THE TURKISH-ARMENIAN BUSINESS DEVELOPMENT COUNCIL AND TURKISH-ARMENIAN ECONOMIC RELATIONS

Nazmi Gül*

Once a question is asked about the situation of the relationship between Turks and Armenians, it is natural that the first answer that occurs in one’s mind begins with the phrase “both nations have lived together for centuries.” These nations, who have lived together for centuries, can contribute to world peace, if they base their relationship upon foundations of their historical friendship, especially when they act upon the reality of having a common border and the impossibility of changing the region. Building such a good neighborhood relationship between the nations is a contemporary excellence.

However, as it is known, ongoing relations between Turkey and Armenia, which have a 268 km long common border and accommodate two nations used to live together, are not very bright. Although 15 years has passed over the collapse of Berlin Wall, the walls between Turkey and Armenia are still there. The “official” tensions experienced from time to time between two countries, also have repercussions on “civilian” grounds. This tense atmosphere reinforced by both historical assertions and current international conflicts, triggers the nationalism in both societies; and even triggers the desires for military solutions, and cause the border between two neighboring states to become an impervious wall. The voices of people in both countries, trying to achieve the idea of “living together in peace and cooperation”, are unfortunately reduced to silence in this humming of hostility.

In this region, which is “insatiable for tragedy”; the burden on Turkish and Armenian people brought by history has now tremendous proportions. Moreover, apart from lessening this burden, there are external forces trying to make it impossible to endure. Along with the effects of struggle experienced between those forces in all over Eurasia, the ethnic-oriented competition between Azerbaijan and Armenia exacerbated by Karabakh War, gives impressions that these parts of world stay behind the time. Recently, it is seen that the bickering between Turkey and Armenia is turned out to be an instrument for political pressure which the international actors used time to time for their benefits over these two countries. Especially this competition experienced between Azerbaijan and Armenia is also echoed in Turkey, escalated with the direct war, endeavor for statues of minorities and geopolitics of energy, and an unusual tension between Turks and Armenians represents the common status-quo.

Turkish-Armenian Business Development Council

The Turkish-Armenian Business Development Council (TABDC), in May 1997, was founded in such an environment. TABDC was established by a group of businessmen living in Istanbul and Yerevan in order to create the necessary atmosphere to find a comprehensive solution to the problems ongoing between the Turks and the Armenians for a long time and for providing to set up economic and political relations which will pave the way for reconciliation.

The main purpose of TABDC is to develop the economic and commercial relations between Turkey and Armenia and to provide the integration of economies of the two countries. For this purpose, TABDC cooperates with ATBDC (Armenian -Turkish Business Development Council) which is its partner representing the business world in Armenia.

Because of the role and importance of personal relationships in business and of the presentation, council activities mostly consist of business travels between Turkey-Armenia-Diaspora, joint meetings and committee exchanges. The principal function of TABDC is to set up mutual relations needed by both countries’ business worlds, to provide necessary information for business plans and business strategies, to eliminate problems to a certain extent, which affect formation of new cooperation negatively, and to ensure Turkish and Armenian firms to come together with their counterparts.

By business trips and meetings organized between two countries every year, TABDC, brings foremost companies of Armenian business world, high ranked officials, various research foundations and academic institutions together. These business trips and meetings provide companies contacts-acquaintanceship which would be result in direct business connections. They also give opportunity to be informed mutually about important developments which take place in Turkey and Armenia and which would affect the business life and decision making mechanisms.

As a result of seeing the potential of cooperation and job opportunities via the recognition of Armenian Diaspora, it has been understood that, the capital and the business potential of Armenians-Anatolia originated- can have paramount contributions to the economies of both countries. As a consequence of endeavors for cooperation with the Armenian Diaspora, initiated by TABDC, TABDC-EU departments were established. TABDC-EU, tries to channel the strength of lobby and, the sources of Diaspora into the economic welfare and development of Turkey and Armenia. TABDC team has for a long time been explaining the negative effects of the present Turkish-Armenian relations on the peoples of both countries and it is still continuing its efforts to explain. The purpose is to make the Diaspora begin to work in favor of mutual economic benefits of Turkey and Armenia. Here, it is assumed that the activities of the Diaspora in favor of Turkey on economic and politic areas would also contribute to Armenia through friendship relations to be established between Ankara and Yerevan.

