[OUTLOOK]Turkey rises again

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[OUTLOOK]Turkey rises again

I made up my mind to visit Turkey during a research trip to Central Asian oil producers last October. Each country was investing its profit from high oil prices in infrastructure and I noticed that Turkish construction companies were in charge of most projects. From major projects in Dubai to the construction of the new capital in Kazakhstan, Turkish builders undertook almost every road, bridge and housing construction project in Azerbaijan, Uzbekistan and the Kurdish region of Iraq. It reminded me of Korea’s dominance in the Middle Eastern construction market in the 1970s. Turkey has replaced Korea as the reliable constructor for rapidly developing economies.
Now that I have been to Turkey, the country has exceeded my expectations. Last year, it received $9.3 billion worth of overseas construction orders. The country had initially thought $7 billion of orders would be more than enough. Even the Turkish government says that it never anticipated such a boom. Turkish construction companies began taking overseas projects in 2001 and are now working in 56 countries.
As a non-oil producer, Turkey is quietly enjoying prosperity in the era of the third oil boom. The president of the Turkish Contractors Association, Erdal Eren, boasted with confidence during a meeting in Ankara: “Overseas construction projects will play the role of an engine for the Turkish economy. At this rate, Turkey will receive $15 billion worth of orders a year without a problem. Turkish contractors have already established themselves for major construction projects in Russia as well as the Middle East and Central Asia.”
As a courtesy, I said, “Thank you for your precious time. You must be very busy.” In response, he bragged abut his full schedule, “Yes, I am very busy indeed. I have to fly to Istanbul right away for a meeting with a minister from Oman, and then I have an appointment with economic delegates from Georgia immediately afterwards.”
I felt that he had every right to be proud. For instance, he said that because he was of Kurdish background, businessmen from other countries will have a hard time competing against him when bidding for projects in the Kurdish region of Iraq. Turkey has a decisive advantage in winning orders from countries with which Turkey shares history, religion or geographical boundary, in the past or present. Turkish companies once had to be satisfied with occasional subcontractor jobs because they lacked techniques and competency. Now that they have accumulated the required abilities, Mr. Eren assured me that he has confidence in the success of Turkish contractors. Moreover, because most of the neighboring countries used to be Turkish territory, Turkish companies have a home ground advantage.
For one reason or another, the initiative of the Middle Eastern construction market has been taken by Turkey. It is true that Korean construction companies, which had been struggling since the financial crisis, are reviving thanks to the boom in the Middle East, but the situation is completely different from the 1970s and 1980s. The center stage has been turned over to the rapidly emerging Turkish companies. The Turkish contractors have control of many projects and are offering foreign companies partnerships.
Turkey’s brisk economy is not entirely due to the construction boom. Istanbul is the gateway for all goods transported into the emerging oil producers in Central Asia. It is the main hub in the growing region and a strategic point that is increasingly important to Russia and Europe as well. Turkey will pocket a considerable profit from oil pipes from the Caspian Sea to the Mediterranean that pass through the country. Moreover, Russia’s new transport routes for oil and natural gas won’t be able to bypass Turkey. The worldwide resource war over oil is offering an unprecedented opportunity for the Turkish economy.
After all, the development of Central Asia is directly related to the Turkish economy. Even if Turkey’s economic growth does not match the glory of the Ottoman Empire, we should not exclude the possibility that Turkey will emerge as an important axis in Eurasia. Once again, the rise of Turkey will begin in Istanbul.

* The writer is the CEO of the JoongAng Ilbo News Magazine. Translation by the JoongAng Daily staff.


by Lee Chang-kyu

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