TRKNWS-L Turkish Daily News excerpts (January 3, 1996)

From: "Demetrios E. Paneras" <[email protected]>

Turkish News Directory

CONTENTS

TURKISH DAILY NEWS / 3 January 1996

[01] Ciller's trump is CHP

TDN Parliament Bureau

ANKARA- The two main center-right parties continue their tactical war, but have introduced no solution vis-a-vis formation of a government, though a week has passed since the election results were disclosed. The Motherland Party (ANAP) has already declared an alliance with the Democratic Left Party (DSP), and the True Path Party (DYP) Chairwoman Tansu Ciller is trying to draw the Republican People's Party (CHP) to her side.

President Suleyman Demirel is expected to start the official process next week by appointing one of the party leaders to form a new government. While the ANAP-DSP alliance is against a government headed by Ciller, the DYP chairwoman needs the CHP, as the party which doesn't object to her premiership. According to reports, Ciller has already met with CHP Chairman Deniz Baykal to secure such an alliance. DYP Deputy Chairman Ibrahim Yasar Dedelek told the TDN that there had not been any meetings with the CHP at the lower ranks of the two parties. He said: "There may however be an agreement between the party leaders. I am sure they are contacting each other." Dedelek further stated that the DYP and CHP shared similar policies on issues like the customs union and privatization.

Dedelek said Demirel should appoint the DYP leader to form a government if Welfare Party (RP) Chairman Necmettin Erbakan failed. "This would be the normal procedure," he said, adding that no progress was likely until then.

On the CHP side, however, there are contradictory views on the party's entry into a coalition. Former CHP chairmen Murat Karayalcin and Hikmet Cetin are defending the view that the CHP should join a coalition as a third partner with ANAP and the DYP. But Chairman Deniz Baykal has been arguing that Bulent Ecevit's DSP should be the party to join the ANAP-DYP coalition, and not his CHP. Ecevit, who is absolutely against Ciller's premiership, says the CHP should be the third partner if ANAP and the DYP agreed to form a coalition.

A former minister of the CHP, Onur Kumbaracibasi, said, "The electorate gave the CHP an opposition duty this time." Speaking to the TDN, Kumbaracibasi added that the DSP chairman had promised a coalition with ANAP, and people who voted for the DSP had such a coalition in mind. Kumbaracibasi however predicted that a Welfare Party-ANAP coalition would emerge from the present uncertainty, since an agreement between ANAP and the DYP was a very remote possibility. He said the RP may agree to leave the prime ministry to ANAP and thus evade responsibility.

Kumbaracibasi said a DYP-ANAP-CHP coalition was out of the question, and the fight over the DSP and CHP was just a tactical war between the leaders of ANAP and the DYP, who were actually fighting for the premiership.

Former Justice Minister Seyfi Oktay, from the CHP, told the TDN that the general view in the party was against taking part in a new coalition. "But if it becomes a matter of saving the regime, and if the CHP feels it is an obligation, then our party may take part in the government," Oktay stated. He added that it would be a great mistake to form a government with the RP.

[02] Middle East: The sands are shifting...slowly

To one who spent more than a decade working on Middle Eastern affairs, developments in that region during the past few weeks -- let alone the past few years -- are little short of extraordinary.

With the exception of the assassination of Israeli Prime Minister Yitzhak Rabin, they're also reassuring. And even that despicable act may prove to have positive impact, as it seems to have been the catalyst in convincing Syrian President Hafez Assad to reopen talks with Israel.

Those discussions, now under way in a plush conference center outside Washington, are ostensibly being held in complete privacy. As usual, however, enough is leaking to show that the Syrians are not, as in the past, merely repeating familiar positions and waiting for the other side to offer concessions. Another good sign is that officials in Lebanon, a country under Syrian tutelage, have openly talked about an Israeli-Lebanese peace treaty.

Not that the Israelis aren't offering concessions. The prospective timetable for a full Israeli withdrawal from the Golan Heights -- once to be stretched over several years and in several phases, testing Syrian intentions each step of the way -- seems to have been compressed to a few months, and the Israeli desire for electronic monitoring posts on Syrian territory appears to have been dropped.

