Publication: Eurasia Daily Monitor Volume: 4 Issue: 228

The recent U.S. National Intelligence Estimate (NIE) report suggesting that Iran halted its nuclear weapons program in 2003 has eased the pressure on Turkey over its growing economic ties with Iran.

Since the moderate Islamist Justice and Development Party (AKP) came to power in November 2002, Turkey’s bilateral trade with Iran has grown more than five-fold, from $1.2 billion in 2002 to $6.7 billion in 2006. So far this year, the two countries have also finalized three energy cooperation agreements.

Turkey already imports natural gas from Iran under a 25-year, $30 billion agreement signed with Tehran in 1996 by Necmettin Erbakan, prime minister of Turkey’s own previous Islamist government. On July 13, 2007, Turkey and Iran signed a memorandum of understanding that foresaw a Turkish investment of $3.5 billion in Iran’s South Pars oil field (see EDM, August 13). On August 20, 2007, Turkey signed a deal with Tehran to import 3-6 billion kilowatt hours of electricity from Iran each year (see EDM, November 8). Under the terms of the agreement Turkey and Iran also agreed to build joint-venture hydroelectric power plants in Iran with a total capacity of 10,000 megawatts (Anka, December 1). On December 5 Turkish Energy Minister Hilmi Guler and Iranian Minister of Industries and Mines Ali Akbar Mehrabian finalized an agreement of cooperation in mining and industrial minerals (Anadolu Ajansi, December 5).

The agreements caused concern in Washington, particularly those that foresaw Turkey investing in Iran. However, the AKP government has refused to back down, arguing that Turkey’s need to diversify its suppliers for its growing energy requirements takes preference over placating the United States. On November 20, Guler told reporters he expected to sign more agreements with Iran in the months ahead, including some new ones in natural gas (CNNTurk, November 20).

Although the full extent of Iran’s nuclear ambitions remains the subject of often-heated debate, there is little doubt that the NIE report has considerably strengthened the AKP’s position and made it more difficult for Washington to apply pressure over Ankara’s deepening ties with Tehran. It has also considerably boosted Ankara’s hopes of serving as a transit country for the transportation of Iranian natural gas to Europe.

On December 9, Iranian officials announced that they expected Iranian President Mahmoud Ahmadinejad to pay an official visit to Turkey early in 2008, although discussions were still continuing over the precise date (NTV, CNNTurk, December 9).

Nevertheless, although there is little doubt that relations between Turkey and Iran are currently closer than at any time since the 1979 Iranian Revolution, in many ways the two are not natural allies. There are longstanding historical and cultural rivalries, in addition to the sectarian divide between the Shia regime in Tehran and the committed Sunni Muslims who dominate the AKP.

Since it came to power, the AKP has also sought to strengthen ties with the countries of Central Asia, whom it regards as sharing a common ethnicity. In a visit to last week Turkmenistan, Turkish President Abdullah Gul described Turkmens and Turks as being of the same seed, blood, language, and religion. Gul characterized the arrival of his delegation in the Turkmen capital of Ashgabat as “returning to our ancestral homeland (Hurriyet, Milliyet, Sabah, December 8).

After he and Turkmen President Gurbanguly Berdimukhamedov had signed an agreement on greater economic cooperation, Gul noted that bilateral trade between the two countries had reached $1.1 billion during the first 10 months of 2007, which was already more than in all of 2006 (Anadolu Ajans, December 8).

Gul and Berdimukhamedov also opened a power plant built by the Turkish Calik Group, which enjoys very close relations with the AKP government. On December 7, while Gul and the other leading members of the Calik Group were still in Turkmenistan, Turkish authorities approved the sale of the country’s second-largest media firm, ATV/Sabah, media group to the Turkuaz consortium, which is owned by Calik, for $1.1 billion.

Sabah/ATV had been taken over by the state after the discovery of alleged financial irregularities. The sale had originally been expected to attract considerable investor interest. However, other bidders backed out when it became it clear that the AKP government had already decided to sell the ATV/Sabah to Calik. Few in the secularist Turkish media were convinced that the decision was unrelated to the fact that Prime Minister Tayyip Erdogan’s son-in-law Berat Albayrak was appointed general manager at Calik earlier this year. Several journalists noted that, although the party is frequently criticized for its alleged Islamist aspirations, it does not appear to be immune to the attractions of Mammon (Radikal, Vatan, Hurriyet, Sabah, Milliyet, December 7).