Turkey and Armenia’s efforts to reconcile their differences will relieve some tension in the Caucasus, but a boom in trade from reopening the border can only take place if Azerbaijan is included in the equation and that is dependant on unraveling the Nagorno-Karabakh problem, according to Turkish leaders
Despite the historic step taken by Turkey and Armenia, local businessmen and experts warn that only a comprehensive solution that includes Azerbaijan could boost economic and trade opportunities for the region.
“It is quite important to find a parallel solution for the Azerbaijan–Armenian track. We actually think Turkish-Armenian reconciliation will accelerate the Nagorno-Karabakh solution,” Kaan Soyak, co-chairman of the Turkish-Armenian Business Development Council, or TABDC, said Wednesday in an interview with the Hürriyet Daily News & Economic Review.
The normalization process is expected to have an enormous impact on trade between the border towns of the two countries. Iğdır, which is linked to Armenia through the border gate Alican, is one of them. "The border trade has become the main actor of the local economy as livestock and agriculture production decreased," Kamil Arslan, president of Iğdır Industry and Trade Chamber told the Daily News on Wednesday.
The exclusion of Azerbaijan from the peace process would be the worst scenario for local tradesmen, according to Arslan. Pointing out that many local businessmen have deals in autonomous Azeri areas such as Nahchivan, Arslan said: "In such a case they might lose their current market."
“It takes 10 to 12 days to send our goods to Azerbaijan and Turkmenistan through Georgia. However, it will only take four hours to export through Armenia. That’s why we insist on a comprehensive solution that includes the Azerbaijanis.”
He advocated Armenia had no promising potential, saying: “Trade only with Armenia will not be profitable. It doesn’t have medium or large industry. Its economy is weak with no significant production. We already sell our goods to them thanks to our dealers across the country.”
“But if a transit corridor linking Iğdır to Baku is opened, then our trade volume will be doubled” he said.
Economic growth to stem ‘democratic move’
Turkish government has nowadays been working on a “democratic move,” also known as a Kurdish initiative, but it will fail without economic growth in the region, Soyak said.
“An economic initiative is needed in eastern and southeastern Anatolia and I believe that reconciliation with Armenia will promise it. You can reach nowhere through only political campaigns without financial solutions,” Soyak said.
Richard Giragosian, director of the Armenian Center for National and International Studies, or ACNIS, voiced the same opinion, saying: “Opening its closed border with Armenia would constitute a new strategic opportunity for galvanizing economic activity in the impoverished eastern regions of Turkey, which could play a key role in the economic stabilization of the already restive Kurdish-populated eastern regions and thus meet a significant national security imperative of countering the root causes of Kurdish terrorism and separatism with economic opportunity.”
Turkey will also offer Armenia not only a way to overcome its regional isolation and marginalization, but also a bridge to larger markets crucial for economic growth and development, he said.
Promising projects to boost bilateral economic ties
Border trade isn’t the only key element to boost bilateral relations, according to TABDC’s Soyak. It seems that the tourism sector will be an initial driving force. Approximately 400,000 to 500,000 Armenians visit their homeland once a year and they are quite interested in small tours to historical attractions in eastern Turkey. Initially $60 million is expected even if 200,000 of them stay for three days.
He said there could be a railway linking Turkey to the Caucasus, the Central Asian states, Russia and China will be realized, strengthening Turkey’s geostrategic position.
Turkish builders can invest in sub-construction projects in the neighboring country. Armenia can provide natural gas and electricity since it became an energy hub in the southern Caucasus, Soyak said.
And lastly, the textile sector, severely affected by Russian customs, may utilize a free-trade agreement between Russia and Armenia if its production is partly completed there, he said.