Turkey’s diplomatic efforts bring economic boom

Alisa Roth Jul 28, 2011

Turkey’s diplomatic efforts bring economic boom

Alisa Roth Jul 28, 2011

Jeremy Hobson: Bad news, America — and I am not talking about the debt ceiling. A recent poll from the Arab American Institute in Washington finds our popularity among Arab nations is dropping again. In Egypt, for example, U.S. favorability was about 30 percent after President Obama was elected. It’s 5 percent now.

This week, the same polling outfit had good news for the nation of Turkey. Its popularity in the Arab world is soaring. For the past few years, the country has pursued what it calls a ‘zero problems’ policy with its neighbors. And it’s been strengthening business ties with countries like Syria and Iraq.

Marketplace’s Alisa Roth reports.

Alisa Roth: At the Besler flour mill in eastern Turkey, workers drop 100 pound sacks of flour onto large spiral slides. Down they go. The sacks of flour end up in the backs of a fleet of trucks that will take them to places like Iraq and Syria. In 2002, the company did about a million dollars worth of foreign trade. Now, its foreign trade is about $145 million. Besler doesn’t just sell flour. It sells sunflower oil and pasta, too. About half of the company’s business is with foreign clients and neighboring countries account for most of that.

Mesut Cakmak is a manager at Besler. He says the Turkish government has been a big help.

Mesut Cakmak: The government’s established good relations with neighboring countries. That makes it a lot easier for investors and businessmen to make deals with foreign firms and trade with them. That’s the “zero problem” policy in action.

For example, arranging a trip to Syria used to be incredibly complicated. Now, thanks to visa-free travel between the two countries, he can be there in half an hour. And that’s despite Syria’s political situation. Gaziantep, the city where Besler is based, is very close to both Iraq and Syria. It was part of the old Silk Road, so companies here have been doing business with the Middle East for centuries. But in recent years, Turkey’s zero problems policies have helped turn Gaziantep into a modern boomtown.

Baran Caner: Iraq and Syria and Saudi Arabia like covers about 60 percent of our total trade.

Baran Caner helps Gaziantep companies do business abroad through the city’s Chamber of Commerce.

Caner: We are one of the biggest suppliers for those markets in textile, food, plastics, construction.

Caner says from what he hears, the unrest hasn’t had much effect on companies yet.

Caner: We have companies who invested in Syria, they have factories in Aleppo. They have distributors in Aleppo and Damascus. We didn’t receive any complaints from them so far. I believe the things on TV sometimes can be a bit of an exaggeration, sometimes.

He says some companies did have trouble getting paid by clients in places like Egypt and Libya. But that’s mostly been resolved.

There is an alternative view, though. Some here say Turkish companies are suffering because there’s been less demand for goods and services from countries that are in turmoil.

Nurhan Toguc is chief economist at Ata Invest, which is a brokerage house in Istanbul. She says the Middle East is a big, diverse area.

Nurhan Toguc: Libya, for example, is one of the key countries for Turkey because of the major construction work in Libya region. So that will have more impact on Turkey than the other countries, for example Egypt. Because trade with Egypt is still very low.

And some countries haven’t been changed by the Arab Spring: Turkish businesses working in Iraq, for example, are still doing well. And when individual businesses do well, so does Turkey’s overall economy. It grew 11 percent in the first quarter of this year, which makes it the fastest growing economy in the world.

At Besler, the flour sacks are still sliding merrily down the chutes. Mesut Cakmak, the manager, says he expects business will continue to flourish. He says: We’re lucky, we sell food and people always need to eat.

In Gaziantep, Turkey, I’m Alisa Roth for Marketplace.

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