Turkey Flexes Economic, Political Muscle In Iraq

Turkey's Prime Minister Recep Tayyip Erdogan (right) meets with Iraqi President Jalal Talabani in Istanbul i i

Turkey's Prime Minister Recep Tayyip Erdogan (right) meets with Iraqi President Jalal Talabani in Istanbul, Dec. 22, 2010. Turkey is vying with Iran to be the most influential regional power in Iraq. Tolga Bozoglu/AFP/Getty Images hide caption

itoggle caption Tolga Bozoglu/AFP/Getty Images
Turkey's Prime Minister Recep Tayyip Erdogan (right) meets with Iraqi President Jalal Talabani in Istanbul

Turkey's Prime Minister Recep Tayyip Erdogan (right) meets with Iraqi President Jalal Talabani in Istanbul, Dec. 22, 2010. Turkey is vying with Iran to be the most influential regional power in Iraq.

Tolga Bozoglu/AFP/Getty Images

Turkey is stepping up its role in Iraq, vying with Iran as a regional power. These powerful neighbors use investments and building projects to ensure long-term influence. The competition is heating up as the U.S. prepares to withdraw troops from Iraq by the end of next year.

Northern Iraq is the staging ground for Turkey's bid for economic dominance, and the Marina restaurant in Irbil is the kind of place that businessmen come to make deals. The food is pricey, and the live entertainment is in Turkish, a sign of Turkey's growing role. In the central market, Turkish products are available in every shop stall.

Local university professor Birzo Abdul Qhader surveys the goods on display.

"These baskets are Turkish, the plastic flowers, towels, the children's clothes," he says.

Turkish builders are active, too. A Turkish firm designed and built Irbil's new international airport. Turkish companies have invested in new five-star hotels and housing estates. And in the energy sector, state companies are exploring for oil in the south, while private oil companies are staking claims to discovered oil near Irbil.

"They've basically traded the stick for the carrot," says Greg Gause, who teaches about the politics of the Middle East at the University of Vermont.

"The Turks have predominant influence of any foreign power, even rivaling the U.S., and they've done it through a clever and low-key strategy," he says.

The economic boom in the north is due to the relative stability in the semi-autonomous Kurdistan region. It is also due to a dramatic shift in Turkish policy.

"[The Turks] are a very serious player in the Kurdish economy, which is doing much better than the rest of Iraq," Gause says. "But they've also gained a lot more day-to-day influence than they've ever had in the past."

Turkey's Historic Shift Toward Iraq

For years, Turkey opposed Kurdish autonomy in Iraq and did not recognize the Kurdish regional government, preferring to deal exclusively with Baghdad. Turkey has long feared that Kurdish aspirations for independence would incite Turkey's own Kurdish minority. The Turkish army conducted cross-border raids against the PKK, separatist Kurdish rebels who are fighting for an ethnic homeland for Kurds.

But the government in Ankara, dominated by the AKP, or Justice and Development Party, has made a historic shift, symbolized by an official visit by Turkish Foreign Minister Ahmed Davutoglu and the opening of a Turkish consulate in Irbil. Turkey's overall trade with Iraq has jumped to more than $6 billion a year, and Ankara's goal is to raise trade to $25 billion in five years, making Iraq its top trading partner. With Iraq's vast oil reserves, Turkey aims to be a major energy bridge from the Middle East to Europe.

Eric Davis is a Middle East specialist at Rutgers University. He notes that the Turkish chamber of commerce and industry has been lobbying the government not to allow the military to attack PKK forces whenever it wants, because that threatens investments in the north.

Indeed, stability in the north has led to a housing demand, which opened opportunities for Turkish contractors. Turkish laborers are building thousands of housing units in Irbil. Success in the Kurdish region in northern Iraq has led to bids farther south.

"Maybe we will go further down to Basra," says construction manager Serdar Kutsal, who has plans for a project in Karbala, south of Baghdad. "We will — but most likely we will go with our Kurdish friends."

In Baghdad, a Turkish consortium outbid an Iranian group for an $11 billion project to renovate Sadr City, the capital's largest Shiite neighborhood. Turkey is contesting Iran's economic dominance in southern Iraq with a consulate in Basra that focuses on trade.

"Different kind of influence — I know what Turkey is trying to do, and it is definitely a win-win policy," Kutsal says.

This is a historic rivalry, says Davis of Rutgers University. "This is like going back to the Ottoman Empire and the Safavids ... in the 1500s. This is the old struggle for Iraq between the Turks and the Iranians," he says.

Building Ties In Kurdistan And Baghdad

In the modern contest, carried out in business suits rather than military uniforms, Turkey appears to have Arab and American backing to keep Iran in check. Iraqi Prime Minister Nouri al-Maliki visited Ankara to get Turkish support for his bid to form the new government. He also sought approval in many more visits to Tehran.

"I think that's the long-term Turkish goal here, and in many ways, the long-term Iranian goal is to so tie the business and economic elements that their influence becomes so pervasive that it's unquestioned," says Gause of the University of Vermont.

Iran has historic political ties to Iraq's Kurds and Shiite Arabs and used those connections to press for an Iraqi government in line with Iranian interests. Turkey flexed political muscles, too, says Joost Hiltermann with the International Crisis Group.

"The regional states absolutely had an influence — but none of them was able to impose the solution it wanted," he says.

