Talking with Turkey

Economic News

22 Jul 2010
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When the Bulgarian and Turkish prime ministers met in Ankara this week, they were marking the latest step in over a decade of warming relations.



Bulgarian Prime Minister Sergei Stanishev was in the Turkish capital on an official two-day visit at the invitation of his Turkish counterpart, Prime Minister Recep Tayyip Erdogan.



"I'm happy that the high-level political dialogue between Bulgaria and Turkey is active and fruitful, that direct contacts between ministries and organisations, as well as between local governments, in the two countries are on the rise," Stanishev told the press in Ankara, before going on to say that "Trade between Bulgaria and Turkey has substantially grown."



Stanishev was accompanied on his visit by a 120-member delegation representing a broad cross-section of Bulgarian business interests - from tourism to textiles and pharmaceuticals to construction. The delegates conferred with representatives from 20 leading Turkish businesses at meetings in Istanbul and Ankara to further discuss bilateral economic relations.



Some of the agreements reached in these meetings aim at generating a more conducive atmosphere for trade between the two countries' companies, while also showing a commitment to equal treatment for both countries' investors.



All a far cry from how things stood in the past, when relations - often concerning Bulgaria's large ethnic Turkish minority - were often strained. The warmth over the past few years, however, has clearly been a boon to the economies of both countries.



One significant milestone was the free trade agreement signed between Bulgaria and Turkey in 1998. As a result of this, trade between the two countries increased from $580.7m in 1998 to $1.8bn in 2004.



At a meeting of the Turkish-Bulgarian Business Council on Wednesday, Stanishev put current trade figures at $2.3bn, with future expectations topping $3bn. Erdogan also noted that Bulgaria-Turkey trade volume has risen threefold over the last five years and that Turkish investment in Bulgaria now exceeds $500m.



Co-operation with infrastructure development and in energy also generated significant discussion.



Erdogan indicated that Turkey was willing to resume electricity imports from Bulgaria for the first time since 2003, when disagreements over the terms of the deal halted transmission. The ministers of economy from both countries are now expected to begin negotiations on the terms of a new agreement, with Turkish energy officials planning a visit Bulgaria in the days ahead.



While Bulgaria is eager to renew exports of surplus electricity, Turkey has expressed great interest in participating in large-scale infrastructure projects in Bulgaria. There are currently numerous road, rail, bridge and other projects being undertaken in preparation for the EU membership target date of 2007. Many of the lucrative contracts for these projects will be financed by the European Bank of Reconstruction and Development (EBRD) and other foreign investors.



Stanishev outlined some of his infrastructure priorities for the two countries in an interview with the Turkish press.



These included improvement of highways and the modernisation of border checkpoints to allow for a faster transit of Turkish trucks to Western Europe. Also on the agenda was the incorporation of Turkey into the energy supply network Union for the Co-ordination of Transmission of Electricity (UCTE), and further development of the Nabucco gas pipeline.



The Nabucco pipeline, which will pump between 13.5bn cu metres and 16bn cu metres of natural gas annually to central and western Europe from the Caspian region, Iran and perhaps the Middle East, has become a significantly more important issue recently, following the gas pricing squabbles between Russia and its customers.



Because both Bulgaria and Turkey depend heavily on Russian gas supplies, the two countries share a mutual interest in seeing the alternative pipeline enter operation as soon as possible to ensure a more balanced, stable supply.



The promotion of tourism and ease of transit between the two countries was another topic of discussion during the visit. Erdogan expressed his view that a compromise on visa procedures would better facilitate trans-border tourism.



Also, Turkish Transportation Minister Binali Yildirim and Bulgarian Transportation Minister Peter Moutafchiev signed an agreement on improving the border crossing between Svilengrad and Kapikule and railway border services.



In addition to the economic and trade agenda, international issues relevant to both nations were also discussed. EU integration is an important issue for Bulgaria, which is hopeful for accession in 2007, and for Turkey, which is vying for prospective membership in an expanded EU.



Close ties with Bulgaria could help Turkey's chances of entering the EU. Ankara can learn from Sofia's own experience in the process of accession, while Bulgarian support for Turkey's membership gives it another ally within the Union.



With so many diverse subjects being broached over the two days of discussion in Turkey, it has become clear that the political, social, cultural and economic ties that bind Bulgaria and Turkey run deep. Past experiences have shown that as long as both sides continue to foster this spirit of co-operation, both can continue to benefit from their partnership.

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