US embassy cable - 05ADANA177

UNCLAS SECTION 01 OF 03 ADANA 000177 
 
SIPDIS 
 
SENSITIVE 
 
NOT FOR INTERNET DISTRIBUTION. 
 
E.O. 12958: N/A 
TAGS: PGOV, ECON, PREL, PHUM, TU, SY, IZ, ADANA 
SUBJECT: SOUTHEAST TURKEY'S ECONOMY GETTING BY 
 
REF: ADANA 169 
 
1. (SBU) Summary:  The southeast's economy is not booming but it 
is getting by.  Fuel smuggling across Van's border with Iran has 
taken on significant proportions.  Van's business incubation 
center provides an example of local business succeeding at doing 
things on its own, without Ankara's help.  Diyarbakir sees 
itself as a European entrepot to the Middle East, modeled on 
Singapore in East Asia.  Diyarbakir businesses are seeking 
expansion of trade with Iraq, and welcome investment from 
outside the region, but feel that government incentives, though 
appreciated, are not making a difference in the investment 
climate.  A good deal of money continues to flow across the Iraq 
border, mostly through foreign exchange bureaus.  Many of the 
southeast's problems continue to be structural in nature.  The 
region requires assistance in dealing with a broad array of 
women's advocacy issues.  More young women are attending school 
throughout the region, mostly supported by funding from a 
UNICEF/GOT program.  Villagers in the southeast continue to 
return to their villages, but commitment to village return in 
some areas remains weak.  An NGO in Hakkari is running a small 
de-mining project and seeks U.S. assistance.  End summary. 
 
Van: Fuel Smuggling and a Successful Business Center 
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---------------------- 
 
2. (SBU) The economy in the southeast is not booming, but it is 
getting by.  In Van province, where Iranian agricultural 
products, processed foods and light consumer goods have been a 
staple of area markets, fuel smuggling across the border with 
Iran has taken on significant proportions.  This activity 
appears to be proceeding with de facto coordination between the 
government and the local AK party.  During a September 28 and 29 
visit to Van and Hakkari we saw hundreds of trucks in the 
process of moving fuel.  Van police told RSO that 3,500 trucks 
have been registered in the province recently; mostly cargo 
trucks with factory-installed 650 liter tanks.  In the small 
town of Guzelsu, located about 13 miles from the border, we 
witnessed large numbers of trucks off-loading fuel into other 
vehicles, barrels, plastic containers and various receptacles. 
Van's neighboring province, Hakkari, has suffered considerable 
economic setbacks since the government shut down its official 
border gate with Iran at Esendere.  Still, AKP-governed Van 
province keeps open an unofficial border crossing point at 
Albayrak village, where most of the smuggled fuel appears to be 
entering the province. 
 
3. (U) On a more upbeat note, Van's World Bank-funded Business 
Development Center provided an example of how local businesses 
in the southeast are succeeding in doing things on their own. 
The President of VANSIAD (Van's chapter of Southeast Turkey 
Business Association) told us that 185 people had been employed 
over that past four months at Van's Center.  He commented that 
Van's business community was trying to be dynamic enough to turn 
the physical plant of the Center into a job creation opportunity 
rather than letting the infrastructure of the failed former 
parastatal Sumer textile factory go to waste.  He reminded us 
that Van and Tarsus were two such successful Business 
Development Centers in the southeast, but that similar efforts 
in Zonguldak and Adana were not working out. 
 
Diyarbakir: Middle East Entrepot Seeks Investment 
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4. (SBU) ConOffs met with GUNSIAD (Southeast Turkey Business 
Association) officers in Diyarbakir, which held a trade fair 
from September 30 through October 3 to attract business from 
neighboring countries.  With Turkey's growing ties to the EU, 
Diyarbakir sees itself as a new European entrepot to the Middle 
East, somewhat like Singapore or Hong Kong in East Asia.  These 
goals have the support of both central government and municipal 
authorities in Diyarbakir.  GUNSIAD officials told us that 
business representatives from Syria, Jordan, Kuwait, Iran and 
Iraq were in attendance at the fair.  With the trade fair in 
town, Diyarbakir provincial authorities cancelled a pro-EU rally 
scheduled for October 2, mostly out of security concerns arising 
from anti-EU sentiment in the country (reftel). 
 
