Lifting of Iran embargo both opportunity and threat for Turkey

Lifting of Iran embargo both opportunity and threat for Turkey

Germany has been the quickest to respond after the embargo was lifted for Iran. German Economy Minister Sigmar Gabriel has flown to Iran accompanied by a large group of industrialists and businesspeople. There he will meet Iranian President Hassan Rouhani. 

Germany is planning to increase its exports to Iran, which were worth 2.39 billion euros in 2014, to 10 billion euros, within three to four years. After Germany, Spanish and French delegations will be visiting Tehran. 

Clearly, Iran, as a country that has the fourth largest oil and the second largest natural gas reserves in the world, is whetting the appetite of many countries with its $400 billion economy and its $120 billion privatization plans. 

The lifting of the embargo on Iran has also mobilized the business world in Turkey. The trade volume between the two countries today is around $14 billion. Some calculate that this amount may double in 2016. But sentiments are still mixed toward Iran. 

Some rejoice that the embargo has been lifted, but others have concerns. Iran is an opportunity in some fields and a competitor in others. 

The United Brands Association (BMD), the umbrella organization of many retail brands, is due to visit Tehran at the beginning of September. According to the BMD, up to 20 famous Turkish brands may open up to 500 stores in Iran over the next three years. Among them are Boyner, Vakko, Desa, Derimod, Mavi, İpekyol and Mudo.

The tourism sector is also making optimistic calculations. According to Association of Turkish Travel Agencies (TÜRSAB) head Başaran Ulusoy, incoming tourists from Iran will climb to 2 million from 1 million in a short time. We will see whether the tourism sector will be able to fill the gap created by the absence of Russian tourists with Iranians. 

Dr. Mehmet Aktaş, the CEO of Yaşar Holding, which operates in the food and paint industry, believes there is significant export potential to Iran both in food and in paint. 

However, according to the head of the Young Businessmen Association of Turkey, Rahmi Çuhacı, the construction products sector will be affected negatively with the lifting of the embargo. Demanding that measures be taken by the government on this matter, Çuhacı said Iran has made the biggest investment in this sector in the region after Turkey.  

The marble sector, which has a considerable place in exports, is also apprehensive. The situation may turn into a nightmare for Turkey’s marble industry because Iran is a rich country in terms of marble deposits and also has the advantage of using low cost energy. 

According to energy expert and strategist Mehmet Öğütçü, “If Iran can harmonize with international capital, finance, trade and technology systems without problems, and if it adopts a constructive role in regional conflict areas, then it could steal roles currently held by Turkey in the security and economic fields.”