Identifier
Created
Classification
Origin
03ANKARA404
2003-01-16 10:56:00
SECRET//NOFORN
Embassy Ankara
Cable title:  

SCENESETTER FOR GENERAL RICHARD MYERS, CHAIRMAN,

Tags:  PREL ECON MARR MOPS IZ TU 
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S E C R E T SECTION 01 OF 05 ANKARA 000404 

SIPDIS


NOFORN


E.O. 12958: DECL: 01/16/2013
TAGS: PREL ECON MARR MOPS IZ TU
SUBJECT: SCENESETTER FOR GENERAL RICHARD MYERS, CHAIRMAN,
JOINT CHIEFS OF STAFF VISIT TO TURKEY: DOMESTIC AND
REGIONAL POLITICAL ISSUES, ECONOMIC SITUATION, AND SECURITY
ASSISTANCE

(U) Classified by Ambassador Pearson, reason 1.5b/d.


---------
Summary
---------


S E C R E T SECTION 01 OF 05 ANKARA 000404

SIPDIS


NOFORN


E.O. 12958: DECL: 01/16/2013
TAGS: PREL ECON MARR MOPS IZ TU
SUBJECT: SCENESETTER FOR GENERAL RICHARD MYERS, CHAIRMAN,
JOINT CHIEFS OF STAFF VISIT TO TURKEY: DOMESTIC AND
REGIONAL POLITICAL ISSUES, ECONOMIC SITUATION, AND SECURITY
ASSISTANCE

(U) Classified by Ambassador Pearson, reason 1.5b/d.


--------------
Summary
--------------



1. (S/NF) Your visit comes at a critical time in preparing
for potential Iraqi operations. Site surveys began on 14 Jan

03. EUCOM/TGS military-to-military consultations reconvened
on 3 and 13 Jan 03 respectively. Based on a 14 Jan 03 TGS
request, a small CENTCOM/EUCOM planning team will soon arrive
in Ankara to begin preplanning for land force operations with
two US brigades. We have reported that the TGS and MFA are
working to speed site preparation tasks by finding a way to
approve these tasks without Parliamentary vote. Asked about
possible Turkish support for a US-led Iraq operation, most
Turks oppose. However, most Turkish observers feel Turkey
will have to support its strategic partner, but fear war will
have heavy economic consequences for Turkey and would split
up Iraq or at least lead to instability. Your discussion
with the CHOD can express appreciation for recent positive
indicators as well as reinforce the need to make timely
government decisions for Turkish commitment to support US
military operations, if required. The Turkish political
landscape has changed significantly as a result of national
elections, but in ways that likely do not portend serious
change in Turkey,s commitment to our bilateral relationship.
Market and public opinion have treated the sweeping AKP
victory on 3 Nov 02 with guarded optimism, seeing it as an
opportunity to overcome years of weak coalitions, entrenched
party interests, and economic mismanagement. In terms of
foreign policy, Turkey remains committed to broad strategic
partnership with the US and other NATO allies, and remains a
strong supporter in the Global War on Terror. Turkey is
completing its well executed ISAF command, and is in
multilateral talks to complete final agreements on leadership

transition for ISAF III (combined German-Dutch effort).
There is concern in Turkey about the 12 Dec 02 European Union
summit membership decision, and the resultant delay for
Turkish accession. Likewise, the certain EU accession offer
to Cyprus causes great concern in Turkey, which sees itself
as the guarantor of the Turkish-speaking population on
Cyprus. We are continuing our effort to produce agreement in
a fair settlement, but TGS reportedly has some security
concerns. There have been positive developments on the
economic front, especially in reducing the inflation rate and
beginning to stimulate growth, but the economy remains weak
and Turkey's huge debt burden is a source of great
vulnerability. We are trying to reinforce with all our
senior counterparts the need for Turkey to stick to its
economic reform path. The combined economic weakness and
potential military operations in Iraq have produced an
expectation that the US will guarantee the survival of the
Turkish economy and work to meet Turkey,s perceived military
modernization needs by providing a large assistance package.
Your visit provides the opportunity to underline the breadth
of our relationship, at the same time focusing on ways to
resolve mutual concerns on several major operational
challenges. End summary.


