SCENESETTER FOR MAY 30 VISIT OF CODEL BLUNT TO

UNCLAS SECTION 01 OF 05 ANKARA 003004

SIPDIS

SENSITIVE
SIPDIS

DEPT PASS TO H/SUSAN SHEYBANI

E.O. 12958: N/A
TAGS: OREP TU
SUBJECT: SCENESETTER FOR MAY 30 VISIT OF CODEL BLUNT TO
TURKEY

REF: STATE 82968


1. (SBU) SUMMARY: Embassy Ankara warmly welcomes the visit of
CODEL Blunt on May 30. Turkey is a strong ally in the Global
War on Terrorism (GWOT),facilitating the distribution of
critical supplies and fuel to the coalition in Iraq and
supporting the NATO Training Mission (NTM-I) there; publicly
calling on Iran to comply with its IAEA commitments; and
pressuring Syria and Hamas to renounce their support for
terrorism. This summer Turkey will share command of
ISAF-Central with France and Italy and open its first
Provincial Reconstruction Team (PRT) in Afghanistan. But
there are challenges. Bilateral defense cooperation is on
the decline. An increased Turkish security presence along
the Iraqi border to combat an up-tick in PKK terrorist
activity has raised concerns with the Iraqi government.
Turkey's EU accession aspirations are frustrated by slow
implementation of reforms and the lack of progress on Cyprus,
though all concerned are working to avoid a train wreck.
Domestic political tensions between traditional secularists
in the Ataturk mold, who continue to control the military and
important institutions like the Presidency, and a more
religiously-minded conservative strain represented by PM
Erdogan were heightened by a May 17 attack on a court that
left one senior judge dead and four wounded. You may wish to
welcome their partnership in GWOT, urge Turkey to continue to
stand firmly and publicly with the international community on
Iran, and encourage early FM travel to Baghdad. Israeli FM
Livni will have just concluded her first trip to Turkey on
May 29. END SUMMARY.

STRATEGIC DIALOGUE
--------------


2. (SBU) During an April 25 visit to Ankara, Secretary Rice
unveiled with Foreign Minister Gul an agreement to formalize
a regular series of meetings to further our bilateral efforts
on issues such as Iraq, Iran, the Caucasus and Central Asia,
among others. Our two governments are currently putting the
finishing touches on the document and hope to release it
soon. As a majority Muslim country that straddles Europe and
the Middle East, Turkey shares a history and culture with
many countries of US concern and is poised to increase its
constructive role in Iraq and Afghanistan, in the Broader
Middle East and North Africa (BMENA) initiative and
potentially in the Middle East Peace Process. This will also
provide a forum to dialogue with Turkey on issues of
importance to its future, including Cyprus and the EU
accession process.

A PARTNER IN GWOT
--------------

Iraq:


3. (SBU) Turkey's agreement to allow the use of its territory
as a logistical hub has been a crucial asset in our Iraq
operations. Two-thirds of gasoline and diesel fuel shipments
(3 million gallons per day) for the Iraqi people and 25% of
sustainment fuel for the coalition crosses into Iraq through
the Ground Line of Communication at Habur Border Gate. Since
Turkey approved the use of Incirlik Air Base as a cargo hub
to support coalition operations in Iraq in May 2005, over 152
million pounds of equipment has been shipped to US troops.
Six C-17 aircraft now deliver from Incirlik the amount of
supplies it took 9-10 planes to deliver from Germany.
Additionally ten KC-135 tanker aircraft based at Incirlik
since 2003 have run 2800 refueling sorties, delivering 192
million pounds of fuel in support of Operation Enduring
Freedom and Operation Iraqi Freedom. Turkey has four
personnel assigned to NTM-I in Iraq and, under this rubric,
has trained 57 Iraqi military officers in Turkey. Iraqis

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have pledged to send officers to at least seven additional
courses this year.


4. (SBU) Turkey shares the US goal of a unified, democratic
Iraq that is secure within it borders. While Kurdish
aspirations and the PKK presence in northern Iraq remain a
significant concern, the government is contributing to
efforts to ensure the success of the country as a whole. The
GOT vocally supported the participation of all ethnic and
religious groups in the elections and the constitution
referendum; and separately hosted a multi-party conference on
the Iraqi constitution, a dialogue of hard-line Sunni leaders
with US Ambassador Khalilzad, and a meeting of tribal leaders
from the city of Talafar in an effort to calm the situation
there. It provided extensive training to over 300 Iraqi
diplomats and political party members, and spearheaded a
"neighbors meetings" process which has helped Iraqi
government leaders interact with their regional counterparts.
The Turks are considering providing more training, and are
sending their Special Representative to Iraq, Oguz Celikkol,
to Baghdad shortly, both to issue invitations to GOI
officials to visit Turkey, and to lay the groundwork for a
subsequent FM Gul trip to Baghdad.


