US embassy cable - 02ANKARA8381

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 008381 
 
SIPDIS 
 
 
STATE FOR EUR/SE, EB/IFD/OMA AND E 
TREASURY FOR OASIA - MILLS AND GUNARATNE 
STATE PASS USTR - NOVELLI AND BIRDSEY 
 
 
E.O. 12958: DECL: 11/18/2010 
TAGS: ECON, PINR, PREL, TU 
SUBJECT: THE NEW GOVERNMENT'S CORE ECONOMIC TEAM 
 
REF: ANKARA 6259 
 
 
Classified by Econ Counselor Scot Marciel for reasons 1.5 (b, 
d). 
 
 
1.  (C) The new Government Cabinet was announced by Prime 
Minister Abdullah Gul, following his meeting with President 
Sezer November 18.   Following are post's informal 
biographical notes on several of the likely key economic 
players.  When asked at the press conference "who will be the 
economy minister," Gul was careful to state that the detailed 
portfolios have not yet been determined.  But it appears 
likely that DPM Sener will be in charge of economic affairs, 
with State Minister Babacan overseeing the Treasury, and 
State Minister Tuzmen overseeing Foreign Trade.  Because AK 
is reducing the number of ministries (from 38 to 24), these 
positions may not correspond exactly to existing ministerial 
positions. 
 
 
Deputy Prime Minister Abdullatif Sener 
-------------------------------------- 
 
 
2.  (U) Sener was the AK Party's Chief of Operations, and is 
one of three deputy ministers.  He served as Finance Minister 
in 1996-97 under the Refah Yol Government.  Born in 1954, he 
has a BA from Ankara University's elite Political Science 
faculty in 1977, a PhD in economics from Ankara's Gazi 
University, and served on the economic faculty of Ankara's 
Hacetepe University in the 1980's, rising to the post of 
Assistant Dean. 
 
 
3.  (C) Sener, in our initial meeting with him, projected 
confidence in AK's mandate and in his ability to get things 
done within the party.  He can sometimes takes a hard line, 
but then shows flexibility in negotiations.  He stressed that 
Turkey needed to strengthen its engagement with the outside 
world, including the international financial community.  He 
speaks little to no English, and comes from the Chechen 
ethnic group in Turkey (his family, likes thousands of 
others, immigrated to Turkey from the Caucasus in the late 
19th century). 
 
 
State Minister Ali Babacan 
-------------------------- 
 
 
4.  (C) Babacan was Coordinator of AK's Economic Committee, 
and was in charge of the party's outreach to the 
international financial community.  He led the party's early 
October "road show" to Frankfurt, London and Europe, and 
initiated several pre-election meetings with IMF resrep (AK 
was the only political party to meet with IMF.)  Babacan told 
us he wrote the economic sections of the party's platform 
(see www.akparti.org.tr).  He acted as press spin control for 
some pre and post-"mis-statements" by other AK figures.  He 
is considered the most "market friendly" figure for the 
markets, and is likely to get the Treasury portfolio. 
 
 
5.  (U) Born in 1967, Babacan is the youngest member of the 
Cabinet.  He has an MBA in marketing from Northwestern 
University (1992), and an industrial engineering degree from 
Ankara's Middle East Technical University (1989).  He worked 
for a bank consulting firm, QRM, Inc. in Chicago, from 
1992-94.  Since 1994, he has run the family wholesale textile 
business in Ankara.  He has also acted as an advisor to the 
Mayor of Ankara Gokcek, helping to arrange project financing. 
 He speaks fluent English. 
 
 
6.  (C) In our frequent meetings with Babacan since August, 
we are impressed with his general intelligence, knowledge of 
financial markets and economic fundamentals.  But, as banking 
and market contacts have many times reiterated, Babacan has 
no experience managing an economic reform program.  His lack 
of experience can be overcome by working closely with the 
Turkish Treasury's experienced staff and the IMF.  But his 
degree of freedom and ability to make policy will be an 
initial question mark, given AK's centralized process of 
decision-making. 
 
