U.S. Cyprus Relations: Moving Forward Together

Remarks by Ambassador Doherty at The Economist Conference, Hilton Hotel, Nicosia, Cyprus

It is great to be here with you today.  I would like to thank The Economist for inviting me to address you at the 11th Cyprus Summit.   As some of you know, I have been in Cyprus just about a month now.  To represent the United States at such a pivotal time in Cyprus’ history is such a great honor.   It is also with great pride to be the first female U.S Ambassador to Cyprus.   It has only taken 55 years….  Little did I know when I started as a junior diplomat 25 years ago, that my journey would take me to Cyprus.  In fact, when I was younger, I had no aspirations to be a diplomat.  Indeed, as a person from New York City, I am not sure I knew what being a diplomatic meant!

Before becoming a diplomat, I was a journalist, writing about business and economics – and in my dreams, I hoped to write for the Economist.  I even went to the London School of Economics, thinking somehow I would be discovered by The Economist’s editors… and if the Economist didn’t work out, I would set my sights on the New York Times, my “home town” paper.  Well that didn’t happen either.  By the way, I’m not bitter; I have loyally subscribed to the publications for decades.

I also worked on some political campaigns, but after everyone I worked for lost, I thought maybe politics weren’t my calling.  So in my mid-20s I was stumped about what to do next:  a friend told me about the test for the U.S. Foreign Service, but then mentioned how difficult the test was – only a few hundred of the 20,000 who take it pass.  So given my previous hopes I thought, “this won’t work out either.”  But it did.   And what was even better:  I found a career I love.

From explaining how a country can function with 3000 percent inflation, as I did in my second tour in Brazil, to defending U.S. companies in Russia, from engaging in sometimes tough negotiations with the European Union on privacy, trade and investment issues, to working with young entrepreneurs – the innovators and the disrupters – I have enjoyed every day of my career.  I also love that every day, I learn something new…  And given my newness to Cyprus and the complexity of this country’s history, I am learning something in every conversation I have.

As Ambassador, one of my many goals here is to bring American innovation and investment to Cyprus – and to encourage Cypriots to look to the United States for business opportunities.  Indeed, several Cypriot companies are already in the United States, like Hyperion Systems Engineering, which provides consulting and advisory services to the power generation industry in both North and South America.  Others are planning to expand there soon, like Zorbas Bakeries, which will soon launch its first bakery and coffee shop in Queens, NY, with other franchise stores planned in the near future.  The good news is my task has gotten easier because of the good things that are happening here. For the first time in about four years, Cyprus’ economy is growing – maybe up to 1.5 percent this year.  The IMF and others have praised Cyprus’ progress on meeting its obligations.  And just last week, the Cypriot government issued a €1 billion 10-year bond at an average yield of 4.25 percent – the lowest rate ever for Cyprus.  And that isn’t all.  The World Bank’s 2016 Doing Business Report lists Cyprus among 10 countries with improving economies, opening it up for potential new investment.  The WB said Cyprus had moved up 13 places to become one of the top ten most improved countries in terms of economic and business reforms making it easier to invest in the country.

It would be easy to get complacent, in light of the recent good news, but there is still more to be done to have a long lasting recovery.  Restructuring of the banking sector and privatizations of some state owned companies are among the things to be addressed.  I want to do what I can to help with the economic recovery and be a part of making Cyprus a place where American investors and businesses want to set up shop. In my first month, I have met or spoken by phone with U.S. businesses seriously considering investing in Cyprus.  They are drawn by its strategic location and the highly talented work force.   But they also have raised concerns about market access, the regulatory framework, and the physical difficulty in just getting here, as many of you experienced yourselves.  That said, opportunities for business abound in Cyprus.  For instance, there is untapped potential in the gaming sector.  We have already spread the word to U.S. companies on the recent announcement for Expressions of Interest in a casino license and hope to see some U.S. interest in this project.  We look forward to the upcoming tenders for a Cyprus Science and Technology Park and the Larnaca Marina and Port Redevelopment project among others.  And of course there are the very promising hydrocarbons and renewable energy sectors, including the professional services associated with them.

New American investment is already having an impact in Cyprus.  Here are just some examples:  in the summer of 2014, at a time when there was a significant amount of uncertainty in the Cypriot economy, U.S. investor Wilbur Ross led a group of investors to inject over half a billion dollars in Cyprus’ most emblematic bank — the Bank of Cyprus.  In October, the American Club, a global leader in marine indemnity, established a new affiliate in Cyprus, the American Hellenic Hull Insurance Company, offering shipping insurance services to the global market.  Even when it comes to recreational sailing, the American Sailing Association has established a partnership with a leading school in Cyprus, offering a globally-recognized skipper certification.  My intention over the next few years is to generate more opportunities for our respective businesses.  I hope the business community will play a role in that engagement as well.

The U.S. government also is ramping up efforts to promote two-way trade and investment with Cyprus.  Last month, the State Department hosted in Washington a delegation of Cypriot officials for the first U.S.-Cyprus Bilateral Dialogue.  We discussed ways to increase our work together on good governance, on attracting and retaining businesses, and on best practices for building a more competitive labor force.  Another positive outcome of these discussions was that the Cypriot delegation met with U.S. business leaders to discuss industry concerns and opportunities for investment in Cyprus.  Under the auspices of the U.S. Chamber of Commerce, representatives from several leading American companies talked frankly about how to make the Cypriot investment climate more appealing to current and prospective investors.

