US embassy cable - 05ANKARA1650

UNCLAS SECTION 01 OF 02 ANKARA 001650 
 
SIPDIS 
 
SENSITIVE 
 
PARIS FOR USOECD 
TREASURY FOR OASIA - ROY ADKINS 
 
E.O. 12958: N/A 
TAGS: EAID, ECON, EINV, KCRM, PGOV, QA, EG, TU 
SUBJECT: POTENTIAL TURKISH CONTRIBUTION TO BMENA INVESTMENT 
INITIATIVE 
 
REF: STATE 49933 
 
1.  (SBU)  Summary.  In recent months, Turkish government and 
private sector officials have shown an increasing interest in 
becoming more involved on the economic side of the BMENA 
initiative.  This fits with Turkey's large and growing trade 
and investment with the region and its potential -- as a 
large and fast-growing economy located next door -- to make 
an even greater contribution to the region's economic 
development.  The largest Turkish business organization, 
TOBB, has expressed its interest in helping develop the 
capacity of regional business organizations to be a force for 
economic change, which may be a good fit with the objectives 
of Working Group 2 of the MENA-OECD Investment Initiative. 
End Summary. 
 
2.  (SBU)  Understanding that Turkey is not a target of the 
BMENA initiative, but a partner with the G-8 in fostering 
positive change in the region, Post believes that Turkey has 
the potential to be a more active contributor to the economic 
reform dimension of the initiative.  Particularly since last 
December's ministerial meetings in Rabat, Turkish officials, 
especially at the Turkish Treasury, have shown an increased 
interest in finding ways for Turkey to become more involved. 
 
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Booming Trade and Investment 
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3.  (SBU)  Given that a prosperous, stable neighborhood is 
clearly in Turkey's economic, as well as its political, 
interest, Turkey has a great deal to contribute the BMENA 
region's economic development-- especially to the extent that 
its $300 billion economy continues to recover strongly from 
the 2001 financial crisis.  Evidence of Turkey's growing 
economic integration with the region is a three-fold growth 
in annual exports to Arab countries of the Middle East ($2.5 
billion to $7.4 billion) between 1996 and 2004.  During that 
period, imports from the same countries grew from $3.8 
billion to $5.7 billion.  Turkish outward investment in the 
region increased from $26 million (annual flow) in 1997 to 
$123 million in 2004, according to Turkish Treasury 
statistics. 
 
4.  (SBU)  This recent experience is only suggestive of 
Turkey's potential to play a major part in economic 
development in the region.  For example, development of 
transportation, telecommunications, and energy infrastructure 
(such as oil from Iraq and gas from Egypt) that passes 
through Turkish territory would facilitate the region's trade 
with Europe and beyond.  Turkey is also a potential 
large-scale exporter of water and, possibly, electricity. 
Along with trade and investment, Turkish companies would help 
introduce more modern business models and technologies.  On 
an economic governance level, Turkey could offer to share 
with countries with a certain shared history its ongoing 
experience in transitioning from a closed, statist economy to 
an open, private sector driven model. 
 
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Offer of Business Association Initiative 
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5.  (SBU)  A specific area in which the Department might wish 
to consider drawing on Turkey's interest is in the MENA-OECD 
Investment and Governance for Development Initiative 
described in reftel.  In his September 23 remarks to the 
BMENA business dialogue meeting in New York, Rifat 
Hisarciklioglu, the chairman of the Turkish Union of Chambers 
of Commerce and Industry (TOBB), offered his organization's 
services to help regional business organizations develop 
their capacity to be a force for domestic economic and social 
reform.  This seems to fit with the mission of Working Group 
2 of the MENA-OECD initiative.  If the Department found it 
useful, Post would be pleased to work with Washington to 
encourage active TOBB participation in this Working Group. 
 
6.  (U) Baghdad minimized considered. 
EDELMAN