TURKEY SEEKS ARAB INVESTMENT

C O N F I D E N T I A L SECTION 01 OF 02 ISTANBUL 000319 SIPDIS E.O. 12958: DECL: 06/16/2018 TAGS: EINV PREL TU SUBJECT: TURKEY SEEKS ARAB INVESTMENT Classified By: Consul General Sharon A. Wiener ¶1. (C) Summary. The third annual Turkish-Arab Economic Forum attracted high level attendance including the Prime Ministers of Turkey, Syria, Qatar, Somalia and the Palestinian Authority as well as the Iraqi Deputy Prime Minister and a number of finance, energy and investment ministers. Turkish Prime Minister Erdogan delivered a stirring call to his "Arab brothers" extolling the virtues of investing in Turkey as a bridge to peace and stability and a road to Europe, courtesy of Turkey's status as an EU candidate state. His largely upbeat remarks were in sharp contrast to remarks by Turkish Finance Minister Unakitan who highlighted the damage to the global economy caused by high commodity prices and the on-going global credit crunch, assigning the preponderance of the blame for these problems to the United States. End Summary. ¶2. (U) The third annual Turkish-Arab Economic Forum was held June 12-13 in Istanbul. Panel discussion topics included: future Turkish-Arab economic partnership, banking and capital markets links, investment, tourism and real estate, and Turkey's growing energy needs. Turkish participation was very high level with Prime Minister Erdogan delivering remarks at the opening ceremony and the ministers of finance and energy as well as the heads of the Turkish investment promotion agency, the Turkish Chamber of Commerce and the Istanbul Stock Exchange serving as panelists or moderators. ¶3. (U) The opening ceremony featured remarks by the Prime Ministers of Qatar, Somalia, Syria, the Palestinian Authority and Turkey as well as by Iraqi Deputy Prime Minister Barham Saleh. Remarks were largely hortatory, and expressed a general consensus that the conference signified the commitment of players in the region to work together more closely and help each other fill important economic gaps or lack of resources. Prime Minister Erdogan called for improved economic ties between Turkey and Arab countries and urged Arab businesses to invest in Turkey. Erdogan described Turkey as a bridge of development and prosperity between the Arab world and the West and underscored the important role Turkey, as an EU candidate state, could play in bringing the Middle East and Europe closer together. He called for all countries in the region to work together to solve the problems of the Middle East in a cooperative fashion. ¶4. (U) Turkish Finance Minister Kemal Unakitan was one of several finance ministers who participated in a panel discussion on "Turkish-Arab Economic Partnership: A Vision for the Future." This discussion began as a general report of the financial health of each country with comments on areas where greater cooperation would be welcome. Unakitan delivered a somewhat different message by highlighting what he described as three global crises having a negative impact on Turkey - "the oil crisis, the food crisis and the financial crisis." Unakitan noted that high oil prices were causing the balance of power in the world to shift and encouraged Arab countries to focus on taking care of countries in the region (like Turkey) that have water and food resources, but lack fossil fuels. He bemoaned the relative lack of Arab investment in Turkey noting that of the cumulative $52 billion in foreign direct investment over the past three years only $5 billion had come from Arab countries, who had invested $2 trillion internationally during the same period. He suggested Western countries would attempt to attract money from the Arab world to deal with on-going financial turbulence, and warned Arab investors against investing in the United States, because there is no guarantee they'd recoup their investments. Unakitan accused the U.S. of acting out of self-interest, causing wars and economic disruption in the Middle East and contrasted this behavior with Turkey's understanding of the politics of the region. ¶5. (C) Comment: It is interesting that PM Erdogan chose to highlight Turkey's ties to the West and to Europe in particular at this event, while Finance Minister Unakitan very clearly cast Turkey in an "us vs. them" struggle with the West. Unakitan's unhelpful comments about the U.S. source of the economic problems facing Turkey today track broadly with public opinion here; the Spring 2008 Pew Global Attitudes Survey shows 70% of Turks have a negative view of U.S. economic influence with only 4% voicing positive sentiments and 12% with neutral impressions. (By contrast, responses to the same question were more evenly distributed in Lebanon -- 41% negative/20%positive/34% neutral; Egypt 49% negative/10% positive/36% neutral; and Jordan 45% negative/15% positive/35% neutral.) Statements like Unakitan's will only serve to reinforce negative attitudes. ISTANBUL 00000319 002 OF 002 End Comment. WIENER