News / Middle East

    Iraq Crisis Weighs on Turkey's Economy

    Turkish truck drivers captured earlier by militants in northern Iraq at an airport in Irbil, Iraq, July 3, 2014.
    Turkish truck drivers captured earlier by militants in northern Iraq at an airport in Irbil, Iraq, July 3, 2014.
    Dorian Jones

    With the escalating crisis in Iraq, concerns are growing in Turkey over the economic fall out.  Iraq is Turkey's second largest trading partner, with Turkish companies exporting roughly $14 billion a year.  

    With the radical Islamist group ISIL scoring major military gains in Iraq, concerns are growing about the economic impact for Turkey.  

    Sinan Ulgen is a visiting scholar for Carnegie Institute in Brussels.

    "Turkey’s export to the countries in the region have been affected on two grounds.  One because of the instability of course, but the other one is because of the land routes to other markets in the Middle East have been blocked by the instability in Iraq and Syria," said Ulgen.

    But analysts say the impact on Turkish exports to Iraq could have been worse, because around 75 percent of those exports are to the relative stable Iraqi Kurdish region, which has largely escaped the impact of ISIL.

    Turkish transit trade to the lucrative Gulf markets is another story, says political consultant Atilla Yesilada of Global Source Partners.

    He says the Iraq crisis coincides with rising diplomatic tensions between Cairo and Ankara.

    "The Egyptian authorities have started causing troubles for our trucks and ferries.  [About] 30,000 lorries, trucks, had been traveling to Iraq before the crisis and now that the number has dropped to say 5,000," said Yesilada.

    Turkish economic woes could yet worsen, with ISIL continuing to threaten regional stability.

    One area of concern, analyst Yesilada warns, is rising oil prices that will bring new costs, if not in the near future in the medium term for energy importer Turkey.  
     
    "It could expand over time.  The most obvious example is the price of oil.  Every $10 jump in Brent oil adds $4 billion to our energy deficit, and 50 basis points to the CPI inflation," he said.

    Analyst Ulgen says that situation is likely to depend on whether the threat of ISIL can be contained.  He says if the situation deteriorates, so will the economic pain for Turkey.

    "The most important, whether, if, the situation continues to worsen, then Turkey’s [international] risk perception can be affected, which will raise the cost of capital for Turkey and Turkish companies, that will be even more crucial for the Turkish economy," he said.

    Observers point out, stellar growth underpinned the first decade of the AK Party’s rule.  But growth in the past few years has markedly slowed.  

    With Prime Minister Recep Tayyip Erdogan running for the presidency in August elections and a general election in June 2015, observers say keeping the economy running could prove to be Erdogan’s greatest test.  

     

    You May Like

    Ugandan Opposition Candidate: Only Intimidation, Vote Buying Can Prevent Victory

    Kizza Besigye says he has been drawing large crowds and claims he has widespred support ahead of Feb. 18 vote

    HRW: Both Sides in Ukraine Conflict Targeted, Used Schools

    Rights group documents how both sides in Ukraine conflict carried out attacks on schools and used them for military purposes

    Sanctions Just Got Real for Over 54,000 North Koreans

    Shuttering of Kaesong complex ends virtually any hope of peaceful settlement to long-standing tensions on Korean peninsula in near future

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Russia's Car Sales Shrink Overall, But Luxury and Economy Models See Growthi
    X
    February 10, 2016 5:54 AM
    Car sales in Russia dropped by more than a third in 2015 because of the country's economic woes. But, at the extreme ends of the car market, luxury vehicles and some economy brands are actually experiencing growth. VOA's Daniel Schearf reports from Moscow.
    Video

    Video Russia's Car Sales Shrink Overall, But Luxury and Economy Models See Growth

    Car sales in Russia dropped by more than a third in 2015 because of the country's economic woes. But, at the extreme ends of the car market, luxury vehicles and some economy brands are actually experiencing growth. VOA's Daniel Schearf reports from Moscow.
    Video

