Turkey Flexes Economic, Political Muscle In Iraq

Enlarge this image toggle caption Tolga Bozoglu/AFP/Getty Images Tolga Bozoglu/AFP/Getty Images

Turkey is stepping up its role in Iraq, vying with Iran as a regional power. These powerful neighbors use investments and building projects to ensure long-term influence. The competition is heating up as the U.S. prepares to withdraw troops from Iraq by the end of next year.

Northern Iraq is the staging ground for Turkey's bid for economic dominance, and the Marina restaurant in Irbil is the kind of place that businessmen come to make deals. The food is pricey, and the live entertainment is in Turkish, a sign of Turkey's growing role. In the central market, Turkish products are available in every shop stall.

Local university professor Birzo Abdul Qhader surveys the goods on display.

"These baskets are Turkish, the plastic flowers, towels, the children's clothes," he says.

Turkish builders are active, too. A Turkish firm designed and built Irbil's new international airport. Turkish companies have invested in new five-star hotels and housing estates. And in the energy sector, state companies are exploring for oil in the south, while private oil companies are staking claims to discovered oil near Irbil.

"They've basically traded the stick for the carrot," says Greg Gause, who teaches about the politics of the Middle East at the University of Vermont.

"The Turks have predominant influence of any foreign power, even rivaling the U.S., and they've done it through a clever and low-key strategy," he says.

The economic boom in the north is due to the relative stability in the semi-autonomous Kurdistan region. It is also due to a dramatic shift in Turkish policy.

"[The Turks] are a very serious player in the Kurdish economy, which is doing much better than the rest of Iraq," Gause says. "But they've also gained a lot more day-to-day influence than they've ever had in the past."

Turkey's Historic Shift Toward Iraq

For years, Turkey opposed Kurdish autonomy in Iraq and did not recognize the Kurdish regional government, preferring to deal exclusively with Baghdad. Turkey has long feared that Kurdish aspirations for independence would incite Turkey's own Kurdish minority. The Turkish army conducted cross-border raids against the PKK, separatist Kurdish rebels who are fighting for an ethnic homeland for Kurds.

The Turks have predominant influence of any foreign power [in Iraq], even rivaling the U.S., and they've done it through a clever and low-key strategy.

But the government in Ankara, dominated by the AKP, or Justice and Development Party, has made a historic shift, symbolized by an official visit by Turkish Foreign Minister Ahmed Davutoglu and the opening of a Turkish consulate in Irbil. Turkey's overall trade with Iraq has jumped to more than $6 billion a year, and Ankara's goal is to raise trade to $25 billion in five years, making Iraq its top trading partner. With Iraq's vast oil reserves, Turkey aims to be a major energy bridge from the Middle East to Europe.

Eric Davis is a Middle East specialist at Rutgers University. He notes that the Turkish chamber of commerce and industry has been lobbying the government not to allow the military to attack PKK forces whenever it wants, because that threatens investments in the north.

Indeed, stability in the north has led to a housing demand, which opened opportunities for Turkish contractors. Turkish laborers are building thousands of housing units in Irbil. Success in the Kurdish region in northern Iraq has led to bids farther south.

"Maybe we will go further down to Basra," says construction manager Serdar Kutsal, who has plans for a project in Karbala, south of Baghdad. "We will -- but most likely we will go with our Kurdish friends."

In Baghdad, a Turkish consortium outbid an Iranian group for an $11 billion project to renovate Sadr City, the capital's largest Shiite neighborhood. Turkey is contesting Iran's economic dominance in southern Iraq with a consulate in Basra that focuses on trade.

"Different kind of influence -- I know what Turkey is trying to do, and it is definitely a win-win policy," Kutsal says.

This is a historic rivalry, says Davis of Rutgers University. "This is like going back to the Ottoman Empire and the Safavids ... in the 1500s. This is the old struggle for Iraq between the Turks and the Iranians," he says.

Building Ties In Kurdistan And Baghdad

In the modern contest, carried out in business suits rather than military uniforms, Turkey appears to have Arab and American backing to keep Iran in check. Iraqi Prime Minister Nouri al-Maliki visited Ankara to get Turkish support for his bid to form the new government. He also sought approval in many more visits to Tehran.

"I think that's the long-term Turkish goal here, and in many ways, the long-term Iranian goal is to so tie the business and economic elements that their influence becomes so pervasive that it's unquestioned," says Gause of the University of Vermont.

Iran has historic political ties to Iraq's Kurds and Shiite Arabs and used those connections to press for an Iraqi government in line with Iranian interests. Turkey flexed political muscles, too, says Joost Hiltermann with the International Crisis Group.

"The regional states absolutely had an influence -- but none of them was able to impose the solution it wanted," he says.

With so much at stake, Turkey continues to build ties to the leadership in the Kurdistan regional government as well as Baghdad. In a telling piece of political symbolism, Turkish Prime Minister Recep Tayip Erdogan, the leader of a predominantly Sunni Muslim nation, attended the Shiite commemoration of Ashura, one of the most important holidays on the religious calendar. It is a gesture that will likely be noted by the dominant Shiite leaders in Baghdad. The Turks have shown that religion can be good for business.

In an office in Irbil, Turkish businessman Ardel Ahiska explains that it is good to be a Turk in Kurdistan.

"It is a big market for the Turkish businessmen, Turkish trade man," he says. "We will be rich together."