Identifier
Created
Classification
Origin
06ANKARA4301
2006-07-25 13:00:00
CONFIDENTIAL
Embassy Ankara
Cable title:  

A/S SULLIVAN MEETING WITH TURKISH FONMIN GUL

Tags:  PREL ECON ENRG EFIN EINV TU 
pdf how-to read a cable
VZCZCXYZ0014
RR RUEHWEB

DE RUEHAK #4301/01 2061300
ZNY CCCCC ZZH
R 251300Z JUL 06
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 7466
INFO RUEHTH/AMEMBASSY ATHENS 7319
RUEHKB/AMEMBASSY BAKU 1401
RUEHMO/AMEMBASSY MOSCOW 5469
RUEHSI/AMEMBASSY TBILISI 3053
RUEHIT/AMCONSUL ISTANBUL 0985
RHEHAAA/NSC WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUEHBS/USEU BRUSSELS
C O N F I D E N T I A L ANKARA 004301 

SIPDIS

SIPDIS

E.O. 12958: DECL: 07/25/2016
TAGS: PREL ECON ENRG EFIN EINV TU
SUBJECT: A/S SULLIVAN MEETING WITH TURKISH FONMIN GUL

REF: A. ANKARA 4133 (NOTAL)


B. ANKARA 4132 (NOTAL)

Classified By: Ambassador Ross Wilson for reasons 1.4(b) and (d).

C O N F I D E N T I A L ANKARA 004301

SIPDIS

SIPDIS

E.O. 12958: DECL: 07/25/2016
TAGS: PREL ECON ENRG EFIN EINV TU
SUBJECT: A/S SULLIVAN MEETING WITH TURKISH FONMIN GUL

REF: A. ANKARA 4133 (NOTAL)


B. ANKARA 4132 (NOTAL)

Classified By: Ambassador Ross Wilson for reasons 1.4(b) and (d).


1. (C) Summary: In a meeting with Assistant Secretary Daniel
Sullivan on July 14, Deputy Prime Minister and FonMin
Abdullah Gul discussed the Middle East situation (reported
septel) and a range of economic issues. On the southern
corridor for gas, Gul said U.S. support was necessary but
that Turkey had to be very careful about Russian
sensitivities. Gul strongly supported the need for more
bilateral economic cooperation, emphasized Turkey,s
potential as an investment destination and recognized the
need for the GOT to stay the course on economic reform. End
Summary.


--------------
Energy
--------------


2. (C) A/S Sullivan congratulated Turkey on the BTC
completion and inauguration and Gul responded that project
could not have been realized without the U.S. Sullivan asked
how the Turkish Government sees next steps on energy, saying
the U.S. would support a southern corridor with Shah Deniz
supplying southern Europe. Saying U.S. support had been
crucial with Azerbaijan and Kazakhstan in the past, Gul said
&your support is again necessary.8 He stressed, however,
that Turkey would have to be very careful, citing Russian
sensitivities. He said President Putin personally follows
these issues very closely and asks Turkish leaders about them
at every meeting.


3. (C) Gul said Russia cannot continue to take other
countries, gas and sell at a much higher price because it,s
not &logical.8 At the beginning, Russia had opposed BTC
but eventually accepted it. Gul went on to describe a
similar pattern with the proposed Samsun-Ceyhan bypass
pipeline, which was very important to Turkey. &Now they are
looking at it.8 He laughed that Putin will come soon to
Istanbul and see for himself the danger of tankers passing by
on the Bosphorus. Gul noted other projects under
consideration to bring gas to or through Turkey: from Egypt,

and from Iraq, following the oil pipeline from Kirkuk.


4. (C) With regard to Russia, A/S Sulilvan said the U.S. view
is that commercial viability is important but we view the gas
issues much as we did BTC. Russian involvement should not go
so far as to block other opportunities. Open competition and
diversity of supply are the best ways to preserve security of
supply.

--------------
Bilateral Economic Cooperation, EPC
--------------


5. (C) A/S Sullivan underscored U.S.-Turkish economic
cooperation and noted that the Shared Vision and Structured
Dialogue paper specifically called from more economic
cooperation. Sullivan also recalled that after Gul,s dinner
speech in Washington, Sullivan had thanked Gul for his
leadership, since Gul had cited the &unrealized potential8
in the economic relationship. Sullivan pointed out that a
stronger economic relationship helps maintain the political
relationship, citing the example of strong economic trade and
investment between the U.S. and EU countries mitigating
occasional political frictions.


6. (SBU) Gul said that he and Secretary Rice had very
consciously included economic cooperation in the Shared
Vision document. He said Turkey,s trade volume with the
U.S. is growing slowly given the growth in Turkey,s overall
trade. Sullivan said he is interested in ways to broaden and
deepen the involvement of economic agencies and the private
sector on both sides. Gul agreed the private sector is very
important. He said many large Turkish groups started out with
U.S. partners but now other countries are more active.


7. (SBU) Gul also alluded to the potential for U.S.-Turkish
business cooperation relating to third countries, such as in
Iraq or Afghanistan, saying in Afghanistan 95% of the
construction is being done by Turkish companies. On tourism,
Gul said he himself had made the decision to reduce visa fees
for Americans from $100 to $20. He linked the fee reduction
to an increase in American tourists coming to Turkey, from
200,000 to 400,000 per annum.

--------------
Foreign Direct Investment
--------------


8. (C) Gul said he was very pleased to see the GE Capital
investment in Garanti bank, saying Garanti had &consulted
us.8 Gul felt that privatization is going well and pointed
out that Turkey had received $8 billion in Foreign Direct
Investment in the first 5 months of 2006 and expected to
receive $15 to 20 billion for the full year.


9. (C) The Ambassador commended the Government for its
efforts to fix existing company problems since that gives
confidence to new investors. He specifically thanked Gul for
the Government,s efforts on the Cargill case, despite
domestic criticism. Gul said &we were criticized but we
thought it was an example for others.8

--------------
Staying the Course on Economic Reform
--------------


10. (C) On the broader macroeconomic situation, Gul stressed
the need for the GOT to &maintain what we have achieved8 on
monetary and fiscal policy and said it will not be easy.
&There may be outside shocks.8 He mentioned the political
situation and suspicions that some people have that the
Government will not be careful.


11. (C) When asked about the status of Turkey,s social
security reform, Gul said he was proud of it, noting how
difficult this kind of reform has been in other countries,
such as Germany and the U.S. He admitted Turkey had promised
to pass it two years ago but &at least we passed it.8
Regarding the court challenge to the reform, he said the
Government is now briefing the Constitutional Court on the
reform, since &they are not experts.8

Assistant Secretary Sullivan has cleared this cable.

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

WILSON