Turkish Leader in US, Iraq and Economy on Agenda

Turkey

Economic News

22 Jul 2010
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Despite heavy US pressure, the leader of Turkey’s ruling party fought shy of making a clear commitment on Turkish support for an American-led invasion of Iraq in Washington this week.



Recip Tayyip Erdogan, the leader of the Justice and Development Party (AKP), said on December 10th that Turkey and the US instead needed “continuous dialogue” on the issue, while he remained “opposed to developments which could drag Iraq into further instability.”



Meanwhile, Economy Minister Ali Babacan made a follow up visit to Washington on December 11th to meet with US Treasury officials.



Going into the meeting, Babacan played down speculation that he would be going there to discuss the possible impact of a war in Iraq on the Turkish economy and to negotiate a compensation package.



Turkey has long claimed that the 1991 Gulf War impacted on its economy badly. The UN sanctions imposed since then have slashed Turkish-Iraqi trade, with Baghdad having been Turkey’s second major trading partner before the war. Estimates of losses vary, though the general figure given by Turkish officials tends to be in the $50bn range. US officials contest this, though acknowledge there have been losses.



Babacan did however say that Iraq would be discussed, adding that any war there would have consequences for the Turkish economy that would be difficult to predict.



“It’s impossible to know how great a burden this operation will place on Turkey’s shoulders with all these unknowns,” he said. “There will be an exchange of views [on this] and on how the economy should be guarded against negative effects. This is absolutely not a negotiation.”



Babacan will likely meet former CSX Corp. Chairman John Snow, whom President Bush appointed Treasury Secretary on December 9th after the resignation of Paul O’Neil last week.



Meanwhile, Erdogan has continued to voice Turkey’s concerns over any future Iraq operation.



“The Turkish economy is going through a difficult period,” he said. “Even rumours of a US operation against Iraq are having a negative effect on our economy and tourism.”



Just how negative depends on a variety of factors, with most analysts seeing the duration of the operation as key. Balancing losses to tourism and harm to Iraqi trade are the possibility of a regime change removing the UN sanctions and allowing trade to resume. In addition, US Deputy Defence Secretary Paul Wolfowitz, who visited Ankara the week before Erdogan’s trip to Washington, had hinted that a Turkish decision to open its bases to US troops and planes would lead to major investments in base facilities.



“We are talking potentially about tens of millions, probably several hundred million dollars of investment in several facilities we might use,” Wolfowitz told journalists during his visit.



Speculation over what facilities Wolfowitz might be referring to ranges from the Incirlik air base in south-eastern Turkey, from where 50 US and British planes already patrol the northern No Fly Zone over Northern Iraq, to the use of naval facilities such as Izmir and Antakya for landing major US troop contingents.



Yet Turkish officials have said they would find it extremely difficult to accept any major US ground forces in their country. These troops might be deployed too in order to mount an operation into Northern Iraq, an area of high sensitivity to Ankara.



Turkey fears that the toppling of the Baghdad regime might lead to Iraqi Kurdish groups declaring independence in Northern Iraq, seizing Kirkuk, Mosul and the neighbouring oil fields. This, Ankara fears, would result in a rekindling of Turkey’s own Kurdish problem, which has only recently subsided after a civil conflict in which upwards of 35 000 people were killed.



While the Iraqi Kurdish factions have claimed they have no intention of declaring independence, this was somewhat undermined mid-week by a statement from Barham Saleh, the prime minister of the smaller of the two main factions, the Patriotic Union of Kurdistan. He said that “Kirkuk should be a city of Kurdistan,” confirming that the city could potentially be a major flashpoint in any operation, as it has a large Turcoman population, which Ankara has vowed to protect in the event of any attempted Kurdish take over. Meanwhile, the city has been gradually Arabised since 1991, as Baghdad has sought to replace its ethnic Kurdish, Turcoman and Assyrian inhabitants with ethnic Arabs.



Back in Washington though, US officials claimed this week that negotiations on military co-operation with Turkey on an Iraq operation were taking place only at lower levels for now. Erdogan also restated his position that force should be a last resort, with Iraqi non-compliance with the latest UN resolution the only possible trigger for action.



“In the event that Saddam’s administration does not accede to the decision of the international community,” Erdogan said, “the necessary response will be forthcoming.”

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