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 003942 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EINV ECON TU
SUBJECT: PARTICIPANTS POSITIVE ABOUT TURKEY'S POTENTIAL AT 
ANNUAL INVESTMENT MEETING 
 
¶1.  Summary: At the third annual meeting of Turkey's 
Investment Advisory Council, participants were generally 
optimistic about Turkey's current investment climate and its 
future potential.  Turkish PM Erdogan emphasized the GOT's 
commitment to making Turkey an attractive center for global 
investment while State Minister Babacan touted recent 
structural reforms as the basis for Turkey's stronger economy 
(or less vulnerable economy, or more attractive market for 
FDI). Turkey's Foreign Investor's Association agreed with the 
positive atmosphere portrayed in media reports and stated 
that, for the most part, foreign investors in Turkey are 
optimistic about future potential.  End summary. 
 
¶2.  The third meeting of the Turkish Investment Advisory 
Council (IAC) took place in Istanbul on June 28 - 29.  PM 
Erdogan, State Minister Ali Babacan, Finance Minister Kemal 
Unakitan, Trade and Industry Minister Ali Coskun, IMF Deputy 
Managing Director Anne Krueger, and representatives from the 
IMF, the World Bank, the European Investment Bank, and twenty 
multinational companies participated in the event. 
 
¶3.  According to press reports, the general mood of the 
meeting was relatively positive, with the participants 
praising the GOT's performance in realizing the commitments 
it made in previous IAC meetings.  Investor concerns focused 
on limited competition, judicial barriers, lack of IPR 
protection and the administrative barriers they face in 
Turkey.  As a result of the meeting, the participants issued 
a Declaration of Outcomes, which calls for the GOT to focus 
its efforts on increasing privatization and deregulation, 
improving research and development, innovation, and 
technology adoption and the use of quality standards, and 
deepening the financial market developments and efforts to 
reduce the informal economy.  In delivering the consensus 
findings of the investors, Citigroup Vice Chairman Michael 
Klein went out of his way to praise the GOT for holding the 
IAC, and for its accomplishments, saying "there are strong 
hands on the tiller."  Though there is no reason to doubt 
Klein,s sincerity, there may be some connection with 
Citigroup,s rumored interest in buying a bank in Turkey. 
 
¶4.  In his address to the council, PM Erdogan expressed the 
GOT's determination to complete the economic transformation 
it started.  He stressed the importance of the economic and 
political stability Turkey has achieved in recent years, 
which have mitigated the negative effects of short-term 
fluctuations in the economy.  Erdogan added that preparing a 
favorable investment environment and making Turkey an 
attractive center for global investment was a strategic 
target for the GOT. 
 
¶5.  State Minister Babacan stated that recent structural 
reforms and successful debt management have strengthened the 
Turkish economy and made it more resistant to external 
shocks.  He added that Turkey's international competitiveness 
has increased with the overall improvement in the economy and 
the GOT's 2006 FDI inflow forecast stands at between USD 13.5 
and 24.2 billion. 
 
¶6.  Mustafa Alper, Secretary General of the Foreign Investors 
Association, confirmed the press reports and said that 
overall the meeting was very positive and participants were 
pleased with the government's progress.  He added that even 
though Turkey's economy had been shaken by recent market 
fluctuations, investors generally consider them temporary and 
see Turkey's investment climate as healthy.  He mentioned, 
however, that in the margins of the meeting some participants 
expressed concern about the current political debate taking 
place in Turkey and its ability to affect the markets. 
Overall, though, investors remain optimistic about Turkey's 
potential, Alper said. 
 
¶7.  The participants who signed the IAC declaration are: 
 
Muhammed A. Alshaya           Alshaya, Kuwait 
Jacob A. Frenkel              American International Group, 
USA 
Paul Matthys                  Arcelor S.A., Luxembourg 
Jacques de Larosiere          BNP Paribas, France 
Charles Giancarlo             Cisco Systems, USA 
Michael Klein                 Citigroup Inc., USA 
Phillippe Varin               Corus Group, UK-Netherlands 
Paul N. Wright                Eldorado Gold Corp, Brazil 
Paolo Monferino               Fiat S.P.A., Italy 
Jacques Vincent               Groupe Danone, France 
Joong-Geol Kim                Hyundai Motor Co, South Korea 
Stef Wertheimer               ISCAR, Israel 
Hans-Joachim Koerber          Metro AG, Germany 
Yasuo Hayashi                 Mitsui, Japan 
Darryl Edwards                Nortel Networks Corp., Canada 
Johannes Feldmayer            Siemens AG, Germany 
Yoshimasa Ishii               Toyota Motor Corp, Japan 
Diego Beilacqua               Unilever N.V., Netherlands 
 
WILSON 
 
Visit Ankara's Classified Web Site at 
http://www.state.sgov.gov/p/eur/ankara/ 
 
WILSON