UNCLAS SECTION 01 OF 05 ANKARA 009080

SIPDIS


SENSITIVE


STATE FOR THE SENIOR ADVISOR TO PM A/S, PM/B, AND EUR/SE
DOD FOR OSD/PA&E, OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP,
OASD/ISA/NESA, OASD/ISA/BTF


E.O. 12958: N/A
TAGS: MCAP PREL TU NATO
SUBJECT: 2003 REPORT TO CONGRESS ON TURKISH CONTRIBUTIONS
TO THE COMMON DEFENSE


REF: STATE 219916



1. This is Embassy Ankara's submission to the 2002 Report to
Congress on Allied Contributions to the Common Defense.


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General Assessment
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2. (SBU) Turkey experienced a major political change in 2002
when the governing coalition of Prime Minister Ecevit began
to dissolve in July, and November general elections brought
to power the Islam-influenced AK Party in a majority (vice
coalition) government. The outcome of the election was
viewed as a public outcry against the often corrupt and
ineffective parties that have rotated through government
since the late 80's. The AK Party's defense and security
policies are still somewhat unclear, but the Turkish General
Staff (TGS) is certain to maintain its significant influence
in the National Security Council and provide consistency to
Turkey's defense and security policies.



3. (SBU) Throughout the political debate Turkey experienced
in the last half of 2002, the GOT continued to negotiate a
participation agreement in the EU's ESDP in exchange for
assured access to NATO planning assets. The negotiations
culminated in an agreement in December that allows NATO and
the EU to proceed with "Berlin Plus" arrangements. Turkey
has committed forces to the ESDP's Headline Goal and
encouraged the "Turkish Republic of Northern Cyprus" to
continue UN-brokered negotiations in hopes of resolving the
Cyprus problem to improve Turkey-Greece/Turkey-EU relations
and further its goal of becoming an EU member. In December
2002, the EU committed to reviewing Turkey's compliance with
the Copenhagen Criteria in December 2004 in order to begin
accession negotiations thereafter.



4. (U) The Turkish General Staff (TGS) continues to support a
military modernization program that should increase the
capacity of Turkey to meet its NATO responsibilities.
However, the GOT's ability to finance its previously
announced 30-year, USD 150 billion program remains seriously

hampered by the government's precarious financial situation,
particularly an enormous public debt load that siphons off
most revenues. Under the best of circumstances, maintaining
solvency will require the government to live within a very
tight budget for the next several years. This has limited
and will continue to limit funds available for new military
spending. If Turkey is able to achieve growth of 5 percent
or more beginning in 2003, there should be room for some
minor increases in defense spending, but the military will
face competition for budget resources from social programs,
which are on the top of the new government's agenda.
Turkey's 2002 National Defense Budget was reportedly $4.7
billion, based on an exchange rate of $1=1.65 million Turkish
Lira, representing 8.5 percent of the national budget and 3
percent of GNP. (The defense budgets in 2000 and 2001 were
$6.6 billion and $4.3 billion respectively.) Approximately
25 percent of the defense budget is allocated for personnel
expenditures. The Defense Industry Support Fund, which is
independent of the defense budget (and not made public), was
expected to reach $.7-$1 billion when including funds carried
over from 2001. Of that amount 90 percent was intended for
procurement projects.



5. (U) In this fiscal environment, TGS has continued its
indefinite postponement of 32 projects, including 20
utility/heavy-lift helicopters and the Turkish main battle
tank program, which was planned to replace Turkey's legacy
tank fleet. TGS is now focusing on upgrading its M-60 fleet
and has awarded the modernization contract to the ISRAELi IMI
consortium. The Turkish Attack and Reconnaissance Helicopter
(ATAK) direct commercial sale (DCS) project has been delayed
but is still in the contract negotiating phase. Although US
Bell-Textron was selected as the primary candidate for the
project, the negotiations were stalled at year's end. The
GOT started formal negotiations with the secondary contractor
(the "Kamov" ISRAELi/Russian Defense Industry consortium) in

2002. The Airborne Early Warning and Control (AEW&C) DCS
project has experienced delays, but the contract has been has
been awarded, the US Congress has agreed to the contract, and
the project is expected to proceed successfully. The GOT has
received and is evaluating contractor proposals to procure
eight strategic unmanned aerial vehicles (UAV) but is
expected to defer announcing down selection or awarding the
UAV contract until well into FY03.



6. (U) On July 11, 2002 Turkey and the US signed a $175
million Memorandum of Understanding for Turkish partnership
in the Joint Strike Fighter (JSF) Systems Development and
Demonstration (SDD) Phase. As a Level III partner, Turkey
will participate with the United Kingdom, Italy, Netherlands,
Canada, Denmark, and Norway. Over the next 10 years of the
SDD phase, Turkey's investment will enable it to share in the
technological exchange that marks this program as the largest
investment in research and development that Turkey has made
to date.



7. (U) Throughout the reporting period, the GOT continued its
support of UN and NATO humanitarian and peacekeeping efforts.
Furthermore, the Turkish-American "strategic partnership"
dramatically broadened and deepened in 2002, beginning with
Turkey's agreement to take over from the UK as the lead of
the International Security Assistance Force (ISAF) in
Afghanistan and continuing with the ongoing discussions over
the future of Iraq.



