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Iraqi Kurds and Turks: Business as usual –
for now
30.7.2012
By Riad al Khouri - Israeli Haaretz |
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Turkey's Foreign Minister Ahmet Davutoglu (R) and
Iraq's Kurdistan Region president Massoud Barzani
hug before their meeting in Ankara on April 20,
2012. Photo: Getty Images
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July 30, 2012
The Kurds’ only independent political entity is
cozying up to Turkey to do business. How long can
Iraqi Kurdistan stay in the quiet eye of the
regional storm and avoid collateral damage?
In the high-level geopolitical hurricane currently
building up in the Middle East, autonomous Iraqi
Kurdistan seems to be the tranquil eye of the storm.
The province of nearly 5.5 million people enjoys a
GDP per capita that has now grown to well over
$5000, while its political stability is maintained
by the Kurdistan Regional Government (KRG). Iraqi
Kurdistan’s provincial capital. Erbil, is a gateway
to Iraq for businesses and traders from neighboring
countries.
Yet, for Iraqi Kurds, blips on the radar are
appearing. Turkey has warmed to the KRG for the last
few years. But last week, the Turkish government
expressed anxiety that a group linked to the
Kurdistan Workers Party (or PKK), an organization
that Turkey views as terrorist, is now entrenched in
northern Syria near the Turkish border.
Turkish Foreign Minister Ahmet Davutoglu is due to
visit Erbil this week to influence the KRG’s
position in regard to Syria’s Kurds, and he is
likely to re-iterate his prime minister’s recent
warning that Ankara reserves the right to act in
northern Syria against any Kurdish militant
organization perceived as hostile, to prevent it
from “establish[ing] itself there and threaten[ing]
Turkey.”
Turkish fears of Kurdish militant spillover near its
borders are put aside, however, when the KRG and the
Turks increasingly cozy up to do business. This
trend has been established over the last five years,
after Turkey redefined its geopolitical environment,
by publicly growling at Israel and deepening its
economic engagement with its immediate neighbors,
including Iraq.
Helped by Ankara’s concerted promotion of bilateral
trade, Iraqi Kurdistan imported around $5.5 billion
worth of goods from Turkey last year, making the
province Turkey’s eighth-biggest export destination.
(A look around the burgeoning malls in Erbil on my
most recent mission there several weeks ago
confirmed that, increasingly, many of the goods on
sale are Turkish-made.)
For its part, Iraqi Kurdistan sells raw materials to
Turkey, including oil. About ten KRG trucks laden
with crude oil enter Turkey daily, but that will
soon increase to up to 200. The first phase of a
pipeline that is due to carry up to one million
barrels of oil a day from Iraqi Kurdistan to Turkey
is scheduled to finish by the end of 2012. Kurdish
gas will also later be on offer after a recent
understanding between Ankara and Erbil over future
Turkish imports of the fuel.
Great, one might say - but the story doesn’t end
there. Three weeks ago, Iraq’s prime minister and
oil minister accused the KRG of “smuggling” crude
oil to Turkey - and Iran. Though such charges had
been leveled before, this was the first time the KRG
was directly accused by Baghdad’s council of
ministers in a cabinet meeting, a clear heightening
of tension between the federal and provincial
governments.
The Kurds counter-argue that the federal parliament
has been unable to legislate regulations for the oil
sector through a hydrocarbon law, although a draft
bill was presented six years ago. The absence of
legislation means that the KRG is forced to export
oil without recourse to Baghdad,www.ekurd.net
which should technically control marketing of crude
oil. Yet another row is breaking out between Baghdad
and Erbil - over the deal just made between the KRG
and the United States giant Chevron, which is not,
according to the federal government, supposed to
operate in Kurdistan and the rest of Iraq under
separate, parallel agreements.
Iraqi Kurdistan seems set for significant economic
success in the long-term because of its strategic
geopolitical position and openness to trade, but
those very factors are likely to lead to a very
turbulent and politically-charged short-term, as
relations between the KRG and its neighbors, whether
in Baghdad or Ankara, as well as events in Syria,
face the test of the region’s rough instability.
Riad al Khouri, an Arab economist who lives and
works in the region, is a principal of Development
Equity Associates Inc, Washington DC.
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author or news agency,
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