AMB. WILSON'S VISIT TO IZMIR FOR FOURTH OF JULY

UNCLAS ANKARA 004034 SIPDIS E.O. 12958: N/A TAGS: OTRA AMGT ASEC TU SUBJECT: AMB. WILSON'S VISIT TO IZMIR FOR FOURTH OF JULY ¶1. Summary: Ambassador's first official visit to Izmir on June 26-27, 2006 was characterized by a warm welcome from a cross-section of political and business leaders as well as positive press coverage that was picked up at the national level. The reopening of an American Consulate was raised at almost every venue. The highlight of the visit was an Independence Day reception, the first in five years, at Izmir's Aegean Free Trade Zone that featured entertainment by the HaviKoro break dance group visiting Turkey under the auspices of American Voices. End Summary. ¶2. Izmir Governor Oguz Kaan Koksal welcomed Ambassador and provided a broad overview of Izmir. He commented on economic trends and local issues, including the migration of people from the East in search of manufacturing jobs. The biggest problem was housing, which local authorities were working together to address. He said the city is pleased to have a major NATO headquarters located in Izmir. ¶3. Izmir Mayor Aziz Kocaoglu provided an overview of Izmir, infrastructure projects and long-term development objectives. He highlighted efforts to develop Izmir as a tourist center on its own, rather than as a stopover on the way to Cesme and other popular Aegean locales. To that end, the city is upgrading its infrastructure to support cultural venues, fairs, and major conferences. Another key priority has been cleaning Izmir bay through dredging, improved waste management, and other activities. ¶4. Ambassador asked Kocaoglu about the challenges in managing the Izmir municipality. The mayor noted that in recent years, new national legislation has resulted in tremendous changes at the local level by greatly expanding the size of local municipalities. This legislation gave municipalities more authority, as well the responsibility to plan and provide basic services. Ambassador commented that laws that strengthen municipalities help to reinforce democratic institutions. We see this as a good development in the long run despite the short-term strains for new services. He also noted that the Embassy has arranged international visitor programs in the U.S. for municipal officials as a way to facilitate further municipal reforms. The mayor expressed interest in having city officials participate. ¶5. Ekrem Demirtas, Chairman of the Izmir Chamber of Commerce and leading local business figure, also reviewed economic, trade, and investment projects. Ambassador thanked Demirtas for the Chamber's support of Commercial Service Izmir operations. Demirtas noted that CS Izmir's Berrin Erturk was recognized by the local business community as the "go to" person for assistance in doing business with the U.S. ¶6. Demirtas asked the Ambassador's advice on how Izmir can succeed in attracting more trade and investment. Ambassador outlined several suggestions: 1) Reputation is everything. For American companies to look to Izmir, they need to see that existing American trade and investment activities in the region are succeeding and believe they are being treated fairly. 2) Investment is infrastructure and direct links/access to Izmir is critical. 3) Trade follows investment, and connecting with the U.S. financial sector present in Turkey (e.g., GE/Garanti Bank),which has a vested interest in promoting U.S. trade and investment, is important. 4) Linking with the Turkish government's "Year of the Americas" focus on specific U.S. markets could be helpful. 5) Inclusion of Izmir in an upcoming Scientific America supplement on Turkey. 6) Reaching out to Fortune 1000 companies not in Turkey. ¶7. Demirtas highlighted some of Izmir's major initiatives. 1) Izmir is bidding to host the 2015 World Expo. The selection of Izmir would establish the city as a world-class destination and serve as a catalyst for economic development. The Ambassador commended the effort but noted that the U.S. does not participate in the BIE organization that selects the World Expo winner. 2) Izmir has begun the process of applying to UNESCO to be designated a world heritage site. 3) Recognizing the need for more direct flights to Izmir, 111 local businessmen have partnered (with $20 million capital) to create Izmir Air. It is starting with three aircraft but plans to increase its fleet to 15 soon. It will also begin a partnership with Pegasus Airlines. 4) Focusing on retail banking. With an initial capital investment of approximately 60 million Euros, the Aegean Business Bank opened in June 2006 with branches in Athens and Izmir. The five-year plan is to open 26 branches (including Istanbul, Ankara, Thessaloniki, and Piraeus) and to increase capitalization to 100 million Euros. ¶8. Ambassador spoke at an Aegean Industrialists and Businessmen's Association luncheon that included a lively question and answer session. He also met with the Aegean Chamber of Industry and visited Konak Pier, the site of a major U.S.-led real estate property investment that continues to face obstacles from local authorities who are seeking to force the group out. Ambassador pledged continued advocacy support on their behalf. He also met with students and faculty at Izmir Economic University. WILSON