28 Kasım 2011 Pazartesi

Iraq-Turkey air link cut by debt dispute

Monday, November 21, 2011
ISTANBUL- Hürriyet Daily News

Turkey bans state-owned Iraqi planes to land on the Turkish soil in a reaction to a similar decision by its neighbor starting from midnight Nov 20 over a debt row. Company photo

A relatively tiny Iraqi debt to Turkey, compared with the developing mutual trade volume, has resulted in a diplomacy problem that has frozen flights between the two countries.

Turkey decided to ban state-owned Iraqi planes landing on its soil in a reaction to a similar decision by its neighbor starting from midnight Nov. 20. In response, Turkish exporters switched air traffic routes to road freight.

“Already dense traffic on Turkey’s Iraqi border may turn worse if the conflict between the states is not resolved in the short run,” said Alp Doğan of the International Transportation Association.

Especially trucks departing from Istanbul and from Turkey’s southern province of Mersin contribute heavily to the traffic at the border gates, Doğan told the Hürriyet Daily News yesterday. “Turkey should open the two planned border gates to lessen the traffic as the some trucks wait for nearly five days at the Habur gate.”

Solving the problem might take days, according to Ercüment Aksoy, head of the Turkish-Iraqi Business Council at Foreign Economic Relations Board of Turkey (DEİK).

“Unfortunately, Iraqi authorities reacted in an emotional way by banning Turkish planes from landing on Iraqi soil,” he said. “Turkey’s trade with Iraq is too valuable to be ruined with such moves.”

Iraq has banned all Turkish flights from landing in the country starting from 11:45 p.m. on Nov 20 in response to a dispute over millions of dollars owed by an Iraqi government oil company to Turkey. Iraqi Transportation Ministry spokesman Karim al-Nuri said the decision to block Turkish planes from Iraq was in response to a Turkish threat to seize Iraqi planes over a two-decade-old debt.

“In return, Turkey has also banned the landing of Iraqi Airways planes,” said Aksoy after a meeting with Iraqi officials.

“The Turkish Foreign Ministry formed a crisis desk at the weekend to solve the problem,” he said, adding that many Turkish businessmen could not travel to Iraq to participate in business meetings and to bid on tenders in Iraq due to canceled flights.

However, Aslan Kurt, chief executive of MNG Cargo, one of four Turkish carriers flying to Iraq, said he was hopeful for a quick resolution. “The temporary conflict will not harm much of our business,” Kurt said after a press meeting in Istanbul yesterday.

Previously four Turkish companies launched a case in a Turkish court demanding $20 million in return for unpaid debts dating to 1990, and they obtained an order to take possession of planes owned by Iraqi Airways, said Zafer Çağlayan, Turkey’s economy minister, in a statement yesterday. “Two out of four Turkish firms have dropped the case,” said Çağlayan, adding that negotiations with two firms were ongoing, as of yesterday evening.

He said the total amount of debt to these two countries was $18 million.

Talks between both countries’ foreign ministries continued yesterday evening as parties were still working on existing mutual agreements to find a solution to the problem, the Daily News learned.

Iraq was Turkey’s fifth largest export market in 2010, following Germany, the U.K., Italy and France. Turkey’s exports to Iraq have increased more than sevenfold from $718 million in 2003 to $6 billion last year, according to Turkey’s Foreign Trade Under secretariat data. The volume reached $10 billion in the first half of 2011.
Monday, November 21, 2011

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