AMBASSADOR'S FIRST VISIT TO ISTANBUL

C O N F I D E N T I A L ISTANBUL 002171

SIPDIS

E.O. 12958: DECL: 12/19/2015
TAGS: PREL ECON PGOV TU
SUBJECT: AMBASSADOR'S FIRST VISIT TO ISTANBUL


Classified By: Classified by Consul General Deborah K. Jones.
Reasons 1.4 (b,d)


1. (SBU) In his first visit to Istanbul December 18-20,
Ambassador met with a range of business, government and other
leaders, including Mustafa Koc, head of Turkey's largest
holding company, Aydin Dogan, the country's leading media
baron, the Turkish-American Business Council (TAIK),the
American Business Forum in Turkey, the Istanbul governor and
mayor, Ecumenical Patriarch Bartholomew, and Bilgi University
political scientist Soli Ozel.

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"Modernizing" the Relationship
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2. (SBU) In his remarks to his Turkish interlocutors, the
Ambassador emphasized the importance he attaches to dialogue
outside the capital with Turks in many different fields. He
stressed the U.S. and Turkish governments' interest in
improving relations, and said he views strengthened ties not
as an end in itself, but as a means to deliver results. The
Ambassador highlighted as specific priorities improving our
collaboration on Iraq, Syria and Iran; managing Cyprus;
supporting Turkish efforts with the EU; and furthering
economic and democratic reforms in Turkey. He emphasized USG
interest in expanding trade and investment, and he thanked
city officials for their work with consulate and embassy
staff, especially regarding security for our facilities and
personnel.
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Economic Positives; Political Concerns
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3. (C) Business leaders underlined the extremely positive
economic picture in Turkey. Mustafa Koc noted that the AK
party government, helped by the roadmaps it inherited from
the IMF and Kemal Dervis, has done a good job. Five years
ago, he said, he would not have believed Turkey could be
where it is today. He and Aydin Dogan judged that Turkey is
on the right path, that the country's current account deficit
(the largest cloud on the horizon) is financeable, and that
the success of recent privatizations is a sign of how far
Turkey has come. Koc judged, however, that 2006 will be a
critical year, as a result of the possibility of early
elections and the upcoming end of Central Bank Governor
Sureya Serdengecti's term. Unemployment, he added, remains
an intractable problem, and will only be resolved when
further structural reforms are undertaken, and Turkey's
bureaucracy is reduced. American companies, while citing
some specific problems in their individual sectors (lingering
IPR difficulties for the pharmaceutical industry, labor
relations woes in the tire sector, for example),concurred
with Dogan and Koc's generally bullish view, AIG
representative Phillip Schwarz said his firm sees Turkey as
one of its key growing markets in coming years.


4. (C) On Turkish politics, interlocutors expressed concern
with a "loss of focus" on the part of the government since
the opening of EU accession negotiations in October. Most
stressed that the government has been extremely disappointed
with the EU's failure to deliver anything in return for the
difficult steps the government took undertaken on Cyprus,
with some arguing that further hard work on the EU process
will be put off until after the 2007 elections. Sami Ozel
observed increasing "religiosity" of Prime Minister Erdogan's
rhetoric, which he attributed to the preparation of Erdogan's
base for elections if the establishment is able to force him
to call them early. Dogan, however, judged that debate about
such issues as headscarves will remain just that, and that
the government will not actually push the issue.


5. (C) Several interlocutors expressed concern and
disappointment with Justice Minister Cicek's failure to take
a strong stand against the prosecution of Orhan Pamuk. Aydin
Dogan complained about foreign observers' interference with
the Turkish judiciary. While he said he could not be in
favor of limiting freedom of expression, he believed Pamuk
should be subject to the law. The Ambassador stressed the
freedom of expression at stake, urged a change in the law and
dismissal of the pending charges, and noted the corrosive
effect the case would have on attitudes toward Turkey in the
U.S. and EU.


6. (SBU) Throughout his three-day visit, the Ambassador was
warmly and cordially received and garnered wide and favorable
press coverage, reflecting the widespread desire here to
continue the recovery of our bilateral relationship.

JONES