seriously and make institutional preparations. In fact, it is not possible to fail for companies which have a focus on the US, take institutional decisions on trading with the US and make a serious amount of time to do it. The US market is a transparent, complex market that is probably why it is usually defined by the word ‘tough’. It is actually not tough, but it just needs some research and attention. It is just like math which is usually called tough for kids, but math is definitely not tough either. It can be just complex and needs concentration, but it is still a predictable system. The US market is also just like math so that we don’t need to be afraid of structural obstacles rather than being excluded from the Transatlantic Trade and Investment Partnership (TTIP).
Considering that Turkey got into finance markets commercially, even if we date the foreign expansion of Turkey back to 1989, don’t you think that the capital market should have almost thirty years of serious experience? Doesn’t it sound strange that our companies still jump to various markets without any preparations either to sell the remained products or to make profit quickly? Is it still not known that conducting market research and receiving consultancy are so crucial before starting a trading activity in a country? Or, is it considered by the companies that wasting money on them is unnecessary?
Yes, we can say that most of our companies are still not informed of the significance of these preliminary preparation or they consider these kinds of expenses as a burden. They are actually not acting consciously even in the part of jumping to the markets. Even if they can be a little conscious about this, something might be achieved in a way. We usually act tentatively by overrating the market and with the prejudice of that it is tough to do business there. We make this mistake even by being afraid of spending extra money for consultancy: we constantly send our teams abroad by covering their flight expenses etc. in order to let them stay there for a week and observe the market even though we know that they are not familiar with any of these countries and markets, but it is just not to keep them here by doing nothing since their salaries are already being paid. In doing so, we are deceiving ourselves and also being unfair to our employees, knowing that they are not familiar with there and cannot learn anything in this way. Rather than doing so, it is better to consult an expert in the US. However, we are avoiding this because it is expensive, but this person may open a big market to you, and the volume and direction of your whole trading volume may change. In this sense, it is a big mistake to refrain from spending money for the experts from the US so that you have to spend a certain amount of money to figure out a new market, that is an essential part of the nature of this business.
Let’s talk a little about the ways to eliminate the problem of Turkey’s perception abroad and how to carry out lobbying activities there. Considering the US example, what are the deficiencies in Turkey’s existing perception and experience of lobbying?
Turkey’s primary deficiency is responding mostly verbally and giving individual reactions without developing a certain strategy that might be due to the feeling and anger of being treated unfair in particular issues despite being right. It is not enough to tell that we are right in the domestic politics, political environments, televisions and newspapers. It is needed to make a good plan with the aim of being proved right and to execute this plan with each of the tactical steps. For instance, we bring up the subjects that we are complaining about only in high-level committees. We can’t obtain what we desire in this way. The US is not such a country. We have to establish a permanent lobby organization there at every level. I think only this way we can be successful. Moreover, we always concentrate out lobbying activities on the White House, but the Congress is the major entity making decisions in many issues. It is just like one of the Nasreddin Hodja tales in which he searches for his ring in a luminous place although he lost it in a dark place.
In this sense, do we still have difficulties with lobbying activities? Do we come into play in the last minute somehow like the slum lobby activities? Don’t we still have institutional lobbying activities even in US who is repeatedly defined by the authorities as our ally and with whom we have intense relations for over 60 years? If not so, is there a changing order, and are we not able to keep pace with it?
We can explain this briefly with two reasons: High-level decision makers still don’t really comprehend and adopt the US system. Therefore, the budget and organization is not adequate. Maybe the most important point is that there is a deficiency of coordination among related institutions. I think that there might be some developments increasing Turkey’s lobby power in real terms since Binali Yıldırım as an exporter became the prime minister.
However, we have heard some rumours, read articles and listened to statements saying that the money is sometimes spent for unnecessary things, and they have been spending a lot but failed to carry out our lobbying activities. What do you think about that?
