VZCZCXYZ0006
PP RUEHWEB

DE RUEHAK #1512 2931612
ZNR UUUUU ZZH (CCY ADC841AA MSI1787-695)
P 201612Z OCT 09
FM AMEMBASSY ANKARA
TO SECSTATE WASHDC PRIORITY 1012

UNCLAS ANKARA 001512 
 
SENSITIVE 
SIPDIS 
C O R R E C T E D COPY CAPTION 
DEPARTMENT FOR DRL/ILCSR MMITTELHAUSER 
 
E.O. 12958: N/A 
TAGS: PGOV ELAB TU
SUBJECT: LABOR UPSET THAT GOT WILL USE UNEMPLOYMENT FUNDS 
FOR INFRASTRUCTURE PROJECTS 
 
REF: A. ANKARA 1475 
     ¶B. ANKARA 1468 
 
¶1. (U) Summary.  The Government of Turkey passed a law last 
August that will allow it to dip into a fund for unemployment 
insurance and transfer payments for "infrastructure 
development" projects, primarily in the Southeast.  The law 
is unpopular with labor unionists because while the fund is 
not public and is mostly made up of employee and employer 
contributions, it is being used by the GOT as an unofficial 
line of credit.  The GOT's need to draw on this low-hanging 
fruit may be a sign that they are running out of public 
sources to spend their way into pre-election favor.  End 
Summary. 
 
¶2. (U) On August 17, President Gul approved a law which, 
among other things, will permit the government to use 75 
percent of the profits turned over by the unemployment 
insurance fund in 2009 to put towards "infrastructure 
investment" projects, predominantly in the southeast of 
Turkey (such as the Guneydogu Anadolu Kalkinma Projesi, or 
GAP).  According to the Ministry of Finance, this translates 
into a loan of TL 4.5 billion (approximately $3.1 billion, at 
today's rates).  The law stipulates that 75 percent of the 
sum will be repaid in 2010, and the remaining 25 percent will 
be repaid over 2011-2012.  Each year's market rates will 
determine the interest rate for repayment of the sum. 
 
¶3. (U) This law has generally upset labor confederation 
officials.  Labor Attache met with the heads of the Turk-Is, 
Hak-Is, TESK and DISK confederations to discuss the law.  The 
confederations said they consulted with the GOT to express 
their concerns about the law when it was being considered, 
but that they were unable to secure amendments to the draft 
that would have addressed those concerns.  The confederations 
agreed among themselves that the new law is a salient issue 
because the fund itself is not public.  The fund was created 
by contributions from workers (25 percent), employers (50 
percent) and the state (25 percent) with the purpose of 
helping people when they are unemployed.  However, with 
singlehanded passage of the law -- and without taking unions' 
wishes into consideration -- it is being handled by the 
government as a public fund that can be used for short-term 
fiscal relief with no accountability. 
 
¶4. (U) In addition, since the purpose of the fund is to help 
those who are unemployed, the confederations are concerned 
that the GOT's decision to put the money towards 
"infrastructure investment" projects would not target the 
beneficiaries for which the fund was created.  When Labor 
Attache met with Is-Kur, the State Employment office, its 
director assured her that the projects that were to be 
targeted by these funds were supposed to generate employment 
in the GAP area.  The State Planning Office of the Prime 
Ministry further elaborated that the GAP region will have 
prominence, but the East, North, and Eastern Black Sea 
Development Projects also will be considered. 
 
¶5. (SBU) The TESK confederation president said he was so 
disappointed in the law that TESK was going to approach 
like-minded parliamentary representatives from the Republican 
People's Party (CHP) to see if they would agree to approach 
the Constitutional Court to review the law and possibly 
strike it down. 
 
¶6. (U) Comment.  While the State Planning Office of the Prime 
Ministry said that 2.64 million TL has been withdrawn 
already, no projects have been identified to receive funding. 
 According to the law, the funds to be used will have to be 
appropriated by the end of this calendar year, and unused 
funds must be returned.  Media sources have speculated that 
the GOT is trying to use the money to further its goals for 
the Democratic Opening initiative (reftels), or possibly to 
influence public opinion -- especially in the Southeast -- in 
the run-up to possible early elections in 2010. 
 
JEFFREY 
 
           "Visit Ankara's Classified Web Site at http://www.intelink.s 
gov.gov/wiki/Portal:Turkey"