20.
August 2002
2. "HADEP and EMEP meet for alliance", leaders of Turkey's only legal pro-Kurdish party, People's Democracy Party (HADEP) and leftist Labor's Party (EMEP) met on Monday to discuss joint actions at the elections set for November 3.
3. "Turkey warns Barazani", Turkey has warned the chairman of the Kurdistani democratic party Masoud al-Barazani of damages that may inflict him if he causes tension in the region.
4. "Future Turk govt would be restrained by debt", November polls could produce a government dominated by a party suspected of Islamist and anti-IMF leanings, but Turkey's debt burden and a need for continued financial support may rein in any radical tendencies.
5. "Turkey Sees 'Buffer Zone' for Iraq Refugees", Turkey is ready to set up refugee camps inside northern Iraq to shelter and feed thousands who may flee any U.S. military strike against neighboring Iraq, a Turkish Red Crescent official said.
6. "Azeri gas project delayed over Turkish market uncertainty", development of a massive natural gas field in the Caspian Sea is being held up because of continuing uncertainty over whether the gas can be sold to Turkey, the head of the project said Monday.
Dear reader,
due to the holiday time our "Flash Bulletin" will not be forwarded to email addresses from August 1, 2002 until August 25, 2002. It can be viewed, however, right here in the internet at www.flash-bulletin.de as usual.
the staff
1. - Turkish Daily News - "Yilmaz: We expect a date for EU negotiations":
Ankara / August 19, 2002
Deputy Prime Minister Mesut Yilmaz, before his flight from Istanbul's Ataturk Airport to Denmark to meet with Danish Prime Minister Anders Fogh Rasmussen and the Danish foreign minister, said in a written statement that Turkey expected a negotiation date from the EU Copenhagen Summit. Yilmaz declared that Turkey had made the necessary steps for accession to the EU by accepting the adaptation laws and was now waiting for a date from Europe for the start of negotiations.
Yilmaz stated that his aim was to inform his Danish counterparts about the latest adaptation laws, which were ratified on Aug. 3. "Rasmussen visited Ankara in April. At that time, he asked for the necessary changes to be made and said that it was not possible to get a date at the Copenhagen Summit if they were not fulfilled. Turkey made these steps. Turkey is waiting for a date for EU accession from the Copenhagen Summit. We will inform EU term president Denmark about the latest developments and the Turkish government's expectations regarding the summit," Yilmaz said.
Turkish-Danish Parliament Association Turkish Co-chair Cahit Kavak,
EU Affairs Secretary-General Ambassador Volkan Vural, and Foreign
Ministry Deputy Undersecretary Ambassador Akin Alptuna have accompanied
Yilmaz on his visit. 
2. - Turkish Daily News - "HADEP and EMEP meet for alliance":
Ankara / August 19, 2002
Leaders of Turkey's only legal pro-Kurdish party, People's Democracy Party (HADEP) and leftist Labor's Party (EMEP) met on Monday to discuss joint actions at the elections set for November 3.
Apart from HADEP leader Murat Bozlak and EMEP leader Levent Tuzel other officials from both parties were present at Monday's meeting held in HADEP headquarters in Ankara.
EMEP leader Tuzel told reporters that they have met in order to exchange views about recent political developments and discuss possible cooperation between these two parties in the elections.
"There is a labor circle in Turkey expecting that labor and democracy would dominate the power. And this circle has an important vote capacity. In this light, we are trying to create an alternative for labor and democratic alliance," Tuzel said.
Meanwhile, HADEP leader Bozlak noted that Nov. 3 is a very important date for Turkey and called on people not to repeat the same mistakes.
"Turkey has severe problems that carry the risk of turning into a crisis. Those who believe in people are capable of solving these problems. In this light, these people should form serious alliances," Bozlak said.
Both Bozlak and Tuzel vowed to continue to hold ties in order to reach an agreement to form an alliance before the polls.
No merger with CHP
Towards the elections, there is an increasing number of meetings between
political party leaders to form alliances for polls. Republican People's
Party, in a historical call last week, called on leftists parties
to unite under its flag. Meanwhile, former Economy Minister Kemal
Dervis is the key figure carrying out efforts to unite Turkey's scattered
leftist parties.
Answering a reporters question about these efforts, HADEP's Bozlak said, "CHP has called for a merger under its flag. We do not believe that this is the right path. We believe that Dervis would also see that CHP is the wrong address. CHP administration lacks the power to realize such a merger."
Bozlak stated that they have met with Freedom and Democracy Party
(ODP) and Social Democratic Populist Party (SHP) previously to examine
joint values such as democracy, labor and anti-IMF policies.
3. - Hurriyet - "Turkey warns Barazani":
August 19, 2002
Turkey has warned the chairman of the Kurdistani democratic party Masoud al-Barazani of damages that may inflict him if he causes tension in the region. This comes following following statements by Barazani recently made to one of the American papers, in which he said that Karjouk, which is situated in al-Turkman area to the north of Iraq, is a Kurdish governorate.
