Ankara, Erbil explore strategic partnership

Following the historic meeting between Iraqi Kurdistan Region president and Turkish prime minister, Baghdad and Erbil are working on strategic economic partnerships.

al-monitor Turkey's Prime Minister Recep Tayyip Erdogan and President of Iraqi Kurdistan Masoud Barzani (R) attend a ceremony in Diyarbakir, Nov. 16, 2013. Photo by REUTERS.

Topics covered

pipeline, oil revenue, northern iraq, kurdish issue, krg, erdogan, erbil, barzani, ankara

Nov 21, 2013

The symbolic meaning of the historic meeting at Diyarbakir between Massoud Barzani, the leader of the Kurdistan Regional Governmen (KRG), and Turkish Prime Minister Recep Tayyip Erdogan is obvious. In a city considered a political and cultural center by all Kurds, for the first time a leader of the only semi-independent Kurdish state and the prime minister of Turkey, which for years had seen the entity as a major threat, together addressed a jubilant crowd. Beyond the symbolism of the Diyarbakir meeting, the occasion also sealed a very important strategic partnership in the Middle East.

This strategic partnership is built on two key pillars. One is the integration of Northern Iraq with Turkey’s economy, and the other is the political alliance between the Kurdistan Democratic Party (KDP) and the Justice and Development Party (AKP). During my visit to Northern Iraq, I had discussed economic issues with KRG Trade and Industry Minister Sinan Celebi. What he told me was eye-opening.

Attraction of oil

Oil production in the region controlled by the KRG is 300,000 barrels per day. About two-thirds of this amount is exported to Turkey in tanker trucks. This is a tedious and expensive method. Nevertheless, the KRG revenues — which were at $150 million seven years ago — have risen to $12 billion, and per capita income has climbed to $5,000 from $300. It is possible to boost the daily production to 1 million barrels with the operating wells. With proven and estimated oil reserves, this production will increase multifold in coming years. According to Celebi, yet-untapped natural gas reserves are estimated at 40 billion cubic meters. The KRG has already signed deals with international oil companies for production and to build the pipelines that would cross Turkey.

Even limited oil-production revenues have raised Turkey’s exports to Iraq to above $10 billion, which comes after Germany in Turkey’s primary export markets. It is, however, likely to occupy the top slot soon. According to Celebi, 90% of exports to Iraq go to Northern Iraq, with the rest going to the south of the country. Imagine how these numbers are going to multiply when the pipelines are completed and oil and natural gas starts to flow.

Barzani or Ocalan?

There is no need to go into the details of the strategic value Northern Iraq's energy resources represent for the Turkish economy. Iraq is vehemently against this integration, however, and the United States has been supporting Baghdad. Iraqi Prime Minister Nouri al-Maliki did not oppose Barzani’s visit very strongly. Foreign Minister Ahmet Davutolgu must have given him adequate assurances when he visited Baghdad recently. But the players in this grand oil game are not only Ankara, Erbil and Baghdad. The Kurdistan Workers Party (PKK) headquarters in the Kandil Mountains and its organic ally, the Democratic Union Party (PYD), are in the game as well.

As Northern Iraq, or South Kurdistan as it is also known, rapidly gets richer, the economic welfare gap with North Kurdistan (east and southeast Turkey) will further widen. North Kurdistan must get its share of this wealth, which will be possible with the successful completion of the peace process. The majority of Kurds live in Turkey, historically the power center of the Kurdish national movement.

At this point, a new dimension we have not really considered appears. Who will be the sovereign power of the Kurdish national movement? Or we can ask in simpler terms: Will it be Barzani who represents the conservative and right-wing trends? Or will it be PKK leader Abdullah Ocalan, who represents the secular and leftist currents? The roots of the natural alliance with the KDP and the AKP must be analyzed in this rivalry.

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