It is true that sometimes the money is spent unnecessarily but the conclusion drawn from this analysis should not be that we shall not spend money at all. We should think about how to spend our money effectively. Turkey is a key country and a very big economic power. If Turkey wants to have a free trade agreement with the US, it should take a look at what the countries that have free trade agreement with the US did. Many countries from Korea to Columbia have managed this process successfully. We should figure out how they achieved. If all of them have achieved this by spending 30 million dollars in a certain way and by hiring five different lobbying firms, do we have the possibility of achieving the same by spending just 3 million dollars and by hiring only 2 firms? Here, the NGOs should do its share, but we will be successful only by ensuring a good coordination.
You talked about the importance of donating to the Congress before?
Yes, the primary place for lobbying activities in the US is the Congress. In this sense, we are now relatively in a weaker position compared to the other groups that don’t like and act against Turkey. Here, the point we reach is completely owing to the people such as Yalçın Ayaslı, who is Turkish-American. The state’s mind has not still adopted this completely so we have not figured out the system there and we have not calculated what to offer in order to gain what we desire. Therefore, I think we will take a step towards a totally new world if we establish this system in a proper way. It is so that we can utilize the strategic depth in there for other fields. For instance, not only can the strategic depth formed through the Congress be used for importing weapons system or terminating a negative resolution, but also for solving our problems in many issues such as how the Cyprus issue has come to the forefront in the world, our relationships with EU, and so on. We have to establish this system.
What are the ways of being effective in the politics of US? What should Turkey do? Could you give more details about this?
First of all, we have to increase the budget allocated for lobbying activities. As far as I know, the budget of the Ministry of Foreign Affairs for this issue is 5 million dollars per year. This is not enough. This may seem adequate in terms of Congress lobbying but it may be needed to work with different firms for, let’s say, the free trade agreement since it requires a specific expertise. Only the PR budget allocated by the US Embassy in Turkey is 12.5 million dollars for Turkey. Now, you may say that the US is a bigger country than Turkey but Turkey is a big one either. If the first ranked economy in the world allocates a PR budget of 12.5 million dollars for Turkey which is the world’s 18th economy, then as Turkey is not a small country, only 5 million dollars should not be allocated for doing PR in the world’s first economy that Turkey aims to develop its relations with it. The budget should certainly be increased but at the same time spent more effectively. Secondly, we need to make the civil society in Turkey, the business world, and the bureaucracy -not including just the higher ranks- engage with their counterparts in all ranks in the US. This is not so difficult either. The institutions such as the Foreign Economic Relations Board and the Turkish Exporters’ Assembly have already allocated their budgets for this, but there is a deficiency of coordination. Here, the Ministry of Economy may undertake this coordination. If the Ministry of Economy guides us, and we can see ourselves as a part of that kind of a game plan, we will surely do what is needed. Well, don’t we do it today? We do. We have already been keeping in touch with our counterparts but now this is not in the frame of a game plan coordinatively built at the national level. As you know, if you put three Turks into one room, there appear four different ideas. Thirdly, we need to organize a much better Turkish-American Diaspora over there. A part of this point again needs a budget, but why is it so? For instance, we assume that there are 800.000 Turkish-American citizens but we don’t have a list of these people. The embassy doesn’t have it either. We can’t reach out 800.000 Turkish Americans whenever we want. We have to reach our goal by taking a decision which may be either hiring a private investigator or working with a research company. We have to find the contact information of all these 800.000 Turkish Americans at all costs, if necessary, by working with a research company in each of all 50 states. From then on, we need to develop the ways of engaging with them in the advantage of Turkey within the American system.
“The selected representatives of the institutions such as TOBB and TÜSİAD in abroad are not actually the right people. We need a team that is able to make contacts over there and also guide and have an impact on these relations”
Is there such an active country lobbying in US in the way you mentioned? Could you give an example?