The Turkish daily Hurriyet on Saturday quoted a high ranking Turkish official who was not identified that the provinces of Karkouk and al-Mousel are considered the most sensitive areas for Turkey, Turkey will challenge any attempt sought to maintain the Kurdish control on these two oil rich provinces.
The Turkish official indicated that the Turkish authorities mentioned its warning concerning Karkouk and al-Mousel to the USA during the recent visit held by the US under defense secretary to Ankara.
Meantime, the Turkish ambassador in Jordan Arghan Ozar has denied
his country to be in support of launching an American strike against
Iraq. He explained that the Turkish president and the prime minister
had announced during their meeting recently with the US President
George Bush that Turkey is against attacking Iraq militarily and that
Turkey is for Iraq's unity and sovereignty. In an interview with the
Jordanian al-Dostour issued on Saturday, the ambassador said that
his country also refuses to be a starting point in case an American
attack will be directed against Iraq.
4. - Reuters - "Future Turk govt would be restrained by debt":
August 19, 2002 / by Servet Yildirim
November polls could produce a government dominated by a party suspected of Islamist and anti-IMF leanings, but Turkey's debt burden and a need for continued financial support may rein in any radical tendencies.
The Justice and Development Party (AKP) descends from fiery Islamists who once enraged the army by, among other challenges to state policy, promising an "Islamic dinar" currency. It thrives now on widespread popular anger with mainstream parties over the poverty born of Turkey's worst recession since 1945.
But the AKP, streets ahead of other parties in most opinion polls, offers soothing words to NATO allies and to a United States nervously weighing military action in neighbouring Iraq.
It has, it says, learnt from the fate of Turkey' first Islamist-led government, forced from power after a year in 1997 in a campaign led by business and the powerful generals.
AKP's plans to cut waste and raise revenue contain little that is new or has not already been tried or proposed by many other political parties. They go out of their way to present themselves as "conservative democrats". The question for markets, many voters and the army is whether to believe them.
Hemmed in by a massive debt load, a $16 billion IMF lifeline on one side and sceptical Turkish markets and a suspicious military on the other, they have little room for manoeuvre.
AKP, however, reserves the right to tweak the details of Turkey's IMF lending programme and expects the fund to agree since the programme's central principles will remain untouched.
"If the IMF is getting the result it wants why should it refuse?" AKP economy policymaker Ali Coskun said. "The IMF is aiming for debt turnover and a bigger primary surplus. That's what it wants, and what I will promise. There are resources."
Central Bank autonomy, a legacy of the present three-party coalition, would remain and the lira would continue to float.
"Consolidation (of debt) is not something that can be considered," he said.
Coskun, once close to late president Turgut Ozal, credited with the biggest Turkish free market reforms of modern times, knows government and business and heads an AKP economy team full of plans and confidence but short of experience in power.
SAVINGS PAYOUT
Coskun declines to say which areas of the loan deal his party wants to change but has many ideas on how to raise revenue and push an economy into growth. Officials say they will be discreet and sensitive to market volatility.
AKP would encourage Turks living abroad to invest their savings in Turkey and try to register billions of dollars that many believe is sloshing around in Turkey's black economy.
Successive governments have tried similar plans, with only limited success.
"When I look at the AK Party's economic programme there are no controversial schemes or plans and as a matter of fact it looks similar to other mainstream parties' economic programmes," said Serhan Cevik of Morgan Stanley.
AKP says it would also press ahead with privatisation, perhaps in the form of convertible bonds that would offer a fixed return and be convertible into shares at a later date.
Coskun pointed to a small withholding tax that might be used to slow rapid flows of cash in and out of Turkish markets.
It also wants to free up a large proportion of some 11,000 trillion lira accumulated in state coffers from a compulsory savings scheme that has only been paid out in dribs and drabs.
"We have to do something like the drip you give a patient," said Coskun. "There is more than 11,000 trillion in the hands of Ziraat Bank and the Central Bank...We'll immediately announce a plan to pay this back. We'll pay...three trillion immediately."
"This will increase demand. The economy can't grow unless domestic demand increases," he said.
Treasury officials, however, say the cash would not be so readily available and is almost completely tied up. Any large payments from the savings fund would have to matched by new revenue, or possibly borrowing. The IMF is unlikely to approve.
Surveys put AKP at 15-20 percent support, while other parties struggle
to clear a 10 percent hurdle to parliament. If AKP maintains its strength,
the degree of its power will depend on the success of Kemal Dervis,
former economy minister and architect of an IMF crisis plan, to unite
a divided centreleft.
DEBT
The one thing any government that emerges from the November election will face is debt: Turkey's huge pile of domestic debt, the legacy of years of government largesse, successive crises and a costly bailout of a failed banking system.
A UBS Warburg report said it was still early to predict whether Turkey, the IMF's biggest debtor, would have to seek new international support.
"However, even at this stage it is clear that in any event next year's financing challenge will be tougher than this year's in the absence of similar generous (foreign)...funding."
The domestic debt stock stood at 126,830 trillion lira at the end of June. Its size fluctuates alongside the volatile Turkish lira but is over $75 billion, compared to a gross national product expected to be around $165 billion in 2002.