5. (SBU) Diyarbakir businesses are seeking an expansion of trade 
with Iraq.  Kaya Construction Company in Diyarbakir was awarded 
a contract by TOBB for modernization of the Habur border gate 
with Iraq.  While GUNSIAD and CCI (Chamber of Commerce and 
Industry) members in Diyarbakir are always looking for 
opportunities to trade goods, they are trying to drum up 
possible investment interest in Diyarbakir.  GUNSIAD and CCI 
officers told ConOffs that they welcome investment from outside 
the region, but have seen no signs of interest from either 
foreign or Turkish investors.  Business contacts told us that 
government incentives for investment in the region were 
appreciated, but so far were not making any difference in the 
investment climate.  A Diyarbakir CCI official told us that 
Diyarbakir-based business operations in Iraq had no problem 
moving cash across the border.  He added that a good deal of 
money is flowing across the border through foreign exchange 
bureaus.  ConOffs have heard stories about cross-border cash 
flowing through foreign exchange bureaus from businessmen in 
Sanliurfa, Adana and Gaziantep.  Stories of cash being brought 
out of Iraq in suitcases also are common. 
 
Continuing Structural Issues: Women's' Advocacy~ 
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-------------- 
 
6. (SBU) Many of the economic problems in the southeast continue 
to be structural in nature, with occasional signs of 
improvement.  Diyarbakir's DEHAP mayor, Osman Baydemir, 
requested American assistance in dealing with a broad array of 
women's advocacy issues.  These included educational campaigns 
regarding women's rights and against domestic violence, building 
and operating women's shelters and trying to decrease the number 
of honor killings through efforts to change traditional Kurdish 
social structures.  Baydemir was pleased when we explained a 
women's shelter program that the U.S. and UN are working on in 
Van.  He asked that a similar effort be started in Diyarbakir. 
(Note: Mission Turkey already has proposed such a project to 
EUCOM as a regional humanitarian effort.  Its consideration is 
pending.  End Note.) 
 
 
~Wasteful Wedding Ceremonies~ 
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7. (SBU)  The Mayor offered a personal example of his recent 
wedding as one possible case where non-traditional marriage 
customs can succeed among tradition-bound Kurds.  He and his new 
bride recently held a small ceremony with no gifts (normally the 
party would be a very elaborate affair wherein the couple would 
receive gifts of gold) and invited only close friends and 
family; as opposed to the traditional, large, expensive ceremony 
that can often be burdensome on poor families.  He half joked 
that many Diyarbakir prospective grooms already were thanking 
him for setting a new trend which would allow cash-strapped 
young couples to invest in other needed goods rather than 
elaborate wedding ceremonies.  His advisors also considered the 
move politically astute as they calculated that local tribal 
leaders otherwise would have tried to use the vehicle of the 
wedding gift to literally buy favor with Baydemir. 
 
~Girls' Education~ 
----------------------------- 
 
8. (SBU) Most of the Governors, sub-Governors and Mayors we 
spoke with in Diyarbakir, Bitlis, Van, Ahlat, Hakkari and 
Baskale said that more young women are attending school in their 
districts, a development that is largely attributable to funding 
from a UNICEF/GOT program to promote girls' education..  (Note: 
The USG has contributed $9 million to a World Bank/Turkish 
Social Solidarity Fund program  that works through local 
governors to provide cash payments to low-income families 
(usually mothers) if they keep their children in school.  The 
fund also pays for boys, but pays more for girls who stay in 
school.  Another component is payments to poor families if they 
get their infants vaccinated. End Note.)  Municipal authorities 
in Hakkari perceived that the government had shut off payments 
from the UNICEF/GOT program, though this was not apparent in 
other municipalities. 
 
~Return to the Villages~ 
-------------------------------------- 
 
9. (SBU) Local authorities also told us that between Van and 
Hakkari villagers had returned to about 10 villages, but were 
maintaining town residences.  In practice, they only seem to be 
going to the mountains for short, summer stays and only during 
times of tension.  On a contrasting note, showing the weakness 
of commitment to village return, an NGO in Hakkari reported that 
about 30 village youth had returned to the mountains (reftel). 
 
~and De-Mining Efforts 
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10. (SBU) AMCON Adana ConOff's further learned more about the 
impact that mines and unexploded ordnance are having in Hakkari 
and Van province, where tensions are high and clashes 
continuing.  The director of a small de-mining project, with 
Dutch funding assistance and local Army/Jandarma cooperation, 
detailed how she is trying to build mine awareness at the same 
time that she weekly learns of those who have lost lives and 
limbs from legacy mines or unexploded ordnance dating as far 
back as the 1990's.  She asked for U.S. help for de-mining 
(noting a Jandarma unit was doing a small pilot feasibility 
project near Yuksekova), building local capacity for explosive 
ordnance disposal and providing prosthetics for victims.  (Note: 
AMCON Adana is trying to connect her small NGO with U.S. NGO 
Physicians for Peace which does prosthetic work in Turkey.  End 
Note.) 
 
REID