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

UNCLAS SECTION 01 OF 06 ANKARA 008110 
 
SIPDIS 
 
 
CENTCOM AND EUCOM: PLEASE PASS TO POLADS AND J-5 
 
 
E.O. 12958: N/A 
TAGS: PREL PGOV PINS ECON OTRA TU
SUBJECT: TURKEY: SCENESETTER FOR CODELS BEREUTER, HASTERT, 
ISSA, SMITH 
 
 
¶1.  Summary: Turkey's Nov. 3 national elections produced a 
landslide victory for the Islam-influenced AK Party, which 
thus far has chosen to follow a reasonable path with emphasis 
on EU membership.  The economy is on eggshells, and the new 
government will need to stick to the IMF-backed reform 
program to avoid another crisis.  Turkish officials are 
concerned about the possible negative effects on the economy 
of an operation in Iraq, stress the need for international 
legitimacy and a mandate from the UNSC, and state their 
preference for a peaceful process of disarmament.  End 
summary. 
 
 
--------------------------- 
Domestic Political Snapshot 
--------------------------- 
 
 
¶2.  Islam-influenced Justice and Development (AK) Party's 
landslide victory and Establishment standard-bearer 
Republican People's Party's (CHP) distant second-place finish 
in Turkey's Nov. 3 general elections cuts the number of 
parties in parliament back to only two for the first time in 
decades.  More than anything else, AK's victory reflects 
broad public dissatisfaction with business as usual: in 
particular on pocketbook issues, corruption, and the tired 
direction given by a group of political leaders, some of whom 
have been on the scene for over 40 years.  AK has made the 
drive for EU membership -- including passage of necessary 
economic and political reforms -- its top priority.  AK 
leader R. Tayyip Erdogan is currently not eligible to stand 
for Prime Minister because of past legal problems, stemming 
from his conviction for the public recitation of a poem. 
However, AK will form a government with almost the two-thirds 
majority needed to allow it to amend the Constitution (to 
restore Erdogan's political rights), and may be able to find 
the remaining votes needed from independent M.P.s.  Final 
election results show that (1) 45% of the votes cast will not 
be represented in the new parliament because they went to 
parties unable to cross the 10% vote threshold; (2) upwards 
of 60% of the vote went to non-Establishment parties; (3) the 
traditional center-right parties, which have dominated 
Turkish politics for generations, got only 15% of the vote. 
While P.M. Ecevit and Kemalist pundits professed shock at the 
election results, a varied spectrum of other commentators and 
leading businessmen made balanced and forward-looking 
assessments.   The current government under Ecevit will 
continue as a lame-duck administration until the new AK 
government receives a vote of confidence in Parliament, 
probably sometime in early December. 
 
 
------------------- 
EU and Human Rights 
------------------- 
 
 
¶3.  In February, March and August Parliament passed extensive 
reforms intended to meet the political requirements for 
European Union membership.  The EU Commission in its October 
report praised the reforms, but stated that "considerable 
further efforts are needed" to bring Turkey into compliance 
with membership criteria.  It recommended that the EU: 1) 
enhance its support for Turkey's pre-accession preparations, 
and provide additional resources; 2) revise the Accession 
Partnership agreement; and 3) extend and improve the 
functioning of the Customs Union.  The Turkish Government 
criticized the report for failing to give proper credit for 
the reform effort, but remains committed to EU membership. 
With strong U.S. support, Turkey is lobbying EU officials and 
member states.  The Turkish Government wants the EU at its 
December 12-13 Summit in Copenhagen to set a date to begin 
accession talks.  Some EU-member-state leaders have raised 
the possibility of a "conditional date," contingent upon 
further reforms. 
 
 
¶4.  The three reform packages are focused on improving human 
rights, applying to such areas as free speech, pre-trial 
detention, and the rights of religious groups, among others. 
Parliament abolished the death penalty during peacetime and 
lifted bans on private courses and TV broadcasts in Kurdish 
and other non-Turkish languages. 
 
