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.
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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.
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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.
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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.
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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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