NORTH CYPRUS' ECONOMY "MINISTER" - YOUNG AND EAGER

UNCLAS NICOSIA 000363 SENSITIVE SIPDIS TREASURY FOR OFFICE OF EASTERN EUROPE E.O. 12958: N/A TAGS: PREL ETRD EFIN CY SUBJECT: NORTH CYPRUS' ECONOMY "MINISTER" - YOUNG AND EAGER ¶1. (SBU) Sunat Atun, the recently appointed "Minister of Economy" in the "TRNC government" told us on May 29 that he intends to intensify efforts in north Cyprus to combat money laundering and welcomes continued cooperation with the EU and USG towards this end. Atun said "we want to develop our financial sector to become globally competitive, and we can only do this if we have a proper regulatory and enforcement regime." The Turkish Cypriot (T/C) Financial Intelligence Unit, MEBEB, is now under the "Ministry of Economy" instead of the "Ministry of Finance" as was the case under the previous "government." This is reportedly because "Prime Minster" Dervis Eroglu felt that that Finance had too many responsibilities and Economy not enough. ¶2. (SBU) Atun confirmed that the new "government" is living hand-to-mouth financially, is more than 8 months behind on payments to many private sector suppliers, and can only hope to meet payroll and transfer payments via additional financial help from Turkey (On May 30, the press reported that Turkey would give north Cyprus another 60 million Turkish Lira - US$39 million - over and above the formal bilateral assistance program, in order to plug the May deficit.) He is working on a "business plan" for restructuring the north's economy; a Turkish demand in return for fully funding the north's budget deficit for the year. Keys to the restructuring plan, Atun said, will be privatization of some state-owned companies, an end to all public sector overtime, and no increase in public sector wages until the economy is back on its feet. When asked if he was worried about the reaction of the civil servants unions to this plan, Atun responded that the "government" had no choice and it would be best to undertake this difficult political track early in the new "administration's" tenure. ¶3. (SBU) Comment and bio data: The 35 year-old Atun was in the family shipping business before being tapped to become the youngest member of "cabinet" following his first election to "parliament" in April. Aside from managing a shipping company, he served as chairman of the Young Businessman's Association since 2006, where he did little to raise the profile of the organization. Having received economics and shipping management degrees in the UK, Atun tried to professionalize the management style of his company and reportedly succeeded to the extent that non-family members are now in charge and Atun has taken a leave of absence from the firm (this is in contrast to almost all other parliamentarians on both sides of Cyprus who typically maintain their outside financial interests while serving as MP). With no previous government experience and a great deal of energy and enthusiasm, we believe Atun will be an attentive interlocutor in our continuing efforts to encourage updating the north's commercial legislation, improve its anti-money laundering and counter-terrorist capabilities, and move to restructure the economy towards sustainability. Urbancic