Institute for War and Peace Reporting | Giving Voice, Driving Change

Turks and Iraqi Kurds Don't Let Politics Get in Way of Business

Relations between the two remain cool, as trade and other economic ties flourish.
By Caroline Tosh
Trade between Turkey and Iraqi Kurds is booming, but stronger political relations still seem a long way off, say observers.

Turkish construction projects can be found all over northern Iraq, while the region’s supermarket shelves are stacked with consumer products imported from across the border.

However, analysts told IWPR that this economic activity largely reflects the opportunism of Turkish enterprises, rather than a deeper cooperation between Turkey and Iraqi Kurdistan.

They say that while soaring trade may have helped ease tensions, building stronger political ties – and securing Turkey’s recognition of the region’s autonomy – is likely to be a lengthy and uncertain process.

As its gateway to trade and communication with the rest of the world, Turkey’s importance to landlocked Kurdistan is clear. Ankara, meanwhile, relies on border trade with northern Iraq to bring revenue to the country’s poor south-eastern provinces.

During Saddam’s reign, Turkey enjoyed close ties with the Kurdish parties. Iraqi president Jalal Talabani, a Kurd, held a Turkish diplomatic passport until recently.

The two main Kurdish parties fought alongside the Turkish military and independently against the Kurdistan Workers Party, PKK, in the late Nineties, while Turkey was critical in the development of Iraqi Kurdistan by providing a base for United States and British aircraft patrolling the no-fly zone over northern Iraq.

Today, however, relations are soured by the continuing presence of PKK rebels in the Qandil mountains in northern Iraq.

For the last 25 years, the PKK and Turkey have been locked in a bitter conflict, which has claimed the lives of thousands in the region. The PKK says it is defending Kurds and other minorities in Turkey, which human rights groups accuse Ankara of oppressing.

The Kurdistan Regional Government, KRG, has resisted Turkey’s calls to help defeat the separatists – considered to be terrorists by both Ankara and Washington – saying that it cannot tackle them in such treacherous terrain.

Meanwhile, the Turkish government refuses to recognise the KRG’s autonomy, fearing this could encourage the PKK, spark an uprising among Turkey's own sizable Kurdish minority, and even lead to the partition of the country.

In May, the first meeting to be held between the current Turkish and Kurdish leaders – at which they discussed how best to tackle the PKK as well as Turkish investment in Kurdistan – took place in Baghdad.


The political breakthrough came amid burgeoning trade between the two.

In the five years since the overthrow of Saddam’s regime, the value of commercial transactions has soared. It is now estimated to stand at up to three billion US dollars annually, and economists predict that this amount will rise by 250 per cent over the next few years.

Today, thousands of trucks carrying construction materials and consumer goods cross through the Khabur border-crossing from Turkey into northern Iraq each day.

Nearly 500 Turkish companies are currently registered in Iraqi Kurdistan, creating jobs and wealth in the region so long neglected under Ba’athist rule.

Turkish products, which are largely better quality than goods imported from Iran and Syria, are eagerly consumed in the region. Northern Iraqis can now buy items of every type in American-style supermarkets, while western fashion boutiques are appearing around Erbil, the region’s capital.

“People here are excited by the fashion that comes from Turkey which looks slightly more European than that from the Emirates or Dubai – it’s something new and it’s interesting,” said Bayan Sami Abdul Rahman, the KRG High Representative to the UK.

“In our shops and supermarkets, you’ll see many Turkish goods, so there’s a great deal going on here that’s helping the market, helping the economy, and it’s coming from Turkey.”

As well as consumer goods, Iraqi Kurdistan also relies on Turkey to supply some ten per cent of its electricity.

Iraq’s powerful neighbour is also reaping the rewards of fast-growing economic ties.

“Turkey needs this business [with northern Iraq] to try to increase prosperity in south-east Turkey which [contains] some of the most impoverished regions in the country,” said Fadi Hakura, Associate Fellow at Chatham House.

“[Investment in Kurdistan] is a very critical economic lifeline to the south east – especially considering the fact that 15,000 workers from Turkey are working in northern Iraq.”

Some observers have suggested that by investing in the region, Turkey is seeking somehow to spread its influence there.

“By [introducing] products, advertisements and services [into northern Iraq], Turkey can spread the Turkish culture and build a strong economic position through the relationship,” said Ayub Anwar Smaqayi, lecturer in administration and economics at the University of Salahadin.

Jabar Qadir, an expert on Turkish-Kurdish relations and a lecturer in the history department of Koya University, also believes that Turkey is investing in the region to increase its political leverage there.

“Whatever job Turkey does in the region is politically motivated,” he said.

The opening of a new Turkish university in Iraqi Kurdistan last month was heralded by Kurdish leaders as a step towards building stronger formal ties.

“The opening of this university signifies the building of another bridge in our relations, one that will take us toward the right approach,” said Iraqi Kurdistan prime minister Nechirvan Barzani, at the opening ceremony.


But while Turkey seems content to make economic and cultural forays into Kurdistan, the country stops short of political acceptance of the region.

“Although the Turkish government recognises the economic importance of the relationship, this does not mean that they are willing to sacrifice what they consider their political interests – namely, to prevent any kind of an independent Kurdistan emerging in northern Iraq,” said Hakura.

Analysts point out the irony of Turkey helping to build up the autonomous region when it remains bitterly opposed to its independence aspirations.

“It is giving economic legitimacy to Iraqi Kurdistan and still, politically, on the other hand, Turkey opposes Iraqi Kurdistan, so it’s like the left hand of Turkey doesn’t know what the right-hand is doing,” said political science professor Michael Gunter at Tennessee Tech University.

