Iraqis are pushing back on Turkey's domination – but will they succeed?


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July 25, 2022

A huge artillery strike on a popular tourist area of Iraqi Kurdistan last week killed nine civilians, including a baby girl and a honeymooning couple. Top Iraqi officials swiftly blamed Turkey, describing the attack as a “blatant violation” of Iraqi sovereignty.

Despite Ankara’s denials, Iraqis across the country have in the days since begun to give voice to a long-gestating anger against their powerful northern neighbour – one that may soon force a change in their complex and at times tense bilateral relations.

Iraqi frustrations with Turkey are deep-seated and multi-dimensional. Start with energy. Turkish President Recep Tayyip Erdogan leveraged friendly relations with Nechirvan Barzani, president of the Kurdistan Regional Government, to seal a 2013 deal enabling the KRG to export the region’s oil to Turkey without input from the central government.

Baghdad, and many Iraqis, saw the agreement as problematic from the start, with the potential to encourage greater autonomy in the Kurdish region. The region voted for independence in 2017, which quickly backfired due to strong opposition in Baghdad, Ankara, Tehran and beyond.

More recently, as Europe works to wean itself off Russian gas in the wake of the latter’s Ukraine invasion, there have been reports that the KRG will soon agree to export natural gas to the EU via Turkey. Despite a February court decision that gave Baghdad control of Kurdistan’s energy resources, sparking the pull-out of several major foreign firms, Mr Erdogan in April again expressed support for a gas deal, underscoring Turkey’s sense of advantage.

“Turkey exercises almost total control over the Kurdistan region’s oil and gas sector, as it owns the pipelines inside Turkey and the exporting port of Ceyhan,” Douglas Ollivant, Iraq director at the National Security Council under US presidents George W Bush and Barack Obama, wrote last week.

An issue that goes much further back is Turkey’s decades-long war with the Kurdistan Workers’ Party (PKK), which has been fighting for greater autonomy since the 1980s and is labelled a terror group by Turkey, the US and EU. The PKK’s main base is in the Qandil Mountains of northern Iraq, and whenever violence wanes in Turkey’s mainly Kurdish south-east – as has happened in recent years – Ankara takes its fight across the border.

Turkey launched its latest ground and air offensive in April, and its presence in Iraqi Kurdistan has grown sharply in the past two decades as it seeks to establish a PKK-free corridor from Iraq’s border with Iran all the way across Syria, where the PKK-allied SDF is based, to Aleppo and beyond. Ankara now maintains about 40 military bases and observation posts in Iraq, including as far south as Erbil, 75 kilometres south of the Turkish border.

As in some of the areas that Ankara controls within Syria, analysts argue that Turkey has been “occupying” chunks of northern Iraq for years. Turkish nationalists are keen to point out that Mosul was under Ottoman control for centuries. Baghdad has repeatedly expressed its displeasure with Turkey’s military base in Bashiqa, which is frequently subject to attacks, endangering locals.

An increased military and political presence in Iraqi Kurdistan forces the PKK to focus on self-defence, significantly eroding its ability to mount attacks in Turkey, and enables Ankara to keep a close watch on the KRG and apply pressure if it again moves toward independence.

Turkey has additional means of influence and control. In the 1990s, Ankara established a Turkmen political party in Iraq to counter pro-Kurdish policies within the KRG. Turkey has more recently developed the Nineveh Guards, an armed multi-ethnic group meant to curb Iranian influence and push back against the PKK and its allies.

Turkey has also sought to counter Iran’s influence with Iraqi Shiites by bringing Sunni political actors together and aligning them with the Turkish perspective. The decisions of the Sunni bloc in the Iraqi Parliament are widely thought to be supported by Turkey. This, along with Baghdad's efforts to exert pressure on the KRG, helps explain why the central government, despite its regular grumbling, is generally supportive of Turkey’s campaign against the PKK.

Fishermen sail their boat on the receding waters of Iraq's drought-stricken southern marshes of Chibayish in Dhi Qar province in June. AFP
Fishermen sail their boat on the receding waters of Iraq's drought-stricken southern marshes of Chibayish in Dhi Qar province in June. AFP

But the April ground assault, the Turkish drone strike in June that killed a 12-year-old Yazidi boy sitting in his father’s bookshop, and last week’s strike killing tourists, including women and children, have brought anti-Turkey sentiment to a boil, with powerful Shiite cleric Moqtada Al Sadr spearheading an emerging campaign.

Perhaps because the latest Iraqi victims were Arab and staying in a resort Iraqis have frequented during the summer for decades, the sentiment has united a broad cross-section – civil society activists, supporters and foes of Mr Al Sadr, pro-Iranian militants and other groups. Iraqi tour operators boycotted Turkey as protests against Ankara flared in Najaf, Karbala, Baghdad and Nasiriyah.

The Arab League denounced Ankara’s “aggression”, while Iraq’s national security council demanded that Turkey withdraw all of its forces from the country. A full Turkish withdrawal is unlikely. Beyond the large footprint, and the Turkish military officials supporting Iraqi armed forces as part of a Nato mission, Ankara has major leverage on an even more urgent issue.

In a sweltering world and a drought-ridden region, few elements are more in-demand and at risk in Iraq than water. Yet, with a series of new dams on the Euphrates and Tigris rivers, Turkey has in recent years put Iraq at a major disadvantage in terms of water resources. During a severe drought in 2018, for instance, Iraq banned its farmers from planting summer crops because Turkish dams had cut the water flow by nearly two-thirds.

As a result, Baghdad’s ability to shape Turkish policy is limited. Even so, Iraq looks set to push back hard on Turkey’s energy grab, its deadly drone strikes, its significant political influence and expanding military presence. How much ground it gains, and the extent to which sectarianism flares anew, is likely to hinge on the response of the other two power players in Iraq – Iran and the US.

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Q&A with Dash Berlin

Welcome back. What was it like to return to RAK and to play for fans out here again?
It’s an amazing feeling to be back in the passionate UAE again. Seeing the fans having a great time that is what it’s all about.

You're currently touring the globe as part of your Legends of the Feels Tour. How important is it to you to include the Middle East in the schedule?
The tour is doing really well and is extensive and intensive at the same time travelling all over the globe. My Middle Eastern fans are very dear to me, it’s good to be back.

You mix tracks that people know and love, but you also have a visually impressive set too (graphics etc). Is that the secret recipe to Dash Berlin's live gigs?
People enjoying the combination of the music and visuals are the key factor in the success of the Legends Of The Feel tour 2018.

Have you had some time to explore Ras al Khaimah too? If so, what have you been up to?
Coming fresh out of Las Vegas where I continue my 7th annual year DJ residency at Marquee, I decided it was a perfect moment to catch some sun rays and enjoy the warm hospitality of Bab Al Bahr.

 

The biog

Hobbies: Writing and running
Favourite sport: beach volleyball
Favourite holiday destinations: Turkey and Puerto Rico​

Company profile

Date started: December 24, 2018

Founders: Omer Gurel, chief executive and co-founder and Edebali Sener, co-founder and chief technology officer

Based: Dubai Media City

Number of employees: 42 (34 in Dubai and a tech team of eight in Ankara, Turkey)

Sector: ConsumerTech and FinTech

Cashflow: Almost $1 million a year

Funding: Series A funding of $2.5m with Series B plans for May 2020

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: July 25, 2022, 2:00 PM