--------------
Political Overview - The Domestic Scene
--------------



2. (C) Ruling AK Party has been able to pass constitutional
and legal changes to strengthen democracy and restore AK
leader Erdogan's political rights (stripped by the courts in
1999 for his alleged criminal incitement of racial/religious
enmity -- a move widely understood as a political effort to
keep Erdogan on the sidelines) and allow him to become prime
minister this spring. With a Parliamentary majority of 363
of 550 seats, AK is determined to press for fundamental and
much-needed changes in the way political and economic life is
conducted and ordered in Turkey. Under the formal leadership
of PM Abdullah Gul, both a democratic reformer and devout
Muslim, the AK Government has made Turkey's EU membership bid
and economic reform its top priorities. The new GOT is also
insisting on democratizing changes designed to accord
official respect not only to secularist elites, but also to
more conservative and other heretofore "undesirable" elements
(i.e., the religiously pious) long relegated to the
political, social, and economic sidelines.


--------------
Political Overview -- The Regional Scene
--------------



3. (S) Several pillars of Turkish regional policy in recent
years--close strategic ties to Israel, working relationships
with the KDP and PUK in northern Iraq, and resistance to a
breakthrough on Cyprus negotiations, have come under stress
in the last twelve months. Continuing bloodshed in Israel
and the Palestinian Authority has frayed the edges of the
Israeli-Turkish strategic partnership somewhat, without
forcing a fundamental shift of policy. Concern over
increasing autonomy and institutionalization of Iraq,s
northern Kurdish forces led to very sharp exchanges between
KDP leader Barzani and Turkish officials, and GOT relations
with the KDP were tense, although Barzani,s 3 Jan 03 visit
here re-established cooperative tone to the relationship.
Turkish relations with the PUK are relatively good. Anxiety
over the prospective acceptance of Cyprus into the EU--with
or without a settlement with Turkish Cypriots--had led to
talk (now dropped) of Turkey,s annexing northern Cyprus, a
move which would create a serious divide not just with Greece
and the Greek-controlled Cypriot government, but with the EU
itself. The new UNSYG proposal for Cyprus, submitted to both
sides on 11 Nov 02, calls for two states with one
international identity; this has generated significant
interest. We are continuing to work to produce a settlement,
and many Turks tells us we have never been closer. The TGS
can help get a deal if they are satisfied on security
questions. Continuing conflict in northern Georgia is
another source of regional concern, with both US and Russian
military activities in or near Georgia dramatically
increasing in the past year. Relationships with Iran and
Syria, though generally less tense than during the 1990,s
due in large part to the decline of the PKK, remain cool;
Turkish leaders are wary of Iranian attempts to undermine
secular rule and Syrian positions on water rights, among
other issues.


--------------
Iraq
--------------



4. (S) Site survey modus operandi was signed on 10 Jan 03,
site survey teams arrived in Turkey and started site survey
operations on 13 and 14 Jan 03 respectively. Recent
EUCOM/CENTCOM meetings with TGS to conduct mil-to-mil
planning consultations for Iraq operations have taken place
on 3 and 13 Jan 03 respectively. Given we are just beginning
site survey operations, progress continues to be made on many
operational issues, with the significant exception of land
forces operations. However, as a result of continuous
political and military consultations, the TGS J3 told us on
14 Jan 03 that the CHOD Gen Ozkok had been authorized by
Prime Minister Gul to have the TGS J3 receive a small (3-6
person) US planning team to come to Ankara to do
&preplanning of land operations with two US brigades.8 TGS
J3 emphasized that this must be an integrated operational
planning effort by US land, US SOF, and Turkish land forces
(Turkish forces deployed to prevent mass migration) that
would operate in Northern Iraq. (EUCOM HQ is working this
tasking, and we expect a CENTCOM/EUCOM team to arrive in
Ankara soon.) Additionally, we received strong reporting on
14 Jan 03 that the TGS and MFA are working on a way to
expedite site preparations that would not/not require
Parliamentary approval.



5. (S) With respect to requests for coalition operations,
there has been no change in TGS/GOT position that only US
forces will be allowed in Turkey. In particular, TGS
leadership reiterated during 14 Jan 03 mil-to-mil that UK
forces (including air and SOF forces) would not be allowed in
Turkey. Question was asked about UK over flight (thinking in
terms of air support originating outside of Turkey) and
received the same negative reply. UK MOD and permanent MOD
Under-Secretary visit with TGS last week reportedly did not
go well. Although UK MOD reportedly is in the process of
formally requesting to begin bilateral UK/TU mil-to-mil
consultations, our sense is that this request will not be
approved anytime soon.



