Will the economic bloc proposal for Turkey, Iran and Iraq succeed?

There are two visions through which one can look at the existence of any economic bloc, the first: the optimistic vision that looks at the existing and expected interests from the existence of this bloc, which motivates it to plan and coordinate to implement it, and the second vision: the one related to the pessimistic vision that only looks at challenges and problems.

On the political level, it is important for the establishment of any economic bloc to have political will, although it is not required that this will be available on all parties, but it comes after successful steps have been achieved and interests on the ground, which has been achieved positively in the case of the European Union. The opposite was achieved in the failure of the experience of the Arab economic integration project.

In contrast to the great project of Arab economic integration, the Arab region has witnessed integrative experiences on a narrower geographical scale, but not all of them have reached a state of complete success, and among this trade is the experience of the Gulf Cooperation Council, the experience of the Maghreb Cooperation Council and the experience of the Arab Cooperation Council.

In addition to these Arab experiences, there are major projects on the ground with different levels of activation, including the Euro-Mediterranean project, the Middle Eastern project that aims to integrate the Zionist entity into the region, the Turkish project, and the Iranian project.

And recently, Iraq called for concluding an economic bloc that includes Turkey and Iran, and this came during the convening of the Iraqi-Turkish Business Forum for Investment and Contracting, which took place in Istanbul on November 19.

Although the invitation came from the spokesman for the Iraqi Ministry of Trade, Muhammad Hanoun, this may coincide with the great desire of both Turkey and Iran, as there are many factors that facilitate the establishment of this bloc, such as the geographical unity between the three countries, the existence of land roads, and existing commercial and economic transactions Indeed, cultural and civilizational ties extend through time.

There are also obstacles that are not easy, including the state of political and security instability in Iraq, and the problems of Turkey and Iran with the Kurds in Iraq.

On the other hand, Iran suffers from international economic sanctions, even if it is on its way to disappearing. Nevertheless, it has economic, commercial, cultural and civilized dealings with Turkey and Iraq.

In the following lines, we shed light on the commercial and economic potentials of the three countries, as well as the possibility of success, and the challenges that could guide the experience, by asking and answering several questions.

Iran suffers from international economic sanctions, yet it has economic, commercial, cultural and civilizational dealings with Turkey and Iraq (Getty Images)

What are the commercial and economic components of the potential bloc countries?

The figures for the World Bank database show that the gross domestic product of the three countries in 2020 amounted to more than a trillion dollars, and Turkey came first with about 720 billion dollars, then Iran with about 191 billion dollars, then Iraq with 167 billion dollars, taking into account that The decline in Iran’s domestic product comes due to the economic sanctions imposed on it, as its output before the sanctions in 2017 was about 445 billion dollars, and the depreciation of the Turkish lira affected the value of Turkey’s domestic product, which is denominated in dollars.

In terms of population, according to data for 2020, the population in the three countries is about 208 million, with Turkey coming first, with a population of 84.3 million, then Iran, with a population of 83.9 million, and Iraq, with a population of 40.2 million. breeze.

In terms of land area, the total land area of ​​the three countries reached 2.8 million square kilometres. Iran comes in the forefront with an area of ​​1.6 million square kilometres, reaching an area more than the combined areas of Turkey and Iraq. Turkey has an area of ​​769,000 square kilometres, then Iraq with an area of ​​434 million square kilometres. Square.

Iraq and Iran are among the oil-exporting countries, and they are members of the Organization of Petroleum Exporting Countries, and they have production and reserves of oil and natural gas, which makes them an addition to any economic bloc. for Turkey.

At the same time, Turkey represents an important source of water, as it is considered a source country for rivers flowing in Iraq and Iran. Undoubtedly, agricultural and food production in Turkey is an important source for both Iraq and Iran, and Turkey is an important industrial component, and it is on its way to produce technology in the fields of different.

As for the volume of trade exchange between the three countries, the statistics show that the trade exchange between Iran and Turkey in March 2021 on an annual basis amounted to 6.8 billion dollars, and that this was reflected in the form of a surplus in favor of Turkey by up to two billion dollars, but these data reflect the impact of economic sanctions. imposed on Iran, as trade exchange between them declined. It is natural that Iranian gas and oil exports to Turkey amounted to about $9 billion before the sanctions.

As for the value of trade exchange between Turkey and Iraq, it amounted to about 17.3 billion dollars in 2020, according to the figures of the Turkish Statistical Institute. Trade exchanges at the end of the year may lead to a surplus in favor of Iraq.