The quoI for these quids may come from the Americans, not the Syrians: As in the Sinai (and now Bosnia), U.S. troops may be stationed on the strategic heights, as a "trip wire" against possible Syrian use of them to launch rockets or tanks into the Galilee region of northern Israel. Given the nature of the U.S.-Israeli relationship, it would be hard for American politicians to oppose this.

Proclamation of any breakthroughs -- if there are any soon to be announced -- must await the visit to region next week by U.S. Secretary of State Warren Christopher. Assad will want to be the focus of attention at an announcement, and the Americans will be accommodating.

The Turkish-language press has reported that Syria has been told it must end its support for the Kurdistan Workers' Party (PKK) (offered in the form of training facilities in the Syrian-controlled Beka'a valley of Lebanon and housing in Damascus for PKK leader Abdullah Ocalan) as a condition for an Israeli withdrawal from the Golan. This is an overstatement, at best: However good Israeli-Turkish relations are -- and they are good, if quiet -- Israel will not mortgage to them the prospects for peace with Syria. Washington undoubtedly is the prime mover on this front, but the push involves ending all forms of Syrian support for terrorism as a condition for improving U.S.-Syrian relations.

Even if Damascus does what is necessary to remove its name from the list of countries which the United States says support terrorism and therefore becomes eligible for U.S. financial assistance, the Syrians know better than to expect Uncle Sam to open his pockets to them. The U.S. Congress is determined to cut foreign aid (except to Israel and Egypt) to the bone, as part of the process of balancing the U.S. budget in seven years.

In any case, considering Assad's iron-fisted domestic policies and his intransigence over the years regarding both terrorism and Israel, Syria will remain in bad repute in Washington, only slightly less odious than Libya and Iran. The most Damascus can hope for is Washington's acquiescence in commercial deals with U.S. firms and perhaps some quiet American encouragement for the oil-rich Gulf states to help their northern Arab brethren.

"Oil-rich Gulf states": That clich� deserves to be buried, or at least put into perspective. While Saudi Arabia and most of its peripheral partners in the Gulf Cooperation Council may have huge reserves of oil, those aren't matched with huge reserves of cash. The 1996 Saudi budget of $40 billion will show a deficit of nearly $5 billion, as the kingdom continues to accommodate itself to the $50 billion cost of the Gulf War.

Despite continuing doom-sayers in the West, Saudi Arabia has continued to prove its ability to adjust: to the Gulf War, to falling oil prices and now to the illness of King Fahd, who has turned the affairs of state over to Crown Prince Abdullah, his slightly younger half brother, while he recovers from a mild stroke. The smooth way this was done has ended any speculation about the ultimate succession: Had Fahd's six full brothers not accepted Abdullah, they would long ago have raised objections to his status as crown prince. There may be other potential sources of objection, both within and outside the kingdom, but no source of ability to do anything about it.

But then the Saudis are the world's champions at accommodating.

A Saudi prince, asked what his countrymen would do when the oil runs out, told me: "We came from the desert; we'll return to the desert."

[03] The Euphrates issue: storm in a teacup?

Turkish Daily News

The water issue is back in the limelight after Turkey announced a major dam project near Birecik on the Euphrates river in southeastern Turkey. Syria claims the dam project means even less and poorer quality water for itself, and has rallied support among Arab countries to counter Turkey...

This is not the first time Syria has raised the water issue and we are sure it will not be the last. Syria, and for that matter Iraq, has been calling for an agreement with Turkey on the sharing of the Euphrates waters for several years. The fact that water is becoming a valuable commodity in the Middle East seems to be adding to the urgency of Syria's concern.

Yet, while the Syrians want to share the waters of the Euphrates in a just manner, it seems they are always missing the point that, if we put all the cards on the table, it will be seen that due to its economic requirements Turkey needs more of the Euphrates waters than Syria and Iraq, even in relative terms.

Yet we can see clearly that both countries do not really want to put all their cards on the table. Because if they do, it will become apparent that their agricultural lands are much less than they actually state, and thus their water requirements are much less than those of Turkey.