For instance, there is an organization called AIPAC lobbying for Israel. AIPAC is not a political action committee which directly offers money to the Congress, but all the members of AIPAC donate to the Congress. It is solely lobbying for Israel and actually very active in lobbying. This activeness is not linked to those conspiracy theories told by some people in Turkey, stating that this organization is the secret power of Israel in US. The activeness of this organization called AIPAC is stemmed from its accordance with the system, and the mobilization of its own diaspora. For instance, it was recruiting experts whose salaries were paid by the budgets composed of individual grants. It doesn’t have just 1-2 representatives as it exists here in Turkey, such as one representative from TÜSİAD and the other one from TOBB. It has experts who know very well how the Congress works. These are not ordinary experts. In Turkey, even the representatives of institutions such as TÜSİAD and TOBB are selected among those who don’t have enough expertise but just a tendency towards performing the duties of a representative. However, AIPAC recruits a senior who worked in the Congress for many years or, for instance, a former chief of the CIA’s Iran desk considering Iranian politics. It builds an active and serious team that is really able to make contacts over there and also influence, interpret and guide these relations.
Therefore, in addition to developing institutional relationships in the social, economic and political spheres, these institutions and representatives have a policy impact on US politics.
Yes, this is, in real terms, the influencing power of the institutions run like AIPAC. We need to work in the frame of these principles and get organized as well.
In western countries, the state seems being more integrated with the companies and businessmen. These statesmen pay visit to various countries mostly in order to protect the interests of businessmen and companies in their own countries. Is there such integration in Turkey in that level as well? Is there any development on this issue? Can Turkey take advantage of its own businessmen in the lobbying activities?
I think that there have been serious developments in recent years. There is an ongoing process in a positive manner. When I said that “I am a businessman” in the past, my members of my family, who are basically used to the civil service career, were uncomfortable with this definition of “businessman”. In some quarters in Turkey, businessmen are still seen as if they do bad things. For sure, this is a cultural thing stemmed from the perception of striking it rich. The society has been gradually learning that it is not so. Both the state and the public opinion have gradually been accepting that the business world contributes to the society, provides employment opportunity and therefore deserves to be appreciated. That is to say that there is a progress in this sense. However, since the West is surely at peace with itself in this sense, its coordination of the state and the businessmen is in a much better condition than ours. But it can be said that we have a certain progress as well. For instance, it was criticized a lot that we asked the Ministry of Economy for changing a law in a summit, but why don’t the business world make requests as other groups do? Why don’t the representatives of public administration coordinate with the business life? Where is the harm? Businessmen too should express their opinions and demands regarding their major fields or the subjects they know well because they too are influenced by the laws and administrative procedures. This coordination should be developed much more both inside and outside the country.
Seeing a politician and a businessman side by side in Turkey leads to the common perception of that there is a corrupt, an illegal or unethical situation even if it is legal. As you mentioned before, there are some cultural and sociological reasons behind this, but don’t you think that many practices and relationships coming from the past cause these perceptions to get stronger?
You are right. I don’t want to be unfair. It might be a habit related to our relation with money since the Ottoman times. We still don’t make peace with the money. Sometimes we give lectures in universities as a guest lecturer. When we ask the students, ‘Who wants to be rich?’ only a few hands are shyly raised. In fact, most of them should raise their hands and say ‘Yes, I want to be rich.’ This actually happens even though I give lectures on the fields such as business administration and innovation, not philosophy. Why do you hesitate if you choose to do MBA? If you ask, “Who wants to be rich?” in an MBA class in the US, all the hands would be raised. However, if we ask, ‘Who wants to be successful?’ in Turkey, all the hands may be raised. If you are in the business life, you have to accept that success is closely associated with money. There is a cultural impact on why people in Turkey behave timidly to “being rich” which is actually not a bad thing but not right either. In Turkey, there has been the culture of punishing the businessmen in the past that we need to face. You can clearly see this culture in the taxation system. However, I have seen positive developments in this sense in recent years so that there is a more business friendly environment. The economic package explained by the Binali Yıldırım’s government should also be considered as a revolutionary reform in this sense.
In the same way, isn’t there a tendency or a culture of ‘strike it rich the short way’ for the businessmen in Turkey instead of producing something or a making social contribution? I think we also need to include this to the argument. For this reason, in Turkey labour is always thought about the worker, it is not thought from the employer perspective. Your twitter post from the 1st of May was meaningful in that context: you congratulated the Labour Day of the businessmen who are working with effort but not of those who are trying to strike it rich the short way.