With so much at stake, Turkey continues to build ties to the leadership in the Kurdistan regional government as well as Baghdad. In a telling piece of political symbolism, Turkish Prime Minister Recep Tayip Erdogan, the leader of a predominantly Sunni Muslim nation, attended the Shiite commemoration of Ashura, one of the most important holidays on the religious calendar. It is a gesture that will likely be noted by the dominant Shiite leaders in Baghdad. The Turks have shown that religion can be good for business.

In an office in Irbil, Turkish businessman Ardel Ahiska explains that it is good to be a Turk in Kurdistan.

"It is a big market for the Turkish businessmen, Turkish trade man," he says. "We will be rich together."

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RENEE MONTAGNE, host:

This is MORNING EDITION from NPR News. I'm Renee Montagne.

And as the U.S. steadily reduces its role in Iraq, other countries in the region are jockeying to increase their influence. Turkey and Iran are foremost among them. NPR's Deborah Amos visited the northern Iraqi city of Irbil and has this report.

DEBORAH AMOS: The Marina Restaurant in Irbil is the kind of place that businessmen come to make deals. The food is pricey. The live entertainment is Turkish.

(Soundbite of music)

Unidentified Man: (Singing in foreign language)

AMOS: It's a sign that Turkey plays a dominant economic role here. At Irbil's first mega shopping center, more than 60 percent of the products are Turkish. Young entrepreneurs are drawn to this emerging market. Mustapha Ayden opened a brand name eyeglass outlet 18 months ago.

Mr. MUSTAPHA AYDEN: (Through translator) It's better than Istanbul, to make money here.

AMOS: So you have a lot of friends here from Turkey who came to do what you came to do?

Mr. AYDEN: (Through translator) Lots of friends, yes. Yes.

The Kurdish regional government also has lots of Turkish friends, friends with money.

Professor GREG GAUSE (University of Vermont): They basically traded the stick for the carrot.

AMOS: that's Middle East analyst Greg Gause, at the University of Vermont who says Turkish influence in the north rivals the U.S.

Mr. GAUSE: They are a very serious player in the Kurdish economy, which is doing much, much better than the rest of Iraq, but they've also gained a lot more day-to-day influence than they've ever had in the past.

AMOS: And as the U.S. prepares for a military withdrawal next year, Turkey has stepped up that role in a competition with Iran for regional dominance.

(Soundbite of applause)

At this Kurdish political gathering in Irbil, senior Turkish officials had VIP seats - unthinkable a few years ago. Turkey long opposed Kurdish autonomy in Iraq. Turkey's army conducted cross border raids and threatened more. Turkey feared Kurdish aspirations for independence would incite Turkey's own Kurdish minority.

But in a symbol of the historic shift, Turkey's foreign minister made the first official visit to Irbil last year. At the new Turkish consulate, Aydan Selgen's first job is to promote trade - now more than $6 billion a year.

Mr. AYDAN SELGEN: Our immediate target is to increase this to 25.

AMOS: Twenty-five billion.

Mr. SELGEN: Twenty-five billion, yes. And we are trying to make this happen within something like five years.

AMOS: Iraq could become Turkey's top trading partner. And with Iraq's vast oil reserves, Turkey can become a major energy hub from the Middle East to Europe says Selgen.

Mr. SELGEN: It's only natural to market their wealth through Turkey.

AMOS: Turkish state oil companies have invested heavily in Iraq says Ben Lando, the founder of Iraq Oil Report, an online news service. Lando says it's all part of the competition with Iran.

Mr. BEN LANDO (Iraq Oil Report): It's almost like a friendly competition who can have the most contracts, who can bring the most goods and have the biggest presence. When it comes to the economy, Turkey's winning.

AMOS: When it comes to the politics, who's winning.

Mr. LANDO: That remains to be seen.

AMOS: Iran has historical political ties to Iraqi Kurds and Shiite Arabs, and used those connections to press for an Iraqi government in line with Iranian interests. Turkey flexed political muscles too, says Joost Hilterman at the International Crisis Group.

Mr. JOOST HILTERMAN (International Crisis Group): The regional states absolutely had an influence, but none of them was able to impose the solution it wanted.

AMOS: With so much at stake, Turkey continues to build.

(Soundbite of hammering)

The success in creating large housing developments in the north has led to bids on projects further south, says construction manager Serdar Kutsal.

Mr. SERDAR KUTSAL (Construction manager): And maybe we will go further down to Basra. We will but most likely we will go with our Kurdish friends.

AMOS: Even larger Turkish companies are challenging Iran's economic dominance in Baghdad. A Turkish consortium outbid an Iranian group for an $11 billion project to renovate Sadr City - the capital's largest Shiite neighborhood. It's a competition for influence, says Kutsal.

Mr. KUTSAL: A different kind of influence. I know what Turkey is trying to do, and it is definitely a win-win policy.

AMOS: And in a telling bit of political symbolism, the Turkish prime minister, the leader of a predominantly Sunni Muslim nation, attended the Shiite commemoration of Ashura one of the most important holidays on the religious calendar. It was a gesture that will likely be noted by the dominant Shiite leaders in Iraq. Religion can be good for business.

(Soundbite of phone ringing)

Mr. ARDEL AHISKA: Hello?

AMOS: In his office in the Irbil, businessman Ardel Ahiska says it's good to be a Turk in Iraq.

Mr. AHISKA: It is a big market for the Turkish businessmen, Turkish trade man. We'll be rich together.

AMOS: Deborah Amos, NPR News.�

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