Unrest in Iraq stirs worries over Turkish business links
Erdinç Çelikkan ANKARA
Trade with southern Iraq has been halted due to the violence that was escalated by Islamist militants’ seizure of Mosul. Sector representatives say they loaded goods at storage tanks in northern Iraq.Turkish investors are concerned over escalating turmoil in neighboring Iraq that sparked fears of a damage on business ties, which immensely prospered in recent years, between the two countries.
The Islamic State of Iraq and Levant’s (ISIL) seizing control of the northern Iraqi city of Mosul and taking 80 Turkish nationals in the same province have prompted safety concerns, as well as dragging the future of relations between Baghdad and Ankara into uncertainty.
With most of them being contractors, there are more than 1,500 Turkish companies engaged in business with Iraq, which has ascended as one of the favorite markets for Turkish entrepreneurs, particularly in the process of Iraq rebuilding its economy after the U.S.-led invasion in 2003.
Turkish goods and companies have shined out most of their competitors in the region by becoming the second import market for Iraq, while Iraq has become the second export market after Germany for Turkey.
Turkey’s foreign trade with Iraq surpassed $12 billion as of 2013 and the market remains an alluring target in the eyes of Turkish businesspersons.
Customs and Trade Minister Hayati Yazıcı said Turkish businesspersons are used to facing turbulence in Iraq, but ISIL’s seizure is an extraordinary situation and persistence of this would lead to severe results.
“In the past few days, we have been facing a different situation, particularly in the Mosul region. This de facto situation probably won’t be permanent, but the problem will grow if it is,” he said, expressing his confidence that the incidents would be ended before causing permanent damage.
However, as the violence and security measures suspended all truck transports north-sound bound, the goods’ transference to south of Iraq have been at a halt for the past two days, sector representatives say.
Foreign Economic Relations Board of Turkey (DEİK) Turkish-Iraqi Business Council Head Ercüment Aksoy said a continuation of the incidents would cost Turkey’s exports to Iraq to plunge by around $9 billion as the Kurdish-controlled northern Iraq will remain the only market.
Turkish-Iraqi Industrialist and Businessperson Association Chairman Nevaf Kılıç also said the trade between parties has been suspended.
He said transporters have unloaded their southbound goods at storages because the roads are blocked.
“We used to send vehicles south. As the road is closed now, our vehicles cannot go there. So we unloaded our goods into storages,” he told daily Hürriyet.
Turkey-based companies’ investments, ties in Iraq
Mardin Çimento (Cement): Some 30 percent of the company’s income yielded from Iraq.
Enka İnşaat (Construction): Workload in Iraq is 34 percent, no activity in Mosul.
Tüpraş (Refinery): Around 30 percent of crude oil supplied from Iraq.
Coca-Cola İçecek (Bottling): Some 9 percent of sales volume comes from Iraq, 2 to 3 percent from Northern Iraq.
Banvit (Poultry): Around 7 percent of the firm’s income comes from Iraq.
Ülker (Food): Around 5 percent of the firm’s income comes from Iraq.
Arçelik (Whiteware): Around 1 percent of the firm’s income comes from Iraq.
Tekfen Holding: As of the first quarter of 2014, some 0.3 percent of Tekfen Construction Company’s work load is based in Iraq.
Işıklar Yatırım Holding: The firm earns $3-million turnover from paper bag sales in Iraq.
Doğuş Oto (Auto): The firm owns distribution rights of Volkswagen and Audi.