5. (SBU) In addition to Turkey's desire for political
stability, a sovereign, stable Iraq is in Turkey's economic
interest. Bilateral trade in 2005 was $2.87 billion, of
which $2.42B was Turkish exports to Iraq. Turkey exports 270
MW of electricity to northern Iraq. Both countries aim to
increase electricity exports from Turkey to 1000MW, which
equates to 25% of Iraq's current peak capacity. Turkey has
pledged $50M in assistance to Iraq for energy, health and
other projects, which remains mostly unfunded for security
reasons. Turkey's port of Ceyhan is the terminus of the oil
pipeline from Kirkuk.

Afghanistan:


6. (SBU) Turkey has twice successfully led the International
Security Assistance Force (ISAF) in Afghanistan, most
recently from February to August 2005. Beginning in
mid-2006, it will share joint command of ISAF-Central in
Kabul for a two-year period, and will open its first PRT in
the neighboring province of Wardak. PM Erdogan visited
Afghanistan in spring 2005 and subsequently increased
Turkey's pledged assistance ten-fold to $100M. This will be
allocated in $16M increments for five years to build schools,
hospitals, medical clinics and drinking water wells
throughout the country. Four hospitals have already been
constructed. The GOT provides counter-narcotics training in
Turkey to Afghan security forces and will initiate such
training in Afghanistan this year under the auspices of the
Wardak PRT. President Karzai demonstrated his gratitude for
Turkey's assistance by participating in a March
counter-terrorism conference at Turkey's NATO Center of
Excellence for the Defense Against Terrorism.

Other:


7. (SBU) In addition to its efforts in Iraq and Afghanistan,
Turkey continues to cotribute forces to the peacekeeping
efforts inthe Balkans and provides training to Georgian
security forces, including for pipeline security. Turkey has
contributed $41M in equipment to Georgia over the past six
years, and has trained some 1400 Georgian personnel. In
Azerbaijan, Turkey has provided some $150M in equipment and
over $100M in training and facilities over the past six years.

INCREASING PKK THREAT
--------------


8. (SBU) Since ending its self-imposed cease-fire in May

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2004, the PKK terrorist group has stepped up bomb attacks in
Istanbul and increasingly clashed with Turkish security
forces in the country's southeast. A PKK off-shoot, the
Kurdish Freedom Hawks (TAK),has warned foreigners to stay
away from Turkey and threatened additional attacks in tourist
centers. The funerals of 14 PKK terrorists killed in a March
operation led to civil unrest in Diyarbakir and other
southeastern cities, which in several cases turned violent.
Televised news programs are filled with the funerals of
Turkish security forces. Tourism bookings are down from 2005.


9. (SBU) The PKK issue is the biggest irritant in bilateral
relations. The Turkish public and the GOT expect the US to
take action against the PKK in Iraq. The government welcomes
our efforts with European allies to eliminate the PKK's
financing sources and support networks in Europe and our
intelligence-sharing program, but both the GOT and the public
insist on US action against the PKK presence in northern
Iraq. While recognizing that the insurgency prevents
coalition troops from engaging the PKK in Iraq, the GOT
remains frustrated at its inability, and US unwillingness, to
stop attacks it believes are emanating from the other side of
its border.


10. (SBU) Security forces have had some success against the
PKK in Istanbul and Ankara, where significant caches of
plastic explosives were found and suspects arrested. The
early up-tick in terrorist activity in 2006 also hastened the
military's push to strengthen its troop presence along
Turkey's border with Iraq, as it does every spring. The
Turkish press speculates that Turkey is either already
conducting or will engage in cross-border operations into
northern Iraq where the PKK has a presence. The Chief of the
Turkish General Staff GEN Hilmi Ozkok and FM Abdullah Gul
have both publicly dismissed these reports and said that
Turkey is doing nothing more than protecting its sovereign
territory, as it does every year.

REGIONAL DIPLOMACY
--------------


11. (SBU) Given its shared historical, cultural and religious
ties with countries in the region, as well as its geographic
location bridging both east and west, Turkey feels both a
right and a responsibility to engage countries of concern on
issues of importance to the international community. Turkey
has worked hard in recent years to re-establish relations
with Iran and Syria both to bolster its fight against the
PKK, which has a presence in those countries, and to
strengthen its economeQnQlG29, and the Turkish president will travel to Israel
early in
June.


12. (SBU) The MFA, military and many in the AKP government
view a nuclear Iran as a threat to Turkey but all view
diplomacy as the only road to a solution and therefore insist
on engagement. The GOT is averse to broad economic sanctions
that could disrupt a growing commercial relationship with
Iran, particularly energy imports, but is willing to consult
with us on targeted financial sanctions. The government's
public statements -- which we are told match their private
statements -- on Iran's nuclear program have significantly
strengthened since Iran resumed uranium enrichment. You may
want to welcome these statements and to encourage a continued
strong message.

