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Cablegate: Turkey: Business Roundtables in Gaziantep, Adana and Mersin

VZCZCXRO4051
RR RUEHDA
DE RUEHDA #0079/01 3571326
ZNR UUUUU ZZH
R 231326Z DEC 09
FM AMCONSUL ADANA
TO RUEHC/SECSTATE WASHDC 4817
INFO RUEHAK/AMEMBASSY ANKARA 1359
RUEHIT/AMCONSUL ISTANBUL 1123
RUEHDM/AMEMBASSY DAMASCUS 0205
RUEHDA/AMCONSUL ADANA 1426

UNCLAS SECTION 01 OF 04 ADANA 000079

SENSITIVE
SIPDIS

ATTENTION: S/P - GREG BEHRMAN, S/SRMC - KAREN CHANDLER, R - SEHREEN NOOR-ALI

E.O. 12958: N/A
TAGS: ECON EAID PREL SOCI TU
SUBJECT: TURKEY: BUSINESS ROUNDTABLES IN GAZIANTEP, ADANA AND MERSIN
PROVE MINDSET IS KEY TO ENTREPRENEURSHIP

REF: STATE 112468

1. (SBU) SUMMARY: DCM Douglas Silliman, accompanied by Adana
PO and DPO, held three business roundtables in Gaziantep, Adana
and Mersin to discuss President Obama's Cairo speech and the
upcoming Summit on Entrepreneurship. During the roundtables,
business leaders from Gaziantep, with their can-do spirit,
ambition and commonsense approach to competition and enterprise,
upheld their province's reputation for being the most
entrepreneurial in Turkey. Adana's business group discussed
GoT-imposed impediments to entrepreneurship and held that
private business foundations and associations should lead the
way in building transatlantic links. Another group of Adana
entrepreneurs cited the lack of capital and a learn-by-rote
education system as impediments to entrepreneurship. Mersin's
roundtable discussion touched on the need for the GoT to "become
trustworthy" and give businesses a break through tax reform.
All participants welcomed President Obama's ideas and encouraged
support from the U.S. public and private sectors in expanding
transatlantic business ties. END SUMMARY

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WHY IS GAZIANTEP SO SUCCESSFUL AT BUSINESS?

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2. (SBU) When Gaziantep's top business leaders at the
roundtable answered the question "Why is Gaziantep so successful
at business?"several themes emerged. Most mentioned Gaziantep's
Silk Road history and strategic trade location, and from that an
inherent understanding of the day-to-day struggle of commerce.
As a board member from SANKO Holding, one of Turkey's largest
companies operating in more than 10 sectors with over 14,000
employees, said: "We had to learn to sell before we learned to
produce. We are inherently innovative, creative and have a
spirit of self-sufficiency that is aggressive and
uncompromising. We channel that into business."

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FAMILIES EMBRACE BUSINESS CULTURE AND EDUCATION

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3. (SBU) Several business leaders described how their fathers
took them to the workshops or factories to show them the ropes
from an early age. By making them partners from childhood, they
ensured a business culture would be passed from generation to
generation. Business is discussed regularly at all mealtimes, a
few business leaders commented. In Gaziantep, they said,
everyone is an entrepreneur. All the leaders emphasized
education was the top priority for parents who started
businesses, and that the second generation was vital in
expanding existing enterprises with their newfound know-how.

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NO BRAIN DRAIN AND FIERCE LOYALTY TO THE PROVINCE

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4. (SBU) Unlike other provinces where children of successful
business leaders stay abroad or in Istanbul, Izmir or Ankara to
seek their fortunes, Gaziantep business leaders and
entrepreneurs have an unflagging loyalty to the province and a
deep pride of association. They pointed out Adana's prosperity
began in the 1950s with five major family businesses that later
pulled up stakes and moved to Istanbul, leaving the province
bereft of any significant commercial entities. In contrast,
Gaziantep's second and third generations who are so central to
expanding and invigorating Gaziantep businesses stay and carry
out their commitment to making it a better place for the whole
community. SANKO Holding, for example, has set up foundation
schools and provides scholarships to disadvantaged children, and
its philanthropy in the area of archeology was instrumental in

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salvaging submerged mosaics from the famed Zeugma collection.
The spirit of contributing to the community lives in Gaziantep
entrepreneurs.

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UNITED BY SCARCITY AND INSPIRED BY THE SUCCESS OF OTHERS

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5. (SBU) Gaziantep has little arable land and no resources to
speak of. Even potable water must be transported from 80 km
away. Under these circumstances, Gaziantep had to recognize its
limitations and capitalize on its relative advantages, including
its location on an established trade route, border crossings
with Syria, and access to airports and seaports. Gaziantep used
its advantages to become a top producer of Turkish exports.
Gaziantep's business leaders do not see other companies' success
as something to be envied but rather as a model to admire and
emulate.