Armenian Diaspora, from the economic and politic standpoint is completely integrated into the nations they live with. These people, who can also be called the Diaspora of Anatolia, because nearly all have Anatolian origins and with whom we had lived in the same region in Anatolia for centuries, have not remained idle, and have become the important corner-stones in business, politics, and intellectual fields of countries they live in by bringing in their dexterity which they exhibited during the Ottoman time as well. The economic relations to be established with Diaspora Armenians are crucial for the economic future of Turkish export industry which has problems in reaching foreign markets. In addition, the chief consideration is that the contacts between Turkey, Armenia and Diaspora established by TABDC, have become the sole means acting as a catalyst in friendship relations between Ankara and Armenia today. So much so that, the operations carried on by TABDC for the normalization of Turkey-Armenia-Diaspora relations, are praised during the last two years in “Regular Report on Turkey’s Progress towards Accession” prepared by European Commission. In the report in question, TABDC is the only independent non-governmental organization whose activities are emphasized. The accomplishments are the outcomes of the joint efforts of founders and members of TABDC. All companies and foundations participating in the activities of TABDC have direct or indirect contributions in this effort for the normalization of relations between the two nations.

TABDC is a foundation established for economic purposes only. However, at the same time, it works for establishing relations which will provide both nations to come closer in the areas of education and culture. Quite a few organizations for cultural relations are arranged by TABDC.

Politically, since its establishment TABDC have pursued a policy supporting neither Turkey nor Armenia because it is a joint Turkish- Armenian foundation. It has remained within the framework of reason and common economic benefits for both countries. For this reason TABDC gained full confidence of both parts because it has equal distance with each country. These activities of TABDC which have been carried on for seven years are totally in the knowledge of foreign ministries of both states. TABDC leads for creation of an atmosphere which would provide the normalization of the Turkish-Armenian economic and political relations through the cooperation and the projects increasing the reliance mutually.

Current Situation of the Turkish-Armenian Economic Relations

Since the foundation of TABDC in 1997, the economic relations between Turkey and Armenia, and the matter of current and future dimensions of these relations have gone through development process. As well known, Turkey and Armenia relations are problematic since 1993. The borders are closed and there are neither trade nor cooperation agreements between the two countries. However, notwithstanding the nonexistence of trade agreements, shuttle trade increasingly continues since the early 1990s. Trade between the two countries used to be carried out via middlemen from Iran or Georgia. TABDC eliminated that costly practice and the trade started to be carried out between the businessmen of the two countries.

As a consequence of trade relations that lasts for 10 years many firms established by Turk- Armenian cooperation within the boundaries of both countries. It is said that the volume of trade among the two countries increased from 30 million $ at the year when TABDC established to 120 million $ according to unofficial data, with the support of TABDC. Movement of goods is still carried out via Iran and Georgia since the border between Turkey and Armenia is closed. Some Turkish firms that operate in construction, electronic, agriculture and textile sector, entered into the Armenian market by giving franchises to local partners. Consequently, the market share of Turkish goods in Armenia displays an increase.

Although the Turkey- Armenia border has been closed and in spite of the nonexistence of diplomatic relations, the air corridor via Turkey to Armenia remains open for 8 years. The air corridor has a great influence over the increase of trade volume. A private Armenian airline has two reciprocal flights between Yerevan and Istanbul every week. Recently, a private Turkish airline also arranges flights between Turkey and Armenia. Besides, there are many firms that operate on transportation of passengers and cargo between two countries via Georgia and Iran.

Common Reconciling Economic Grounds Between the Two Countries

TABDC searches for and puts forward concrete cooperation opportunities in order to provide Turk and Armenian businessmen to act together on an economic base. By forming common projects TABDC develops a trustworthy communication way other than the formal lane of Turkey-Armenia relations. Moreover, TABDC supports formation and practicing of international projects that fits the common interests of both states and their public.

Closed Borders and International Transportation Projects

Edmond Demolins, starts his masterpiece, consists of two volumes[1] in which he explains how roads form the social human type, by saying “the primary cause of the diversity of nations and races is the road they follow. Both race and social human being is formed by road”. Demolins perfectly explains how roads affect and develop the production style, behavior form, thereby the life and thus the civilizations. The importance of road has never been diminished. It does not seem like it will diminish in the predictable future either. However, despite of the roles that road has undertaken for the establishment of the civilizations, the roads between Turkey- Armenia- Azerbaijani are still closed due to reasons that everyone knows.

Opening the Turkey- Armenia border to every kind of passing includes goods and transit pass is the central issue of TABDC since it is an organization that pursues economic goals. The absence of necessary transportation infrastructure is the largest problem that troubles trade. Every kind of transportation between Armenia and Turkey can be done only via third states since the border is closed. This increases the cost of transit transportation up to 37 %. This means that if the border is opened up, both Turkey and Armenia will enjoy price advantages up to 37 % when they are importing to or exporting from Caucasus and Middle East countries. First of all, when the financial difficulties of both countries take into account, governments of both states do not have the luxury of disregarding and refusing this advantage.

