Remarks by Ambassador Kathleen Doherty at the PSEKA Conference

Ambassador Doherty at PSEKA

Good morning – kalimera sas … Thank you very much Andy Manatos, for your introduction.  It is a pleasure to be here today and to welcome you back to Nicosia.  There is much to talk about, so in the few minutes I have, I will share with you what is happening here on the ground, and what the future might bring for Cypriots, for the region – and for all of us who care about this beautiful island in the Mediterranean.

During the ten months I have been in Cyprus, I have been struck by the determination and the vision of the two leaders, who are striving to end the division of the island after 42 years.  They and their negotiating teams have made steady and significant progress.  The leaders have expressed hope that an agreement will be reached by the end of this year I will speak about the negotiations in a few minutes but let me start with remarks about the broader U.S. –Cyprus relationship.

Since the Vice President’s visit two years ago, our partnership with the Republic of Cyprus has become stronger and deeper.  We have helped train Cypriot officials how to recognize and address threats from terrorist groups, and from those who want to exploit the banking sector by laundering money.  We have conducted several search and rescue training exercises, and provided equipment for maritime operations.  We provided specialized training to the police.  And regarding this, we saw the skills of the national police in how well they responded to the Egyptian air hijacking a few months ago.  Police officials told us our training had helped enormously.  And the number of Cypriot officials we send to the George C. Marshall Center for European Security studies – the premier institution for military and security studies – has more than quadrupled.

Since the Vice President’s visit, the Secretary of State John Kerry, the Commander of the Sixth Fleet Vice Admiral Foggo, members of Congress, Commerce Under Secretary Ken Hyatt, State’s Assistant Secretary Toria Nuland all have come to Cyprus to underscore the importance we place on our partnership.  And we will continue to seek to do even more together.

Now, turning to the economy and business matters: What a difference three years make.  Cyprus is out of its Troika program, earlier than expected.  The economy is growing, maybe 2.5 percent this year, and tourism is setting a record, with three million visitors expected this year.  President Anastasiades and his economic team deserve much credit for turning around Cyprus’ economy and creating new opportunities for businesses.

Let me talk a bit about these opportunities.  During my short time here, I have heard from more and more U.S. investors and businesses interested in Cyprus. I’d like to share with you some really positive developments.  Many of you all know that Cyprus has the 10th largest shipping industry in the world.  American companies are taking note of the opportunities here.  A major U.S. steamship owners association, American Club, has invested in the new Cyprus-based American Hellenic Hull Insurance Company, which will be managed from Cyprus and New York.  Last year, a U.S. company making ballast-water treatment systems set up shop in Limassol.  That company is also running its EU headquarters from Cyprus.

In the tourism sector, the well-known Hard Rock Café franchise returned to the island under new ownership and opened its doors in Agia Napa this summer.  Hard Rock International is also one of three short-listed consortia bidding for the coveted Casino Resort license in Cyprus.

Then there is the energy sector.  You all know that it is an American company – Noble Energy – that is leading the way in the development of resources in Cyprus’ Exclusive Economic Zone.  And as we learned just yesterday, for the first time, an American energy major and the seventh largest company in the world – ExxonMobil – has placed a bid on one of Cyprus’ hydrocarbon blocks.

The U.S. Embassy also has been very active in promoting Cyprus’ potential as a regional business hub.  To raise the island’s visibility among U.S.- based firms, I asked Ken Hyatt, the Department of Commerce’s third highest ranking official – to come to Cyprus.   He was the highest-ranking U.S. Commerce official ever to travel here.  During his May visit, he spoke about Cyprus’ potential as a  commercial and investment hub in the Eastern Mediterranean and about the economic benefits of settlement and reunification.

Now let me turn to the talks.  We should all be impressed and heartened by the vision and determination of the two leaders.  This is truly a Cypriot-led, Cypriot-owned process – by and for Cypriots.  As I said earlier, there has been significant progress in the talks, as I am sure you heard during your meetings this week.

The leaders have met more than 30 times since negotiations started 16 months ago, and the negotiators have met twice weekly – if not more – during this time.   There has significant progress in four of the six chapters of negotiations, as the leaders have stated, though some differences remain.  The leaders have stated that they will soon start to discuss territory and security.  They are making some tough decisions – for the well-being, stability, and security of both communities.

As we have done for years, the United States is helping Cyprus as it prepares for a possible new future.  Since 1974, the United States has provided assistance worth more than $500 million to Cyprus, helping to build people to people ties through bi-communal dialogue and exchange among civil society groups.

A just solution will also require closure for those who don’t know the fate of family members.  The Committee of Missing Persons, which now has access to Turkish military sites, is doing critical work.  The U.S. has contributed $800,000 to the CMP over the past ten years, including our most recent donation of $250,000 given in March.

As you know, a reunified Cyprus would have a federal system of government. We are sharing information about the U.S. experience with federalism, explaining the relationship between the federal and state governments in the United States, and how a federal judiciary and federal law enforcement agencies work.  The United States also strongly supports the United Nations in its work facilitating the talks.  Special Advisor Espen Barth Eide and his team have been tireless in their efforts, and they have the international community’s full confidence and support.

We also use every opportunity to emphasize with Turkey our belief that a reunified Cyprus is in everyone’s best interest. The President reiterated that message to President Erdogan on the margins of the NATO Summit in July.

Obviously, recent events in Turkey have overtaken the news in the past weeks.  We remain engaged with Turkey and support the democratically-elected government there, but also have raised concerns that it not overreach in responding to the events of July 15.  President Obama has “urged President Erdogan to show restraint and avoid actions that would lead to further violence or instability.”

As we engage with Turkish leaders in the weeks and months ahead on a whole range of issues, Cyprus will remain a key priority for us.  But the events of two weeks ago are yet another reason why time should not be lost in solving the Cyprus issue; it is critical for both communities on the island.

Now, I want to make a pitch to you – actually I have a couple of requests.  We continue to encourage the leaders to stay focused on the talks and not allow outside factors to derail progress.  But both communities need to hear more about the benefits of a reunified Cyprus.

As you probably have heard, what’s on many people’s minds here is what the cost of reunification will be.  That isn’t an easy answer since there are the costs of compensation, integration, and infrastructure for example.  But as Secretary Kerry has said, the United States will be there to support a solution.  And I say it again today:  we will help with technical and financial aspects of reunifying Cyprus.  As Ambassador, I am in close discussions with my counterparts in the U.S. government and with Congress about ways we can help.  I also want to ask you to think about how you can help provide financial support.

A reunified Cyprus will offer enormous opportunities in infrastructure, tourism, real estate development, professional services in sectors ranging from health care to information technology.  I want you to think about what a reunified Cyprus could look like in the future.  Cyprus is just about equidistant from Athens and Baghdad, Ankara and Cairo.   If you are in business, could you imagine having quick access to these markets with a combined population of more than 500 million, working from a reunified country in the European Union, with a highly-skilled, multi-lingual workforce?

Just think about the regional energy potential that will be unlocked in the event of a Cyprus settlement and with greater cooperation between Turkey, Cyprus, Israel, Egypt, and all other players in the Eastern Mediterranean.  It is not hard to imagine that a reunified Cyprus would become a major commercial and business platform, with opportunities for all Cypriots, of all ages – but particularly for young people.  I want you to start thinking now about what you can do to help Cypriots envision and create a better future – a more stable, a more secure, a more prosperous island – a leader in the region, and an inspiration for the world.

Thank you!