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

Ebola Brings Sickness, Fear, Anger

Cornell University Professor Stacey Langwick considers cultural, social aspects of outbreak More

British Fighters On Frontline of ISIS Information War

It’s estimated that several hundred British citizens are fighting for Islamic State alongside other foreign Jihadists More

Violent Quarantine Clashes Hamper Liberia's Struggle to Contain Ebola

Anger, misinformation and mistrust of government hampering efforts to contain the deadly virus More

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.
Gaza Conflict, Hamas Popularity Challenge Abbasi
X
Scott Stearns
August 21, 2014 9:20 PM
The Palestinian unity government of Mahmoud Abbas has failed to convince Hamas to agree to Egyptian-negotiated terms with Israel on a Gaza cease-fire. VOA State Department Correspondent Scott Stearns reports on what the Gaza conflict means for President Abbas, with whom U.S. officials have worked for years on a two-state solution to the Israeli-Palestinian conflict.
Video

Video Gaza Conflict, Hamas Popularity Challenge Abbas

The Palestinian unity government of Mahmoud Abbas has failed to convince Hamas to agree to Egyptian-negotiated terms with Israel on a Gaza cease-fire. VOA State Department Correspondent Scott Stearns reports on what the Gaza conflict means for President Abbas, with whom U.S. officials have worked for years on a two-state solution to the Israeli-Palestinian conflict.
Video

Video Nigeria's 'Nollywood' Movie Industry Rolls in High Gear

Twenty years after its birth in a video shop in Lagos, Nigeria's "Nollywood" is one of the most prolific film industries on earth. Despite low budgets and whirlwind production schedules, Nigerian films are wildly popular in Africa and industry professionals say they hope, in the future, their films will be as great in quality as they are in quantity. Heather Murdock has more for VOA from Lagos.
Video

Video UN Launches 'Biggest Aid Operation in 30 Years' in Iraq

The United Nations has launched what it describes as one of the biggest aid operations in 30 years in northern Iraq, as hundreds of thousands of refugees flee the extremist Sunni militant group calling itself the Islamic State. As Kurdish and Iraqi forces battle the Sunni insurgents, the fighting has forced more people to flee their homes. Kurdish authorities say the international community must act now to avert a humanitarian catastrophe. Henry Ridgwell reports for VOA from London.
Video

Video Cambodian American Hip Hop Artist Sings of Personal Struggles

A growing underground movement of Cambodian American hip hop artists is rapping about the struggles of living in urban America. Most, if not all of them, are refugees or children of refugees who came to the United States from Cambodia to escape the Khmer Rouge genocide of the 1970s. Through their music, the artists hope to give voice to immigrants who have been struggling quietly for years. Elizabeth Lee reports from Long Beach, California.
Video

Video African Media Tries to Educate Public About Ebola

While the Ebola epidemic continues to claim lives in West Africa, information technology specialists, together with radio and TV reporters, are battling misinformation and prejudice about the disease - using social media to educate the public about the deadly virus. VOA’s George Putic has more.
Video

Video Ferguson Calls for Justice as Anger, Violence Grips Community

Violence, anger and frustration continue to grip the small St. Louis suburb of Ferguson, Missouri. Protests broke out after a white police officer fatally shot an unarmed black teenager on August 9. The case has sparked outrage around the nation and prompted the White House to send U.S. Attorney Eric Holder to the small community of just over 20,000 people. VOA’s Mary Alice Salinas has more from Ferguson.
Video

Video Beheading Of US Journalist Breeds Outrage

U.S. and British authorities have launched an investigation into an Islamic State video showing the beheading of kidnapped American journalist James Foley by a militant with a British accent. The extremist group, which posted the video on the Internet Tuesday, said the murder was revenge for U.S. airstrikes on militant positions in Iraq - and has threatened to execute another American journalist it is holding. Henry Ridgwell has more from London.
Video

Video Family Robots - The Next Big Thing?

Robots that can help us with daily chores like cooking and cleaning are a long way off, but automatons that serve as family companions may be much closer. Researchers in the United States, France, Japan and other countries are racing to build robots that can entertain and perform some simpler tasks for us. VOA’s George Putic reports.
Video

Video In Ukraine, Fear and Distrust Remain Where Fighting has Stopped

As the Ukrainian military reclaims control of eastern cities from pro-Russian separatists, residents are getting a chance to rebuild their lives. VOA's Gabe Joselow reports from the town of Kramatorsk in Donetsk province, where a sense of fear is still in the air, and distrust of the government in Kyiv still runs deep.
Video

Video Five Patients Given Experimental Ebola Drug Said to Be Improving

The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video China Targets Overseas Assets of Corrupt Officials

As China presses forward with its anti-graft effort, authorities are targeting corrupt officials who have sent family members and assets overseas. The efforts have stirred up a debate at home on exactly how many officials take that route and how likely it is they will be caught. Rebecca Valli has this report.
Video

Video Leading The Fight Against Islamic State, Kurds Question Iraqi Future

Western countries including the United States have begun arming the Kurdish Peshmerga forces in northern Iraq to aid their battle against extremist Sunni militants from the Islamic State. But there are concerns that a heavily-armed Kurdistan Regional Government, or KRG, might seek to declare independence and cause the break-up of the Iraqi state. As Henry Ridgwell reports from London, the KRG says it will only seek greater autonomy from Baghdad.
Video

Video In Rural Kenya, Pressure Builds Against Female Circumcision

In some Kenyan communities, female genital mutilation remains a rite of passage. But activists are pushing back, with education for girls and with threats of punishment those who perform the circumcision. Mohammed Yusuf looks at the practice in the rural eastern community of Tharaka-Nithi.

AppleAndroid