6. (S) Gen Ozkok leaned hard on compensation during his
Washington meetings in November 2002. He saw this as the key
to selling full cooperation to the politicians, who will need
to convince the people that cooperation will not harm
Turkey,s interests as much as non-cooperation. There have
been several high level US/TU economic meetings to discuss
size and structure of economic assistance, stressing that the
purpose of any US assistance would be to get Turkey over an
economic shock caused by any operation. With full Turkish
support, that shock will hopefully be brief and take us into
a situation with much brighter prospects for Turkey,
including reconstruction contracts and increased trade with a
friendlier administration in Baghdad, increased long-term
tourism, and the prospect of lower oil costs. The Turkish
government continues to negotiate for the largest possible
economic support package available. You are likely to hear
again from the CHOD on this issue.



7. (S) The MFA has outlined a key dilemma for the Turkish
decision-makers. On the one hand, they agree with us that
the best chance for avoiding war is to demonstrate coalition
preparedness to disarm Saddam forcibly if he does not do it
on his own. That argues for allowing US (and possibly other
coalition) forces into Turkey to send a strong signal to the
Baghdad regime. On the other hand, if this approach succeeds
and Saddam,s &change of heart8 constitutes a change of
regime and he is allowed to stay in power, Turkey foresees a
possible sharp downturn in relations with Iraq as well as
much of the Arab world.



8. (S) Nevertheless, at the end of the day, most Turks,
official and ordinary, realize that Turkey really has no
choice. Turkey will have to cooperate to some extent with
the Americans ) with or without another UNSCR. The
alternative would not only put them on the other side of the
fence from their key strategic partner, but they would also
be surrendering US economic protection and protection of
their &red lines8 (no Kurdish state, no Kurdish funny
business (seizing Kirkuk and Mosul),no refugees, no
subjugation of the Turkmen, and no ability of the PKK to take
advantage of the war) to foreigners. Turkey wants to work
with the US to shape Iraq and the Middle East, and they
realize that if you don,t play the game, you don,t make the
rules. In the end, the GOT will have to use this
&nationalist8 argument to gain parliamentary approval for
full support. The PM assured Amb Pearson that he and the AK
Party leadership were not the problem. The PM told the
Ambassador that he needed at least two more weeks to prove to
his constituency that he had done all he could to stop the
possibility of war. Once he could show that war was
inevitable, he would be able to deliver support for the US.
He claimed that on his recent Middle East trip he told his
Arab interlocutors "if there is war, we should all join the
coalition." The PM said he was "shocked" to read reports of
US frustration and anger with Turkey, and explained that he
needed time to persuade the Turkish Parliament to support the
US requests.


--------------
Economic Overview
--------------



9. (C) Although 18 months of economic reform have laid much
of the foundation for greater financial stability and growth,
Turkey's enormous debt burden and structural weaknesses mean
the economy remains extremely vulnerable. The incoming
government has an opportunity to move Turkey away from the
financial precipice on which it has been perched for the past
two years, but to do so it must move quickly to bolster
market confidence, support the battle against inflation, and
implement further reforms needed to generate growth.

10. (C) Financial markets' initial reaction to the AK
election victory has been extremely positive, with interest
rates on treasury bills falling from 65 to 53 percent and the
stock market picking up huge gains. This reaction is based
on the market hope that (a) a one-party government will be
able to move much more aggressively to implement reforms, and
(b) AK means it when it says it will continue to work with
the IMF to implement sound economic policies. This initial
positive view has been fading, and the markets, IMF and we
are seeking renewed implementation of reforms because there
are signals AK is reverting to the old way of doing business.



11. (C) Turkey believes that we cannot divorce the security
cooperation program from broader concepts of economic
support/strategic alliance. The Turkish view is that
modernization and related programs are not just business, but
are critical investments in the common strategic interest.
Turkish expectations about US economic support remain high.
In addition to continued financing, many Turks expect the US
to open its textile markets, direct more US investment to
Turkey, and promote American tourism to Turkey. Through the
Economic Partnership Commission, we have offered Qualifying
Industrial Zones (still needs congressional approval),and
have been pressing hard for improvements in the investment
environment. We also continue to stress our strong support
for the Baku-Tbilisi-Ceyhan and Shah Deniz pipelines, key
elements of the US-Turkish effort to promote an East-West
energy corridor through Turkey. Turks worry that a US
operation in Iraq would hurt their already-weak economy,
particularly if it affects the summer tourism season, and
will expect significant US economic support/compensation



12. (C) The consistent message that the U.S., EU, IMF, and
World Bank are giving the AK government is: further economic
assistance depends on your complete implementation of the
economic reform program. The Turks face billions of dollars
of debt service payments each month, and raising new debt to
pay off this debt service depends completely on market
confidence. Markets want to see the reforms continue. Thus,
if AK doesn't follow through with reforms, no amount of aid
from us, IMF, World Bank or EU will help the Turks escape the
specter of a debt "event." The Turks received a recent scare
with weak market demand for their 7 Jan 03 debt auctions, but
continual reminder of full implementation of economic reforms
is still needed.


