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