While Turkey’s policy appears inconsistent, it seems, nonetheless, to have survived even during periods of heightened tensions.

At the height of Turkey's attacks on PKK guerrillas in December 2007, when the Turkish military launched cross-border attacks – a move condemned by the KRG – the Ibrahim-Khalil trade route remained open.

At the same time, dozens of Turkish companies took part in international industrial exhibitions held in Erbil and Sulaimaniyah, the second largest city in the region.

“The economic ties are rarely affected by the political position, so the commercial and economic relations between Turkey and the region develop constantly,” said Dara Jaleel Khayat, head of the Commercial and Industrial Chambers in Kurdistan.

Some note that while formal political relations have been fraught, friendships exist between politicians on both sides.

“There are personal relations between Kurdish and Turkish officials, but we want to enhance and build on those relations based on international law and regulations,” said Falah Mustafa, the official in charge of the Kurdistan Region's Foreign Relations Office.


Observers point to several political factors that could have a bearing on the development of Turkish and Iraqi Kurdish relations.

American troops are preparing to withdraw from Iraq over the next two years, thus strengthening Turkey’s position with regard to the Iraqi Kurds.

The explosive problem of Kirkuk must also be solved. Iraqi Kurdistan authorities would like the status of the oil-rich and ethnically diverse city settled by referendum, and a provision for this is set out in the country’s constitution.

But a plebiscite, which was due to take place in December of last year, seems to have been postponed indefinitely – in part, as a result of strong Turkish pressure.

Turkey – along with other ethnic groups living in Kirkuk – has opposed this solution, claiming to be championing the interests of the region’s Turkomans, to whom they are ethnically and linguistically related.

Analysts say the Turks are worried that if KRG absorbs Kirkuk, it could use its oil money to help establish an independent and wealthy Kurdish entity, with which the increasingly troubled Kurdish south in Turkey might then seek ties.

The problem of the Kurdish separatists is a further sticking point that will be hard to overcome, with neither side seemingly prepared to back down.

A high-ranking official of one of the Kurdish political parties, who preferred to stay anonymous, told IWPR, “Neither the PUK [Patriotic Union of Kurdistan] nor the KDP [Kurdistan Democratic Party] will join the Turkish front and fight the PKK again.”

Meanwhile, Ankara remains keen to exploit the vast reserves of oil, and perhaps gas, which are thought to lie untapped in Iraqi Kurdistan.

“Already there are pipelines which transport oil from northern Iraq into Turkey, to export to foreign markets, so Turkey wants to develop that energy relationship,” said Hakura.

With so many factors at play, it is uncertain how the relationship between Turkey and Iraqi Kurdistan will develop.

“It depends mostly on Kurdistan – if it keeps its independence aspirations in check, things should be fine, probably,” said senior fellow at the Brookings Institution Michael O’Hanlon.

Some analysts feel that as this economic cooperation deepens, political relations are also genuinely warming up.

“Just in the last six to eight months, there has been rapid improvement in relations between the two sides,” said Joost Hiltermann of the International Crisis Group, ICG.

Kurdish president Massoud Barzani met Turkish officials for the first time in three years in Baghdad on October 14. Significantly, a second meeting was held in Erbil, on October 28, said Hiltermann.

“We will see this moving to higher and higher levels all the time,” said Hiltermann, predicting that trade would increase even more, strengthening economic and diplomatic relations between Turkey and the Kurdistan region.

“Two issues have divided them – the PKK and the issue of Kirkuk. They haven’t been resolved, but they’re talking about them,” he said.

“They can talk about them in a rational way, and I think they will be able to find some sort of compromise where neither side will be totally happy, but they can live with whatever solution is found.

“But that’s still going to take a bit of time. I would not say that this will happen in the next few months – it may take another year or two.”

Rahman said that the Kurdistan region is keen to maintain “good and friendly relations” with its influential neighbour.

“Turkey may one day join the European Union, it is part of NATO – it’s a big player in the Middle East," he said.

“It’s also in Turkey’s interest to have good relations with the Kurdistan region of Iraq and Iraq, as a whole.

“I think that things will get better, but that doesn’t mean it’s going to be a smooth path or that it’s going to be quick. Quite often, these things take time but we’re ready to work on that in any way needed.”

Gunter said there was evidence of a political thaw, marked by a snail’s pace change in Turkish attitudes in recent years.

“Very slowly, Turkey is coming to accept the concept of the Kurds,” said Gunter, who sits on the board of directors of the EU Turkey Civic Commission, set up to promote Turkish membership of the bloc.

“But whether this is going to be quickly enough to satisfy the requirements of the Kurds and the rest of the world in the fast-changing Middle East, I don’t know.”

Turkey’s gradual progress towards meeting conditions for joining the EU could help normalise relations with Iraqi Kurdistan, he said.

The country began EU accession negotiations in 2005, and the success of its bid depends on it pushing through political reforms and addressing the socio-economic problems faced by Kurds living in Turkey.

“If Turkey met the Copenhagen criteria [the rules that define whether a country is eligible to attain] EU membership, it would largely give the Kurds what they want in Turkey, and I think would lead to Turkey becoming less paranoid about the Iraqi Kurds,” he said.

“The economic investment Turkey has made in Iraqi Kurdistan gives Turkey a political incentive to cautiously recognise what the Kurds are accomplishing [in the region].”

Caroline Tosh is an IWPR editor in London and Muhamad Shekh Fatih is an IWPR-trained journalist in Sulaimaniyah.

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