--------------
FMF Debt Relief
--------------



13. (C) FMF debt relief (and re-initiating of an annual FMF
program) remains a top TGS priority and TGS officials may
raise the issue within the context of ways in which the USG
can assist Turkey.


--------------
Security Assistance/Direct Commercial Sales
--------------



14. (C) Overview: The continued flux in the economic
situation has severely affected the long-range acquisition of
many of the major defense procurement priorities. Although
there has been recent success regarding the AEW&C aircraft,
the result on many programs is that timelines have been
extended and decisions forestalled due to the negative
political impact major arms acquisitions may present. Among
the most important programs still in the balance is the ATAK
helicopter sale.



15. (C) Boeing and AEW&C: On 4 Jun 02, Boeing and Turkey
signed a USD 1 billion contract to provide Turkey four 737
Airborne Early Warning and Control aircraft. Boeing worked
hard with SSM, the Government of Turkey,s acquisition
agency, to meet all contract provisos to achieve a 4 Dec 02
contract effectivity date; however, the lack of approval of
certain contract provisos caused delay. TGS, the
Undersecretariat of Defense Industries (SSM) and the TUAF are
concerned about recent provisos that were placed on Boeing,s
export licenses. DSCA chief, Lt Gen Walters, got an earful
from TAFC, TGS and SSM during his Nov 02 visit here and
promised to get back to the Turks on how quickly the USG
could decide on the provisos. We expect USG response on
provisos by end of Jan 03. Meanwhile Boeing and SSM have
extended the 4 Dec effectivity date to 4 Feb 03. US
Electronic Systems Center, provided SSM a letter of offer and
acceptance 9 Aug 02 for the $27 million dollar government
furnished equipment FMS case supporting Boeing,s contract.
ESC and SSM worked all LOA points until 10 Oct 02. SSM
completed evaluation of the LOA and signed on 11 Nov 02.



16. (U) ATAK Helicopter: The ATAK Helicopter Modernization
Program is currently TGS, #1 security assistance priority.
In Oct 02 TGS expressed significant disenchantment with Bell
Textron,s pricing submissions. The pricing effort is
considered high risk from Bell,s perspective due to
technology transfer, integration risk, Turkish work share,
and local content (terms and conditions). SSM has requested
a new revised price submission and has also started active
price negotiations with a Kamov (Russia)/IAI (Israeli)
consortium. During the week of 18-22 Nov 02, Lt Gen Walters
from DSCA, Navy IPO, and Bell Helicopter presented TGS with
two FMS and two DCS options for consideration. TGS, MND, and
SSM continue to analyze these proposals. TGS J5 indicated in
a 30 Dec 02 meeting that operational issues have precluded
presentation of these proposals to TGS leadership.



17. (C) EX-IM Bank Helicopter Guarantee: Senior MFA and TGS
officials have been disappointed with Congress' decision not
to support an extension of the EX-IM loan program to enable
the Turkish Navy to purchase additional Sikorsky helicopters.
Extending the program is one of TGS's highest priorities
(after FMF debt forgiveness and reinstatement of FMF
financing) and the Turks are still looking to the USG to
deliver on its pledge to support an extension of the program
as voiced at the High-Level Defense Group (HLDG) meeting in
Istanbul (Apr 02). According to recent information, the EX-IM
board will now vote on extending the loan program on 16 Jan
03, and we may have a positive resolution on this issue by
the time you arrive.



18. (C) JSF: Turkey and SSM signed an MOU on the JSF
program in Washington 11 Jul 02. The identification and
accompanying official announcement of Turkey,s JSF National
Deputy to the JSF Program Office in the US will continue to
facilitate Turkish participation in JSF program. If the
subject comes up in the your meetings with TGS officials, we
recommend that you congratulate Turkey on its decision to
become a level-three partner and reiterate our commitment to
working closely with Turkey over the years to develop this
new stage of our strategic partnership.



19. (C) UAV: Unmanned Aerial Vehicle. SSM has received the
responses to the initial request for proposal from both
General Atomics Aviation Systems Incorporated (GA ASI) and
Israeli Aviation Industries (IAI). These proposals are
currently under evaluation and down-selection was initially
expected to occur by the end of Nov 03. The actual selection
process will not occur until early in 03. Export licensing
and technology transfer for local content and work share
opportunities are key variables in their selection process.


--------------
Closing
--------------



20. (U) We look forward to your visit, and would be glad to
answer any other questions you might have after review of the
issues.
PEARSON