Turkey’s deteriorating political ties spill over to economic side

Turkey’s relations with its neighboring regions have strained for the last years. The economic and trade ramifications of these deteriorating ties become more and more visible.

The latest reaction to Turkey has come from the interim Libyan government. The interim government decided to exclude Turkish companies from contracts, as Prime Minister Abdullah al-Thinni earlier accused Turkey of receiving officials from a rival government controlling western Libya.

The Turkish side reacted to the decision and the Foreign Ministry said yesterday that Libya’s decision does not carry any value given the dispute over political legitimacy in the country, the Turkish Foreign Ministry has said. And the Tripoli-based government in the country told to Anadolu Agency yesterday that the Turkish companies would be welcomed to the territory under their control.

According to the figures from the Turkish Contractors Association (TMB), around 200 Turkish companies had ongoing projects worth billions of dollars until 2011, when some of the companies’ construction sites were raided; forcing workers to flee back to Turkey. Several Turkish companies have applied to international courts to receive compensation for their losses, which are over $5 billion, but they still do not take any solid paybacks.

The association also said the total value of the projects completed in Libya in 2014 was quite low compared to the last two years.

This is diplomacy. Such actions and reactions are the case among countries. The problem here has been that Turkey experienced similar problems with a majority of its neighbors.

The same movie is in the theaters for many Turkish companies’ ties with their Syrian, Egyptian or other counterparts. This is not about losing money. These businesspeople also lose their friends there, becoming less dependable.

A Turkish businessman told me what he faced in Egypt a couple of years ago. He used to making business more than 100 Egyptian companies. And he said he sent a letter to each of them after the social unrest had peaked in the country in 2013.

He invited them and their families to Turkey until the things would become normal again in Egypt.

“They are my friends and in business relations matter most, as you know,” he said to me.

Yet almost 100 percent of his friends kindly rejected his invitation, noting they did not see Turkey as a “friendly country,” although they saw him a friend.

The same country now prepares not to renew the Ro-Ro agreement with Turkey in April.

“Egypt decided that it will not renew a three-year transit-trade agreement with Turkey in the latest evidence of worsening relations between the two countries,” Egyptian officials said in October 2014.

I do not even mention Turkey’s economic and trade relations with Syria, which has recently been near zero.

The Arab Spring movements and then the rising militancy in the region have stirred political, social and economic structure in many North African and Middle Eastern countries. Some of them were unofficially ‘divided’ or experienced even regime changes.

Long-term strategies and tactics in all types of ties matter in any type of relationship for the sake of reaping the yields. I hope these yields are ‘peace dividends’ for Turkey.