TURKISH FOREIGN MINISTER BABACAN: BABY JOHN TAKES

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 002295

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/07/2017
TAGS: PGOV PREL TU
SUBJECT: TURKISH FOREIGN MINISTER BABACAN: BABY JOHN TAKES
A BIG STEP UP

REF: ANKARA 2234

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


1. (C) SUMMARY: With President Gul's official acceptance of
the new cabinet proposed by PM Erdogan on August 29, Ali
Babacan succeeded Gul as Turkey's foreign minister. The
youngest of Erdogan's 25 ministers, some Turkish journalists
used to call him "Baby John" because of his youthful
appearance. They don't anymore. As Minister of State for
the Treasury, and later as Turkey's Chief Negotiator for its
EU accession process, Babacan has proven to be a fast
learner, an effective negotiator, and a serious player in the
GOT's policy-making circle. Babacan's experience as a
graduate student and business consultant in Chicago, his
excellent English-language skills, and his pro-U.S. outlook
bode well for closer USG-GOT engagement on foreign policy
issues of mutual importance. With Abdullah Gul as President
apparently bent on continuing to be a major foreign policy
player, Babacan will have to work hard to make his foreign
policy mark. Babacan's dual hatting as Turkey's Chief EU
Negotiator may limit his focus on U.S. issues. END SUMMARY


WHY BABACAN?
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2. (C) Ali Babacan's fast rise is in keeping with his
trajectory since he graduated at the top of his class in 1985
from Ankara's premier English-language TED High School. He
surpassed himself in 1989, graduating first among over 1700
students from Ankara's Middle East Technical University with
a degree in industrial engineering. Babacan left Turkey the
following year as a Fulbright Scholar, and used the
scholarship to gain an MBA from Northwestern University's
Kellogg School of Management. Thereafter, he gained business
experience working as an associate at QRM Inc. in Chicago
doing financial consulting to major banks and other financial
institutions. He returned to Ankara in 1994, becoming
chairman of his family's textile business and establishing
Turkey's first wholesale mail order textiles business. That
same year, Babacan was asked to serve as a chief advisor to
the Mayor of Ankara on financial matters, negotiating on
behalf of the city with the World Bank, the Turkish Treasury,
commercial banks, and credit rating agencies to secure
financing for the city's priority development projects. He
helped the city weather Turkey's economic crisis of the
mid-1990s.


3. (C) Babacan, known to be somewhat religiously conservative
in his personal life, became a founding member of the Justice
and Development Party (AKP) in 2001. With AKP's electoral
victory in November 2002, Babacan parlayed his smarts and
business savvy into an appointment as AKP's State Minister
for the Treasury. Babacan was able to convince Erdogan of the
need for the GOT to tackle tough economic reforms, at times
the lone cabinet voice making the case. Some believe he was
the only minister who understood why Turkey had to implement
the orthodox, pro-market policies designed by the previous
government's economic guru Kemal Dervis. Babacan's oversight
of tough fiscal, monetary, and financial sector reforms
clearly played a key role in Turkey's economic success over
the last five years. When Turkey's EU accession bid finally
got off the ground in October 2005, PM Erdogan again turned
to Babacan to lead Turkey's team as Chief Negotiator as well.



4. (C) By all accounts, Babacan has performed admirably in
both jobs. He begins his tenure as FM with arguably more
relevant foreign affairs background than did Gul. As head of
the GOT economic team that has negotiated with the IMF in
recent years, Babacan has established good relations with the
international financial institutions and with finance
ministry colleagues all over the world. He has acquaintances
throughout at least EU member state foreign ministries. He

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has regularly accompanied PM Erdogan to meetings with foreign
leaders (e.g. Davos),bringing to his new job extensive
contacts with a wide array of international leaders.


5. (C) Ankara-based European diplomats who have worked more
closely with Babacan in his role as EU negotiator echo the
view that he is smart, a quick study and a hard worker. He
is perhaps the most globalized of Turkey's senior leaders and
understands foreigners' way of thinking. He knows how to say
what global capital wants to hear and tends often to be in
marketing mode. But they also characterize him as lacking,
at times, a "human touch." They point, too, to Babacan's
lack of an independent political base within AKP and his
reputation for being a bit of a yes-man in his dealings with
PM Erdogan and President Gul as potential stumbling blocks if
he is truly to lead the way on foreign policy.

AND WHAT WILL HE DO AS FM?
--------------


6. (C) Babacan's Chicago experience provides him a measure of
insight into the U.S. shared by few in AKP. He has
demonstrated a fondness for Americans and, despite his overly
full schedule, regularly made himself available to visiting
USG officials, congressional delegations, and business
delegations. Babacan can be expected to pursue his new
duties with an eye toward consultation with the United States
on issues of mutual importance, including Iraq/PKK, Iran,
Afghanistan, the Middle East, and others. That does not mean
he will see eye-to-eye with us on all issues. Some will
recall that Babacan joined then-FM Yasar Yakis in
negotiations in late 2002 and early 2003 with USG officials
over a hoped-for invasion of Iraq from Turkey. Babacan
pushed hard for an obscenely large economic assistance
package (upwards of $90 billion). He complained at the time
that Turkey would only back war against Iraq as a last
resort, and he reminded U.S. officials that Turkey had
suffered huge economic losses during and after the first Gulf
War which it did not want to repeat. His first experience at
the White House -- where he overplayed his hand and was shown
the door -- was also not a pleasant one, but he has learned
his lessons well.


7. (C) Babacan will also continue to serve as the GOT's Chief
Negotiator for EU accession, focusing on what both Erdogan
and the new President have declared as one of Turkey's
foremost foreign policy priorities. He managed to wear two
hats when he was State Minister; it is not clear whether his
expanded responsibilities as Foreign Minister will allow him
to maintain that balance. Although Gul's presidency is
expected to be more active on foreign policy than that of his
predecessor, it is not yet clear on which issues the new
President may try to assume primacy. Given Gul's extensive
foreign policy background, Babacan may have to rely on good
relations with the new President and his own sway with the
Prime Minister. He will have to work to carve out a good
niche for himself.


8. (C) The measure of Ali Babacan will be taken by how
effectively he establishes his authority over all aspects of
Turkish foreign policy and emerges from Abdullah Gul's
shadow. Either way, his elevation to the FM job further
establishes him as a prominent figure in Turkish politics and
grooms him as a potential political heir to PM Erdogan and
President Gul. This is a make or break job for Babacan;
whether he can continue his meteoric rise will depend upon
how much more smart, creative, and tough he proves to be.

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

WILSON