2005/2006 REPORT TO CONGRESS ON TURKEY'S

UNCLAS SECTION 01 OF 06 ANKARA 001605

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: MCAP PREL NATO US TU
SUBJECT: 2005/2006 REPORT TO CONGRESS ON TURKEY'S
CONTRIBUTION TO THE COMMON DEFENSE

REF: 05 STATE 223383

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Sensitive but unclassified -- please protect accordingly.


1. (U) This is Mission Turkey's contribution to the 2005/2006
Report to Congress on Allied Contributions to the Common
Defense. We follow reftel's format.

General Assessment
--------------


2. (U) A. Turkey has NATO's second-largest military after the
United States. It has taken on an impressive number of tasks
within the Alliance, including NATO Rapid Deployable Corps
(NRDC)-Turkey serving in the second deployment of NATO
Response Force in 2003-2004; NRDC-Turkey will serve in this
capacity again in 2007. Turkey's Partnership for Peace
Training Center opened in 1998; its Center for
Excellence-Defense Against Terrorism opened in 2004. Turkey
has also offered its Air Force base in Konya as a NATO
Tactical Air Training Center.


3. (U) In Aug. 2005, Turkey completed its second
International Security Assistance Force (ISAF) command (II
and VII) in Afghanistan, which it held for six months and
during which time it contributed over 1,500 troops. Turkey,
France, and Italy have agreed on a shared command of the ISAF
Central Region Command in Kabul starting in the second half
of 2006. Turkey will lead a Provincial Reconstruction Team
(PRT) in Wardak Province beginning in the second half of
2006, and also currently contributes to SEEBRIG's deployment
to the Kabul region. Turkey also contributes to
reconstruction and training efforts in Afghanistan. It is
involved in the reconstruction of schools and is exploring
counter-narcotics training programs for Afghan police and
alternative livelihood options for poppy farmers. Following
PM Erdogan's May 2005 visit to Afghanistan, the GOT increased
its reconstruction budget for Afghanistan ten-fold, to $100
million. Turkey continues to provide significant personnel
and assets for Operation Active Endeavor, KFOR, and Operation
Althea. Turkey also provided airlift as part of NATO's
support for the African Union Mission in Sudan, and assisted
NATO's relief efforts for the Pakistan earthquake.


4. (U) B/C. Since 2003, Turkey has continued its reform
efforts in order to meet EU candidacy criteria, and was
rewarded with the official opening of membership negotiations
on Oct. 3, 2005. However, the GOT has also been preoccupied
with events in Iraq, including concerns about perceived
Kurdish expansionism and the significant increase in PKK
violence in Turkey since the terrorist organization lifted
its unilateral ceasefire in mid-2004. Despite its concerns
about Iraq, Turkey continues to be a strong partner in the
Global War on Terrorism.


5. (SBU) The Turkish military is undergoing a modernization
program that should increase Turkey's capacity to meet its
NATO responsibilities. However, the GOT's ability to finance
its military modernization program remains hampered by the
government's limited financial flexibility as it gradually
restores the health of public finances which were badly
damaged by unsuccessful economic policies in the 1990,s and
by the 2001 financial crisis. Since the crisis, Turkey has
experienced four straight years of strong economic growth
during which Turkey's debt ratios have improved and public
finances have been put on a more stable footing. GDP grew
8.9 percent in real terms in 2004 and preliminary estimates
suggest it grew at least 5 percent in 2005. Nevertheless,
military spending competes not only with continuing large
debt service payments but also with social and investment
spending needs that were neglected during the immediate
post-crisis austerity. With 2006 growth likely to be strong
as well, there may be room for minor increases in force
modernization spending.


6. (SBU) Embassy calculates 2005 defense spending at 13.5
billion New Turkish Lira (YTL) or US$ 10.07 billion, based on
an average exchange rate of 1.3408 lira per dollar. This
calculation includes spending on Jandarma and Coast Guard
which are not included in the Defense Ministry budget, but

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does not include Defense Industry Support Fund spending which
is off-budget. By this calculation, 2004 defense spending
totaled 12.2 billion YTL, or US$ 8.6 billion using an average
exchange rate of 1.421. This represented 8.1% of the budget
and 2.9% of GDP. 2005 defense spending represented 9.3% of
the budget and 2.8% of GDP. In the 2006 budget, Turkey is
projected to spend US$ 10.01 billion, equivalent to 9.0% of
the budget and 2.6% of projected GDP. The reduction in the
dollar figure is due to the forecast exchange rate used in
Turkey's economic program: 1.4184 lira per dollar. In lira
terms, defense spending in 2006 will increase 5.2% from 2005.
The decline in defense spending in relation to GDP can be
attributed to strong GDP growth coupled with continued fiscal
austerity, rather than to a shift of spending away from the
defense sector.


