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Al-Ahram Weekly 20 - 26 May 1999 Issue No. 430 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 20 - 26 May 1999 Issue No. 430
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Profile Supplement Travel Sports People Time Out Chronicles Cartoons Letters Putting trade with Turkey first
by Aziza Sami
When Minister of Petroleum Hamdi El-Banbi arrived in Ankara last February, he was whisked away directly from the airport to meet with Turkish President Suleyman Demirel who later announced that his country was giving top priority to importing Egyptian natural gas. This came shortly after the defusion of tensions between Turkey and Syria over the Kurdish issue last December which was the result of successful mediation efforts undertaken by Egyptian President Hosni Mubarak. The same month the Egyptian and Turkish presidents announced that their countries would establish a free trade area. The two leaders said their objective is to improve their already increasing level of annual bilateral trade to reach one billion dollars in the year 2000.
The significance of Egypt's economic rapprochement with Turkey is that it serves the double purpose of boosting regional trade ties -- a top priority of the Egyptian government -- and at the same time forging stronger links with one of the region's most important geopolitical players.
"Egypt and Turkey are key players in the region, economically and strategically. Both have a large population and are pursuing a strategy of dynamic economic growth," said Dawlat Hassan, assistant to the Egyptian foreign minister for economic affairs and international cooperation. "Given the role both countries can play in international forums, both regionally and internationally, it is very important that they develop their relationship," she added.
Since February the capitals of the two countries have witnessed a flurry of activities by trade delegations which intensified further this month. A delegation from Botas, the state-owned Turkish natural gas company, was here at the beginning of May, and a high-level Turkish delegation is expected in Cairo within days to continue negotiations on the free trade area. Once details of the trade zone are agreed on, it will be created over an eight-year period.
The Egyptian-Turkish Joint Business Council, a private sector body which initiated the idea of a free trade area last year, will meet in Port Said in June to look into cooperation in the textile sector, an important industry in both countries. An Egyptian trade mission will visit Turkey's southeast Anatolia region where a massive human and economic rehabilitation project is in the works. This visit follows one by Turkish businessmen to Egypt's Toshka region in early May.
Hassan
CetirgeIn global economic terms, the two countries have a common interest in negotiating trade agreements with the European Union and coordinating their positions vis-à-vis the World Trade Organisation (WTO). In addition, the two countries play a pivotal role in the G15 group of developing nations of which they are founding members.
But perhaps it is in the arena of regional politics that economic integration between Egypt and Turkey will have its most tangible impact. Closer economic ties between them could serve to lessen Turkey's isolation from its Arab neighbours and perhaps reduce the possibility of a Turkish-Israeli economic-security alliance being formed, according to Director of the Al-Ahram Centre for Political and Strategic Studies Abdel-Moneim Said. Economic rapprochement with Turkey will also put Egypt in a better position to help contain future tensions which might arise between Turkey and its neighbours, Syria and Iraq, whether over the Kurdish issue or because of disputes over water resources claimed by the three countries.
Turkish Ambassador to Cairo Aytuk Cetirge emphasises that Egypt and Turkey have no bilateral problems to contend with. The political mediation of President Mubarak between Turkey and Syria gave impetus to what had already been "a good and strong relationship," the ambassador said. More needs to be done, however, to enhance economic relations, Cetirge added. The ambassador dismissed the notion that future tensions could arise between his country and Syria. He also dismissed the suggestion that NATO's newly-declared strategy of defending the common interests of its members in a broadened context could in any way in the future involve Turkey militarily against any of its Arab neighbours.
But a different view was voiced by Said who said that "NATO's new strategy has added another dimension to Turkey's changing role in the Middle East and its relations with its neighbours, Egypt included. Turkey is the only Muslim member of NATO, and the only member belonging historically and geographically to the Middle East." Turkey's role in Europe might be constricted due, among other things, to its differences with Macedonia and Bulgaria. In the Middle East, on the other hand, Turkey will now have an enhanced stature and a greater role in regional affairs because it will have more military clout as part of a NATO which is expanding its mandate, according to Said.
Rivalry may be implicit in Turkey's relations with Egypt which does not enjoy the umbrella that NATO provides Turkey. "Of course, what Turkey's future relations will be [with Egypt and the Arab countries] will be determined by its positions versus Iraq and Syria, and also by what will be happening on the Turkish-Israeli front," Said pointed out.
Although Egypt and Turkey have entered into several defence pacts, these cannot be compared with the level of military cooperation between Turkey and Israel -- a factor which irks the Arab countries since they see this arrangement as constituting a threat to the regional balance of power.
The military aspect of bilateral relations between Egypt and Turkey "is very important, with high-level contacts undertaken recently through visits by the Turkish chief of staff," the Turkish ambassador said. Cetirge described the military pacts between Turkey and Israel as "defence agreements, and not an alliance. We are not in alliance with Israel nor do we have plans against a third party. We are simply doing mutually good shopping. Israel is modernising our fighter planes. This was done through a bidding procedure won by an international consortium [of companies] including Israel. If Egypt has good technology and good prices for something that we need, then we will take it. If it proposes something and it is the best and cheapest, then we will buy it."
Turning to economics, Cetirge said, "There is a great potential for developing trade between the two countries. For Turkish investors, there is no sector in the Egyptian market in which they would not be interested" -- from exporting Egyptian desert sand through a venture which has already been set up, to the manufacture of cement bags and participation in the construction of luxury hotels, such as the Four Seasons. Egypt is Turkey's eighth largest trading partner worldwide.
Despite the improvement in the balance of trade, which has been growing at an average annual 15 per cent rate since 1993, according to Dawlat Hassan, "the number of joint ventures between the two countries, mostly medium-sized projects, is quite low, and we are working to increase them."
The upper echelons in the trade and foreign ministries of both countries -- along with the Turkish and Egyptian business sectors -- are coordinating the establishment of joint ventures in third markets such as the region covered by the Common Market for Eastern and Southern Africa (COMESA). Egypt will serve as Turkey's gateway to Africa, and Egypt will have access through Turkey to the new Commonwealth of Independent States grouping and Asia.
Turkish businessmen have also been invited to look into Egypt's privatisation programme in which "they have shown great interest", according to the ambassador, and there is good potential for cooperation in the tourism sector and the automotive industry for both the local and export markets.
With the new Turkish government currently being formed by Bulent Ecevit's Democratic Left Party (DSP) and better prospects for stability compared to the frequent changes in government of the past four years, the outlook is positive for a continuation of economic reform in Turkey. These reforms will be reflected in the quest for more foreign direct investment (FDI) and strengthening of ongoing trade relations. Egypt's efforts to increase trade with Turkey will continue, but according to Said, it remains to be seen whether the Egyptian economy will offer other countries, Turkey included, business opportunities worthy of the strong initiatives taken by the Foreign Ministry to open up foreign markets.
