Can Turkey Afford Kurdish Gas?
Turkey may be hurting its broader economic interests in Iraq by pursuing energy ties with the Kurdistan Region, writes Guven Sak.
Political turmoil has an acute effect on Turkey’s economic relations in the Middle East. Our southern borders being as they are, we in Turkey are learning more about this than we would like. While the Syrian crisis will have an impact on the Turkish economy, Iraq will have an even greater effect.
First, Iraq is energy-rich, while Turkey is energy-poor.
Second, Iraq is an important customer for Turkish industrial exports, but there are others in the region who could take Turkey’s place. This has all become relevant as relations with Baghdad have taken a nosedive over Turkey’s ambitions to reach an energy deal with the Kurdistan Regional Government. Only recently, the jet of Turkey’s Energy Minister Taner Yildiz was refused a landing permit at Erbil’s airport. There are several reasons for concern here.
“Iraq is Turkey’s route to the Middle East,” as I was once told. I now see the wisdom behind those words. The first American intervention closed the region for Turkey during the 1990s. The second one has reopened it to us. Throughout the 1980s, Iraq was either the second or third-largest destination for Turkish exports. It became Turkey’s second-largest trading partner after Germany toward the end of the decade. Then came the first American intervention, pushing Iraq to a negligible 25th place in Turkish exports. As of 2012, Iraq is once again Turkey’s third most important export market. So far, so good.