As for the trade exchange between Iran and Iraq, it amounted in March 2020 on an annual basis to $13 billion, achieving a surplus for Iran of about $5 billion.

It is noteworthy that Iran is the only source of electricity export to Iraq, and there is a transaction between them that is exempted in this area from the sanctions imposed on Tehran.

What are the expected benefits in the event of the formation of the bloc?

If practical steps are taken to activate this bloc, there are several benefits that can accrue to everyone, provided that there is better political and security stability in Iraq, where Turkey and Iran can supply Iraq with the establishment of joint industries that improve the structure of Iraq’s domestic product.

Rather, in the event of the development of forms of integration between the countries of the bloc, Iraq would be in a better position in terms of diversifying its economy so that oil would be one of the resources, and the agricultural sector could be developed there after reaching shares of water that Turkey would pay to Iraq.

Iraq will not be the only beneficiary, but Turkey will have a better opportunity to expand its regional relations, which will increase its regional position in a geopolitical framework, and its inter-trade with both Iran and Iraq will be in a better position.

What can achieve a better outcome for the bloc is expected to lift the sanctions on Iran, which will enable Turkey to contribute significantly to the development of its infrastructure, which is reflected well on the Turkish companies specialized in this field, from the construction of roads and power stations, as well as the establishment of many One of the industries that can come within the framework of the partnership between the two countries.

A Turkish flag with the Bosphorus Bridge in the background, flies on a passenger ferry in Istanbul, Turkey September 30, 2020. REUTERS/Murad SezerTurkey will have a better opportunity to expand its regional relations in the event of the establishment of the economic bloc (Reuters)

What will happen to the economic relations of countries when the bloc is formed?

There is a set of developments that can improve relations between the bloc’s countries through the economic gate, although there are some obstacles, such as that Iran is not a member of the World Trade Organization, and Turkey abides by some customs and trade agreements with the European Union.

The three countries may be eligible to bypass the free trade zone stage in the short term, and move to the customs union stage, which will take a period to rehabilitate Iran and Iraq to keep pace with their systems with Turkey, which is more integrated into the global economy.

What are the effects of this on neighboring countries and the region?

If this bloc is written to enter into force, it will provoke other gatherings in the region, especially the Gulf Cooperation Council, whose position has been greatly shaken since the crisis of the blockade of Qatar in June 2017.

The expected bloc can also be considered as confronting the trend of normalization with Israel, to which 4 Arab countries joined in 2020, namely, the UAE, Bahrain, Sudan and Morocco.

And the bloc can be employed in a positive framework, so that it accommodates the Arab countries wishing to join it, and in this case it will be considered a fulfillment of the desire of many experts for the need to achieve integration between the Arab countries, Iran and Turkey, which will improve the region’s situation in the areas of confronting other regional blocs at the world level.

What areas of coordination are of highest priority?

On the agenda of relations between the countries that are included in the expected bloc, a set of issues that need to be resolved, chief among them: the issue of water, and the demand of both Iran and Iraq for better shares of water than it is now from Turkey as a source country.

It is also required to bypass customs-related issues in accordance with the rules of the World Trade Organization, taking into account some privacy for Iraq’s situation for a transitional period that can be agreed upon, due to the decline in industrial and agricultural structures in it, and it may also be appropriate to develop financial and banking transactions in line with the rules of international finance, even if Iran It will suffer in this matter because of the sanctions imposed on it now, and until it reaches an agreement on its nuclear program soon, it will be necessary to give it some time, due to the nature of the transitional phase that the file of lifting the sanctions will require.

It is also necessary to make real efforts to develop the road transport network between the countries of the bloc, which leads to the ease of the flow of goods, as well as shortening the time related to shipping and the rest of the procedures, as well as facilitating the procedures of inter-investment for those countries.

What are the challenges that could face the establishment of this bloc?

We cannot neglect the political and security sides prevailing in the region as well as among the countries of the bloc, as they represent a challenge to the establishment of this bloc. On the one hand, Iran and Turkey have been working for years on two regional projects, which requires taking into account the interests of the two projects and eliminating the contradiction between them, which is difficult to achieve. In the medium and long term.

In addition, the state of political and security stability in Iraq seems to be difficult in the short term, which leads to the absence of commitment by the Iraqi government to fulfill its obligations, and the problems raised by the Iraqi Kurds towards Turkey and Iran will lead to a careful consideration of the commitment. Any commercial and economic agreements that may cause losses to the various parties.


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