Turkey’s growing stakes in Iraq
Turkey may not have contributed troops to the US-led forces in Iraq, but it has been involved in an invasion of sorts.
In this offensive though, the battle flags are the advertising billboards of Turkish companies, which have spread across the occupied country and are making Iraq into an important market for Turkish goods.
It was three employees of one such Turkish enterprise that were taken captive and threatened with execution recently in Iraq. One of the conditions agreed for their eventual release was that their employers, the Turkish air-conditioning repair firm Kayteks, withdraw from the Iraqi market.
This drew attention to an increasing nervousness in Turkish business circles over working in their troubled southern neighbour, where tempting contracts are on offer – along with huge security risks.
Yet Iraq has long been a favourite market for Turkish companies, which have a history of major cross-border business.
Booming again
Before the US-led forces launched their attack in March last year, official trade between Turkey and Iraq had already topped the billion-dollar mark. Most of this was made up of exports of consumer goods and food under the United Nations-administered aid-for-oil programme.
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Employees of Turkish firms have |
Meanwhile, the unofficial figures are widely thought to have been twice that, as illegal trade in Iraqi diesel and crude oil – hauled over the border by Turkish drivers in makeshift tanker trucks – was long a feature of life along the Turkish-Iraqi frontier during the 1990s and the years of a UN embargo banning such trade.
Prior to this embargo, and the 1991 Gulf war, trade had been even larger. In August 1990, it stood at around $4bn a year, making Iraq one of Turkey‘s most important markets.
Now, more than a decade later, business is again starting to boom for Turkish entrepreneurs with Iraqi connections, especially as the US has listed its ally in Ankara as one of the countries that can benefit from the hundreds of contracts being doled out in Iraq.
Captives freed
More than 200 Turkish firms are doing business in Iraq and the numbers are growing weekly.
Yet so are the risks. Turkish enterprises have been heavily targeted by Iraqi groups capturing foreigners, with more than a dozen employees of Turkish firms being snatched in the past three months.
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“The new regime in Iraq means old monopolies are being broken down. Not everyone there is |
However, unlike many other foreign nationals taken captive in Iraq, all have been released unharmed.
In the Kayteks case, the men were kidnapped in early June while working in central Iraq. Along with the demand that Kayteks close its operations in the country was a call for Turks to stage demonstrations against US President George Bush, who was visiting Turkey at the time for the NATO heads of state summit.
With the US leader almost universally disliked in Turkey, thousands of Turks had already planned protests against his visit, with a series of running street battles being fought against police protecting the meeting venue.
Risky business
On 29 June, the day the summit closed, the captives were released. Turkish Foreign Minister Abdullah Gul publicly thanked those Turks who had protested against Bush during the bloc’s Istanbul summit, praising them for playing their part in securing their countrymen’s freedom.
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Cross-border trade between Iraq |
“I think non-governmental organisations and labour unions have played an effective role in their release,” Gul said. “So, I have to say ‘thank you’ to them.”
Kayteks also kept its part of the bargain, announcing it was shutting up shop in Iraq, joining at least three other companies that have bowed to the demands of Iraqi captors in recent months.
Most of those Turks held in Iraq have been working for smaller scale firms, ones trying to break into the newly emerging market, rather than those that have had a more established presence. Expansion carries with it more than the usual uncertainties associated with a new business venture.
“The bigger companies can afford to have security for their personnel,” said one textile exporter who didn’t wish to be named in this article for fear of reprisals in Iraq. “We are trying to get a foothold in Iraq, but we are a small firm and have to take risks that large companies can afford to avoid.”
The exporter also suggested that economics rather than politics was behind some of the pressure being applied to foreign companies operating in Iraq.
“Competition is fierce and some people resent new companies entering the market,” he said. “The new regime in Iraq means old monopolies are being broken down. Not everyone there is happy about that.”
Talking shop
Meanwhile, the Turkish government is keen to push trade with its neighbours, declaring that this also brings regional stability.
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“Peace in the Middle Kursad Tuzmen, |
Speaking at a dinner for Syrian Prime Minister Muhammad Naji al-Utri in Istanbul on 14 July, Turkey‘s Foreign Trade Minister Kursad Tuzmen touted his country’s 50% increase in trade with neighbouring countries in the past six months as a contributing factor to promoting peace.
“Peace in the Middle East,” said Tuzmen, “can be achieved by improving commercial relations and by increasing the investments in the region.”
Except that, for Turkish companies such as Kayteks and others, the situation at present is just the opposite: they cannot prosper in Iraq without peace.