US embassy cable - 03ANKARA5967

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 005967 
 
SIPDIS 
 
 
E.O. 12958: DECL: 09/18/2008 
TAGS: EINV, PREL, PTER, EFIN, TU, IZ 
SUBJECT: AMBASSADOR'S MEETING WITH DEPUTY PM SENER 
 
 1. (U) Classified by Ambassador Eric Edelman reasons 1.5 (b) 
and (d). 
 
 
2.  (C) Summary: In a first meeting with the Ambassador, 
Deputy PM Sener seemed open to helping the U.S. with 
companies' problems in Turkey.  In reply to the Ambassador's 
caution against complacency on the reform program, Sener 
claimed Turkey would meet its targets.  Sener agreed that 
Turkey did not want chaos in Iraq but emphasized the 
sensitivity of the PKK issue for Turkey.  End Summary. 
 
 
MACROECONOMIC ISSUES: 
-------------------- 
 
 
3. (SBU) In his first meeting with Deputy Prime Minister 
Abdullatif Sener, the Ambassador described the opportunity he 
presently saw for Turkey: with inflation at a 20-year low and 
growth continuing, Turkey seems to be reaping the fruits of 
its tough decisions on the IMF program.  Though it is a 
moment for optimism, it is not a time for complacency.  If 
Turkey can complete the Sixth Review in a timely manner and 
hit the 6.5 percent primary surplus target, then it would be 
on a good course. 
 
 
4. (SBU) Sener responded by noting the positive macro 
indicators, predicting GDP growth might surpass the target, 
and that the GOT would hit the fiscal target.  He said they 
"have to control a few things," but overall were on track. 
Sener contrasted the current government with its predecessor 
coalition government which was hard put to take decisions. 
 
 
INVESTMENT ISSUES: 
----------------- 
 
 
5. (SBU) The Ambassador recounted Vice President Cheney's 
private sector experience that, when proposing a new 
investment to a corporate board, a CEO would always be asked 
about the experience of American companies that have already 
invested in the country in question.  Unfortunately, the 
Ambassador continued, a number of American companies have had 
problems in Turkey, so he hoped the Deputy Prime Minister 
would work with him to try to solve some of these problems. 
The Ambassador outlined the problems of pharmaceutical 
companies due to the lack of data exclusivity, which he noted 
was a problem for the EU as well.  Given Turkey's geographic 
position and its workforce, the Ambassador thought Turkey 
should attract much more investment. 
 
 
6. (SBU) Sener said he was willing to talk about any problem, 
and agreed on the importance of improving the investment 
climate.  For this reason, the GOT had established a 
committee to improve the investment climate and was drafting 
related legislation, to which it attached great importance. 
Sener admitted there might be bureaucratic problems and 
expressed a willingness to work on U.S. companies' specific 
problems. 
 
 
7. (SBU) Sener added that there are issues that concern both 
countries on which we can cooperate, citing the example of 
the Imar Bank case.  Sener said that Imar Bank and its owners 
had substantial funds outside Turkey and contacts in the U.S. 
 The Ambassador thought we might be able to cooperate on the 
law enforcement side, although Sener admitted with a chuckle 
that the Imar Bank money was more likely placed in countries 
other than the U.S. 
 
 
8. (SBU) Returning to the investment climate theme, the 
Ambassador said the Uzans' involvement with Motorola had 
parallels to the Imar Bank case:  if a solution could be 
found for Motorola's problems, that would help a lot.  Citing 
Motorola, Cargill, the Cola companies, and pharmaceuticals, 
the Ambassador said the more of these we can resolve, the 
more we can attract FDI and employ Turkish workers.  A more 
transparent and investor-friendly environment would also help 
Turkey with EU accession, and would be good for Turkish 
business, too.  Noting Turkey's longstanding strong strategic 
relationship with the U.S., the Ambassador said the economic 
dimension has been relatively underdeveloped.  Sener agreed 
and said he believed that both economic and political 
relations will develop. 
 
 
IRAQ/PKK: 
-------- 
 
 
9. (C) On the issue of a possible Turkish troop contribution 
to the stabilization force, the Ambassador conveyed U.S. 
sensitivity to the difficulty for any government to send 
troops into a possibly dangerous situation.  The U.S. had a 
very positive impression of Turkish peacekeepers, having 
worked with them in Kosovo, Bosnia, and, especially, in 
Afghanistan.  The Ambassador suggested that if Turkey 
contributed troops, U.S. forces might be freed up for more 
high-intensity missions, protecting the population from 
terror attacks.  The Ambassador described the common interest 
of the U.S. and Turkey in a stable Iraq, pointing out that 
democratic countries rarely go to war with their neighbors 
and are more likely to live up to their commitments.  The 
U.S. and Turkey agree that Iraq should be a unitary state 
within existing borders.  Iraq was not Afghanistan, in that 
it had serious resources, and a democratic Iraq with a 
capable government was something all ethnic groups would want 
to be a part of. 
10. (C) On the PKK/Kadek issue, the Ambassador cited the 
recent visit by U.S. officials with expertise in military 
planning, refugees, and intelligence and said this would be 
the first of several meetings on this complicated issue.  The 
Ambassador stressed that President Bush's commitment was 
categorical:  terrorism, whatever the form, must be 
eradicated from Iraq. 
 
 
11. (C) Sener agreed that no one, including Turkey, wants 
chaos in Iraq.  Recalling his questioning Undersecretaries 
Grossman and Taylor about post-war Iraq, Sener said that 
whenever a government disappears, illegal forces try to take 
advantage.  Sener went on to stress the importance to the 
Turkish nation of the PKK/Kadek issue.  For example, Sener 
said that even though his parliamentary district (Sivas) is 
removed from southeastern Turkey, over his 12 years in 
parliament, whenever he returns to his district people talk 
about the PKK issue.  In Tunceli, there is a special section 
of the cemetery for people killed by the PKK.  Claiming there 
were 5,000 to 6,000 PKK militants in Northern Iraq, Sener 
said it was very important for the GOT to have information 
about U.S. plans.  Sener regretted that the amnesty law had 
only brought in a small number of people, most of whom were 
already in prison. 
 
 
12. (C) The Ambassador said he understood the sensitivity of 
the issue but that the U.S. has worked with Turkey on this 
issue before, showing more understanding of it than Europe 
had.  Sener agreed.  The Ambassador noted that PKK/Kadek had 
been on the U.S. list of terrorist organizations for some 
time, that the U.S. was working on European countries to dry 
up financing sources for the PKK, and that the U.S. had 
cooperated closely with Turkey in the apprehension of Ocalan. 
 The U.S. and Turkey need to cooperate in Iraq but such 
cooperation would really just be a continuation of earlier 
cooperation, the Ambassador concluded. 
EDELMAN