    Video Civil Rights Pioneer Remembers Struggle for Voting Rights

    February is Black History Month in the United States. The annual, month-long national observance pays tribute to important people and events that shaped the history of African Americans. VOA's Chris Simkins reports how one man fought against discrimination to help millions of blacks obtain the right to vote
    Video

    Video Jordanian Theater Group Stages Anti-Terrorism Message

    The lure of the self-styled “Islamic State” has many parents worried about their children who may be susceptible to the organization’s online propaganda. Dozens of Muslim communities in the Middle East are fighting back -- giving young adults alternatives to violence. One group in Jordan is using dramatic expression a send a family message. Mideast Broadcasting Network correspondent Haider Al Abdali shared this report with VOA. It’s narrated by Bronwyn Benito
    Video

    Video Migrant Crisis Fuels Debate Over Britain’s Future in EU

    The migrant crisis in Europe is fueling the debate in Britain ahead of a referendum on staying in the European Union that may be held this year. Prime Minister David Cameron warns that leaving the EU could lead to thousands more migrants arriving in the country. Meanwhile, tension is rising in Calais, France, where thousands of migrants are living in squalid camps. VOA's Henry Ridgwell reports.
    Video

    Video Valentine's Day Stinks for Lebanese Clowns

    This weekend, on Valentine's Day in Lebanon, love is not the only thing in the air. More than half a year after the country's trash crisis began, the stink of uncollected garbage remains on the streets. Step forward "Clown Me In," a group of clowns who use their skills for activism. Before the most romantic day of the year the clowns have released their unusual take on love in Lebanon -- in a bid to keep the pressure up and get the trash off the streets. John Owens reports from Beirut.
    Video

    Video Families Flee Aleppo for Kurdish Regions in Syria

    Not all who flee the fighting in Aleppo are trying to cross the border into Turkey. A VOA reporter caught up with several families heading for Kurdish-held areas of northern Syria.
    Video

    Video Rocky Year Ahead for Nigeria Amid Oil Price Crash

    The global fall in the price of oil has rattled the economies of many petroleum exporters, and Africa’s oil king Nigeria is no exception. As Chris Stein reports from Lagos, analysts are predicting a rough year ahead for the continent’s top producer of crude.
    Video

    Video 'No Means No' Program Targets Sexual Violence in Kenya

    The organizers of an initiative to reduce and stop rape in the informal settlements around Kenya's capital say their program is having marked success. Girls are taking self-defense classes while the boys are learning how to protect the girls and respect them. Lenny Ruvaga reports from Nairobi.
    Video

    Video Chocolate Lovers Get a Sweet History Lesson

    Observed in many countries around the world, Valentine’s Day is sometimes celebrated with chocolate festivals. But at a festival near Washington, the visitors experience a bit more than a sugar rush. They go on a sweet journey through history. VOA’s June Soh takes us to the festival.
    Video

    Video 'Smart' Bandages Could Heal Wounds More Quickly

    Simple bandages are usually seen as the first line of attack in healing small to moderate wounds and burns. But scientists say new synthetic materials with embedded microsensors could turn bandages into a much more valuable tool for emergency physicians. VOA’s George Putic reports.
    Video

    Video Researchers Use 3-D Printer to Produce Transplantable Body Parts

    Human organ transplants have become fairly common around the world in the past few decades. Researchers at various universities are coordinating their efforts to find solutions -- including teams at the University of Pennsylvania and Rice University in Houston that are experimenting with a 3-D printer -- to make blood vessels and other structures for implant. As VOA’s Greg Flakus reports from Houston, they are also using these artificial body parts to seek ways of defeating cancerous tumors.
    Video

    Video Helping the Blind 'See' Great Art

    There are 285 million blind and visually impaired people in the world who are unable to enjoy visual art at a museum. One New York photographer is trying to fix this situation by making tangible copies of the world’s masterpieces. VOA correspondent Victoria Kupchinetsky was there as visually impaired people got a feel for great art. Joy Wagner narrates her report.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.