Exports: Trade with the Middle East soars as relationships thaw

Exports: Trade with the Middle East soars as relationships thaw

By Pelin Turgut

Published: November 28 2008 14:35

Due to a shift in turkey’s foreign policy towards the Middle East the exports dependency of Europe is diminishing with success. The conservative Justice and development party in turkey has strengthened diplomatic ties and trading bond with Islamic countries with investor rich regions in the Middle East: Iran, Syria and the Gulf states. Turkish business is becoming very popular in the Middle East region through building projects, TV series etc. Turkey has found plenty of commercial capital in a region they found too backward and religious.

Since the AKP party took office in 2002 exports to Europe have increased but very slightly compared to the 92 per cent export increase in the Middle East. In August the UAE became the top export destination for turkey, where Germany had led by a mile.

The change in relationship with the Middle East reflects the change in government since 2002. In turkey it is clear that the Islamic party in office is trying to strengthen ties with the Middle East by “diversifying export markets and goods.” (According to Ibrahim Ozturk a Turkish economist at Marmara University.)

In the past the cold war directed Turkish exports to the West. The ruling elite at the time was reluctant to trade with the Middle East due to the situation in the world at the time. The new Government is keen to become a “regional powerhouse”.

Much export success has come from the new party in Office (AKP). In 2002 turkey had 8 trading partners and exported one billion dollars of goods, in 2007 Turkey found themselves with 4 partners. The increase is drastic as it was at 172 in 1996 and in 2008 its 218, the highest exports in Turkish history.

Because of the Islam rooted government lead by Prime Minister Recep Erdogan, Middle Eastern investors see turkey as their “second home.” “The success of the AKP lies in their improvement of trade diversification.” It is known that the Turkish government leaders are more comfortable in the Middle east, analysts say business depends on personal relationships. Relationships with Saudi Arabia and Iran, that were once frosty have improved; a visit from the Saudi King, which was the first in 40 years, reassured the Turkish government. Turkey was the first country outside the Gulf in 2008 to be named the strategic partner by the Gulf co-operation.

Although exports to Europe are still 50 per cent, having these ties with the Middle East draws turkey away from the financial crisis presently in Europe. Mr. Erdogan along with his party is accused of harboring Islamistic agenda, he refuses all criticism questioning who could be disturbed by the increase in exports in the Middle east.

According to Mr. Ozturk becoming an influaential player in the Middle East will icreasese its bargaining power with Europe. ““Turkey can prove how indispensable it is to the EU precisely by demonstrating its influence and added value in places outside Europe. That will make Turkey an asset, not a burden.”