Besides this Turkey has a much more advanced economy and agricultural base than Syria and Iraq. Both countries have archaic irrigation systems which have to be revamped if they are to be of use.

That is why Turkey has proposed a three-phase project in which water and land inventories of all three countries will be made and the real water requirements of each country will then be determined. Yet Syria and Iraq have tried to avoid this.

Instead the Syrians seem to be dragging the issue into the international arena. They have enlisted the support of Egypt, which is nothing new. They have also forced other Gulf Arab states to side with them. Damascus has to be aware that such attempts are futile and will be counterproductive. Turks are used to real international pressure of great severity on the issue of Cyprus. Thus what Syria is trying to do will only help to toughen Ankara's position on the water issue.

There is a widespread belief among the Turkish public that Syria is actively using the PKK card against Turkey by hosting the Kurdish separatists, led by Abdullah Ocalan. Turks are also aware that if Syria and Israel reach a peace accord the PKK, along with all other terrorist organizations, will have to leave Syrian territory, and thus Damascus will no longer have the PKK card to play.

So people here feel it is no coincidence that Syria is trying to mobilize international support to solve its water problems with Turkey. However, we repeat that using pressure tactics against Turkey is useless. The Syrians have used the Arab League before to protest against Turkey on the water issue, and got nowhere. They tried every means to block the construction of the huge Ataturk Dam by using the influence of "petrodollars" in the past, and failed. They even tried to mobilize the World Bank against Turkey.

All in all Syria and Iraq have no other option but to sit down and discuss the water issue in earnest with Turkey, examining all angles of the problem for the sake of reaching a just settlement. But if we exaggerate our water needs, try to get the lion's share of the Euphrates waters even if we do not have proper agricultural lands, and try to use international pressures against Turkey, we have to be aware that we are at a dead end...

[04] State firms may face hard times after customs pact

ANKARA- A customs union with Europe which took effect this week may hit Turkey's clumsy and unproductive state economic enterprises, Turkish officials said on Tuesday.

"Many of the state economic enterprises are overstaffed and operating insufficiently at very high costs. They need state subsidy to maintain their operations after the customs union," a planning official told Reuters.

The official said Turkey has to privatize or restructure state firms which produce many goods, from chemicals to iron and steel.

Turkey has been trying to privatize state firms since 1986, but its performance has remained poor so far.

Turkey and the European Union (EU) removed all tariffs on industrial goods trade on January 1 under a customs union accord approved by the European Parliament last month.

Economists say some Turkish industries protected by high tariffs for decades like iron and steel, food processing, paper products, beverages, and consumer durable goods, are expected to suffer from the trade pact.

The iron and steel sector, which had long enjoyed high tariffs and state support including subsidies, will now face stiff competition from the European counterparts.

The food processing industry should raise its standards to the European levels which will probably increase its cost of production.

Officials say the customs union will create new trade opportunities for European exporters to Turkey and lead to a significant trade diversion from non-EU countries towards EU markets mainly in food products, beverages, textiles, clothing, iron and steel, machinery and paper products.

Despite pressures on some domestic industries, the customs union may force domestic producers to be more competitive and lower their profit margin, and lead to a decline in production costs.

Industries, heavily dependent upon imported inputs, will benefit from the cost reduction and be able to offer goods at cheaper prices.

Some Turkish industries, like textiles, glass and glass products, carpets, cement, canning and preserved fruits and vegetables, and structural clay products, are expected to benefit from the customs union, planning officials said.

These industries will use cheaper imported inputs and moderate price reductions will enable them to increase their exports to the European markets, they expect.

Turkish businessmen say Turkey should lower high energy and financing costs and provide macro-economic stability to weather the negative impacts of the customs union and benefit from the unlimited trade with the EU.

"The most important barrier before us is high interest rates. Small- and medium-scale companies cannot make production or export at this level of interest rates," Selcuk Yasar, head of the Aegean Industrialists' Association, said in a statement.

The government expects to lose some $3 billion in tariff revenues after the customs union.

It has increased value added tax rates to offset the loss in the short run. Economists believe the loss could be offset by more corporate and income taxes which they say will stem from the rise in national output as a result of the customs union.