7. (SBU) Historically the strongest area of our bilateral
relationship, bilateral security cooperation is significantly
declining. Under Turkey's current policy, the emphasis is
on Direct Commercial Sales at the expense of Foreign Military
Sales and American companies are having difficulty competing.
For years, the GOT has had the goal to develop an indigenous
defense industry that can supply a significant portion of
Turkey's military requirements. To meet this goal and to
simplify the bid evaluation process, the Undersecretariat for
Defense Industries (SSM),Turkey's major systems procurement
authority, recently began requiring companies to accept
unconditionally all terms and conditions and to confirm at
the time of bid submission the contractor government's
willingness to allow transfer of the required technology.
Although SSM understands the USG will not guarantee approval
of technology transfer before a contract is signed, SSM has
not revised the tender to remove that requirement. We
believe this issue could adversely affect Turkey's
interoperability within the Alliance and diminish
opportunities for Turkish and U.S. service personnel to work
together.


8. (SBU) D/E. Despite the unpopularity of the Iraq war,
Turkey has provided significant logistical suppor to both
Operation Iraqi Freedom and to OEF inAfghanistan. Turkey
has approved multiple requests for the use of Incirlik Air
Base, including: a tanker refueling operation which has
delivered over 28 million gallons since operations began in
2003 and flown over 2,800 sorties; the transit of 8,500 U.S.
troops on rotation from Iraq from January through April 2004;
and the establishment in May 2005 of a logistics hub which
allows six U.S. military C-17 aircraft to move the amount of
cargo it took 9-10 military aircraft to move from Germany.
This hub has facilitated the movement of 129 million pounds
of supplies since its inception; flown 1280 C-17 sorties;
received 577 wide-bodies cargo aircraft; and houses 150 TDY
support personnel. Turkey also approved the use of hub
flights for the emergency evacuation of U.S. soldiers from
Iraq. In addition, Turkey has approved the use of Incirlik
and other airfields for other CF members' use.


9. (SBU) The Habur Gate, the only border crossing from Turkey
into Iraq, provides 25% of fuel shipments to Coalition forces
in Iraq and two-thirds of gasoline and diesel fuel shipments
for the Iraqi people. Significant shipments of food and
water for coalition forces also pass over the border.


10. (SBU) The Turkish government has also demonstrated its
support through its public announcements of support for the
recent Iraqi elections; the re-opening its consulate in Mosul
in 2006; provision of training in Turkey for Iraqi diplomats,
political parties, and (as part of the NATO training mission)
Iraqi Security Forces; hosting a conference for Iraqi
constitution drafters in July, and a meeting of Iraqi Sunni
leaders with Amb. Khalilzad in Istanbul in December.


11. (U) In 2004, Turkey launched its maritime interdiction
operation in the Black Sea, Operation BLACK SEA HARMONY. The
GOT reported that in 2004 and 2005 it devoted approximately
325 personnel, 50 vessels, and 220 aircraft to this
operation. In 2005, Turkey opened BLACK SEA HARMONY to the
other Black Sea littoral states. Turkey provides data
obtained from this operation to NATO.


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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 U.S. forces in Turkey.
However, the U.S. Office of Defense Cooperation in Ankara and
its support facilities operate rent-free on Turkish military
bases and enjoy Turkish military security. In addition,
Turkey increases its security presence at U.S. facilities
when the terrorist threat is perceived to be higher.


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


13. (U) Cost estimate if US Office of Defense Cooperation had
to hire contract guards is US$ 321,000 for 2004 and US$
328,400 for 2005. Cost estimate to hire contract guards at
Incirlik Air Base is US$ 642,000 for 2004 and US$ 656,000 for

2005. U.S. military aircraft do not pay landing fees to land
at Turkish military airfields (estimated value: US$ 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 (2004)

-- Land (11,120 sq m of land valued at US$ 14.90/sq m, based
on prevailing fair market value of land in that district and
adjusted for inflation of 14.86%) = US$ 190,342;

-- 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 of 14.86% is US$
151,143/year.

Total foregone rent of GOT-owned land and facilities is US$
341,485 for 2004.