8. (U) Turkey officially took over leadership of ISAF in June
for a six-month term due to expire in mid-December and has
since agreed to extend its leadership until mid-February 2003
to give Germany and the Netherlands time to prepare for the
role. Ankara continues to place emphasis on stability in the
Caucasus and central Asia, committing approximately $30
million over the last five years to upgrading the Georgian
military's ability to maintain control of its territories.
TGS continues to coordinate security assistance to the
Caucasus with the US through the OSD-led Caucasus Working
Group.



9. (SBU) Turkey's contributions to the war on terrorism have
been substantial. The GOT's long-time leadership in the area
of counterterrorism and consistent support of US efforts
since 9/11 have underscored its role as one of the United
States' key allies. Its strategic location and distinction
as the only Muslim NATO Ally have further demonstrated
Turkey's importance to the US and NATO. Turkey has
participated actively in GWOT. In doing so, Muslim Turkey
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 troops 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 8,000 sorties
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.


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Direct Cost-Sharing
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10. (U) In accordance with current bilateral agreements, the
USG has not sought a direct GOT contribution toward the costs
associated with the stationing of US forces in Turkey.
However, Turkey significantly increased its security presence
at all US facilities for approximately four months following
9/11, and the Turkish National Police provided unmarked cars
at all US living quarters for a period of time.
Additionally, on September 11, 2002, the GOT significantly
increased force protection with additional military and
police presence.


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Indirect Cost-Sharing
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11. (U) Turkey continues to play a major role in Operation
Northern Watch (ONW), which is mandated to enforce the no-fly
zone over northern Iraq. Turkey's parliament renews its
legislative commitment to host ONW at Incirlik Air Base every
six months and remains a major ally, teamed with the US and
UK, in the critical UN-mandated mission. Despite repeated
Iraqi threats of retaliation against Turkey and significant
lost trade, the GOT remains a strong supporter of ONW. US
military aircraft do not pay landing fees in Turkey to land
at Turkish military air fields (estimated value: USD 2
million) but do pay to land at commercial airfields.



12. (U) Indirect cost-sharing in the form of foregone rent of
GOT-owned land and facilities used at no cost by the USG is
calculated as follows:


Office of Defense Cooperation, Ankara


-- Land (11,120 sq m of land valued at $18.30/sq m, based on
prevailing fair market value of land in that district) =
$216,113;


-- Prevailing fair market value of headquarters building
(5,500 sq m), motor pool and shop (620 sq m), and parking lot
(5,000 sq m) adjusted for inflation is $328,000/year.


US-utilized land at Incirlik Air Base (all buildings and
facilities are built and paid for by the USG):


-- 13,477,700 sq m at the fair market value of $6.47/sq m =
$87.201 million annually.


Total Foregone Rent of GOT-owned land/facilities =
$87,745,113/year.



13. (U) Forgone Tax/Customs revenue:


American military activities and personnel assigned to Turkey
are exempt from all income, corporate, stamp taxes and
customs duties. The estimated forgone revenue is calculated
as follows:


-- Turkey-wide PX/Commissary sales, valued at over $23.3
million annually, at an average VAT rate of 22 percent is
estimated to be $5.128 million annually;


--Forgone customs duties on personal property, personal
vehicles, supply equipment, weapons and munitions, military
vehicles, and local purchases at an average VAT rate of 18
percent is estimated to be in excess of $12.24 million
annually.


Total Foregone Tax/Customs = $17.368 million


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Grant Aid, Peacekeeping, Humanitarian Assistance, Current
Contingency Operations, Counterproliferation, and Nuclear
Threat Reduction
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14. (U) Because of its cultural, historic, and even familial
ties to the Balkans, Turkey continues to be a supporter of a
robust Western presence in the former Yugoslavia. Turkey
supports KFOR with a mechanized infantry battalion task force
of approximately 752 personnel. It has supported SFOR since
1996, currently with about 498 people in a mechanized
battalion task force, with one company of the task force
assigned to the security of SFOR headquarters. Turkey has
also assigned one frigate, three F-16 fighters, and one
minesweeping vessel that can be provided upon request for
support of SFOR and/or KFOR. In FYROM, there is a 40-person
Turkish national support element. Other Turkish involvement
in current peace operations include five observers in UNIKOM
(Kuwait), seven observers in UNIMOG (Georgia), 37 police
officers for IPTF (International Police Task Force in
Bosnia), and 18 observers for TIPH (Temporary International
Presence in Hebron), and ONW liaison officers. Turkey has
committed up to five thousand troops to the EU's rapid
reaction pool, including one mechanized brigade, one F-16
squadron, two C-130 or C-160 transport aircraft, two
frigates, one submarine, one support vessel, and one
amphibious ship.



