TURKEY'S TOP BUSINESS GROUP TAKES LEAD IN

UNCLAS SECTION 01 OF 02 ANKARA 003014 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ECON EAID ETRD PREL TU IZ AF PA IS SUBJECT: TURKEY'S TOP BUSINESS GROUP TAKES LEAD IN RECONSTRUCTION REF: A. ANKARA 2781 ¶B. ANKARA 2779 ¶C. TEL AVIV 2730 ¶D. STATE 132207 ¶E. ANKARA 2422 ¶F. ANKARA 2928 ¶G. ANKARA 2820 ¶1. (SBU) Summary: The Turkish Union of Chambers and Commodities Exchanges (TOBB) is a leader in the Ankara Forum for Economic Cooperation between Turkey, Palestine, and Israel (refs A-C). They are developing free trade zones in Gaza and the West Bank, although they are frustrated by lack of progress in Gaza. TOBB also is interested in the proposed Reconstruction Opportunity Zones (ROZs) (refs D-E) in the FATA region along the Pakistani-Afghan border. TOBB leaders met with Pakistani government and business leaders in Islamabad in November, and plan to visit Afghanistan in January. TOBB has also been approached by the UK to participate in reconstruction in Basra, Iraq. They have the institutional capability to mobilize significant Turkish investment money to make these sorts of projects successful. End summary. West Bank & Gaza -------------- ¶2. (SBU) As part of its goal of restoring peace to Turkey's troubled neighborhood (refs A-C),the Turkish Union of Chambers and Commodities Exchanges (TOBB) has become a leader in the Ankara Forum for Economic Cooperation between Turkey, Palestine and Israel. Its main focus has been to establish free trade zones in Gaza and the West Bank, although they are frustrated by the lack of progress in Gaza. Mustafa Bayburtlu, TOBB Director for EU & International Affairs, told us that negotiations continue with the Israeli Army for a Security and Trade agreement in Gaza. During the September Ankara Forum meeting in Jerusalem, they were asked to shift their focus to creating a similar project in the West Bank instead of Gaza. While they begin work on the West Bank project, TOBB will continue to try to bring the Gaza project to fruition. ¶3. (SBU) In cooperation with Israeli and Palestinian officials, TOBB chose the West Bank region of Tarkumia for the industrial zone. Bayburtlu estimated it will cost $25 - 30 million just to get the West Bank project started. Unlike in Gaza, the land in Tarkumia is privately-owned. To avoid separate negotiations with each landowner, TOBB will sign a concession agreement with the Palestinian Authority and then create a Palestinian Investment Fund to acquire the land. In addition, the area is in a "B" zone, a Palestinian zone with Israeli security, requiring double negotiations. Bayburtlu added, however, that this is one of the few projects in the region that Tony Blair cites as achievable. TOBB plans to negotiate with the World Bank and other NGOs to improve the infrastructure leading to the industrial zone area. Bayburtlu also noted that the location of the two sites is conducive to building a bridge between them in the future. Afghan/Pakistani ROZs -------------- ¶4. (SBU) During their November visit to Islamabad, TOBB leaders met with Pakistani Chambers of Commerce and government officials to discuss the proposed Reconstruction Opportunity Zones (ROZ) in the FATA region, which EEB A/S Sullivan mentioned during his September meetings with TOBB President Rifat Hisarciklioglu (ref D) and MFA U/S Ertugrul Apakan (ref E). TOBB is interested in participating in such projects, but Bayburtlu admitted that their interest remains theoretical at this point. Turkish companies operating currently in Pakistan do about $2 billion in business each year. ¶5. (SBU) TOBB plans to organize a trip to Afghanistan by the end of January 2008. After that, they hope to organize a trip to the U.S. with Pakistani and Afghan businessmen to meet with USG officials and U.S. businessmen. Bayburtlu told us that TOBB believes it is important to get Afghan and Pakistani buy-in to the project. In the meantime, he echoed a previous request made by Guven Sak, President of the Economic Policy Research Council of Turkey (TEPAV, a think ANKARA 00003014 002 OF 002 tank connected to TOBB University) for any feasibility studies or reports available on business opportunities in the FATA region. Peace Through Economic Prosperity -------------- ¶6. (SBU) One of TOBB's guiding philosophies is that economic cooperation through trade and industry can lead to peace and understanding. Their efforts to bring Israeli and Palestinian businessmen together are some of the most ambitious in the region. We should foster TOBB's interest in the ROZs and Basra projects as well. They have the institutional capability to mobilize significant Turkish investment money to make these sorts of projects successful. Visit Ankara's Classified Web Site at http://www.state.sgov.gov/p/eur/ankara/ WILSON