US campaign against Iraq threatens Turkey’s fragile economy
The Turkish government has expressed strong disapproval over the United States’ plans to target Iraq as part of its war on terror. The Nation’s Prime Minister, Bulent Ecevit recently told American media that military action in Iraq would be destabilizing for the Turkish economy.
A fragile nation, relying on a $16 billion loan from the International Monetary Fund (IMF) and the World Bank, Turkey has significant interest in the region. The Republic has suffered more than $30 billion in losses from the continuing embargo against Iraq since the early nineties. In addition, trade relations have not only been damaged with Iraq but also with other Arab nations south of Turkey.
Trade between the two neighbors stood at $1.2 billion in 2001. Nearly 60 percent of this trade was accounted for by Iranian oil and gas exports to Turkey, which began flowing through a newly laid pipeline, making Tehran one of Turkey's biggest trade partners. Talks are also underway for the re-launching of an Iran-Turkey-Europe railroad link for the transport of passenger and cargo.
A disruption of Iraqi-Turkish trade would deal another blow to Turkey's crisis-racked economy. The turmoil, which erupted in the banking sector in February 2001, sent the economy into one of the worst recessions in Turkey's modern history, pushing inflation up and causing the lira to lose some 50 percent against the dollar. — (menareport.com)
© 2002 Mena Report (www.menareport.com)