15. (U) By far the GOT's most substantial contribution to
peacekeeping and humanitarian assistance in this reporting
period was its leadership of ISAF from June 2002 to
mid-February 2003, involving the commitment of nearly 1400
Turkish personnel and 150 vehicles to Afghanistan. The
Turkish General Staff (TGS) estimates that ISAF leadership
costs Turkey approximately $9 million dollars per month. In
addition to its ISAF leadership, Turkey played a leading role
in the training of the first national guard battalion and
donated uniforms and equipment for those 600 soldiers.
Turkey continues to coordinate closely with the USG in
providing additional training to the Afghan National Army.
On the humanitarian front, Afghan reconstruction projects
completed with Turkish assistance now total $2.8 million, and
the GOT has committed $1.5 million for 2003. $4.5 million
has been set aside for possible future use. Turkey is
focusing its reconstruction efforts in four areas:
healthcare, training, agriculture and gender issues projects,
such as those that address women's and children's issues.
Completed projects breakdown as follows:


-- $ 314,000 for medicine, medical supplies and equipment,
cash assistance to
hospitals;
-- $ 1,760,000 for training of doctors, diplomats, water
experts, teachers;
-- $ 200,000 for infrastructure (telephone network
installation);
-- $ 23,800 for baby food;
-- $ 608,936 cash to Afghanistan Reconstruction Trust Fund
(ARTF) and early support to
the Afghanistan Interim Authority Fund (AIAF).



16. (U) To pursue its goals of stability and westernization
in the region, Turkey provides military equipment, education
and training to personnel from Central Asia and the Caucasus,
especially Georgia, where it has committed over $30 million
dollars over the last five years. Some 30 Turkish military
advisors are in Georgia and have trained more than 400
Georgian special forces and border guards. TGS coordinates
with the US its assistance to the Caucasus and Kazakhstan
through the OSD-led Caucasus working group, which met three
times in 2002. In 2002 Turkey provided training/education at
various Turkish military institutions to 1200 guest military
personnel from some 30 countries. It has bilateral military
training, technical and scientific cooperation agreements
with almost 60 countries.



17. (U) Turkey has actively supported the US in pursuing the
adaptation of NATO to a post-Cold War world. Ankara has
expressed its support for the NATO Rapid Reaction Force,
niche capabilities, and missile defense. Its commitment to
the Partnership for Peace is evident in its Ankara PfP
Training Center, which has trained more than 2200 students
from 45 NATO, PfP and Mediterranean Dialogue countries in
courses ranging from "Peacekeeping Operations Management" to
"Refugee Relief." The GOT budget to support participants in
the PfP training center is approximately $150,000 per year.
During 2002, Turkey participated in 11 PfP or Spirit of PfP
exercises. Furthermore, TGS has invested substantial
resources into renovating its 3rd Corps Headquarters in
Istanbul to make it suitable for hosting a NATO High
Readiness Force (HRF) Headquarters. The Turks fully
supported NATO enlargement at Prague, particularly in
southeastern Europe.



18. (U) Turkey has launched a number of groundbreaking
regional cooperation mechanisms in southeastern Europe. It
continues to be an active participant in the South-East
European Cooperation Process (SEECP) and the numerous
initiatives that have emanated from it, including the South
Eastern Europe Brigade (SEEBRIG), an integrated infantry
brigade composed of units from Albania, Bulgaria, FYROM,
Greece, Italy, Romania, and Turkey, with the US and Slovenia
acting as observers. Turkey contributes a mechanized
infantry battalion, a reconnaissance company, an artillery
battery and some supporting units to SEEBRIG. In 1997-8,
Turkey conceived and nurtured the Multinational Peacekeeping
Force--Southeast Europe (MPFSEE), which operates the on-call
SEEBRIG. It was activated in 1999 under a Turkish commander.
In 2001, the GOT successfully brought together Russia,
Ukraine, Romania, and Bulgaria to establish the BLACKSEAFOR,
an on-call force comprising naval units of the Black Sea
littoral states.



19. (U) Turkey is a vigorous supporter of regional
counterproliferation cooperation. It is a member of every
major USG-endorsed arms control and counterproliferation
regime, including NPT (1969), BWC, (1974), Wassenaar (1996),
MTCR (1997), CWC (1997), CTBT (1999), NSG (2000), and
Australia Group (2000). Since 1999, the GOT has undertaken
the responsibility for the operation and maintenance of the
Belbasi Seismic Monitoring Station, an important data source
for the worldwide comprehensive test ban treaty (CTBT)
nuclear test-monitoring network. During 2002, the GOT
finalized a project to install USG-donated radiation
detectors at Turkish border crossings. The detectors are
intended to deter and, if necessary, interdict smugglers
trafficking in radioactive material that could be used by
terrorists or countries of proliferation concern to build
nuclear weapons.



20. (U) Since February 1999, TGS and the US Missile Defense
Agency have been cooperating on a joint missile defense
architectural study in anticipation of a developing tactical
ballistic missile threat against Turkey and it NATO Allies.
Turkey has consistently supported US objectives for pursuing
missile defense for the Alliance.


Point of Contact
--------------



21. (U) Point-of-contact for this report is Pamela Tremont,
Political-Military Affairs, PMA, tel: 90-312-455-5555 x 2525,
tremontpm@state.gov.
PEARSON