US embassy cable - 02ISTANBUL2110

UNCLAS SECTION 01 OF 02 ISTANBUL 002110 
 
SIPDIS 
 
 
SENSITIVE 
 
 
PARIS FOR USOECD 
 
 
E.O. 12958: N/A 
TAGS: ECON, EAID, TU, Istanbul 
SUBJECT: ISTANBUL'S MINIATURE OECD: ENCOURAGING PRIVATE 
SECTOR DEVELOPMENT IN TRANSITION ECONOMIES 
 
 
1. (U) SENSITIVE-- NOT FOR INTERNET DISTRIBUTION 
 
 
2. (SBU) SUMMARY: Officials at Istanbul's Center for Private 
Sector Development, a joint undertaking of the OECD and 
Turkish International Cooperation Administration (TICA), 
outlined an ambitious program of seminars and programs for 
next year in recent meetings with Pol/Econ Section Chief and 
Econ Specialist.  The center seeks to encourage the 
development of a vibrant and sustainable private sector in 
target regions through programs focusing on such themes as 
encouraging foreign direct investment, enterprise finance and 
financial sector development, investment and agribusiness, 
and rule of law and anticorruption efforts.  In addition, a 
handful of Turkey-specific activities are planned, including 
an assessment of regulatory reform in Turkey (the subject of 
a major series of OECD studies last year) and several 
sectoral workshops, organized in cooperation with the 
Istanbul Chamber of Industry (ISO)  As in the past, the 
center will focus on bringing together a range of government 
officials from transition economies to share experiences and 
focus on best practices.  In effect, Center Manager Engin 
Goksu stressed, the center functions as a "miniature OECD", 
focusing on the Southeastern European, Black Sea, Caucasus 
and Central Asian regions, but also including Russia, Eastern 
Europe and Mongolia.  While primarily funded by the OECD and 
TICA, the Center is also seeking enhanced cooperation with 
bilateral donors active in these areas, as well as with 
potential corporate sponsors of specific programs.  End 
Summary. 
 
 
 
 
3. (SBU) A Turkish/OECD Partnership: Pol/Econ Section Chief 
and Economic Specialist recently toured the spacious offices 
and conference facilities of Istanbul's "Center for Private 
Sector Development" in the downtown Eminonu district, 
overlooking the Golden Horn and Bosphorus.  The new 
facilities, which the center moved into last year, permit it 
to organize conferences on site, obviating the need to rent 
more expensive facilities at local hotels.  TICA and the OECD 
jointly support the center's activities, with Turkey paying 
for the Istanbul facilities for the center, as well as 
covering lodging and per diem costs for conference and 
seminar participants.  The OECD largely covers the costs of 
the materials and experts who organize the seminars (Center 
Manager Goksu is on the OECD's Paris staff), leaving sending 
countries responsible only for the airfare for their 
participating officials.  On average, the center hosts 15-20 
programs a year, with some 30-50 participants per program. 
Goksu indicated, however, that in some instances Central 
Asian countries in particular have had difficulty paying the 
high airfares from the region, so that Central Asian 
participation has suffered as a result.  He indicated that in 
his travels through the region in recent weeks he has sought 
to disseminate information about the center to various 
bilateral aid missions, in the hope of encouraging future 
cooperation to help meet some of these costs. 
 
 
4. (SBU) 2003 Program: Goksu outlined an ambitious draft 
agenda of 22 separate programs for the center in 2003.  Eight 
programs will be devoted to encouraging foreign direct 
investment, including sessions on investment in the tourism 
sector (a followup to a 2002 program to assess the impact of 
the earlier session), public-private partnerships, exchange 
controls and liberalization and its impact on FDI, and FDI, 
privatization, and environmental issues.   Special regional 
seminars will address investment in extractive industries in 
the Caspian region, the Eurasia investment initiative 
(including the Black Sea Investment initiative), and the 
investment compact within the Stability Pact and the 
Southeast European Cooperative Initative (SECI).   Two 
programs are planned on enterprise finance and financial 
sector development, including enterprise finance and risk 
capital for Federation of Euro-Asian Stock Exchange (FEAS) 
member countries, and a FEAS group meeting on capital market 
development that will be held in Almaty.  Programs on 
investment and agribusiness are planned focusing primarily on 
Central Asia (in conjunction with UNCTAD), while the OECD 
itself will take the lead on a series of programs addressing 
Rule of Law issues, including "Constitutional Courts on the 
role of constitutional law in the economic reform process," 
dispute settlement and commercial arbitration, and the annual 
meeting of the Anti-corruptio network for Transition 
Economies.  Finally, separate programs will address 
regulatory reform in Turkey, privatization in transition 
economies, EBRD programs for investors in transition 
economies, sectoral developments in Turkey (with Turkey's 
ISO), E-government and E-commerce, and WTO membership for 
transition economies. 
 
 
5. (SBU) "A Miniature OECD": Goksu stressed that the center 
essentially functions as a small-scale OECD, in that it 
provides a forum for officials from a range of transition 
economies to come together and exchange knowledge, best 
practices, and information on how policies can best be 
implemented.  While the center's geographic range is wide, 
reaching essentially from Vienna to Ulaanbator, its focus 
remains on the core regions of Southeastern Europe, the 
Caucasus, and Central Asia.  Officials from other Eastern 
European countries and the Russian Federation have 
participated as well, however, as have officials from 
Mongolia. 
 
 
6. (SBU) Comment: In addition to being an important outreach 
mechanism for the OECD in its efforts to work with non-member 
transition economies, the center also represents a 
substantial commitment of resources by the GOT.  As such it 
particularly represents Turkey's commitment and efforts to 
build bridges to its newly independent neighbors in Central 
Asia and the Caucasus.  While the center has in the past also 
benefited from bilateral economic assistance, in particular 
from GTZ, that aid has now ended, and it is solely reliant on 
the GOT, OECD and assorted other international organizations 
that help organize some programs.  Goksu stressed, however, 
that he is committed to seeking not just some limited 
targeted bilateral assistance to facilitate attendance, but 
also to outreach to the corporate sector, as the center seeks 
to fulfill its mandate of encouraging private sector 
development in its target regions.  End comment. 
ARNETT