This is so true, I also see 1st of May as my celebration. I also wake up every day and go to work and I think that I take a lot more risks and that I take on a much greater workload compared to my employees.
Let’s talk a bit about your work life. You have a success story stretching from EA Aviation to Eclipse that everyone is talking about. There have been people who have associated Turkey’s project for creating its own airplane with your success story together with Özmen couple’s success story. We also know that the President Erdoğan is supporting such a project. We know that he is giving you advice. The success of the businessmen in the defence and aviation industries has also boosted Turkey’s self-confidence in producing certain types of technologies. Could you please talk to us a bit about your own work life, trade activities and your personal story?
From an early age, I was a person who was curious about how someone’s habits are impacting his or her work life. In this context I would always follow the magazines and publications that would tell and write about the popular developments. In this way in 2003, I read about the ‘Eclipse’ personal work jet project that was launched by important work life leaders such as Bill Gates and Al Mann and I was curious about it. I followed that project. This project was initiated thanks to NASA’s budget, it is a project that reminds of the Jetsons actually but in order to realize humankind’s dream to fly since ancient civilizations, there was a need for a customization revolution in aviation. In the late 1990s, studies were carried out for the widespread usage of civil personal aircrafts in the future by countries that are still giving importance to R&D and innovation such as the US. In the late 1990s this project was taken over by Burt Rutan, a very well-known aerospace engineer who designed NASA’s space shuttle. Some infrastructure work was carried out by transforming the project into a more realistic, more implementable personal jet design project instead of a futuristic one. These works then attracted the attention of Vern Raburn, Microsoft’s 7th employee and an entrepreneur who was Bill Gate’s childhood friend and Vern took over the project afterwards. Gates and Raburn are close friends; you can even see a speeding ticket that the police issued to both of them in the Albuquerque Museum. You might know, the first Personal Computer was made in Albuquerque. This is a city of 700 thousand inhabitants in the New Mexico State but interestingly it witnessed very important technological developments. I was then informed about this project and I wanted to contribute in some way. Using my connections in the US, I met a Dutch gentleman who was first the partner and who then became the boss of the factory. This was truly an entrepreneurship success for me.
How did you achieve that? Could you please let us know the details?
Of course I can. First I told them about Turkey’s historical leaderships in aviation when Turkey was not on their agenda. Turkey’s vision in aviation is really not limited to its first war pilot, we broke grounds in aviation, especially in this region. Thanks to Ataturk’s vision, the foundations that were laid during Ottoman period were evaluated correctly ahead of many countries. When you look at the date of establishment of the Turkish Air Association or the Turkish Airlines, you see that Turkey has led the way in this area when nothing was there in many other countries. Of course with the support and self-confidence that this has given me, and with the background from history, I bought the selling rights of an airplane. However this was maybe not within reason for me personally at that time, actually my financial opportunities were limited. But they wanted to give me a chance, of course I had also promised a certain number of orders, afterwards I started looking for a fleet investor. I convinced that investor, and just when we started off the journey by designing an airplane supplement, a fleet, the factory went bust in the end of 2008 together with the crisis that was spreading across the world.
Was the general 2008 economic crisis the direct cause of the factory’s bankruptcy? Were there a financial problem, payments balance problem or any other problems? Was it a factory that was not successful in its business? Is it not a risky initiative to buy a bankrupt factory?
The factory was not unsuccessful. The global crisis influenced the financing need of the factory of course but the factory’s shareholders did not have a personal financing problem on their own. The factory was totally broke only because they could not agree on subjects such as who will put how much in, who will have the authority etc. In that time there were many bankruptcies in the US, but the fact that a factory with around 3000 employees in a town of 700.000 inhabitants went through this situation attracted attention, there were protests and so forth. In the end an administrator was assigned and sent an ultimatum: he told that ‘If the necessary financing is not provided until the given date I will sell all the assets through an auction in the context of the bankruptcy’. He said that both the debtors and the shareholders will be banned from biddings. But again the shareholders could not agree between themselves during that period. We were only customers of the factory at that time but we knew what was going on inside. We were observers in the Board of Directors as we had filled a high number of orders. In this way, we understood that there was a success story there but that the factory was doing badly because of the disagreement between shareholders. We made a deal with the administrator, a deal of buying the assets of top priority according to the ‘stalking horse bid’ conditions identified in Chapter 7 of the US bankruptcy law. The meaning of this is that we give the offer of first priority, of course whoever wants can be a rival, but in the auction they must give a higher offer than ours.