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NEVER POLITICIZE BUSINESS AND MAINTAIN FLEXIBILITY

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6. (SBU) Gaziantep business leaders uphold the rule of "no
talking politics" in business meetings. They emphasized the
importance of taking a common sense approach to politics and
government and working with the governor and mayor to "maximize
the environment of opportunities." Business leaders also
mentioned holding their members of Parliament accountable for
representing their business needs in Ankara. The financial
sector in Turkey did not develop until the 1980s, they said, so
the maxim that has guided business in Gaziantep is "It may be
small, but it's mine." This independence is guarded carefully,
and retaining the flexibility to adapt to changing economic
fortunes is vital to the longevity of business. For that
reason, government intrusion into money matters is generally
eschewed, including complicated financing schemes that might
hinder movement.

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THE BOTTOM LINE: VIEW EVERYTHING AS AN OPPORTUNITY

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7. (SBU) Gaziantep business leaders summed up the secrets to
Gaziantep with a single phrase: view everything as an
opportunity. With the country's largest industrial zone
employing the latest technology, exporting to more than 100
countries and enjoying its position as Turkey's top exporting
province by volume, Gaziantep's success is driven by this
mindset. Gaziantep business leaders expressed an interest in
new opportunities in Afghanistan and welcomed additional
information about the role they could play there.

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ADANA: FOCUS ON LINKING U.S.-TURKISH BUSINESS ASSOCIATIONS

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8. (SBU) Adana's Cukurova Young Businessmen's Association
(CUGIAD) leaders were critical of the GoT for making
entrepreneurship so difficult, citing onerous and ill-conceived
government regulations, a prohibitive tax burden, the lack of
infrastructure to support entrepreneurs and the deficiency of
available capital. CUGIAD's president dismissed the value of
large business delegations that accompany prime ministers and
presidents on official trips, pointing out that very few
meaningful business gains ever materialize. One businessman was
curious what the United States could offer that the European
Union had not already offered, referring to the EU's numerous
grant programs and business capacity-building projects. CUGIAD
members welcomed any structure that would promote partnerships
between Turkey and the United States, but believed meaningful
progress would come only by linking Turkish and American
business-oriented civil society. The association president said
he wanted a "development solution" and would be pleased to start
a dialogue with a U.S. counterpart, in particular to invigorate
the province's agribusiness-based import/export businesses.

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LACK OF CAPITAL HINDERS WOULD-BE ENTREPRENEURS

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9. (SBU) During an evening roundtable discussion with some of
Adana's most dynamic entrepreneurs, including three nominated
for the 2010 Summit, the lamentable lack of capital for start-up
businesses was cited as an enormous impediment to creating an
entrepreneurial momentum akin to the United States. One guest
described a $19 million World Bank program that charged Adana
government bureaucrats with evaluating proposals and
distributing entrepreneurship grants. In the end, the public
officials were so parsimonious in their bequests that more than
75 percent of the money was returned to the WB. Another
businessman, also a member of a national association of
entrepreneurs, described the typical predicament of a policeman
in western Turkey who went to more than 10 banks to finance the
production of a textile machine he invented, but could not raise
the funds. An economist at the table pointed out that two
venture capital funds operate in Turkey, but he did not believe
they effectively supported entrepreneurship - and very few
people outside of Ankara and Istanbul know about them. The
owner of one of Adana's most successful private schools pointed
out the lack of an entrepreneurial mindset and the inability of
the Turkish education system to imbue such a spirit in students
who learn by rote and focus only on end-of-year exam
preparations.

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MERSIN: THE GOVERNMENT MUST BECOME MORE TRUSTWORTHY

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10. (SBU) Established leaders of Mersin's business community
protested the arduous tax burden on established businesses,
including payroll taxes and social security, as well as the high
cost of energy and fuel as obstacles too daunting for most
business start-ups. The government, one leader said, must
"become more trustworthy," citing opaque business contract
awards, preferential treatment, and the inability to expand
without government support. Business leaders also pointed out
the lack of capital to create or expand businesses. They
highlighted ways in which Mersin's economic potential rests in
its flourishing port and transportation logistics operations. A
logistics center is currently under construction and will be a
hub where rail, sea, and land transportation will converge to
create Turkey's largest logistics operation and to boost
Mersin's strategic position with access to markets in the Middle
East, Northern Africa, and Europe.


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COMMENT

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11. (SBU) While business leaders unanimously pointed to
obstacles such as the poor regulatory system, government
shortcomings, heavy tax burden, lack of capital, and an
education system apathetic to entrepreneurial spirit, the
Gaziantep business roundtable was most encouraging in its
revelation that entrepreneurship is a state of mind. Business
leaders across the provinces were also unanimous in their
encouragement of U.S. support for business development. Given
Turkey's sensitivity and general objection to being labeled a
"Muslim country," the message here must be crafted as
"entrepreneurial outreach and support." President Obama's Cairo
speech espoused an important idea that has certainly resonated
in southern and southeastern Turkey - to work towards economic
development by creating a new corps of business volunteers to
partner with counterparts. END COMMENT.
DARNELL

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