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Turks, Kurds Keep Ties Businesslike in New Iraq

Despite tension between the ethnic minority and the government over the border, Turkish firms are eagerly investing where Westerners won't.

April 29, 2006|Solomon Moore | Times Staff Writer

SULAYMANIYA, Iraq — As they attempt to secure their hold on a semi-independent slice of Iraq and rebuild its economy, Kurdish leaders have turned in a surprising direction -- toward Turkey.

For much of the last century, Turks and Kurds have been bitter enemies. Starting in the 1930s, Turkey banned the language of its Kurdish minority and violently suppressed Kurdish independence movements on its soil. Just in recent weeks, Turkish security forces and Kurdish protesters clashed in riots that claimed more than a dozen lives.

Across the border, the Turkish government has opposed Kurdish moves toward self-rule in Iraq's three northern provinces. And Turkish leaders have accused the Kurds of harboring bases for militant groups that have attacked civilians and military targets in Turkey.

But today, Kurdish leaders are seeking investment from Turkish firms. To date, 314 Turkish companies have signed contracts for projects valued at more than $1 billion, officials of Iraqi Kurdistan have said.

Visitors to Kurdistan can fly into one of two airports built by companies based in Turkey, drive Turkish-built roads and see Turkish-built housing developments and university buildings.

"Turkish companies are everywhere in Kurdistan and doing everything," said Ilnur Cevik, a Turkish businessman whose Cevik Ler company claims more than $100 million in Kurdish government construction contracts.

"Soon my company will be generating electricity in collaboration with the Kurdistan government," he said.

The influx of Turkish companies is part of a policy to thaw relations with its wary neighbor, Kurdish officials say.

"We really have been flooded with Turkish companies," said Safeen Dizayee, a leading member of the Kurdish Democratic Party, which controls western Kurdistan. "This is healthy because it helps to develop good international relations. Naturally if Turkey, or any other country, has a vested interest here, their politicians are going to be obliged to be flexible."

The investment also carries benefits, both economic and political, for Turkey. Before the U.S.-led invasion of Iraq in 2003, officials in Ankara, the Turkish capital, had complained that United Nations sanctions on Iraq had cost Turkey $60 billion in lost revenue.

In Iraqi Kurdistan, some Turkish leaders see a chance to renew a large, nearby market, which could strengthen their own nation's economy.

"Northern Iraq is an especially lucrative market because it is the most stable part of Iraq and because it borders Turkey," said legislator Reha Denemec, a member of the ruling Justice and Development Party.

"Turkish companies are lining up to do business there, especially in construction. So much Turkish cement is going there that this has driven up cement prices in Turkey," he said.

On the political side, "the trade is crucial because it helps us deal with our terror problem in the southeast of the country," added Denemec, referring to Kurdish separatist groups within Turkey.

The Kurds' struggle in Turkey is part of their aspirations for statehood throughout the region. Twenty million Kurds -- considered the world's largest ethnic group without a political homeland -- live, often uneasily, in Syria and Iran as well as Iraq and Turkey.

Iraqi Kurds were subject to brutality and inferior status under Saddam Hussein and eagerly supported the invasion to depose him. The autonomy and relative tranquillity they enjoy in northern Iraq is the fruit of that alliance with the United States.

Yet many Western firms still shy away from the region because of concerns about violence and political interference with contracts. To some extent then, Iraq's Kurds are inviting Turkish companies out of necessity.

"Many international institutions consider the risk in Irbil [the capital of Kurdistan] to be the same as the rest of Iraq," said Douglas Mellor, an American living in Britain who advises the Kurdish government.

Global companies such as Coca-Cola Co. have thus far declined to risk sending executives into any part of Iraq, Mellor said.

"The British Petroleums and the Shells of the world are very interested in Iraq, but because they are [publicly traded] companies with large boards of directors, a lot of them are just kind of hovering around. They're interested, but quite often their executives can't even fly into Iraq."

Regionally based firms, with more knowledge of Kurdistan and its influential people, have been better able to exploit opportunities here. Turkish firms, along with companies from Lebanon, Jordan, the United Arab Emirates and to a lesser extent, Iran, have launched an unprecedented building boom in Kurdistan.

"Until 1991, there were about 200 or so public projects over the past 120 years," said Dizayee, the KDP official. "Since then, there have been about 1,200 projects."

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