Anatolia's tigers looking to the Middle East and North Africa: Turkey made headlines last year with the rate of its GDP growth--8.5%, second only to China's, and the Middle East's share of that business is growing fast.[ILLUSTRATION OMITTED]
Now that it is more than six years since Turkey began talks with Brussels on becoming a full member of the European Union, with no result, people in the predominantly Muslim country could be forgiven for thinking that Europe's foot-dragging has something to do with their religion. But for many in the Turkish heartland of Anatolia, being in Europe matters much less than it did a few years ago. The reason: unlike the larger western cities such as Istanbul, Izmir and Bursa, which are highly dependent on exports to recession-hit Europe, many cities there, known collectively as the "Anatolian Tigers", are prospering, mainly because their vibrant small and medium-sized enterprises are finding lucrative new export markets in the Middle East and North Africa.
Turkey made headlines last year with the rate of its GDP growth--8.5%, second only to China's. Much of that had to do with the increase in output from cities like Kayseri, Konya and Gaziantep, where the predominantly agricultural economy has given way to vast new industrial zones, trade centres and technology parks. Couple that with the prospect of new energy sources and with a rapidly growing tourism industry that is increasingly attractive to both regional and international visitors, and it's small wonder that the region is booming.
Even before the "Arab Spring" brought new Islamic parties to power in Egypt, Libya and Tunisia, the Middle East's share in total Turkish trade was rising, reaching 14% by the end of 2009 compared to just 6% in 2002, according to figures produced by the Turkish Confederation of Businessmen and Industrialists (TUSKON). Following Prime Minister Recip Erdogan's headline-grabbing visit to Egypt last September, Turkey is expecting its bilateral trade to rise threefold, to some $5 billion, within the next few years, up from $3.7 billion in 2010. Turkish firms, including SMEs from Anatolia as well as larger corporates such as Turkcell, Akbank and Taha--whose representatives took part in Erdogan's high-level delegation to Cairo--are looking at oil and gas projects in Egypt, as well as industry, IT and telecoms in particular, along with financial services and tourism.
Some 140 Turkish firms are also wooing new business in Libya, where the government in Istanbul hopes to resume some $18.5 billion in contracts and orders that were suspended after the uprising last year against former President Muammar Gadaffi. Much of this will include repair and maintenance work on Libya's oil and gas and other war-damaged facilities as well as the construction of new schools, hospitals, hotels, housing and factories. Total trade between Turkey and Libya could jump to about $10 billion by the middle of this decade, Turkish analysts predict.
Other large Turkish firms are busy building new airports, rail and port projects in Abu Dhabi, Dubai, Qatar and Oman, as well as new power and water infrastructure in Iraq. Anatolia's industrial cities, including Konya, Kayseri and Gaziantep, are expected to benefit in particular by meeting Iraq's huge unmet demand for building materials, capital and consumer goods, as well as fresh fruits, vegetables, dairy and meat in the coming few years. Already, Konya alone has seen its exports to Iraq rise from $57 million in 2005 to $156 million last year, largely due to its growing trade links with Iraq's oil and gas-rich Kurdistan region. Analysts say this could more than offset the loss of trade with neighbouring Syria and lead to even more contracts and orders in countries such as Kuwait, Qatar and the other Arab Gulf states.
"Turkey is progressing, growing and becoming an important power in the world," Arzuham Dogan Yalcindag, the chairwoman of the country's media giant, Dogan TV, said on a recent visit to Gaziantep. "This is a country with a very young population, half of which is under 29 years of age. We think it will develop further with its young population and the dynamics of Anatolia." Countries, such as Turkey and those in the Middle East, that could combine local culture, values and riches with global knowledge, resources and an entrepreneurial spirit were able to create real value, she added.
That sentiment is shared by the authorities in other Anatolian industrial and commercial centres, who have combined their efforts with local and regional businesses, civil society organisations and federal officials. In Konya, which is known as "the breadbasket of Turkey" because of its extensive wheat-growing areas and fertile plains, four industrial zones have been set up in coordination with the region's universities and technical institutes. They are attracting new multinationals such as Unilever as well as the bigger Turkish-owned corporations of western Turkey which are eager to tap into Anatolia's trade potential with the Middle East.
As with other companies in the region looking to expand their exports to the Arab world, Konya Seker, the Turkish sugar conglomerate which was started by 17 agricultural cooperatives and 60,000 farmers in Konya, is expanding its manufacturing and processing facilities, in this case to produce more chocolates, hard candy, cream, Turkish delight and halva. There is "high demand" from countries such as Morocco, Tunisia, Algeria, Lebanon, Palestine and Syria, reports Recip Konuk, chairman of the company. As a result of their and others' success, Konya now exports goods worth some $1.3 billion a year, including a rising share to MENA. This is about the same as the whole of Turkey's global exports in the 1970s.
Another industrial powerhouse in central Anatolia, the city of Kayseri and its surrounding districts, has benefited from its geographical position close to Iraq, Iran and the Arab Gulf states as well as to the Arab countries of the Levant and North Africa, which can be reached via shipments from Turkey's ports on the Aegean Sea. With a population of more than one million--up from just 66,000 in 1950, it currently exports goods ranging from furniture, textiles, leather and processed foods to plastics, household appliances, metals and machinery worth some $1.5 billion to more than 100 countries.
