Cablegate: Potential Turkish Contribution to Bmena Investment

This record is a partial extract of the original cable. The full text of the original cable is not available.

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
----------------------------

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

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