Could Iraq Make Up for Turkey’s Loss in Unstable MEA Countries

Turkish-Syrian relations have substantially improved particularly in the past couple of years.
Turkey’s trade losses with Arab countries shaken by opposition protests could be compensated for mainly by increased trade with its neighbor, Iraq, the president of the Turkish Exporters Assembly (TİM) told Sunday’s Zaman.

In recent years Turkey has shown a strong will to improve its ties with the Arab countries, with which it has historical, economic, cultural and religious ties. The majority of these countries have traditionally been autocratic regimes. In light of the latest incidents of civil unrest, it is clear that the situation in these countries could become fluid, and that iron-fisted leaders can be ousted by an angry opposition, making such countries more volatile. The wave of revolt that started in Tunisia has sparked a fire which quickly spread through other Arab nations, sweeping some leaders away with it while narrowing the breathing room for others. Syria is the latest Arab nation whose people are demanding more human rights and better democracy. The uprising in Syria was of immediate concern to Turkey because of its unique relationship with the country.

On top of being neighbors, Syria and Turkey have developed an unprecedented close economic, cultural and political relationship. Furthermore, the mayhem took place in regions where Turkey has been trying to build strong economic ties, causing exports to the countries in question to decline by varying margins.

According to TİM, exports to all Arab countries that suffered from revolts declined in the first three months of this year. For instance, in January and February, when most of the events took place, exports to Egypt, Libya, Syria and Tunisia all dropped compared to the first two months of 2010. Turkey’s exports to Egypt and Tunisia took the biggest hit, falling 21 and 38 percent, respectively. Exports to Libya fell by 6 percent while to Syria by 16 percent. Speaking to Sunday’s Zaman, TİM President Mehmet Büyükekşi said the decline in exports should not be of major concern. He does not deny the fact that trade with countries in troubled regions has diminished as of late. However, according to Büyükekşi, the focus should be on medium and long-term trade, so arguments over such short-term losses should not overshadow Turkey’s medium and long-term trade plans with these countries.

Iraq has emerged as a prime candidate for absorbing losses incurred by Turkey. Data provided by TİM show that in the first two months of 2011, exports to Iraq were around $1.1 billion. This represents a 40 percent increase in exports to Iraq over the same period of last year.

Turkish Prime Minister Recep Tayyip Erdoğan paid a visit to Iraq this week, accompanied by a large group of businessmen looking for more business opportunities. TİM President Büyükekşi was also with the prime minister during his visit and says the high-level visit will have a big impact on the future of the Turkey-Iraq relationship. It will also have a tremendous effect on trade between the two nations, he told Sunday’s Zaman.

“For example, before 2003, Turkey’s exports to Iraq were almost zero. They were around $829 million in 2003, jumping to $2.8 billion in 2005 and finally reaching $6 billion in 2010. With already a 40 percent increase in exports to Iraq in the first two months of this year compared to the same period of last year, Iraq will replace France on Turkey’s list of top export destinations and take fourth place overall by the end of this year,” he said.

Büyükekşi explained that the outcome of the ongoing protests will be better living standards with improved democracy for the people. In fact, the interim governments in Tunisia and Egypt have already promised the people more jobs with higher wages and economic regulations to assure them of more efficient integration with global markets. According to Büyükekşi, this will in turn give the middle class in these countries more purchasing power and increase demand of goods from the rest of the world. At this point, Turkey will play an important role in meeting those demands, he adds. Büyükekşi also shared his observations of the visit to Iraq with Sunday’s Zaman. During the visit he witnessed a deal in which a Turkish company agreed to supply tractors and mechanical products, a contract worth $16 million. Another contract was signed with the Iraqi Ministry of Agriculture to supply vegetable oil worth $300 million. These examples show that a variety of sectors in Turkey can benefit from trade opportunities in Iraq in the near future. Another big advantage of Iraq is that it is Turkey’s neighbor and its close proximity makes it more convenient for Turkish businessmen.

Investment opportunities for Turkish firms in Iraq are promising. “During our visit, the president of the National Investment Commission of Iraq informed us that the country will undertake unprecedented investment projects in the near future. In Baghdad alone, these investments will top $30 billion. The Iraq national investment plan will include the construction of 1,000 hospitals and medical clinics, another 1,000 schools and universities, and around 3 million houses. On top of such construction, Iraq will also invest in five other major sectors. It aims to pour money into the tourism sector and plans to attract 15 million tourists over the next 15 years. This will require constructing airports, roads, railways and such on top of outfitting existing ones. All this offers Turkish investors and businessmen a great opportunity,” Büyükekşi says.

Concluding his remarks, Büyükekşi pointed to the fact that Turkey is an important and active player in its wider region and has positioned itself well in countries there, watching their markets closely. He also said tremendous effort is being made, along with wide consensus and strong coordination among all levels of the public and private sectors in Turkey, in finding new business and trade opportunities abroad.

“As soon as the situation gets back to normal, Turkey will be in the best position,” he said.

03 April 2011
SOURCE: TODAYS ZAMAN