Coskun, like many Turkish economists and bureaucrats before him, points to the large proportion of domestic debt held by state institutions as a major assistance to the treasury.
"These are floating rate notes...as rates go down and the risk premium falls so will these," he says. "Thirty percent (of domestic debt) is dollar-indexed papers. If there's no swing in exchange rate, these are no different to external debt."
"The problem is the $17 billion proportion of the $79 billion
domestic debt that is fixed rate and short term. If you can establish
confidence, rates will fall and the maturity of the $17 billion can
extend. Lower rates and you clean it up."
5. - Reuters - "Turkey Sees 'Buffer Zone' for Iraq Refugees":
DIYARBAKIR / August 20, 2002
Turkey is ready to set up refugee camps inside northern Iraq to shelter and feed thousands who may flee any U.S. military strike against neighboring Iraq, a Turkish Red Crescent official said.
Turkey, a close U.S. ally likely to play a role in any strike on Iraq, is determined to avoid the international humiliation and scorn it suffered after the 1991 Gulf War when one million Kurdish refugees, starving and exhausted, crossed over the region's mountains into Turkey.
Turkish troops initially tried to hold the exodus inside Iraq but were rapidly overwhelmed by sheer numbers of refugees who soon exhausted meager local provisions. The pictures of chaos and suffering in the makeshift camps inside Turkey were broadcast internationally. "The priority is to set up a buffer zone 10 miles inside Iraq to provide for any Iraqis who may cross the border," Muzaffer Karadede, chief of the Red Crescent in the city of Diyarbakir, told reporters late on Monday.
There was also provision for handling refugees inside Turkey, a country suffering its worst recession since 1945.
NATO-member Turkey already maintains a military presence inside northern Iraq, which has been run by local Kurdish factions who broke away from Baghdad after the 1991 Gulf War.
Turkish forces operate against Kurdish rebels who have withdrawn from southeastern Turkey to mountain bases there. Some 30,000 people have been killed in a separatist fighting in Turkey since rebellion began in 1984, but fighting has lessened since the capture of guerrilla leader Abdullah Ocalan in 1999.
Ankara says it opposes military action against Iraq, fearing damage
to its frail economy, but it seems likely it would provide at least
air bases and logistical support for its close ally.
FIVE REFUGEE CAMPS
Diyarbakir is the biggest city in Turkey's southeast, a predominantly Kurdish region with deep trade and cultural ties to the Kurdish areas in the north of Iraq.
Karadede said plans had been drawn up to establish five refugee camps across the northern Iraqi border from the Turkish province of Sirnak.
"We have depots of tents, blankets, food and medicine," he said. The five camps could handle up to 2,000 large families of refugees, he said.
Washington sees Turkey as an essential ally in its plans to remove President Saddam Hussein, whom it accuses of developing weapons of mass destruction.
President Bush has said Saddam constitutes a danger to the United States and must be removed. There is speculation of an action at the end of this year or the beginning of next year, but Bush says there are no firm plans.
Iraq has the second largest oil reserves in the world behind Saudi Arabia.
Turkey hosts U.S. and British warplanes that patrol northern Iraq to enforce a no-fly zone designed to protect the region from attack by Baghdad government forces.
Karadede said the refugee camps had been planned in coordination
with Turkish civil and military groups as well as a Kurdish group
that controls that section of northern Iraq.
6.
-AFP - "Azeri gas project delayed over Turkish market uncertainty":
BAKU / August 19, 2002
Development of a massive natural gas field in the Caspian Sea is
being held up because of continuing uncertainty over whether the gas
can be sold to Turkey, the head of the project said Monday.
David Woodward, head of oil major BP's operations in Azerbaijan, said
approval for the start of full field development at Shah Deniz was
to have been given in July but has now been pushed back to late October.
"There are still a number of issues relating to the Turkish market
and the sales and purchase agreement that was signed between Azerbaijan
and Turkey last year," Woodward told reporters.
"We need to resolve the issues relating to that agreement before
it will be possible to sanction (full field development of Shah Deniz)."
Shah Deniz, which lies in Azerbaijan's sector of the Caspian Sea,
contains an estimated 400 billion cubic metres (14,000 cubic feet)
of gas, making it a world-class field and the biggest gas discovery
in the Caspian to date.
The consortium operating the field plans to build a gas pipeline from
Azerbaijan to Turkey to supply the domestic market there.
In March 2001 the governments of Azerbaijan and Turkey signed an agreement
under which Turkey committed itself to importing six billion cubic
metres of gas from Shah Deniz each year.
However, some industry insiders and analysts have warned that the
project is not feasible at the moment because Turkey's economic turmoil
is depressing demand for natural gas in the country.
The Shah Deniz consortium says it is still confident a solution can
be found and that full field development and pipeline construction
will both go ahead.
The consortium comprises BP, which is also the project operator, Azeri
state oil company SOCAR, Statoil, TotalFinaElf, Lukoil, OIEC and TPAO.