"No visitor to Kayseri could fail to notice that this is ... a deeply religious society, [yet] one where change and modernisation are eagerly embraced," a group of academics studying Anatolia wrote for the Berlin-based European Stability Institute (ESI) in 2005. "There is a large new mosque in the centre of the university, and an even larger one in the industrial zone, where many of the workers pray on Fridays. Every company sets aside rooms for prayer; most of the older businessmen have been to Mecca on the Haj. There are very few restaurants in the city which serve alcohol," their report observed. "Islamic charity is a deeply rooted local tradition, and many of the city's educational and cultural establishments were founded with private donations."
Erzurum, to the east, is another Anatolian city that is growing rapidly, thanks to its wealth of thermal and hydroelectrical power and its favourable location as a transit point for supplies of oil and gas from the Caspian Sea via Azerbaijan and Georgia. The Baku-Tbilisi-Erzurum (BTE) natural gas pipeline pumped 4.9 billion cubic metres of gas in 2010, a figure which is growing annually as more reserves are developed in the Caspian. Plans to link Azerbaijan's gas exports to Europe via links through Iraq, and possibly Jordan and Syria as well as Turkey, are also expected to benefit Erzurum and other regions in Anatolia.
Already, trade between Turkey and Azerbaijan, one of the fastest-growing countries in the world, is forecast to rise to more than $3 billion this year, up from $2.5 billion in 2010. Following a visit by Erdogan to Baku last summer, officials added that they anticipated that this figure would reach $10 billion by the end of this decade.
Kayseri is also taking the lead in promoting its tourist attractions and convention facilities to the rising numbers of visitors from Arab and Muslim countries as well as Europe. Situated at the foot of Mount Erciyes, which is almost 4,000 metres high and which boasts one of the world's longest ski runs, the municipality, together with local businessmen, has allocated some $380 million to the construction of new hotels, restaurants, shopping areas, exhibition halls and meeting centres, as well as facilities catering to winter sports and visitors attracted by its ancient and historic sites spanning the pre-Christian and Roman eras to the Ottomans.
Its five-star hotel, the Hilton Kayseri, is already a centre for business visitors given its location just 10 minutes from the main business district and close access to the city's international airport. It also offers spectacular views of Mount Erciyes, as well as Kayseri's picturesque green parks and historic sites, including Kayseri's 1,500-year-old castle, originally built by the Byzantines.
Konya, the home of some of Turkey's most important mosques and monuments dating from the 11th, 12th and 13th centuries, when it was the centre of the Seljuk Empire, is also a growing focus for Muslim tourists and pilgrims, particularly from countries such as Iran, Pakistan and the Yemen, as well as Turkish residents in Europe. The shrine and tomb of the famed 13th century poet and philosopher, Jalaluddin Rumi, who founded the Mevlevi Sufi brotherhood, is one of the most popular attractions.
For the country as a whole, "Northern Iraq will soon become the biggest trade partner", Mark Spelman, managing director of the international consultancy, Accenture, told businessmen in March during a visit to Bursa in the northwestern part of the country. Last year, he noted, exports to Turkey's top trading partner, Germany, had fallen to just 10.4% of the Turkey's total trade, compared with nearly 14% in 2004. In contrast, Turkey exported goods and services to Iraq in 2011 worth $8.27 billion, giving it a 6.1% share of total trade, compared with just 2.9% eight years ago.
Altogether, exports to Iraq rose 37 % between 2000 and 2010, more than four times higher than the 9% growth reported for Germany during the same period. For Saudi Arabia, the rise in the exports was even more impressive: they were up by 38%.
Today, European, US and Japanese car makers, such as Renault, Mercedes-Benz, Fiat, Ford and Hyundai, are among Turkey's most eager partners, establishing or expanding vehicle manufacturing operations in cities such as Istanbul, Bursa and Izmir, as well as smaller operations for assembly, parts or raw materials in Anatolia. Most of the companies involved, whether large or small, report that the MENA region is expected to become one of their most dynamic markets in the coming decade.
"Turkey has learned its lesson well," comments Seyit Mehmet Buga, chief executive of the Konya-based Ittifak Holding, a company which was originally set up 20 years ago with contributions from thousands of Turks working in Germany and which is now listed on the Istanbul Stock Exchange. In the past, he says, "those who accepted western lifestyles shaped this country. Now [it is] those who have accepted Europe's culture of production."
Although disenchantment with European integration policies and with the performance of Turkey's European markets in the past few years is widespread, particularly in Anatolia, industrialists and officials are still careful to point out that this does not mean that they do not want better ties, politically and economically, with Europe.
A more liberal visa regime for Turks visiting or working in the EU would be a start, they say, but so too would more action from Istanbul on meeting Europe's customs regulations and procedures, and on helping to create a more modern transport and logistics network in Anatolia that can cut down the cost of exports to Europe as well as to the Middle East and North Africa.
European technology, marketing and branding skills, as well as advice on human rights, the rights of women and a free press, are essential for Turkey to become a more competitive player in world markets, other exporters insist.
For Istanbul, they add, that could also be a spur to attract more foreign investment from Europe, and from the thousands of Turks who have prospered there and who are eager to see their homeland progress.