Turkey located on the main crossroads of the new “Silk Road” whose main and sub arteries will grow on the way to reach Middle Eastern and Middle Asian oil and natural gas. Moreover, Turkey should be considered as an important crossroads and station on the way of the US and Europe’s entrance to East Asia, primarily Turkic Republics; and East Asian producers’, primarily Japan, penetration into the Europe. Turkey’s strategic importance will increase and her central role in the region, with regard to the economical, political ad social respects, will strengthen to an extent that she utilizes this geographic advantage. The case is also the same for Armenia. It is not surprising that Turkey undertakes roles both as a consumer Market and as a part of very important projects aiming at reaching Middle Asia and Europe markets such as Baku- Ceyhan oil line and TRACECA (Transport Corridor Europe Caucasus Asia). When these projects completed, they will become the vital points which load the economy of the Eurasia region. For this reason these projects become the part of the “Big Game” that restarted by the international actors on the Eurasia region.

However the projects mentioned can only be concluded if Turkey-Armenia transport line, which is one of the lines of the transport corridors on the axis of East-West and North-South, is opened up. The reason is that closed status of the land and rail roads due to the problems on Turkey- Armenia- Azerbaijan line is the most important obstacle in front of the East-West transport corridor projects[2]: This closed line causes three states not to utilize the advantages of their geographic locations efficiently.

The investment opportunities needed to build the transportation infrastructure in order to provide Turkey’s economic growth in Caucasus and Middle Asia region exists. Both Land and Rail road projects are designed to link Pan-Europe transport corridors to Middle Asia via Turkey and Armenia. Moreover, there are new plans which aim at widening harbors in Mersin, Iskenderun, Samsun and Hopa.

The capital that will be provided by the projects can make great contributions to Turkey, Armenia and Georgia to overcome the existing lack in their transportation infrastructure.

Cooperation in the Tourism Sector

Tourism is one of the main sources to create foreign exchange and job opportunities. The tourism potential between Turkey and Armenia is considerably high. Thanks to the historical remaining that still exists in the region it’s possible to go back centuries. Armenian Diaspora who are 7 million are longing for their mother country, Anatolia.

There are tourist regions, which aren’t explored and introduced to the world public in Eastern Anatolia and Caucasus. The greatest chance of these regions as compared to other regions in the world is the available customer potential. If the reality that is approximately 7 million Armenian Diaspora in all over the world are Anatolian origin taken into consideration, the tourism potential and regional investments that it brings with ones the stability and the environment in which tourists go around are maintained, should be paid attention.

TABDC together with the Diocese of the Armenian Church of America brought a group of 150 Armenian Diaspora from the USA to Turkey between the dates of June 4-18, 2001 under the framework of confidence tourism to test it. The success of the first test case has increased the opportunity of hotel investments in the region. In the future, the tourists that came to Anatolia will certainly want to pass Armenia and this means passage of many tourists who have high income from our villages and cities that are on the frontier and take services in these regions. The issue of tourism is very important for the development and welfare of our eastern regions and Caucasus states and should be taken into consideration by the TABDC.

Agricultural Products Wholesale Market Project and MANEC

TABDC, which thinks that peace and stability can only be provided by improving trade relations, put the Agricultural Products Wholesale Market Project into force with International Center for Human Development of Armenia by the support of the American University and Center for Global Peace in May 2002. The project’s aim is to buy and sell the surplus of agricultural and stock raising products of these two countries on internet. Thanks to the websites that were established for the reciprocal buying and selling of agricultural and stock raising products, the boundaries which are the greatest obstacle for trade has also been overcome on internet.

After the achievement of a certain success in TUTPP the project is widened to cover Azerbaijan and Georgia and now named as Marketing Network of Caucasus (MANEC). The MANEC project does not only cover the production in agricultural sector but also the regional production in all other sectors. The production potential in all sectors of the Caucasus countries are first transferred to the internet to be presented to the buyers and then submitted to the customers through local regional agencies established in Turkey, Armenia, Georgia and Azerbaijan. The detailed information about the project summarized here can be obtained from the internet address of http://www.manec.com .

Textile Sector

Armenia was leader with her skilled labor and production quality in textile sector during the Soviet era. Now, it has also been producing under very favorable conditions by her existing textile factories for many American and European companies. However, Armenian textile sector have difficulty to find cheap fabric. Armenia which have special agreements about textile sector with the US and the European Union, have great advantage since there is no quota limitation between her and the US. With the fabric, technology and know-how provided from Turkey and with the production potential and cheap labor in Armenia, cheap and high quality products with which it’s impossible to compete in worldwide would be produced (come into existence). It’s estimated that Armenian-Turkish joint production will appear as a new potential in textile sector in the world with the support of the Diasporas who are ready to make all kinds of contribution in marketing. Since Armenian textile producers have not enough fabric and technology they are not able to fill up their quotas. On the other hand Turkey has difficulty with the capacity of her quota in foreign market. Textile is a very convenient issue for the partnership of Turkish and Armenian businessmen.

