ANKARA -- In a wide-ranging interview with Nikkei on Wednesday, Turkish President Recep Tayyip Erdogan looked forward to talks with U.S. President Donald Trump at this week's Group of 20 summit in Japan and expressed hope for greater Japanese investment.
Here is the full transcript of the interview.
Q: The results of the June 23 Istanbul mayoral election are seen as a response to claims of authoritarianism against you. How will you end polarization in the society?
A: The election was carried out with a high participation rate and democratic maturity. A metropolitan municipal election where many candidates race is a reflection of Turkey's strong and established democratic culture and well-functioning institutions. Renewing elections is a legal process. However, ultimately the winner is Turkish democracy.
This has also shown how empty the smears toward our democracy were. In Turkey, there is no will above the will of the nation, and no decision above the decision of the nation. What brought Turkey to this stage of democracy is the AKP [Justice and Development Party] government's successful 17 years in power.
Look, there are always poles in politics. There is no politics without poles. AKP and our alliance partner are one pole and the other side consists of four parties, and that's how this election took place.
But there is a detail that you should pay attention to. We have an overwhelming majority in the municipal parliament. We won that. AKP leads all the commissions. All of the deputy mayors are from AKP. We won those in the March 31 election. Therefore, we are not the loser but a winner of the elections.
Q: Will you cooperate with the new Istanbul mayor inside the municipal parliament?
A: If he comes with realistic projects in line with the interests of Istanbul, of course the AKP group will support it. However, if he comes with unacceptable projects, then for the benefit of Istanbul we will never give support to such projects.
Q: You will meet U.S. President Donald Trump during the G-20 summit. Are you confident that you can persuade Trump not to impose sanctions on Turkey over the purchase of S-400 missiles from Russia?
A: I believe my meeting with U.S. President Trump during the G-20 summit will be important for eliminating the deadlock in our bilateral relations and strengthening our cooperation. Besides, a visit by Mr. Trump to Turkey in July is being talked about.
The S-400 air defense system procurement issue is a goods and services procurement for meeting the urgent security needs of our country. In our search for an effective air defense system against the security threats, technology transfer and cost-benefit analysis were priorities for us. Our S-400 procurement should be evaluated under this framework. Next month we will start to receive this system.
Our talks with the U.S. administration on the matter are ongoing. I hope to talk about this issue with Mr. Trump during the G-20 in detail. Actually, regarding the S-400s, Mr. Trump knows Turkey's concerns, why we needed this system and how we came to this point very well.
So far, we have put forward different suggestions to eliminate the concerns of which we were told, including establishing a joint commission. Derailing the process, exerting a language of threats will benefit no one. I believe we will resolve the S-400 issue in line with our alliance and strategic partnership.
Q: If the U.S. excludes Turkey from the F-35 fighter jet project and imposes sanctions, how would Turkey respond? Will there be an arbitration process?
A: Now we are proceeding according to our road map. It is out of the question for us to compromise from this road map. We have already paid them $1.25 billion for the F-35 project. If they do make such a wrong move, we will take it to the international arbitration court because we will want them to pay us back the money we have spent so far.
Besides, we are producing many parts of the F-35 in Turkey. We are a partner of this. We are not just a market, a buyer, but also a manufacturing partner.
Also, I have never heard such an expression from Trump in any of my meetings with him so far.
We will have a meeting during this G-20 visit. We will talk about these issues and also review all aspects of our relations together. We will also review the developments in the north of Syria.
CAATSA [The Countering America's Adversaries Through Sanctions Act] cannot be applied to Turkey because we took this step [of buying the S-400] before CAATSA came into effect. Back then, there were no such rules.
What I hope is that we will get the best results and end this issue.
Q: Concern is growing among Western countries that Turkey is leaning away from NATO toward Russia. How would you respond to this?
A: Turkey has been an important actor within NATO since we became a member in 1952. We are making important contributions in the many unstable regions like Afghanistan. Currently, we are actively supporting many NATO missions. Turkey has been preserving its important and critical position within NATO.
Besides, in the 21st century, expecting countries to limit their relations to few countries is obviously not realistic. Here what we need to talk about is not orientations excluding each other, but a diversity which is enriching our foreign policy. Our policy is 360 degrees.
Moreover, it is very natural for our country to enhance relations with a neighbor based on common interests and mutual respect. We do not hesitate to take any step we need to take to preserve our stability in this region, which is full of threats.
We have relations with our neighbor Russia going back for centuries. We are taking our relations forward under the framework of priorities of both countries. Especially, we are having intense contacts with Russia to end the clashes in Syria and to bring stability and tranquility to the country as soon as possible. The Astana process and Idlib Agreement are just a few of them. Energy, commerce, defense and industry are other areas of our bilateral cooperation. None of these are against another country or organization. Turkey is a very important partner in the Europe-trans-Atlantic alliance and it will remain so.
