5th Euro-Mediterranean Business Summit in Istanbul
Joseph Nezih Yackley, Special to The Turkish Times - Istanbul - More than 250 businessmen and government representatives from two dozen European, North African and the Middle Eastern countries met in Istanbul recently to assess the economic and business climate among the countries along the shores of the Mediterranean and discuss strategies to improve cooperation. The meeting was held during the first two days of March at Ciragan Palace Hotel on the shores of the Bosphorus linking Europe with Asia.

The 5th Euro-Mediterranean Business Summit, entitled "The Mediterranean Region and the Global Economy," was organized by the Turkish Industrialists and Businessmen's Association (TUSIAD). The emphasis of the discussions and presentations was on the Barcelona Process, which was established in 1995 by the European Union and 12 Mediterranean states to promote stability and economic growth in the region.

A highlight of the conference was the creation of the Union of Mediterranean Confederation of Enterprises (UMCE), to be centered in Tunisia and headed by Hassan Chami, president of the Moroccan Employer's Association. UMCE's primary task will be to coordinate business activity toward the establishment of a free trade area in the Mediterranean by 2010, a primary goal of the Barcelona Process.

Pascal Lamy, the European Trade Commissioner, addressed the conference via video presentation, expressing the need for the southern Mediterranean partner countries (the non-EU member signatories to the Barcelona Process) to promote greater economic integration amongst themselves through enhanced trade and cooperation. "Only then can a Mediterranean free trade zone become possible," he said.

Turkey's Minister of Econo-mics Kemal Dervis stressed the interdependence between Euro-pe and the countries of the southern Mediterranean. He made the case for limited, but steady migration from the southern Mediterranean states to the EU on the grounds that this would reinvigorate the European economy and help overcome the economic and demographic challenges posed by Europe's aging population and generous welfare state. At the same time, he called for more productive European investment in the southern Mediterranean. "These two regions complement each other. Their relationship is important for each other and for the world," Dervis emphasized.

Workshops Formed
Following the plenary session, participants disbursed into three workshops to discuss infrastructure investment, the new WTO round and preparing for the knowledge-based economy. The workshops offered several recommendations, all of which reemphasized the need for greater cooperation between southern Mediterranean countries and a more proactive role on behalf of the EU. The Agadir Declaration of May 2001, introducing a free trade area between Morocco, Tunisia, Egypt and Jordan was applauded as a positive step in this direction. Discussions concerning the role of the European Investment Bank (EIB) in developing the region's infrastructure focused on prioritizing environmental protection, communication, industrial competitiveness and regional development.

The conference noted, with concern, the emerging digital divide between the developed and the developing world, which has manifested itself across the shores of the Mediterranean, as well. In order to counter this trend, southern Mediterranean countries were encouraged to prioritize technology-related activities and to promote the conditions necessary for foreign direct investment to help develop advanced technology.

Tempered Optimism
Most analysts agree that the Barcelona Process has had little success in achieving its goals during the first six years of its existence. While preliminary trade talks have been conducted with all the southern Mediterranean partner countries except Syria, business participants noted a lack of commitment from both sides of the Mediterranean to introduce the type of innovative measures needed to promote regional trade.

There are reasons to be optimistic, however. Conference participants pointed to decisions made at the Fourth WTO Ministerial Conference in Doha, Qatar, to launch an ambitious round of new trade talks, which could help open new markets for Mediterranean exporters. The introduction of the Euro was also cited as a promising element in stimulating business and investment opportunities. Finally, the proposal by the European Commission last month to create a Euro-Med financial institution akin to the EIB was recognized as a step in the right direction.

Firm believers in the "disciplining effects of economic markets," conference participants pointed to the need for political reforms throughout the Middle East and North Africa to promote greater trade and integration with the European Union. While acknowledging the catalyst role that the Barcelona Process plays in the reform process in the southern Mediterranean countries, the final summit declaration recognizes that such a process remains the responsibility of national governments.

Turkey Can Help
Considerable attention was paid to the host country, which plays a unique role in the Mediterranean economy. Turkey is the largest market in the Mediterranean with a population approaching 70 million. Along with Malta and Cyprus, Turkey is the only signatory to the Barcelona Process that is also a candidate for EU membership. Furthermore, Turkey is the only EU candidate to have signed a customs union with the EU, in place since 1996.

"Turkey's improved competitiveness has and should continue to pave way for structural reforms in Turkey," said Tuncay Özilhan, President of TÜSIAD. Acknowledging that more needs to be done, especially in the field of public procurement and securing of financing for small and medium-sized enterprises, Özilhan believes these reforms have helped prepare Turkey for the global era.

Turkey has come to represent both the promise and the challenge of the Barcelona Process. Trade between Turkey and the European Union has increased considerably since the customs agreement was signed, currently amounting to more than 50% of all its exports. Imports show a similar pattern. Turkey's trade with other southern Mediterra-nean countries however, pales in comparison.

According to Dervis, the customs union has applied an external discipline to Turkey, forcing necessary reforms that could serve as a model for other states around the Mediterranean. He also discussed Turkey's application to the European Union. Linking Turkey with its Ottoman past, Dervis described Turkey as "truly European."

He recognized the need for Turkey to overcome its problems and continue its reform efforts, but ended his presentation on an optimistic note, claiming "We really believe that we will be in the European Union by 2010."

Conclusions
In the final summit declaration, conference participants cited the need to reinvigorate the Barcelona Process, which threatens to fall further behind in its goals of promoting regional prosperity and peace through greater economic and political cooperation. The Sixth Euro-Mediterranean Business Summit is scheduled to take place in Egypt in 2004. In addition to the issues discussed in Istanbul, the implementation of ratified Euro-Mediterranean agreements, the Barcelona Process' Regional Program and the upcoming WTO Round will provide participants plenty of material for discussion.