U.S.-UTILIZED LAND AT INCIRLIK AIR BASE (2004) (all buildings
and facilities are built and paid for by the USG):

-- Land (1 Acre = 4,047 Square meter) -- 4,047 x US$ 6.11
(prevailing FMV land) = US$ 24,727

-- 3,323 (total acres) x US$ 24,727.17 = $82,168,385

-- Buildings - Total square footage of buildings (4,169,795)
multiplied by average cost per square foot (US$ 43.86)
equates to US$ 182,866,799 estimated value of buildings.

Total cost of land and buildings for Incirlik is US$
265,035,184 for 2004.

Total indirect cost for 2004 is US$ 3,304,485 -- includes
landing fees, guards and foregone rent of GOT-owned land and
facilities.

OFFICE OF DEFENSE COOPERATION, ANKARA (2005)

-- Land (11,120 sq m of land valued at US$ 14.90/sq m, based
on prevailing fair market value of land in that district and
adjusted for inflation of 14.86%) = US$ 218,628;

-- 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 of 14.86% is US$
173,603/year.

U.S.-UTILIZED LAND AT INCIRLIK AIR BASE (2005) (all buildings
and facilities are built and paid for by the USG):

-- Land (82,168,385.91 X 12% (inflation rate) = US$
92,028,592.

-- Buildings - Total square footage of buildings (4,256,447)
multiplied by average cost per square foot (US$ 43.86)

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equates to US$ 186,666,932 estimated value of buildings.

Total cost of land and buildings for Incirlik is US$
278,695,524 for 2005.

Total indirect cost for 2005 is US$ 3,376,631 -- includes
landing fees, guards and foregone rent of GOT-owned land and
facilities.


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:

-- For 2004, Turkey-wide PX/Commissary annual sales were over
US$ 21,297,434. Using the average VAT rate of 22 percent,
foregone tax revenue was US$ 4.6 million.

-- For 2005, Turkey-wide PX/Commissary annual sales were over
US$ 23,067,026. Using the average VAT rate of 22 percent,
foregone tax revenue was US$ 5.1 million.

--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 US$ 6.1 million
annually for 2004 and 2005.

Total Foregone Tax/Customs 2004 = US$ 10.7 million

Total Foregone Tax/Customs 2005 = US$ 11.2 million

Contingency Operations, etc.
--------------


A. Recent Contingency Operations:


16. (U) Turkey contributes to the following key contingency
operations:

Afghanistan: Commanded ISAF VII February-August 2005,
contributing approximately 1500 troops. For other periods in
both 2004 and 2005, Turkey contributed approximately 230 to
300 personnel to ISAF. Turkey also maintains a small number
of personnel at CFC-A Headquarters in Kabul.

Kosovo: For both 2004 and 2005, Turkey maintained a battalion
in KFOR plus some additional headquarters personnel, totaling
from 375 to 400 troops.

Bosnia: Turkey smoothly transitioned its SFOR presence into
the EU-led Operation ALTHEA. For both 2004 and 2005, its
presence remained at about 350-370 personnel (one battalion
plus others).

Operation Active Endeavor: For 2004 and 2005, Turkey
contributed four vessels and about 573 personnel to Operation
ACTIVE ENDEAVOR.

Operation Black Sea Harmony: For 2004 and 2005, Turkey used
56 vessels and 220 aircraft to conduct Operation BLACK SEA
HARMONY, Turkey's MIO in the Black Sea.


17. (SBU) Iraq: Though the Turkish parliament decided on
March 1, 2003 not to allow coalition forces to transit Turkey
for OIF, since then Turkey has provided considerable support
for OIF. Despite the unpopularity of the Iraq war, Turkey
has provided significant logistical support to both Operation
Iraqi Freedom and to OEF in Afghanistan. Turkey has approved
multiple requests for the use of Incirlik Air Base,
including: a tanker refueling operation which has delivered
over 28 million gallons since operations began in 2003 and
flown over 2,600 sorties; the transit of 8,500 US troops on
rotation from Iraq from January through April 2004; and the
establishment in May 2005 of a logistics hub which allows 6
US military C-17 aircraft to move the amount of cargo it took
9-10 military aircraft to move from Germany. This hub has
facilitated the movement of 41,339 tons of supplies since its
inception; flown 1280 C-17 sorties; received 577 wide-bodies
cargo aircraft; and houses 150 TDY support personnel. Turkey

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also approved the use of hub flights for the emergency
evacuation of US soldiers from Iraq.


18. (SBU) The Habur Gate, the only border crossing from
Turkey into Iraq, provides 25% of fuel shipments to Coalition
forces in Iraq and two-thirds of gasoline and diesel fuel
shipments for the Iraqi people. Significant shipments of
food and water for coalition forces also pass over the border.


