Iraq Economy Balances On Turkey And Its Truck Drivers

by Aaron Glantz

(IPS) -- The Bush administration and the Turkish government did their best to kiss and make up this week. After days of sabre-rattling from Ankara over Kurdish domination in Kirkuk, U.S. Secretary of State Condoleezza Rice appeared shoulder to shoulder with her Turkish counterpart, Abdullah Gul, yesterday.

"Friends have differences from time to time," Rice told reporters, saying that Turkish-U.S. ties were fundamentally strong because they are based on common values of democracy and freedom.

For his part, Gul returned the favor. According to Turkey's state-run Anadolu news agency, Gul told Rice he believed peace should be assured in Iraq, emphasising that since the fall of Saddam's regime, Turkey has kept its border with Iraq open and allowed Turkish truck drivers to deliver goods to the Iraqi people.

Observers believe the fact that the border is open is very important to the economic health of the country. Because most of Iraq's oil refineries are still not operating at their pre-war capacity, much of the country's northern oil reserves are sent by pipeline to Ceyhan in Turkey where they are refined before being trucked back into Iraq.

If Turkey were to close the border and disrupt the flow of oil, Iraq's economy could be paralyzed, especially since the country's other major borders -- with Jordan, Syria, and Iran -- are far more dangerous than the Turkish one.

But while Turkey has thus far kept its border open, many truckers have refused to work. Six weeks ago, Turkish truckers launched a strike seeking higher wages and greater security. So far, a few have returned, but most continue to stay away.

"The fee for taking a trailer from Turkey to here is $500," says Mehmet Ozhan, one of the drivers who returned to his route. "If I could make a living doing something else I would, but I can't."

Eighty Turks have been killed in Iraq during the country's two-year occupation, most of them truckers. Some have been kidnapped. In August, driver Murat Yuce was shot in the back of the head by militants and a video was posted on the Internet.

Like many of the Turkish truckers, Ozhan is Kurdish, from the underdeveloped southeast of Anatolia. Most economic opportunities in the area there relate to its proximity to the Iraqi border.

"I have sold my sheep and my farm and everything else I own to buy my truck. If I stop driving I will starve," he says.

Most truckers continue to stay away, however, and so kilometers-long lines have formed outside most of northern Iraq's petrol stations. The official price of refined petrol has gone up 50 percent and drivers are increasingly forced to turn to the black market, a development that has pushed the government here to institute a policy of rationing.

"Our fuel stations are very, very busy and make it very difficult for people to receive their share," explains Siwan Abu-Bakr Aziz, Kurdistan's general director of Petroleum and Minerals. "Now we follow a different system in order to control people's access."

Now every resident of Northern Iraq is allowed one trip to the gas station where they can buy 40 litres of petrol a week, at a cost of about a penny a litre.

The country's main refineries in northern Beiji, central Daura and southern Basra process less than 500,000 barrels per day of crude oil, but Iraqi officials are in the midst of expanding the refinery infrastructure.

Oil ministry officials say there are plans for a 30,000 barrel-per-day refinery in Koysenja near the northern city of Suleiymania, and another in nearby Koya. In northern Mosul, an area of high insecurity, a refinery is planned to deal with crude reserves..

And in southern Nasriyah, a new 10,000 barrel a day refinery recently opened, with an even larger one planned for Najaf, a Shiite Muslim religious site.

Iraq currently spends $200 million per month on gas and other oil imports.