2004 REPORT TO CONGRESS ON TURKEY'S CONTRIBUTION

UNCLAS SECTION 01 OF 05 ANKARA 007649

SIPDIS


SENSITIVE


STATE FOR SENIOR ADVISOR TO THE 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
SUBJECT: 2004 REPORT TO CONGRESS ON TURKEY'S CONTRIBUTION
TO THE COMMON DEFENSE


REF: STATE 305999


(U) This message is Sensitive But Unclassified.



1. (U) This is Embassy Ankara's submission to the 2004 Report
to Congress on Allied Contributions to the Common Defense.


= = = = = = = = = =
General Assessment
= = = = = = = = = =



2. (SBU) In aiming to accelerate democratization, pursue its
EU candidacy, revive the economy and tackle chronic
corruption, the GOT adopted wide-ranging legislative reform
packages in January and July 2003. The reforms were designed
to: crack down on torture; expand freedom of expression,
association, and religion; and reduce the role of the
military in government. The July package included a number
of changes to the NSC, including: allowing for a civilian to
serve as NSC Secretary General; halving the number of regular
NSC meetings, from one per month to one every two months; and
limiting the NSC's authority to demand documents from other
government agencies. There was discussion in Parliament of
establishing greater transparency in the military budget
process, but no such legislation was adopted.



3. (SBU) The Turkish military 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 military modernization program remains
seriously hampered by the government's difficult financial
situation, particularly an enormous public debt load that
siphons off most revenue. Although the Turkish economy has
been on an improving trend through most of 2003, even under
the best of circumstances the government will have to live
within a very tight budget for several years to maintain
solvency. This has limited, and will continue to limit,
funds available for new military spending. Since Turkey is
poised to achieve real GNP growth of 5 percent in 2003, and
is well positioned to maintain a strong growth rate in 2004,
there may be room for some minor increases in force
modernization spending, particularly if savings are realized
from a shortened period of required military service.
Embassy calculates 2003 defense spending -- including
Gendarmerie and Coast Guard spending, which are not included
in the Defense Ministry budget -- to be $8.1 billion, based
on an exchange rate of $1=1.5 million Turkish Lira,
representing 8.3 percent of the national budget and 3.4
percent of GNP, approximately the same percentages as last
year. The $1.9 billion increase in defense spending over
2002 is partly attributable to a stronger lira.
Approximately 25 percent of the defense budget is allocated
for personnel expenditures. If the Defense Industry Support
Fund -- an off-budget item that is not made public -- were
included, total 2003 defense spending is reportedly on the
order of 4.5 percent of GNP, or about $10.7 billion.



4. (U) Turkey's eight-month leadership of ISAF ended in mid
February 2003, although Turkey continues to contribute 139
troops to ISAF, and in December offered three Blackhawk
helicopters that help NATO fulfill its ISAF statement of
requirements. Turkey has offered 750 troops, six fighter
aircraft and one frigate to the new NATO Response Force.



5. (SBU) In this fiscal environment, the Turkish military has
continued its indefinite postponement of a number of
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 continues to focus
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 is still in the contract negotiating phase.
Although US Bell-Textron was selected as the primary
candidate for the project, the negotiations continued at
year's end. The GOT continued to "negotiate" with the
secondary contractor (the "Kamov" Israeli/Russian Defense
Industry consortium) in 2003. The Airborne Early Warning and
Control (AEW&C) DCS project was finalized and became
effective in June. The GOT continues to evaluate contractor
proposals to procure eight strategic unmanned aerial vehicles
(UAV) but is expected to defer announcing down selection or
awarding the UAV contract.

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 the most highly invested 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.
Turkey has been a strong supporter of NATO enlargement, PfP,
the Mediterranean Dialogue and Berlin Plus.



8. (SBU) Ankara continues to place emphasis on stability in
the Caucasus and Central Asia. At the November 17 US-Turkey
Caucasus Working Group meeting the GOT and USG agreed to
several concrete programs of cooperation in Georgia and
Azerbaijan that should increase military capacity in those
countries and encourage security independence and a western
orientation.



9. (SBU) Turkey's contributions to the war on terrorism have
been substantial. 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.



10. (U) In Afghanistan, in addition to playing a lead role in
ISAF, Turkey provided two aerial refueling tankers in support
of Operation Enduring Freedom (OEF)-related missions in 2003,
allowed coalition forces to use Turkish facilities to base US
tankers and to transport humanitarian and other non-lethal
support to Afghanistan. Turkey continues to streamline
customs procedures for equipment used for OEF, granted
blanket permission for US OEF aircraft to operate in Turkish
airspace and granted permission for USAF tankers to fly out
of Incirlik to support regional air refueling operations.