Actually you were previously rivals with you partner. There is also an interesting story there. Could you elaborate please?
Yes, we were first rivals with my partner, however we met in the pre offer stage and we decided to work together. When another rival could not participate in the auction we bought the factory with the first deal we had made for 40 million dollars. It is a long story but to sum up, the fact that there was a wrong perception about Turkey abroad was interestingly in my favor at that period. My partner then confessed to me that situation. He said that ‘You had given a large order. When I looked at your age I first could not understand that you were an investor, when I looked at where you’re from I thought that you are an oil-rich person and that you would buy the factory only for prestige so I thought let’s form a partnership with him let’s go together instead of competing with him.’At that time we bought it together for 40 million dollars. Two years later Skorsky became a partner and that allowed us to grow quicker.
When we talk about the aviation sector, the US and Western European countries come to our mind immediately. Can Turkey have a future in the aviation sector, a potential?
Yes if we take the right decisions. However we shouldn’t look too political when we take these right decisions; if we begin this journey by acting emotionally, only to satisfy our ego, then we will be unsuccessful.
You have a good command of the Turkish aviation sector via EA Aviation which you own and you are following the developments closely. Turkey recently starting to produce its own aircraft has been a project that was being expressed very often lately. Combining it with your experience with Eclipse, did your outlook on the deficiencies of Turkey’s aviation sector change or not?
Of course, when you have more and diverse experiences your point of view also develops. When we said let’s produce a jet in aviation we saw clearly the reasons why Turkey was left behind in that area. To have your own airplane design and to develop it costs, even if you are successful, between 1 and 3 billion dollars. Moreover, even when there is a risk that you will not be successful, there is no guarantee that you will sell that airplane even when you get that success. That is why aviation is one of the most capital intensive sectors in the world and generally it is not a sector in which you can take the first step without the support of the government. For instance Brazil got quite far in that subject because the government gave incentives in that area in the 1970s. So Embraer came where it actually stands in 40 years. When we look at it now of course it is a profitable company, it has huge contributions to Brazil in terms of technology, employment, added value, export possibility and advertising in the world. But this success starts with the decisions Brazil took in the 1970s. That is why the decisions we will take in that direction, our investments are really important. Today the regional jet project is in the agenda, but we should not have big export dreams for the next year or 2 years later when we just start off. Investing today to aviation will allow the next generations to diversify their export capabilities and employment opportunities.
The projects Turkish businessmen develop abroad, the investments and the experience they have gained have nevertheless created hope for the public in Turkey. We are seeing that the perceptions which are being fostered for many years such as ‘Turks cannot do it anyway’ are starting to fade away. As you have indicated through various occasions, Turkey has also a certain historical perspective in aviation and a vision that was set a long time ago. I think we were not aware of this for a long time. Now we see that a company having a Turkish businessman as one of its shareholders which produces jets offers the latest technologies allowing fuel savings. The success of our businessmen in other defence industries and various sectors is evident. Can Turkey ambitiously market the brands and successes it produces in the world? Is it doing serious promotion work to fight these perceptions?
