Jailed Kurdish Leader Ocalan Calls for Cease-Fire

Abdullah Ocalan, the jailed leader of the militant Kurdish group that has been fighting Turkey’s army for almost 30 years, called for an end to the armed struggle and a political solution to the conflict.

“Let guns be silenced, let ideas speak,” Ocalan said in the letter, read out by lawmaker Sirri Sureyya Onder to hundreds of thousands celebrating the Kurdish new year in Diyarbakir, the biggest city in Turkey’s largely Kurdish southeast. He called on PKK fighters inside Turkey to leave the country.

Ocalan’s call for peace is the latest phase in Prime Minister Recep Tayyip Erdogan’s initiative to end the conflict, which has left more than 30,000 people dead. His government has broken a taboo by engaging in talks with the PKK leader, whose group is classified as a terrorist organization by Turkey, the U.S. and the European Union.

Turkish stocks, bonds and the lira gained after Ocalan’s letter was broadcast on national television.

Obstacles to an agreement include the risk of a backlash among Turks who oppose concessions to the PKK. That’s what ended Erdogan’s earlier peace initiative in 2009.

Speaking during a visit to Holland today, Erdogan told reporters that the absence of Turkish flags at the Kurdish rally where Ocalan’s letter was read out was “provocative” and contradicted the PKK leader’s message.

Television footage of the Diyarbakir meeting showed an official stage decked in the PKK’s yellow, green and red, and thousands of flags in the same colors.

Iraqi Bases

Opposition to talks with the PKK exceeded support by more than two to one, according to a Metropoll survey in Istanbul earlier this year. When a group of Kurdish lawmakers visited the northern Black Sea region to promote the peace plan, they were besieged by stone-throwing crowds.

It’s also not clear what measures Erdogan will take to meet Kurdish demands for self-government, or whether Ocalan has full control over PKK commanders at the group’s main bases in northern Iraq.

Turkish military operations would end if PKK fighters withdrew from Turkish territory, Erdogan said today. In the past, Turkey has regularly bombed the group’s Iraqi camps.

The war with the PKK has cost Turkey more than $300 billion, according to government estimates. It’s no coincidence that the 1990s, when the conflict peaked, was the worst decade in recent times for Turkey’s economy, Finansbank AS said in an e-mailed note today.

Truth Commission

A peaceful solution would be the “ultimate argument for re-rating the Turkish economy” and lira-denominated assets, chief economist Inan Demir wrote.

Two-year benchmark lira bonds erased losses after Ocalan’s announcement and were trading to yield 6.15 percent at 4:55 p.m. in Istanbul, 3 basis points below yesterday’s close. The lira and the benchmark ISE-100 stock index both added 0.1 percent.

In talks with Kurdish lawmakers last month, Ocalan outlined plans for a truth commission to be established and Kurdish villagers driven from their homes to be enabled to return, according to leaked minutes of the talks published by Milliyet newspaper last month.

He said the Turkish plan would include “collective rights and a Kurdish reform law,” and that Kurds shouldn’t push beyond that to demand autonomy. Ocalan also warned that civil war was a risk if the peace talks broke down, according to Milliyet.

In the letter read out today, Ocalan called for a regional conference to include representatives from Iraq and Syria, where there are also Kurdish minorities.

Turkey has developed close ties with the autonomous Kurdish government in northern Iraq, which it previously viewed with suspicion as encouraging separatist feelings among Turkey’s Kurds. Turkish companies are among those developing energy reserves in Iraqi Kurdistan, which is locked in territorial and financial disputes with the Baghdad government.

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