There are some other important developments to note.  The United States and Cyprus are working together to combat tax evasion.  U.S. and Cypriot tax authorities are sorting out the final details for fully implementing the U.S. Foreign Account Tax Compliance Act (FATCA), providing for the exchange of tax information between our two countries.  I am also glad to hear that Cyprus is planning to adopt the Common Reporting Standard – or CRS – in accounting, on January 1, thus contributing to the global effort against hidden money abroad.  I believe Cyprus has a lot to offer American and foreign investors and entrepreneurs. I also believe Cyprus is a place companies should consider for their regional operations, given the conditions elsewhere in this part of the globe.  I will talk about the region a little bit later but since the issue of the settlement process is on everyone’s minds these days let me say a few words about this.

This is a hopeful, perhaps pivotal, time for Cyprus.  With the ongoing settlement talks and the commitment and courage of both the Greek Cypriot and Turkish Cypriot leaders, there is a real window of opportunity to forge a just, lasting and comprehensive settlement, based on a bizonal, bicommunal federation.  The United States strongly supports the efforts of the two leaders, their teams and of the United Nations.  We have long believed in the promise of an undivided island.

Over a thirty year period, the U.S. has provided more than half a billion dollars in Economic Support Funds, supporting programs for Cypriots to come together on common issues such as in infrastructure, cultural heritage, education, environment, and health. We also funded activities related to energy conservation, banking, trade, and skills development.  We hope these shared experiences will provide a foundation for a new future.

As a friend to all Cypriots, we support a shared Cypriot vision of peace and prosperity, and of a future that offers hope to all Cypriots. I truly believe such a settlement could have a profoundly positive impact on the island’s economy, create more opportunities for trade and investment, and bring tangible benefits to all Cypriots.  A settlement will give hope to all who believe that nothing is impossible.  We all could use this hope: because the story is much different in the region and beyond.

Just 100 kilometers away, the deteriorating situation in Syria has compelled more than four million to flee their homes.  These are the ones we know about, the ones who have registered with The United Nations High Commissioner for Refugees.  There are perhaps hundreds of thousands unknown and unregistered.  A significant number of those migrants have been joined by hundreds of thousands of others from Libya, Iraq, Afghanistan, and Yemen in search of prospects for a better future for themselves and their families.  This is the largest refugee crisis since World War II.  The European Union is in the process of designing a system that would allow those with legitimate asylum claims to normalize their status.  The United States is also taking steps to resettle the most vulnerable populations.  We will raise the number of Syrian refugees admitted to at least 10,000 in 2016 from just under 2,000 in 2015.  We will also increase the number of worldwide refugees accepted each year to 100,000 by 2017, representing a significant increase over the current annual cap of 70,000.  We will continue to examine responses to a refugee crisis that has overwhelmed Europe.  Cyprus has not had the inflow of refugees as other countries in the region have had.  The main reason for this is simple:  Cyprus is an island, and far from other countries in the European Union.  But Cyprus has picked up several hundred refugees in distress in nearby seas, and has been actively supporting a broader European approach in finding a solution.

The United States has been helping Cyprus on emerging maritime humanitarian issues, including conducting regular search and rescue exercises – which will also help with broader maritime safety and security issues. The way in which we all address this refugee crisis will have profound consequences on the region and the future.

Looking just a bit further afield, we have all seen the horrors at the hands of DAESH or ISIL – the Islamic State of Iraq and the Levant.  Its spread of violence, poses a threat to all of us, though even more so to countries nearer to the places where it has taken root.  We all need to confront the threat from terrorism together.  Speaking globally, we have to deny safe haven to terrorists, disrupt the flow of foreign fighters, block access to financing, and expose the lies that terrorist groups propagate – and that is particularly challenging in this world.

We’re living in a very different environment, and terrorists have learned how to exploit media and information technology in ways that pose a unique set of challenges for us all.  We all need to look at some of the reasons why terrorists have set up roots.  We need to improve governance and enhance economic opportunities for all but particularly young people so that radicalization is less appealing.  Regretfully, given the state of the world, there is much more that could be said about the threats and challenges we all face and need to address together.

I’ll stop for now, and just say that I know we all wish for more stable, more peaceful times.

And that brings me back to the beginning of my remarks, back to Cyprus.  Because here the story is different:  the sense of hope and the potential of a different future are real.  Though the challenge of reaching an agreement is great, we should all be encouraged by the vision and the commitment of the two leaders, Nikos Anastasiades and Mustafa Akinci.  Like them, we should think about the extraordinary opportunities a lasting, comprehensive solution will have for Cyprus and the region.  A solution will bring greater security to the wider region.   A united Cyprus will be an island of stability in a sea of instability.

As a newcomer here, looking at the challenges and opportunities in this region, seeing the hope and dynamism of this moment in history for Cyprus – and embracing the strong legacy of friendship between us… I just can’t think of a better moment to stand on the foundation of all we’ve accomplished and move toward the future together.

Thank you.