Turkey’s Existing Caucasus Policy and the Necessity to Change Her Vision

Turkish diplomacy has mainly focused on the security and regional stability in the Caucasus up to now. Since Turkey is in a difficult region security is still the most significant topic of both her national agenda and foreign policy. Commercial interest in Eurasian region is always coming after these two-interested areas. Nowadays, we are living in an environment where competition in international economic arena increases day by day. Although Turkish business world had realized it the situation is heartrending. But instead of this, the economic organizations like BSEC (Black Sea Economics Cooperation) should have been strengthen and the policies that highlight the regional partnership should have formed.

Certainly, economics and geopolitics cannot be dealt with separately. Meanwhile, no nation should determine its aim as geopolitics goals, which aren’t constructed on a reliable economic basis. However, is it possible for Turkey which can be defined as a great power in regional scale to be a leader in Eurasian region with the security thesis she developed on the basis of fear and anxiety towards Armenia and Russia? The reconcilement between economic and geopolitical interests that always interrelated with each other should be provided for Turkey without being late.

Although Turkish businessmen who have investments with the TABCD in the Eurasia interested in the political part of the Turkish-Armenian relationship as less as possible, they everyday face with the impediments set up by regional political tensions. Every political conflict in the Caucasus, including Turkish-Armenian conflict, is the most important political obstacle for the Turkish economic interest. However, Turkey has pursued a policy, which sustained the existing situation in regional conflicts during the past 10 years. This led the solution of the conflicts to the mercy of extra regional powers. However considering the geographical closeness of Turkey to the region she seems the only state that will help reconcilement of the existing conflicts. In other words, first the solution of conflicts between Turkey-Armenia-Azerbaijan in east-west direction and then between Abkhazia-Georgia in north-south direction are required for the economic interests of Turkey and they should be given priority in the agenda of Turkey.

Turkey made all the things she could to support the Baku-Ceyhan Project. Her efforts paved the way for the implementation of the project despite the geographical, geologic and economic impediments. Now what should be focused on are; the projects of INOGATE (Interstate Oil and Gas Transport to Europe) and TRACECA, to make effort for the functioning of highways and railways from Kars to the interior parts of the Central Asia by working with the European Union and to ease relations with Armenia. Because Turkey always become successful when she follows active, productive and strategic policies as contrast to policies in which she waits and supports the existing status-quo.

Conclusion

In conclusion TABDC is working hard to make the business opportunities between Turkey and Armenia highlighted above real. We believe that everybody will encourage the projects prepared by the TABDC which ones become real will facilitate the sustaining of peace and stability in the region and increase the welfare of both of publics to perform the historical friendship between Turks and Armenians again.

As it is observed in international economic forums during the last 10 years Turkey did not exactly compass the significance of economic diplomacy and the advantage it provided in politics as well as the importance of giving priority to her economic relationships. To sum up, it can be said that Turkey endangered her economic interests in Eurasia Continent that are vital because of the Armenian problem. TABDC believes that from medium run to long run the economic diplomacy developed for friendship and peace on the behalf of two publics will superior to geopolitics.

The main goal of the TABDC is to open boundaries between Turkey and Armenia for the free flow of goods and transit passage. When the trade between two countries can be made first-hand the existing trade capacity will be 4-5 times greater than now. Transit transportation through third countries causes considerable cost increases and decreased capacities. This gap has been fulfilled by the Russian Federation and Iran. Turkey should take over the expected role to provide peace and stability in the region as soon as possible. Turkey should especially reconsider her relations with Armenia and take the initiative in the spheres of transportation (opening of the highway and railway through Kars-Gyumri-Nakhichevan-Baku) and economics as soon as possible for her regional interests. These initiatives, which are in conformity with the principle of “good relations with the neighbor” of the EU, will provide Ankara advantage in Brussels.

Endnotes

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* Nazmi Gül is Business Relations Coordinator at the Istanbul-based Turkish-Armenian Business Development Council (TABDC).

[1] Edmond Demolins, ‘Comment la Route Cree le Type Social’, Firmin-Diot et Cie, Paris, 1927. Transfered by; Asim ARAR Foreign Ministry, Head of Department. Web site: http://www.mfa.gov.tr/turkce/grupe/ues_10/ulastirmaduzenlemeleri.htm

[2] On May 1993 TRACECA Project which is a part of TACIS program was formed with the contribution of Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. The Project has a common strategic importance for Turkey and Armenia. The main purposes of TRACECA are briefly as follows: 1) Supporting the cooperation between the participating Republics in order to increase the trade in the region. 2) Developing Middle Asia- Trans Caucasus- Europe Transport Corridor. 3) Solving the trade and transport systems’ problems in the region. 4) Creating a Technical Aid Program which is financed by the European Union).