CYPRUS THREATENS TURKEY'S EU BID
--------------

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13. (SBU) The EU has expressed frustration with what it
perceives as lackluster GOT efforts to fully implement
democratic reforms. Indictments against novelist Orhan Pamuk
and other writers and intellectuals for statements
purportedly undermining the Turkish identity, and unresolved
issues with Turkey's Kurdish population that are exacerbating
the PKK problem, give ammunition to those who want to prevent
Turkey's accession. But the lack of a settlement of the
Cyprus question may be the biggest immediate threat to
Turkey's EU bid. Turkey remains bitter over the 2004 Greek
Cypriot vote against UN secretary-general Annan's plan for a
comprehensive settlement and the lack of measures to reward
Turkish Cypriots for their favorable vote, and continues to
look to the UN for the way forward. Under its EU customs
agreement, amended in 2005 and expanded to include all new EU
members -- including Cyprus -- Turkey must, in theory, open
its sea and airports to Greek Cypriot vessels by the end of

2006. Turkey is unwilling to do so in absence of some
opening of Turkish Cypriot ports and an end to Turkish
Cypriot economic isolation. In January, FM Gul put forward a
proposal that would include this. The lack of a deal could
stall further EU negotiations, though all parties seem intent
on finding creative ways to avoid a Cyprus &train wreck8
that could derail Turkey,s accession negotiations.

THE DOMESTIC EQUATION
--------------


14. (SBU) Over the next year or so, though, getting the
Turkish Government to undertake anything even moderately
controversial ) whether related to its own southeast, Cyprus
or the EU ) will be difficult. In the run-up to the
presidential election (May 2007) and parliamentary elections
(scheduled for November 2007),the government's room for
maneuver will be limited. This is even more so in the
aftermath of a May 17 gunman's attack at the Council of State
(an administrative appeals court) that left one judge dead
and four others wounded. This has heightened pre-existing
tensions between PM Erdogan's pro-Islam Justice and
Development Party (AKP) government and the
military/secularist establishment.

ECONOMY RECOVERING STRONGLY, BUT VULNERABLE
--------------


15. (SBU) The AK Party government has implemented key
economic and structural reforms that have supported the
strong economic recovery from the deep 2001 financial crisis.
An average GDP growth rate of nearly 8% over the past three
years is one of the highest in the world, foreign investment
has strengthened, and high inflation has been subdued. The
IMF is currently overseeing a $11.8 billion stand-by program
and the World Bank's loan portfolio of $6 billion is one of
the largest for any country. Reforms and optimism engendered
by the EU accession process have also bolstered economic
performance. Yet, despite the significant achievements, the
current account deficit is large (about 7% of GDP this year)
and the government remains heavily indebted. This leaves the
economy vulnerable to market swings that could threaten
economic and political stability. Unemployment and poverty
also remain serious problems. These vulnerabilities were
highlighted since mid-May by a global market pullback that
coincided with increased political uncertainty in Turkey,
leading to a 16% fall in the exchange rate and 18% drop in
the stock market and a shap increase in domestic interest
rates. However, if the government continues to
follow-through on reform commitments -- as it recently did by
reaffirming the IMF program -- and EU accession remains on
track, the economy should be able to weather the current
turbulence.


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DEFENSE INDUSTRY COOPERATION DECLINING
--------------


16. (SBU) Defense industry cooperation, once the strongest
aspect of our military-to-military relationship, is in
significant decline. No US firm has won a direct commercial
sale since Boeing was awarded a contract for an Airborne
Early Warning and Control (AEW&C) aircraft in 2002. In 2004,
three tenders (UAVs, Main Battle Tanks, and attack
helicopters) were canceled. Two US firms, Boeing and Bell,
were interested in a second attack helicopter tender, but
declined to participate due to onerous liability and
technology transfer requirements. (Several non-US firms did
submit bids.) Sikorsky may choose not to participate in a
tender for 54 utility helicopters for the Turkish Armed
Forces and Forestry Service for the same reason, and Raytheon
may bow out of contention for an aircraft trainer tender.
Both in Ankara and in Washington, US firms and the USG have
raised the technology transfer and liability concerns with
Turkey's Ministry of Defense and Defense Industry
Undersecretariat (SSM). Despite both Turkish military and
government insistence that it wants US competition in these
tenders, SSM has resisted making the necessary changes to the
tenders to ensure it.



AGGRESSIVE COUNTER-NARCOTICS PROGRAM
--------------


17. (SBU) Turkey remains a significant transit country for
Southwest Asian heroin destined for European markets.
Turkish law enforcement vigorously pursues opiate traffickers
and have made extensive opiate seizures. Arrests resulting
from large seizures are prosecuted and generally result in
lengthy sentences. Over eight metric tons of heroin were
seized in Turkey in 2005, while nearly ten metric tons were
seized in 2004. Several of the world's largest verified
opiate seizures have been made in Turkey in recent years,
including 7.5 metric tons of morphine base that were captured
in a single seizure in 2002. In 2004, 4.4 metric tons of
morphine base were seized and in 2005 there were two heroin
seizures of over 1,000 kilograms each. Turkish law
enforcement is actively participating in DEA's Operation
Containment, a regional plan for combating Afghan opiates.

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

WILSON