 
¶5.  The Turkish government does not recognize the ecumenical 
nature of the Patriarchate in Istanbul.  Nor has the 
government changed its position against allowing the 
reopening of the Ecumenical Patriarchate's seminary on the 
island of Halki despite the Patriarchate's continual 
requests; the seminary was closed in 1971 when the Turkish 
government nationalized private institutions of higher 
learning.  In October, the Ambassador accompanied a 
delegation from the Archons of the Order of Saint Andrew the 
Apostle in New York during a visit to the Patriarchate and 
Halki and meetings in Ankara. 
 
 
------------------ 
Economic Situation 
------------------ 
 
 
¶6.  Turkey's financial situation remains fragile, with the 
main vulnerability being the country's ability to continue 
servicing a large sovereign debt burden in 2003.   Concerns 
with the effects of an external shock on their own debt 
sustainability underlie many Turks' misgivings -- both in 
private sector and in government -- with an Iraq operation. 
Turkey has, nevertheless, performed well for the first 18 
months under an IMF-backed economic reform program.  By year 
end 2002, inflation will be cut in half (to 34 percent), 
growth is expected to come in at 4 percent (after a deep 
recession in 2001), and the banking sector is much better 
regulated and as a result in a stronger position than it was 
before the 2001 crisis.  Political uncertainty, however, has 
cost Turkey in terms of higher interest rates on government 
bonds which will add to Turkey's financing bill next year. 
The focus now is on the direction of the AK-led government 
that will emerge in the coming weeks.  The expectation in the 
markets is that the new administration must continue with the 
existing IMF-backed reform program.  Any deviation from this 
program -- especially on fiscal austerity and on structural 
reforms -- will again cause uncertainty and interest rates to 
rise.  The new government will have to do everything right in 
order to retain investor confidence and to avoid a serious 
financing problem in 2003 -- with or without an external 
shock. 
 
 
------------------ 
Foreign Investment 
------------------ 
 
 
¶7.  Attracting more foreign direct investment is a key 
element of Turkey's reform program.  Turkey currently 
receives very small flows of foreign direct investment, 
compared with other emerging market countries.  For instance, 
Poland attracts $4-5 billion per year on average, while 
Turkey gets less than $1 billion (thus far in 2002, Turkey 
has only received $180 million in foreign direct investment). 
 Political and economic instability, and unresolved business 
disputes involving large U.S. companies, have hurt Turkey's 
business image and limited investment flows.  The AK Party 
has said that improving the business climate and attracting 
more FDI is a high priority. 
 
 
--------------- 
Bilateral Trade 
--------------- 
 
 
¶8.  On bilateral trade ties, our trade is roughly in balance 
-- each country exports about $3 billion to the other.  In 
order to boost trade with Turkey, the President has proposed 
creating a Qualifying Industrial Zone (QIZ); products 
exported from a QIZ enter the U.S. duty free provided they 
meet certain conditions.  Legislation authorizing QIZs in 
Turkey is currently pending in Congress.  Other key trade 
issues involve Turkish action to enhance protection of 
intellectual property rights and to reduce tariff and 
non-tariff barriers to U.S. agricultural exports. 
 
 
------ 
Energy 
------ 
 
 
¶9.  On regional energy issues involving Turkey, we have seen 
important progress on the realization of the East-West energy 
corridor from the Caspian to the Mediterranean, which 
continues to be a major U.S. policy objective in Turkey.  The 
Baku-Tbilisi-Ceyhan (BTC) oil pipeline is firmly on track, 
and is entering the construction phase.  The governments of 
Turkey and Azerbaijan have recently reached final agreement 
on a gas sales purchase agreement for the 
Baku-Tbilisi-Erzurum, or Shah Deniz, gas pipeline, which 
likely will be sanctioned by the project owners in February 
¶2003.  The U.S. is working closely with the Government of 
Turkey to help it achieve its goal of becoming a transit 
country for Caspian gas to Europe. 
 
 
------ 
Greece 
------ 
 
 
¶10.  Relations between Turkey and Greece are better now than 
they have been in decades.  The positive climate grew out of 
the personal friendship between Greek F.M. Papandreou and 
former Turkish F.M. Cem and has been largely sustained 
despite Cem's departure from government in July.  Greece 
appears to have become one of the most vocal supporters in 
the EU for an accession negotiation date for Turkey, and 
Greek P.M. Simitis was the first foreign leader to 
congratulate Erdogan on AK's electoral victory. 
Nevertheless, potential problem areas remain in the form of: 
1) territorial issues related to sea and airspace in the 
Aegean; 2) continental shelf; and 3) Cyprus. 
 