Q. International financial institutions see Turkey's official GDP forecasts for 2019 and 2020 as unlikely to be attained. Are you considering a downward revision in growth and macroeconomic targets?
A: In 2019, leading indicators in the second and third quarter show that the recovery process in the economy will continue. The seasonally adjusted manufacturing sector capacity utilization ratio has been increasing for five consecutive months since February, and in June it reached 76.6%. The real estate sector confidence index has significantly improved and increased 4.9 points compared to the previous month. Also, the consumer confidence index has improved in June.
With decreasing political uncertainty, continuation of structural reforms and support of base effects, we expect a stronger recovery in the second half of the year. By prioritizing structural reforms, Turkey will draw closer to its potential growth from 2020.
As always, by taking both domestic and foreign conjecture and developments, we will prepare a new economic program regarding the 2020-22 period. Within this framework, of course, public finance and macroeconomic outlook estimations will be penned again.
Q: Turkish and Japanese delegations are having final negotiations for an economic partnership agreement. Are you confident that a deal can be reached and that you and Abe can announce an agreement in principle during the visit? How will Turkey and Japan benefit from the EPA?
A: Signing an EPA with Japan is our priority agenda in the economic field. Negotiations are ongoing in a constructive manner. We desire to conclude an agreement within this year.
I believe the EPA will open new possibilities for Turkish and Japanese business circles. This will secure an increase of both trade volume and investments between the two countries.
Q: Feasibility studies show that the cost of a proposed nuclear power plant in the city of Sinop is more than double the initial estimate, and the Japanese-backed project has been halted. In which sectors or types of infrastructure would you like to see Japan replace the nuclear plant investment?
A: To have nuclear energy among our supply sources is one of our 2023 targets. Within this framework, we are continuing our work in cooperation with our international partners.
We are not at the desired point on the Sinop nuclear power plant project. The feasibility study report and cost analysis, which is prepared by the Japanese side, was examined by our Energy and Natural Resources Ministry and our other relevant institutions in detail. We met a picture which is not compatible with our initial agreement in terms of both cost and project calendar.
It is, of course, saddening that the Sinop nuclear power plant did not progress as we desired. However, we do not limit our cooperation with Japan in the energy field to nuclear energy only. We think that we can work together with Japan in many areas like clean coal, renewable energy, R&D work, developing human resources and transportation projects.
For this, we hope to conclude a memorandum of understanding between our institutions, which is currently being negotiated, in the shortest time possible, as it will serve as a road map for our bilateral relations in the energy field.
We have a full resolve to deepen our cooperation with Japan on energy.
Q: What are the expectations of Turkey from Japan in terms of enhancing economic relations between the two countries?
A: With its strong domestic market, skilled workforce, strategic geographic location [and] developed transportation, communication and energy network, Turkey is providing valuable opportunities to Japanese investors. We expect Japanese investors to benefit from these capabilities.
Turkey enjoys strong economic relations with a wide geography. We are encouraging Turkish and Japanese companies to realize projects in third countries in various sectors.
We aim to conclude an EPA with a win-win mentality that will help to meet the deficit in trade which Turkey is running against. We also aim for the opening of the Japanese market to Turkish agricultural products.
Q: How do you respond to criticism that Turkey and the Syrian groups it is supporting do not show enough effort to eradicate al-Qaeda-affiliated Hay'et Tahrir al-Sham from Syria's Idlib as a part of the Sochi agreement with Russia? Can Turkey consider talking to the Assad regime for a negotiated settlement to the problem?
A: Terror organizations like PYD/YPG, PKK and Daesh, which finds areas of movement in Iraq and Syria, are posing an important threat against regional and international peace. Turkey, which is a joint target of all these terror organizations, is showing the most serious and realistic struggle against them on the field. Especially, we dealt a heavy blow to terror organizations in the region with Euphrates Shield and Olive Branch operations.
Our effort with Russia and Iran is an initiative that proved itself for establishing regional peace. We have reached serious success in both averting civilian losses and progressing on a path for a political solution by implementing de-escalation zones. We avoided hundreds of thousands of people leaving their homes in Idlib and migrating to our country and Europe. Therefore, maintaining the status quo in Idlib is important and valuable.
We know it very well that circles feeding from chaos in Syria are showing efforts to sabotage this agreement. Provocations we see on the field are the work of the Syrian regime and terror organizations. We will continue to be both at the table and on the field for building lasting peace and lasting stability in our region, starting with Syria. Turkey will keep the title of the country that pursues the most serious struggle with terror organizations without any discrimination.
Interviewed by Nikkei staff writers Momoko Kidera and Sinan Tavsan.