11. (U) Turkey continued to play a major role in Operation
Northern Watch (ONW),which was mandated to enforce the
no-fly zone over northern Iraq until the mission ended with
the beginning of Operation Iraqi Freedom (OIF). Despite
repeated Iraqi threats of retaliation against Turkey and
significant lost trade, the GOT supported ONW. In the face
of overwhelming public and parliamentary opposition to OIF,
the GOT permitted overflight of combat aircraft for the
operation. Turkey has also facilitated the use of a resupply
route through Turkey to supply coalition forces in Iraq with
humanitarian, food and fuel products for Iraq. In October
2003, the Turkish Parliament voted to allow Turkish troops to
be deployed to Iraq in support of the Iraq stabilization
force. In consultation with the US, Turkey decided to
withdraw its offer of troops for the time being. The GOT
pledged $50 million for Iraqi reconstruction at the Madrid
Donors conference and has offered to train Iraqi police using
Turkish trainers.


= = = = = = = = = =
Direct Cost-Sharing
= = = = = = = = = =



12. (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, the US Office of Defense Cooperation in Ankara and
its support facilities operate on Turkish military bases and
enjoy Turkish military security. In addition, Turkey
increases its security presence at US facilities when the
terrorist threat is perceived to be increased.


= = = = = = = = = = =
Indirect Cost-Sharing
= = = = = = = = = = =

13. (U) US military aircraft do not pay landing fees in
Turkey to land at Turkish military airfields (estimated
value: USD 2 million) but do pay to land at commercial
airfields.

14. (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 $14.90/sq m, based on
prevailing fair market value of land in that district and
adjusted for inflation of 14.88%) = $190,309;


-- 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 $131,589/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 = $87.5
million per year.





15. (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 $25.9
million annually, at an average VAT rate of 22 percent is
estimated to be $5.7 million annually;


--Forgone customs duties on personal property, personal
vehicles, supply equipment, weapons and munitions, military
vehicles, and local purchases at an average rate of 18
percent is estimated to be in excess of $6.1 million
annually.


Total Foregone Tax/Customs = $11.8 million per year



16. (U) TOTAL INDIRECT COST SHARING = $101.32 million per year


= = = = = = = = = = = = = = = = = = = = = = = = = = = =
Grant Aid, Peacekeeping, Humanitarian Assistance, Current
Contingency Operations, Counterproliferation, and Nuclear
Threat Reduction
= = = = = = = = = = = = = = = = = = = = = = = = = = = =



17. (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 is
an active participant in all NATO operations and supports
KFOR with a mechanized infantry battalion task force of
approximately 407 personnel. It has supported SFOR since
1996, currently with about 364 people in a mechanized
battalion task force, with one company of the task force
assigned to the security of SFOR headquarters. Turkey has
offered 750 troops, six fighter aircraft and one frigate to
the new NATO Response Force. 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. Turkey supports ISAF in Afghanistan with 139 troops.
In addition to its NATO commitments, 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.



18. (U) Turkey's contributions to UN Peacekeeping Operations
as of December 2003 are:


MONUC (Congo) 11 civilian police officers
UNAMSIL (Sierra Leone) 5 civilian police officers
UNMIK (Kosovo) 119 civilian police officers
UNMISET (East Timor) 2 military observers, 20 civ police
officers
UNOMIG (Georgia) 5 military observers
UNAMA (Afghanistan) 1 civilian police officer
UNMIL (Liberia) 3 civilian police officers



19. (U) On the humanitarian front, Afghan reconstruction
projects completed with Turkish assistance by the end of 2003
total $5.4 million, fulfilling in two years, Turkey's
five-year pledge. Turkey hopes to commit an additional $5
million over the next three years. Turkey has focused its
reconstruction efforts in four areas: healthcare, training,
agriculture and gender issues projects, such as those that
address women's and children's issues.



20. (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.
In Georgia, it has contributed $33 million in equipment and
$14 million in training and training facilities in the past
four years. Some 30 Turkish military advisors in Georgia
have trained more than 400 Georgian special forces and border
guards. In Azerbaijan, Turkey has provided some $131 million
in equipment and $90.65 million in training and training
facilities. In Kazakhstan, Turkey has planned to provide
some $4.8 between 1998-2003, but so far has spent $550k. TGS
coordinates with the US its assistance to the Caucasus and
Kazakhstan through the OSD-led Caucasus working group. In
2003 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.



21. (U) Turkey has actively supported the US in pursuing the
adaptation of NATO to a post-Cold War world. Its commitment
to the Partnership for Peace is evident in its Ankara PfP
Training Center, which has trained more than 3600 students
from 49 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.



22. (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.



23. (U) Turkey is a vigorous supporter of regional
counterproliferation cooperation. It is a member of every
major arms control and counterproliferation regime, including
NPT (1969),BWC, (1974),Wassenaar (1996),MTCR (1997),CWC
(1997),CTBT (1999),NSG (2000),AUSTRALIA Group (2000) and
the Ottawa Convention (2003). 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.



24. (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
--------------



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


EDELMAN