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Cablegate: Ambassador's Meeting with Dpm Sener On Economic

This record is a partial extract of the original cable. The full text of the original cable is not available.

141401Z Jul 03

UNCLAS ANKARA 004424

SIPDIS


DEPT FOR E, EUR/SE AND EB
DEPT PASS USTR FOR LERRION
TREASURY FOR OASIA - MILLS AND LEICHTER


SENSITIVE


E.O. 12958: N/A
TAGS: ECON EFIN EINV PREL TU
SUBJECT: Ambassador's Meeting with DPM Sener on Economic
Reform and Investment Climate Issues

1. (SBU) Summary: In his farewell call on Deputy Prime
Minister Sener on July 10, the Ambassador encouraged the GOT
to stick with the economic reform program, emphasizing anti-
corruption and other measures which would help boost foreign
direct investment. The Ambassador also highlighted the
negative effect of the ongoing Motorola dispute on investor
sentiment toward Turkey. Sener reaffirmed Turkey's
commitment to the reform program and to efforts to improve
the investment environment. End summary.


Economic overview
-----------------


2. (SBU) DPM Sener acknowledged some negative economic
developments, including a recent increase in interest rates.
The strength of the lira has not thus far negatively
impacted foreign trade, but a continued strong lira could
prompt concern in the markets if it causes the current
account deficit to increase.


3. (SBU) Sener reaffirmed Turkey's commitment to the IMF
program, while admitting to problems and delays in
implementation. He continued that the delay in the fifth
review was a mistake, partially attributable to parliament's
internal regulations, which delayed consideration of some
draft legislation.


Investment Climate
------------------


4. (SBU) The Ambassador mentioned that Motorola officials
were in Ankara to meet GOT officials on their pending
receivables from Telsim, owned by the Uzan family. He
emphasized that a positive resolution of this case would
improve investor sentiment toward Turkey and reinforce the
GOT's commitment to the rule of law. Sener responded the
Uzans have been in conflict not only with other companies,
but also with Turkish state.


5. (SBU) The Ambassador urged Sener to undertake anti-
corruption activities and other measures to enhance the
investment environment for domestic and foreign companies
alike. He pointed out that Turkey is attracting as little
as 10 percent of its foreign direct investment potential,
despite an educated and hard-working labor force.


6. (SBU) Sener responded that combating corruption was
important to gaining the trust of the citizenry, which would
in turn help efforts to improve tax compliance. He also
said that the GOT Coordination Board to Improve the
Investment Climate Environment, headed by State Minister
Babacan, was working to cut bureaucratic hurdles for the
private sector and to provide a secure legal environment and
economic stability.
Pearson

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