Absolutely, the lack of confidence in the general public is caused by the problems related to our own perception. Turkey is already producing parts to the world’s most important airplane producers for many years. What you call an airplane is the sum of the parts. The real success there is actually being able to produce these parts. After having produced these parts in accordance with the international aviation standards it was not that difficult to assemble these parts all together. Design was the key here. Turkey has also the ability to make that design. There are companies such as TAI in Turkey with around 3000 employees. We have companies which produce and perform export in sectors which require cutting edge technology such as aviation. Turkey has an exposed vision and background in this area. In short, there is no reason and no need for a lack of confidence in this subject in Turkey. I don’t think there is a real cause; there is just a psychological difficulty. We need to evaluate that: can we make airplanes? We can, we have many opportunities in our hands. But it should not be taken for granted. That is to say, we need to take the right step in terms of trade. Which type of airplane are we going to produce, how will that airplane be, what is the target market? We need to answer these questions very well and we need to make a deep analysis. Here we shouldn’t refrain from building foreign partnerships at the beginning. TAI is a very important company in terms of aviation infrastructure and it is a company that is 100% Turkish. But TAI did not start off that way; it began as a common ground with Lockheed Martin. In this way, it has sucked in all the build-up over years that belonged to Lockheed Martin. Then TAI excluded it from the partnership and carried on in its way but after getting that build-up. That is why we should not shy away from partnerships, however correct goals must be set.
If you wish, let’s talk a bit about the Turkish American Business Council (TAİK) for which you are the current president. Could you tell us about TAİK’s history, its importance in the Turkish American relationships and the work it is doing?
The Turkish American Business Council (TAİK) is Turkey’s oldest business council. It is the biggest organization operating under the Foreign Economic Relations Board (DEİK). When we look at companies which are active in this sector founded in 1985, those that are in charge of TAİK, which took part in the Director of Boards and were members companies within those 31 years, we see the companies and names that lead the Turkish economy. This is the biggest source of our pride. For instance newly deceased Mustafa Koç was the president for 7 years. It has an important role in the formation of the Turkish American trade relationships. It is pursuing this mission through regular annual organizations, conferences and different projects. We enable our members to open up to new markets and we facilitate entrance to the American market. Right now we have at least 6-7 organizations which have done serious investments in the US within the Board of Directors.
As the president, are you participating in person to the public relations works? You are also taking on the representation duty for TAİK and participating in various organizations, you give speeches in the Senate or related platforms and you give interviews to the media don’t you?
Of course, we are trying to create awareness in this way. For example we are telling in the right locations that there are no structural obstacles and that distance is not a structural obstacle. Especially there is a need to inform this at the SME level. Our big companies know certain truths but other barriers can also emerge. We are working to overcome those problems. For example, they do not know the state incentive system very well. We are also directing people in this way. In the US, all the states are in competition with each other. Of course the US is a federal republic but there is important rivalry between the states. If you look at Turkish investments from that perspective, we have important investments in 6-7 states. From nuclear medicine to heavy industries, from aviation to copper producing centers, TAİK members have started to make investments in value added industries. In this respect, I think that TAİK has undertaken very important missions and personally I am making an effort to carry those missions one step further.
Lastly, is there a message you would like to give to the politicians, or to those who make politics in Turkey? How does Turkey look from the US? What would you recommend the young entrepreneurs in Turkey?
First, there is an image crisis that we need to solve internally in Turkey. We should solve it together with the politicians. Of course some problems occur but from the trade point of view, for the durability of our economy, we need to feel some self-confidence. This is the first thing. Second, some of our domestic political conflicts should not be considered in our perception abroad and we should not carry those conflicts abroad. I am not saying not let it go any further. Turkey has certain problems and these problems need to be argued within their real dimensions. Our mission is also not to lie to the foreign investor; we need to tell the truth. However it is clear that the current perception is not telling the truth. When Turkey is looked at as Middle Eastern country, Turkey is being compared to Egypt, Syria, Iraq. However we know that this is not correct. Our republic is relatively a young one under development, but it is true that we are evolving for better. Even all the Gezi Events should be thought of as the expression of the democracy’s maturation. Look, even in 2016 the American media has written ‘Civil War’ captions relating to the happenings in Dallas. When Americans ask me, I say: the protests in the 1960s in the US were not limited to small incidents. During the 960s-70s, how many people died on the roads? At that time, were the rights of black Americans well established? It was not. Today the situation is completely different; there is even a black president but these types of incidents can still happen. These difficulties can be one truth about the US but it is not telling the whole story.