 
State Minister Kursad Tuzmen 
---------------------------- 
 
 
7.  (C) Tuzmen was elected an AK Party MP from Gaziantep in 
the November elections, but is best known to Washington 
interlocutors as the former Undersecretary of Foreign Trade. 
In that position, he was considered close to the prior 
government's coalition partner MHP, though he clashed 
frequently with his State Minister Tuncay Toskay.  He is a 
strong, even vociferous advocate of Turkish industry, and has 
in the past brought industry reps into bilateral U.S.-Turkey 
meetings.  Tuzmen has a forceful personality, and often is 
combative.  As Foreign Trade U/S, he demonstrated keen 
interest in promoting trade with Iraq, and led several 
Turkish business delegations to Baghdad. 
 
 
8.  (U) Tuzmen rose up in the Foreign Trade Undersecretariat 
bureaucracy, becoming a director general of Free Zones, and 
then Deputy Undersecretary. For his work on behalf of the 
duty free zone businesses, he was awarded "Bureaucrat of the 
Year" by a Turkish business magazine in 2001.  He had earlier 
served as an expert on duty free zones in the State Planning 
Organization.  Tuzmen speaks English, with a BS in management 
from the Middle East Technical University and an MBA from the 
Universitiy of Illinois. 
 
 
Minister of Industry and Commerce Ali Coskun 
-------------------------------------------- 
 
 
9.  (C) Ali Coskun, born in 1939, is AK's Vice Chairman of 
Economic Affairs and a well known, pro-Islamist Istanbul 
businessman.  In frequent meetings beginning in August, he 
strikes us as an "old school" Turkish businessman who sees 
the state's role in the economy as largely to subsidize 
private industry, through the traditional channels of 
below-market loans for exports and other means.  He opposed 
the establishment of the independent banking board BRSA in 
2000, and has continued to criticize it.  At the same time, 
he deferred in our meetings to other AK figures like Babacan, 
younger than him, who had differing ideas.  His ministerial 
job as an advocate for industry and the "real sector" may not 
grant him much control over policy, which is good.  He is not 
dogmatic, and has a good sense of humor. 
 
 
10.  (U) Coskun is a former ANAP supporter, who after the 
death of President Ozal joined Refah.  He was elected to 
parliament first as a Refah deputy from Istanbul and then 
from the Refah successor Fazilet Party.  He has served as an 
executive of several semi-official business associations:  a 
founding member of the Foreign Economic Relations Board 
(DEIK); its U.S. branch, the Turkish American Business 
Association (TABA); and the Union of Chambers of Commerce of 
Islamic Countries.   He owns several ceramic tile factories 
in Istanbul.  His other main business was as Chairman of an 
Islamic bank - Ihlas Finans - which went bankrupt in February 
2001. 
 
 
Minister of Energy Hilmi Guler 
------------------------------ 
 
 
11.  (C) Guler has been head of AK's research and development 
group.  Born in 1949, he graduated from Ankara's Middle East 
Technical University with a degree in metallurgical 
engineering.  He worked in the Turkish Aircraft Industry as a 
project engineer, and later served on the boards of several 
public sector entities, including TUBITAK (Turkish Scientific 
and Technical Research Organization), IGDAS (the Istanbul Gas 
Distribution Company) and Erdemir (the state-owned steel 
giant), and Etibank (the former state bank mandated to 
support the mining industry, later privatized and now 
bankrupt).  In Embassy's  initial meetings, Guler struck us 
as reasonable and pragmatic. 
 
 
Minister of Finance Kemal Unakitan 
---------------------------------- 
 
 
12. (U) Unakitan is a relative unknown with whom Embassy has 
never met.  He was named at the last-minute to replace Tayyip 
Erdogan as an Istanbul parliamentary candidate when Erdogan 
was prohibited from running.  We have heard that he worked 
with Erdogan in a financial capacity in the Istanbul 
municipality.  He worked as a Finance Ministry auditor, and 
then served as President of Turkey's Pulp and Paper 
Association under Prime Minister Demirel in 1978.  He has 
previously served as a board member of the Islamic bank 
Al-Baraka Turk, and currently sits on the board of Family 
Finans, previously known as Feisal Finans (an Islamic bank 
partly owned by Saudis). 
PEARSON