News / Economy

Turkey Seeks Increased Trade with Iran

FILE - Turkey's Foreign Minister Ahmet Davutoglu and Iranian counterpart Ali Akbar Salehi, left, at news conference, Ankara, Jan. 19, 2012.
FILE - Turkey's Foreign Minister Ahmet Davutoglu and Iranian counterpart Ali Akbar Salehi, left, at news conference, Ankara, Jan. 19, 2012.
Dorian Jones
Iran's recent agreement with world powers to curb parts of its nuclear program in exchange for a possible easing of sanctions has spurred hopes in Ankara of a major trade and finance opportunity.
 
Turkish Foreign Minister Ahmet Davutoglu recently traveled to Tehran, where he committed his country to a major expansion of trade, saying Ankara is determined to increase trade volume with Iran to over $30 billion and aims for $100 billion by 2020.
 
Trade volume between the neighboring countries volume now is around $20 billion, the bulk of that coming from energy-scarce Turkey's fuel imports.
 
Turkey is the biggest importer of Iranian gas.
 
Turkish economy minister Zafer Çağlayan has called on banks to reopen financial relations with their Iranian counterparts.
 
"Turkey has a very efficient middle value added manufacturing industry," said Atilla Yesilada, an analyst for political consulting firm Global Source Partners.
 
"Clearly our commercial agricultural fruits and vegetables are far superior," he added, explaining that there is a potential for substantial growth in Turkish exports to Iran. "There is tremendous overlap, and if Iran ever returns to the international order, it will have major program of renovating its refineries, developing its aging fields, etcetera. All of these things would be tremendously beneficial for Turkish economic actors."
 
According to Inan Demir, chief economist of Istanbul-based Finansbank, Turkish exports to Iran are already on the rise despite continued trade restrictions, a trend likely to continue with the easing of sanctions.
 
"This could help through exports to Iran, [although] it’s difficult to be very precise about the magnitude of higher exports," said Demir. "In the first nine months of the year, Turkey’s exports to Iran [totaled] $3.7 billion ... one the largest figures on record."
 
But Demir warns that Çağlayan's call to reestablish banking relations could have negative repercussions for Turkish banks if Iranian financial sanctions are lifted.
 
"Iran now will be able to repatriate some of its [foreign currency] holdings abroad as the sanctions are eased in a limited fashion ... and Turkey would be one of the source countries," he said. "So it's likely we could some outflows in [foreign currency] and gold, I would presume, as the sanctions are lifted and Iran is able to repatriate. So I think this another channel of impact that one should consider."
 
Ultimately, analyst Yesilada says how much bilateral trade grows is likely to be determined by politics rather than economics.
 
"There is really no guarantee that Iran would ever [have] Turkey [as] its primary trading partner," he said. "Iran perceives Turkey for what it is. We are a major stumbling block for their regional objectives and their de facto major rival in the region, an ally of the West. Unfortunately this is a region where trade, like anything else, is a diplomatic weapon. The market forces don’t work efficiently here."
 
Turkish-Iranian relations have been strained over Syria in particular, with Ankara and Tehran supporting opposite sides in the ongoing civil war. But the diplomatic rapprochement underway is one that, observers say, could bring economic gains.

You May Like

Sydney Hostage-taker Failed to Manipulate Social Media

Gunman forced captives to use personal Facebook, YouTube accounts to issue his demands; online community helped flag messages, urged others not to share them More

UN Seeks $8.4 Billion to Help War-Hit Syrians

Effort aimed at helping Syrians displaced within their own country and those who've fled to neighboring ones More

Who Are the Pakistani Taliban?

It's an umbrella group of militant organizations whose objective is enforcement of Sharia in Pakistan 'whether through peace or war' 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.
Putin: Russian Economy to Rebound in 2 Yearsi
X
December 18, 2014 5:13 PM
Russian President Vladimir Putin held his annual end-of-the-year news conference Thursday, tackling questions on the Russian economy, the crisis in Ukraine and Russian relations with the west. VOA's Jeff Custer reports.
Video

Video Putin: Russian Economy to Rebound in 2 Years

Russian President Vladimir Putin held his annual end-of-the-year news conference Thursday, tackling questions on the Russian economy, the crisis in Ukraine and Russian relations with the west. VOA's Jeff Custer reports.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video Will Pakistan School Shooting Galvanize Pakistan Against Extremism?

The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video Turkey's Authoritarianism Dismays Western Allies

The Turkish government has been defiant in the face of criticism at home and abroad for its raids targeting opposition media. The European Union on Monday expressed dismay after President Recep Tayyip Erdogan lashed out at Brussels for criticizing his government's action. Turkey's bid to be considered for EU membership has been on hold while critics accuse the NATO ally of increasingly authoritarian rule. Zlatica Hoke reports.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8140
JPY
USD
118.81
GBP
USD
0.6402
CAD
USD
1.1597
INR
USD
63.066

Rates may not be current.