Israelis would be allowed to invest in Turkish-controlled northern Cyprus

By Dalia Tal - Globes

Israelis would be allowed to invest in Turkish-controlled northern Cyprus

Israel previously denied permission to avoid confrontation with Greece.

"The Israeli government will allow Israeli companies to invest in the Turkish Republic of Northern Cyprus ," Israel's Ambassador to Turkey Pinchas Avivi told Turkish Foreign Minister and Deputy Prime Minister Abdullah Gul on Monday, during a visit to Israel.

Until now, the Israeli government avoided granting permission to Israeli businesspeople to invest in the Turkish-controlled part of Cyprus, in order to avoid a confrontation with Greece. Following Turkey's recent negotiations for entry into the EU, European countries eased their objections to investment in Turkish-controlled Cyprus. Israel has followed suit.

Gul said the Turkish Republic of Northern Cyprus needed all types of investment in transportation, tourism, agriculture, and water. Among the projects under consideration are a renewal of the shipping line between Haifa and Cyprus, and a large water project in Nicosia by the Tahal Group

During the visit, Gul met Israeli businesspeople and company managers to interest them in investing in telecommunications, agriculture, agroindustry, energy, water infrastructure, and security of airports, seaports and other installations and facilities in Turkey.

Israel-Turkey Business Council chairman Dr. Alon Liel, a former Ministry of Foreign Affairs director general, said Turkey would host a major security exhibition in June 2005. Turkey suffered severe terrorist attacks during 2004. Many Israeli security companies are likely to be interested in the exhibition.

Gul emphasized that all legislation governing foreign investment in Turkey had been amended, and that the country was now much more open to foreign investment. He added that Turkey's government had just carried out a currency reform, deleted extra zeros from the country's currency.

Gul said Turkey's economy grew by 6% in 2004, and was expected to grow by 10% in 2005. Inflation is now in the single digits, which also greatly aids foreign investment.

Gul added that the International Monetary Fund (IMF) had recently announced the lifting of restrictions on development projects in Turkey, which could lead to the resumption of the water infrastructure Southeastern Anatolia Project (GAP). Tahal, Bateman Engineering, Merhav and other companies are due to participate in the GAP.

During his visit, Gul did not discuss the issue of exporting water to Israel. However, lower ranking officials at the Ministry of Foreign Affairs said that if private companies wanted to take on the project, it could be carried out.