1. (U) UN Peace Support Operations: In 2004, Turkey
contributed 265 personnel to other UN peacekeeping
operations, and 269 in 2005.


B. Military Assistance:


20. (U) Afghanistan: All in 2005: Turkey donated US$ 3.5
million in used military equipment, and donated US$ 850,000
to the GOA for procurement of equipment. 12 Turkish
instructors teach at Afghanistan's Military Academy in Kabul.
Turkish mobile teams trained 1452 members of the Afghan
National Army, and trained 124 Afghan soldiers in Turkey.


21. (U) Caucasus and Central Asia: 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. It has contributed $41
million in equipment in the past six years. Turkey has
trained some 1400 Georgian personnel. In Azerbaijan, Turkey
has provided some US$ 150 million in equipment and over US$
100 million in training and training facilities over the past
six years. In Kazakhstan, Turkey has provided $6.8 from 1998
to 2005. TGS coordinates with the US its assistance to the
Caucasus and Kazakhstan through the OSD-led Caucasus Working
Group. Turkey provides somewhat less assistance to the other
Central Asian states. It provides no assistance to Armenia.


22. (U) 2004 figures:

Georgia: US$ 1.7 million
Azerbaijan: US$ 1.8 million
Kazakhstan: US$ 577,000

(U) 2005 figures:

Georgia: US$ 1.3 million
Azerbaijan: US$ 1.6 million
Kazakhstan: US$ 692,000


23. (U) NTM-I: 2005: Turkey has five personnel assigned to
NTM-I (four in Iraq). Under NTM-I, 56 Iraqi officers trained
in Turkey in 2005.


C. Humanitarian Relief Operations:


24. (U) Afghanistan: In 2005, the GOT announced it was
increasing its reconstruction assistance ten-fold, to $100
million.


25. (U) Pakistan: Following the 2005 earthquake, Turkey sent
24 planes and search and rescue and medical teams. Turkey
also facilitated the use of Incirlik Air Base for transport
to Pakistan of 1.16 tons of humanitarian goods from the UNHCR
warehouse in Iskenderun. GOT and private donations from
Turkish citizens totaled US$ 225 million.


26. (U) Iraq: Over 2004 and 2005, the GOT provided US$ 2.9
million in food, medicine, and other aid to residents in
Talafar, Fallujah, Kirkuk, and Mosul. Turkey has pledged US$
50 million is reconstruction aid for Iraq, but has disbursed
relatively little of this sum.


27. (U) Katrina: Turkey donated US$ 1.6 million in 2005.


28. (U) Tsunami: In 2005, Turkey donated US$ 7.6 million for
tsunami relief.

SIPDIS


29. (U) Georgia: Turkey provided US$ 1.0 million in food
relief in 2004.


D. Capacity Building:

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30. (U) As of January 2006, Turkey provides 236 civilian
police officers to UN missions in DROC, Sierra Leone, Kosovo,
East Timor, Liberia, Ivory Coast, Haiti, and Sudan, as well
as five military observers in Georgia.


31. (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, Macedonia,
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 BLACKSEAFOR, an
on-call force comprising naval units of the Black Sea
littoral states. In 2004, Turkey launched its maritime
interdiction operation in the Black Sea, Operation BLACK SEA
HARMONY. The GOT reported that in 2004 and 2005 it devoted
approximately 325 personnel, 50 vessels, and 220 aircraft to
this operation. In 2005, Turkey opened BLACK SEA HARMONY to
the other Black Sea littoral states. Turkey provides data
obtained from this operation to NATO.


32. (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 since its opening in 1998 has trained
almost 6000 students from 58 countries in courses ranging
from "Peacekeeping Operations Management" to "Refugee
Relief."


33. (U) Turkey opened its Center of Excellence-Defense
Against Terrorism (COE-DAT) in 2005. Since its inception, it
has provided courses to 260 students from at least 27
countries. The U.S. provides two officers and one NCO to the
Center.


E. Counterproliferation:


34. (U) Turkey commenced participation in the Proliferation
Security Initiative in 2003. The GOT participated in three
PSI Experts Group meetings in 2005, and participated in two
PSI exercises. Turkey plans to host the first PSI combined
land, air, and sea exercise in May 2006.


35. (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.


36. (U) Since February 1999, TGS and the U.S. 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 its NATO allies.
Turkey has consistently supported Alliance missile defense
activities.

Visit Ankara's Classified Web Site at
http://www.state.sgov.gov/p/eur/ankara/

MCELDOWNEY