 
------ 
Cyprus 
------ 
 
 
¶11.  The Cyprus issue has long kept Turkey and Greece at 
odds.  Settlement talks continue under the auspices of the 
UN.  We believe that there is an opportunity for a lasting 
solution on the island in the context of the EU accession 
process.  Nevertheless, Turkish officials have raised the 
public specter of a potential "train wreck" that could affect 
not only the situation on the island but also Greek-Turkey 
and EU-Turkey relations.  The admission of Cyprus to the EU 
before a settlement has been reached, and before Turkey has 
received at least a date for accession negotiations, is 
anathema to Turks.  The landslide victory of AK in the Nov. 3 
elections, however, could create some room for maneuver. 
While sympathizing with Turkish sensitivities, AK has 
criticized "Turkish Republic of Northern Cyprus" leader 
Denktash for his mismanagement of the "TRNC" and, as a 
single-party government with a significant mandate from the 
Turkish public, might be more open to seeking a solution 
where past Turkish governments have remained intransigent. 
 
 
--------------------------------------------- - 
Armenia/Nagorno-Karabakh (NK) and Central Asia 
--------------------------------------------- - 
 
 
¶12.  Armenian diaspora attempts to have Western legislatures 
pass resolutions condemning what Armenians consider a 1915 
genocide by the Ottoman Empire continues to roil relations 
between Ankara and Yerevan.  Moreover, normalization of 
relations is likely to occur only with the resolution of the 
Nagorno-Karabakh conflict between Armenia and Azerbaijan, 
Turkey's closest ally in the region; such a solution would 
have to resolve the status of NK, which is Azerbaijani 
territory but currently occupied by Armenia; and the question 
of a land corridor across Armenia to connect Azerbaijan's 
main territory with its exclave Nakhcivan.  Turkey has had 
aspirations to play a leading role in Central Asia for the 
past decade, but its initial attempts after 1991 reminded 
Central Asian states of the Big Brother approach of Soviet 
Russia; uneven Turkish economic growth led Central Asians to 
question the value of a special relationship with Turkey; and 
some Central Asian states also grew concerned that Turkish 
promotion of new schools set up in the region under the aegis 
of Turkish Islamic figure Fethullah Gulen was a wedge to 
introduce more militant Islam into the region.  As a result, 
Turkey had to scale back its ambitions.  Growth of Turkish 
influence in the region will depend to a great extent on how 
well Turkey demonstrates its economic vigor and ability to 
maintain a moderate Islamic identity. 
 
 
------------------------------------------ 
OEF and the Global War on Terrorism (GWOT) 
------------------------------------------ 
 
 
¶13.  Our only predominantly Muslim NATO Ally, Turkey has 
participated actively in GWOT.  In doing so, it has supported 
our message that GWOT is not a war on Islam.  In the 
aftermath of 9/11, the Turks issued strong public statements 
condemning the attacks, and, in the face of considerable 
public opposition, pushed through a parliamentary resolution 
authorizing the deployment of Turkish troops abroad for 
Operation Enduring Freedom (OEF) and the stationing of 
additional foreign troops in Turkey.  Turkey was one of the 
first countries to offer Special Operations Forces for OEF. 
Turkey also streamlined customs procedures for equipment used 
for OEF, granted blanket permission for US OEF aircraft to 
operate and refuel in Turkish airspace (over 5,000 flights to 
date), dispatched liaison officers to CENTCOM, EUCOM and to 
Kandahar, offered the use of additional air bases for 
operations through Turkey, offered two KC-135 tankers in 
support of air operations, and increased its force protection 
posture at US military facilities in the country. 
 