Israel in $700 Mil Turkish tank upgrade deal-report
TEL AVIV, March 10 (Reuters) - State-owned Israel Military Industries (IMI) has won a $700 million deal to upgrade 170 Turkish M-60 A1 tanks in the largest-ever arms deal between the two countries, the Ha'aretz daily reported on Sunday.

The deal, to be signed in the next few weeks, could grow further since Turkey has 1,000 tanks that need upgrading, the paper said.

A spokesman for IMI was not immediately available for comment.

The deal follows four years of talks in which Israel originally offered to sell Turkey its Merkava tanks but Turkey decided instead to upgrade its existing tanks, the paper said.

Under the terms of the upgrading, to take place over the next six to seven years, IMI will set up a production line in Turkey and transfer technology for the manufacture of some parts to Turkish firms.

Pepsi Bottling to buy Turkish bottler for dlrs 100 million
SOMERS, New York - Pepsi Bottling Group Inc. said Wednesday it agreed to acquire Fruko A., the exclusive Pepsi bottler in Turkey, for about dlrs 100 million from the principal local owners and PepsiCo Inc.

Pepsi Bottling said the Fruko purchase will increase the company's worldwide volume by about 4 percent. Fruko, which makes and sells Pepsi-Cola, 7-Up and several local brands, sold 46 million physical cases in 2001.

On Jan. 24, Pepsi Bottling said it expects full-year 2002 case volume growth of 3 percent. Pepsi Bottling had 2001 revenue of dlrs 8.44 billion.

The main stock index fell 3.69 percent to 10,917.99 points while yields on the busiest February 5, 2003 paper rose to 67.00 percent from Monday's 66.95 percent prior to the results of the auction of 224-day debt, expected after 1100 GMT.

"There are fears of war... Therefore there's no new money entering the (stock) market," said Bedri Ergulser of Taksim Securities in Istanbul.

Prime Minister Bulent Ecevit said on Sunday he would tell U.S. Vice President Dick Cheney that Turkey's economy, working to recover from its worst economic slump recession 1945, is delicately balanced and Turkey opposes military action for Baghdad's refusal to allow back U.N. weapons inspectors.

A Reuters poll of six banks estimates maximum yields of 68-68.5 percent at Tuesday's auction and a sale of 300-600 trillion lira (some $220-440 million). Meanwhile Turkey announced on Monday it had mandated two foreign banks as joint leaders of a global dollar bond offer local banking sources expect to seek some $500 million of borrowing with a five-to-seven year payback.

Anlaysts said on Tuesday they expected good demand at the sale although some worried over Turkey's huge debt burden.

"I am not sure that issuing more debt is a way to alleviate the debt spiral although demand should be encouraging especially as Turkey has escaped the U.S. steel tariffs and the IMF is in town," said Sheetal Radia of Standard and Poors MMS in London.

An IMF team is in Turkey for its first review of the new economic pact focused on tackling Turkey's $89 billion domestic debt load while lowering inflation and bolstering growth.

Turkey's treasury says it will service 523.4 trillion lira in domestic debt this week, only 45.4 trillion lira of which is to the market.

Finance Minister Sumer Oral said on Tuesday talks with the IMF were proceeding well and neither side foresaw any revisions to targets set out under the programme.

The lira was at 1,365,000 to the dollar on the interbank market from Monday's 1,364,000 and was trading at 1,367,000 on the central bank-brokered spot market.

Turkish Economy Minister Kemal Dervis is to travel to the U.S. and Mexico on Thursday, when he may meet with IMF and World Bank officials, government sources said on Tuesday.

WTC Dinner Program "Doing Business in Turkey" in Seattle WA
Held as prelude to May 12-17, 2002 "Turkish Trade Mission"
The Turkish Times - An evening of food, fun, and facts was held in Seattle on March 5 about doing business in Turkey. The evening was co-hosted by Turkish American Association and Trade Development Alliance.

Turkey is a very important trade partner for companies in the Northwest.

In 2000, Turkey was Washington State's 12th largest export market,totaling over $802 million. Presently the Turkish government is in the process of large scale economic reform, including a complete overhaul of the banking sector, liberalization of the energy sector, and accelerated privatization. As the Turkish market continues to reform and grow, there are ample opportunities for doing business with its companies. To help you make the most of these expanded trading opportunities, we are pleased to offer an exciting evening filled with valuable information on Turkey and informative tips on business, dining and cultural etiquette.

Although cultural similarities may be found among Middle Eastern countries, the Turkish culture is unique. It would be a mistake to assume that business and social practices are the same in Turkey as they are in its neighboring countries.

This special event was attended by a Turkish Trade Dele-gation, who addressed the business climate and trade opportunities with Turkey. Members of the Turkish American Association led a discussion of Turkish business culture.

The visit of this delegation is a prelude to a Turkish trade mission, which will take place May 12-17, 2002. At that time, Washington State businesses will have the opportunity to meet for in-depth discussions with the Turkish delegates.

For additional information, please contact the World Trade Club by e-mail: info@worldtradeclub.net or phone: (206) 283-9400.

Two Turks Join FORTUNE Billionaires
The Turkish Times - Two Turkish businessmen joined FORTUNE magazine's prestigious list of Billionaires.

Ranking 87th in the world was Mehmet Karamehmet, 48, with $4.0 billion in personal worth, head of Cukurova Holding, Turkey, specializing in finance and telecom.

Following Mr. Karamehmet in 112th place was Sakip Sabanci, 69, the colorful head of the Sabanci Holding, with diversified investments from rubber and paper to automotive and banking. Sabanci reportedly amassed a fortune of $3.3 billion.