VZCZCXYZ0000
RR RUEHWEB

DE RUEHAK #1033/01 1221452
ZNR UUUUU ZZH
R 021452Z MAY 07
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 1931
INFO RUEHIT/AMCONSUL ISTANBUL 2624
RUEHJM/AMCONSUL JERUSALEM 0293
RUEHTV/AMEMBASSY TEL AVIV 0133

UNCLAS ANKARA 001033 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
EEB ALSO FOR A/S DAN SULLIVAN 
NEA FOR FRONT OFFICE; NEA/IPA 
NSC FOR ABRAMS/DORAN/WATERS 
PASS USAID FOR KUNDER/MCCLOUD/BORODIN 
 
E.O. 12958: N/A 
TAGS: ECON EINV EAID KWBG BEXP TU
SUBJECT:  TURKISH NEXT STEPS ON EREZ ZONE 
 
REF:  JERUSALEM 717 
 
SENSITIVE BUT UNCLASSIFIED. 
 
¶1.  (SBU)  Summary.  In a May 1 meeting, Guven Sak, the brains 
behind the Turkish business association TOBB's effort to develop the 
Erez industrial zone in northern Gaza, described his planned next 
steps.  Consonant with reftel reporting, Sak believes that a 
security arrangement covering movement of goods is key.  Once this 
is accomplished, he believes it will be easier to obtain Palestinian 
business and government support and garner investor interest.  The 
USG could consider helping the initiative by 1) supporting agreement 
on security arrangements, 2) offering advice on how to navigate the 
Palestinian angle, and 3) supporting investor recruitment in 
cooperation with the private sector, including the U.S. Chamber of 
Commerce.  End Summary. 
 
¶2.  (SBU)  Sak will go to Tel Aviv May 7 to give a presentation at a 
dinner hosted by the Israeli Manufacturers Association, TOBB's 
Israeli partner.  On the 8th, Turkish Ambassador Namik Tan has 
arranged a meeting with MOD advisor Haggai Alon to discuss the 
security agreement.  Sak understands from Tan that Ambassador Jones 
may also attend this meeting (nfi).  On the 8th, he meets with MOD 
official Amos Gilad, Palestine Investment Fund Director Muhammad 
Mustafa, and Former PA Industry Minister Mazen Sinokrot -- who Sak 
says is a key Palestinian supporter.  He also hopes to see Saeb 
Erekat, and may also meet DPM Peres to discuss a proposal made by 
Peres for Turkish-Israeli cooperation to develop an industrial zone 
in southern Lebanon. 
 
Security Agreement 
------------------ 
 
¶3.  (SBU)  Sak's priority is to make substantial progress on an 
agreement covering security and movement of goods between the zone 
and Israel.  He said he had been exchanging ideas with Gilad in 
writing.  Sak is arguing that traditional Israeli reliance on 
security checks of trucks at the border will not work and that a 
"new security concept" is necessary.  This new concept would involve 
surveillance and monitoring within the enclosed border zone, 
including by trusted third parties (such as a foreign security firm) 
trained by Israelis.  He thinks this would give deeper protection 
than border checks and ease the flow of goods.  He said that Israeli 
Manufacturing Association official Dan Katarivas had recently 
visited Ankara and was helping lobby Israeli officials, like Deputy 
Defense Minister Sneh, on the concept.  Uncertainties about the 
future of Minister Peretz (another supporter) are a complicating 
factor in getting an agreement. 
 
Palestinian Support 
------------------- 
 
¶4.  (SBU)  Sak said he recognized that TOBB had not done a good job 
selling the project to the Palestinian business community.  He plans 
to begin rectifying that by hiring locally-based staff and opening 
offices in East Jerusalem and Gaza.  He has hired former Free Zones 
Authority head Nasser Jaber (who he described as a technocrat booted 
by Hamas) for the Jerusalem office and is working with Palestinian 
contractor Abu Shahla (phonetic) to find space in Gaza.  He said he 
agrees that Palestinian businesses should be partners in zone 
projects, but admitted that those opportunities had not been clear. 
Once he has the staff in place, he plans to market the project 
actively, including by holding a "town meeting" in Gaza. 
 
¶5.  (SBU)  On the concession agreement, Sak said he had raised with 
the PIF's Sami Aburosa the idea of the Free Zones Authority (PIEFZA) 
delegating licensing authority to the PIF.  He said that Mazen 
Sinokrot, a member of the PIF board who has good relations with 
Hamas, had also suggested this and could be helpful. 
 
Investor Marketing 
------------------ 
 
¶6.  (SBU)  Finally, Sak is thinking ahead to the next stage of 
recruiting investors.  He plans to approach representatives of the 
"Chicago Ten" interfaith group of businesspeople, who had previously 
shown an interest in the project.  Following up on the April meeting 
between TOBB President Hisarciklioglu and A/S Sullivan in 
Washington, Sak said he had nearly finalized a letter from 
Hisarciklioglu and his Israeli and Palestinian counterparts inviting 
the U.S. Chamber of Commerce to become an observer to the Ankara 
Forum.  He said he had been in touch with Chamber officials, who 
indicated their readiness to be supportive. 
 
Comment:  Possible USG Support 
 
------------------------------ 
 
¶7.  (SBU)  Sak is results-oriented and can be expected to get done a 
lot of what he plans to do.  His comments seem to address the points 
raised in reftel.  (Sak said he had heard about ConGen Jerusalem's 
inquiries and appreciated the interest.)  Based on our meeting with 
Sak and reftel, following are some ideas from our perspective about 
how the USG could support this initiative. 
 
-- Advice on how to secure Palestinian business community support. 
Sak said that the more he learns the less he understands about 
Palestinian politics.  He understands that there may be factions and 
groups that he has to bring on board of which he is not even aware. 
He is getting some advice from Israelis, but is not sure how 
reliable it is.  Some objective advice on how to navigate 
Palestinian politics and the Palestinian business community would 
probably be useful.  Perhaps there is a US-based Palestinian or 
business association with Palestinian ties that we could recommend. 
 
-- Support for a security agreement with Israel.  Sak said these 
discussions are not yet at a critical point.  If they come to such a 
point, Sak said he may ask for U.S. help and expertise to weigh in 
with Defense Ministry or other Israeli decisionmakers. 
 
-- Marketing to investors.  Sak said the Turkish government would 
provide export credits to help Turkish businesses transfer capital 
goods to Gaza.  The USG could consider making similar support 
available to U.S. investors, including Exim and OPIC support.  Post 
urges that Department consider this and be in touch with Exim and 
OPIC, as appropriate.  In addition, the U.S. Chamber's network 
should be valuable in reaching out to potential investors. 
Wilson