 
---- 
ISAF 
---- 
 
 
¶14.  Turkey was one of the first countries to contribute 
forces to the International Security Assistance Force (ISAF) 
in Afghanistan.  In June 2002, Turkey assumed the leadership 
role and currently has 1,400 troops on the ground.  Turkey's 
tenure as ISAF lead nation ends o/a December 20 and the Turks 
are looking  to the USG -- their key strategic partner -- to 
have a successor in place as close to that date as possible. 
The Germans/Dutch have agreed to take over ISAF command from 
the Turks, but have said they will not be able to do so until 
March 2003 at the earliest.  The US is working with the 
Germans and Dutch to speed up the transfer of ISAF command so 
as to minimize the extra time (and money) the Turks are 
required to remain in Kabul. 
 
 
---- 
Iraq 
---- 
 
 
¶15.  The Turkish government has consistently preferred a 
peaceful solution or a solution legitimated by new UN 
Security Council resolutions.  A majority of Turks worries 
about the consequences of military action against Iraq; 
Turkey vigorously opposes creation of an independent Kurdish 
state in Northern Iraq.  However, should the U.S. decide to 
initiate military operations, Turkey would likely support us, 
while insisting on guarantees that its interests be protected 
and seeking economic compensation for projected losses.  AK 
Party has said Turkey,s position will depend on the mandate 
established by UNSC resolutions.  The well-know Turkish 
concerns include damage to the fragile Turkish economy 
(especially investment and tourism); the potential for 
Iraq,s disintegration/the emergence of an independent 
Kurdish state in northern Iraq; Iraqi Kurdish control of 
Mosul or Kirkuk oil fields; preventing refugee flows into 
Turkey; and protection of the Iraqi Turkmen population. The 
Turks will also expect the U.S. to live up to President 
Bush,s January 2002 commitment to PM Ecevit that the US 
would consult with Turkey every step of the way on Iraq. 
 
 
---- 
NATO 
---- 
 
 
¶16.  Turkey continues to view NATO as its strongest link to 
Europe and therefore places great importance on the Alliance 
and its continued viability.  It supports a robust 
enlargement but worries that the organization's enlargement 
may erode NATO's efficiency and ability to act.  The Turks 
also seek to ensure that their own influence in the Alliance 
is not diluted by the addition of new members and that NATO's 
presence in Turkey is not trimmed in the process of NATO 
command structure reform. 
 
 
---- 
ESDP 
---- 
 
 
¶17.  Permanent arrangements for NATO-EU cooperation in the 
form of Berlin Plus are currently stalled due to the lack of 
an agreement on the participation of non-EU NATO Allies in 
ESDP in return for guaranteed access to NATO assets.  The US, 
Turkey and other Allies are opposed to ad hoc arrangements 
that would allow the EU to "deploy" ESDP in the Balkans 
pending permanent resolution of Berlin Plus.  In the 
meantime, key players, including the UK, Turkey, Greece, and 
EU HiRep Solana are working to negotiate a deal that will 
satisfy Turkey's national security concerns and the EU's need 
to protect its sovereignty of decisionmaking.  The Turks will 
expect US backing on ESDP if they believe the EU is pressing 
for an agreement that compromises Turkish national interests. 
 
 
--------------------- 
Military Capabilities 
--------------------- 
 
 
¶18.  Turkey spends one of the highest proportions of its GNP 
among all Allies on defense and is supportive of US efforts 
to prod other Allies to increase their capabilities.  Turkey 
is undertaking a serious military modernization program over 
the next several years, but is hampered by the ongoing 
economic crisis.  While Turkey may support the concept of 
"niche capabilities" in NATO, it likely will continue to 
invest in its own defense priorities given its perception 
that threats to Turkey are different than those to other 
Allies and its belief that NATO (i.e., the Europeans) may not 
invoke Article V to protect Turkey against Kurdish terrorists. 
 
 
---------- 
Arms Sales 
---------- 
 
 
¶19.  Bell Textron has been in contract negotiations with the 
Turks for nearly two years for 50 anti-armor helicopters 
based on the U.S. Marine Corps' AH-1Z King Cobra, a contract 
valued between $1.5-2B dollars.  Negotiations have bogged 
down over Turkish demands that Bell, while only a 
sub-contractor to Turkish aircraft industries, assume an 
inordinate degree of risk.  We are supporting Bell,s efforts 
to develop a roadmap to reach contract signature by the end 
of the year.  The Turks remained concerned that after 
contract signature, the sale will get bogged down in 
licensing and Congressional notification process. 
 