As a businessman who went great guns at an early age, do you have recommendations to young fellows? Especially on the subject of entrepreneurship. In Turkey, aside from a youth who is trying to rise quickly or strike it rich without working, without improving himself in any way, by being a member of a party or by being this or that; I also see the emergence of a youth segment that is curious about creativity, innovation subjects, and who has an entrepreneurship soul.
Here I would like to tell a saying I really like. ‘Hard work beats talent when talent does not work hard’. First of all, my first recommendations is that they must understand they have to work really hard. If there is someone who seems successful from the outside by not working, this can only be an illusion. For instance, search for those who have won the lottery, I bet you, none of them have a sustainable economic success. Ready money is not enough for anything. It will be enough if only you manage it cleverly. So again it requires work. You have 1 million TL in your hands, if you don’t do anything for 10 years, you will not have anything at the end of the 10 years due to inflation and so on. I am observing the other idler youth you were talking about, I see their situation as horrible for themselves and for the future of Turkey. Look when we are even criticizing adults who are trying to strike it rich without working and spending effort. The fact that a person opts this way, still at the age of self-development, will destroy him materially and spiritually.
Along with globalisation, the fact that companies, virtual applications or entrepreneur inventions or a PC game we see especially in the areas of social media and IT yield high returns globally and make the youth impassioned to become an entrepreneur in those areas but doesn’t that make them also lazy? Or else they are so focused to the result they want to achieve such that they forget what they had to do and they give up when they cannot reach those goals? The perception that ‘I will find something and I will become rich immediately’, when you do not realize how much effort and work it requires to find that thing, can lead to the opposite effect and can lead to failure through a sense of relaxation and idleness. Are there some things you would like to remind young entrepreneurs on that subject?
Yes unfortunately. Looking at the statistics I know a lot of young people which belong to that category. They have to know that this is completely unconnected from the truth. There are although very few exceptions; from Facebook to UBER, Twitter, Microsoft, Apple, all the companies that have achieved big success required a lot of work. It is never possible to achieve something without working a lot. As much as working a lot, they must set goals for themselves and define how they will achieve those goals. For instance you are beginning a journey, do you have a chance to reach your destination if you do not know which route you will take? You have a chance but it has to be a big coincidence, many companies go bankrupt this way. Why do most of the companies that are established go bankrupt? Because they are unprepared, they take off the journey without knowing where they’re going. If they do not break up the objective into different steps actually that objective is not realistic. There the environment as well as talent will have an influence. You can only develop the necessary network and your talent gradually by working a lot, preparing your goals and steps well and by disciplining yourself. If you want to be a successful business person, first you have to put yourself a goal which you will work towards with passion. You can only be successful if you are in a sector or in a business line in which you can work with passion, if not, you do not have the chance to be successful. You cannot just enter a business line by saying that it is profitable, you have to like it, and you need to have a passion for it. For instance, if you do not like construction, if making a building does not make you enthusiastic, you have no chance of becoming the next Ali Ağaoğlu. For this reason, parents should guide their children in the correct way. Even if the child is working, has a profession, you should guide him towards a job of his liking. If the child wants to become a painter but you really want him to become a mechanical engineer, even though that child might finish university successfully as a mechanical engineer, he will not become a successful mechanical engineer. For this reason you need to set a realistic goal in line with your own passion and walk towards that goal with correct planning and hard work.
Aviation is your passion since you are a child; you have always talked about that. In this context, we can see that you have applied your recommendation in your own life.
Dear Mr. Alptekin, thank you for this long and nice conversation. I would like to thank you for this interview on behalf of the Centre for Policy and Research on Turkey (Research Turkey) team as well. We wish you all the success in your life and your subsequent projects.
Thank you. It was a pleasant conversation.
Please cite this interview as follows:
Research Turkey (August, 2016), “Interview with Ekim Alptekin (Part II): “The Economic Dynamics of Turkish-American Relations: Improving Trade Relations, Lobbying Activities and their Political Effects”, Vol. V, Issue 8, pp.12 – 30, Centre for Policy and Research on Turkey (ResearchTurkey), London, Research Turkey.