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Cablegate: Ambassodor and Finance Minister On the Economy And

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

UNCLAS ANKARA 000342

SIPDIS


SENSITIVE


STATE FOR E, EB/IFD AND EUR/SE
TREASURY FOR OASIA - MILLS AND LEICHTER
NSC FOR BRYZA AND MCKIBBEN
USDOC FOR 4212/ITA/MAC/OEURA/DDEFALCO


E.O. 12958: N/A
TAGS: EINV EFIN PREL TU
SUBJECT: AMBASSODOR AND FINANCE MINISTER ON THE ECONOMY AND
INVESTMENT


REF: 03 ANKARA 7785


1. (SBU) In a January 16 meeting, Ambassador congratulated
Finance Minister Unakitan on Turkey's economic successes in
2003, but warned that the recovery remained fragile and that
the GOT needed to implement the reform program fully. He
predicted that the Prime Minister would hear similar comments
in Washington, and would be asked how Turkey planned to
finance recent minimum wage and pension increases.


2. (SBU) Unakitan responded that the 2003 economic results
"did not make us happy." For example, while inflation fell
to 18.4 percent, it remained far above European levels, even
compared to relatively higher inflation countries such as
Bulgaria. He assured the Ambassador that the leadership is
aware that it cannot relax, and has to redouble its efforts
to accelerate privatization, integrate the unregistered
economy, lower interest rates, and meet EU accession
criteria. He also made a point of stressing the importance
of a strong, independent Central Bank. He said the
government was working with TUSIAD and other private
organizations on legal reform, and was determined to get rid
of corruption in the judiciary. (Note: AK officials
increasingly have been pointing to corruption and
incompetence in the judiciary as a key factor in harming the
investment environment. End note)


3. (SBU) Recalling their December discussion (reftel),
Ambassador reiterated the importance to Turkey's economic
recovery of attracting more foreign capital, and stressed
that the Prime Minister's visit, the March Investor
Conference, and the June NATO Summit presented the GOT with a
golden opportunity to "showcase" its reforms and its improved
investment environment. In that context, he made a strong
pitch for the GOT to resolve some of the long-pending
problems and disputes affecting U.S. companies.


4. (SBU) Unakitan agreed that Turkey needed to attract more
foreign capital, including that held by Turks abroad. Noting
that investors can "smell" profits, he expressed confidence
that, if Turkey created favorable conditions, investors would
come. On the specific U.S. investment disputes, he said
Parliament would soon pass legislation resolving Cargill's
zoning problem, and that the Prime Minister was personally
working on the data exclusivity issue. He said he had
discussed the Frito Lay-Kar Gida legal dispute with Justice
Minister Cicek, and urged the Ambassador to ask Cicek about
it. (Septel reports on Embassy's extensive recent
discussions with various ministries on the range of
investment disputes/problems.)
EDELMAN

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