 
--------------------------------------------- - 
Indigenous and Transnational Terrorist Attacks 
--------------------------------------------- - 
 
 
¶20.  In the aftermath of the Gulf War, the predecessor to the 
Turkish terrorist group Revolutionary People's Liberation 
Party/Front (DHKP/C) assassinated four Americans in Turkey 
and carried out numerous bombings of U.S. targets (mostly 
private sector businesses, although two rockets were directed 
toward the Consulate General in Istanbul).  Other Turkish 
terrorist groups with anti-western sympathies include Turkish 
Communist Party/Marxist Leninist (TKP/ML), Turkish Workers 
and Peasants Revolutionary Army (TIKKO) and Islamic Greater 
Eastern Raiders/Front (IBDA/C).  A renewed conflict with Iraq 
could cause these groups to actively target U.S. interests in 
Turkey.  Al-Qaida threats to target U.S. bases in Turkey have 
been pubic knowledge for some time.  We can also assume Iraqi 
intelligence operatives could plan subversive operations in 
Turkey should the Turks offer support to the U.S. initiative 
in Iraq.  The Turkish National Police (TNP) are quite 
responsive in their role as protector of U.S diplomatic and 
military interests in Turkey.  TNP has provided enhanced 
coverage at our two most vulnerable facilities (Istanbul and 
Adana), closing two city streets bordering each facility. 
Mission Turkey is confident the TNP will continue their high 
level of responsiveness for U.S. facilities. 
 
 
------------------------ 
Homeland Security Issues 
------------------------ 
 
 
¶21.  In FY 2002 US Embassy Ankara and American Consulate 
Istanbul adjudicated approximately 70,000 non-immigrant visa 
applications -- most from Turks -- and more than 6,000 
immigrant visa applications.  Ankara and Istanbul also 
processed around 6,000 Iranian non-immigrant visa 
applications.  Iran's status as a state sponsor of terrorism 
poses a particular challenge in these cases.  Embassy Ankara 
last year submitted more than 295 names of potential 
terrorists for inclusion in the Consular Lookout namecheck 
system.  This year we have added some 300 more names to the 
system.  The use of supplemental application forms and other 
measures to improve our ability to scrutinize each 
application has lengthened the entire process.  While 
consular officers offer as expeditious service as possible, 
their primary responsibility is to carry out U.S. law and to 
ensure those who receive visas will not pose a threat to the 
U.S.  As new Homeland Security visa requirements are 
implemented, such as the inclusion of biometric data on 
visas, we will have new challenges to process. 
---------------------------------- 
Security Issues for Mission Turkey 
---------------------------------- 
 
 
¶22.  Embassy Ankara has outgrown its 1950's era chancery. 
Driven by intense U.S. policy interests in Turkey, staff 
continues to expand but we have no more room.  Three 
buildings on the compound have minimal setback to Paris 
Caddesi and are a major concern.  Efforts are underway to 
consolidate the staff of the Public Affairs Building (located 
in a renovated apartment building outside of perimeter wall) 
onto the compound.  This will improve our security and allow 
us to concentrate our resources on the chancery compound. 
The ongoing facility space plan will relocate many offices as 
far away from the perimeter as possible to reduce overall 
vulnerability.  Current space conditions necessitate the use 
of the two annex buildings along the perimeter.  While we 
have deployed local guards and TNP to reduce the perimeter 
threat, a longer term solution is needed  The Consulate in 
Istanbul will move from the current historic but exposed 
quarters to new office building, meeting security standards, 
next spring. 
 
 
--------------------------------- 
Facility to House Consulate Adana 
--------------------------------- 
 
 
¶23.  The lease for the current Consulate expires in 12/02 and 
landlord does not wish to renew.  Embassy team began an 
exhaustive search for a new Consulate site for Adana in 
2000/2001 with no success.  The commercial real estate market 
in Adana cannot meet our physical security standards for this 
type facility.  A possible solution we explored using space 
as a tenant in a wing of the Hilton Hotel reconstructed to 
DOS standards recently disappeared. We continue to experience 
difficulty finding options to relocate our Consulate in 
secure offices. 
PEARSON