Newspaper article The Christian Science Monitor

Turkey's Meager Harvest of Gulf Promises

Newspaper article The Christian Science Monitor

Turkey's Meager Harvest of Gulf Promises

Article excerpt

TURKEY'S early support of the United States-led coalition against Iraqi aggression was viewed as crucial. President Turgut Ozal's commitments to shut Iraq's oil pipelines through Turkey, to honor the trade embargo, and to allow the coalition full use of air bases in Turkey were no small sacrifice, economically or politically. Many Turks, however, believe that Turkey has been thanked with little more than empty promises.

Turkey's economic situation is worse than before the war. The impact has been greatest in lost oil revenue, a significant drop in tourism, lost remittances from Turkish workers in the Gulf, and a shrinkage of export markets. Turkey's loss of oil revenue from shutting down the Turkish-Iraqi pipelines has been estimated at over $2 billion. Oil revenues won't return to previous levels as long as restrictions remain on Iraqi oil exports. Turkey's 1989 deficit of $2.4 billion will likely rise to $4 billion fr om 1990 through at least 1992.

Turkey's expanding tourism industry reached $2.5 billion in 1989. The Gulf crisis, however, depressed 1990 revenues to an estimated $1.1 billion. Tourism revenues for 1991 have been estimated at $1.5 billion, a 60 percent drop in less than two years.

Remittances from Turkish workers in the Gulf have also dropped dramatically. Much of the lost revenue cannot be recouped, as the 4,000 Turkish workers who had been in Iraq will not soon return. Of the 2,000 Turkish workers previously in Kuwait, many will be unable to return to their jobs due to increased competition from Egyptian, Bangladeshi, Pakistani, and Indian workers. Loss of remittances may result in a crowding effect on the Turkish government by a private sector trying to raise capital.

Losses will also be felt in export revenues. Of Turkey's $11 billion to $12 billion export revenues in 1989, 32 percent were from Islamic countries. Thus, over $3.8 billion of export revenue has been disrupted. There will be no return of revenues from the largest Islamic market, Iraq, in the near future.

Due to the composition of Turkey's exports, the US and Europe can do little to help Turkey recoup its losses. Eastern Europe, which receives 6 percent of Turkey's exports, is unable to provide any offset. Western Europe, which receives 55 percent, will be pressured to increase imports from Eastern Europe rather than from Turkey. As for the US, relaxed textile quotas are not enough to offset lost Turkish exports to Islamic countries. …

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