Receive free global trade updates
we will send you myFT Daily Digest Email summary of latest information global transactions There is news every morning.
Turkey is in “intensive talks” over alternatives to the India-Middle East trade corridor plan agreed at this month’s G20 summit, as the country seeks to bolster its historic role as a cargo route from Asia to Europe.
Ankara opposes the proposed India-Middle East route that would transport goods from the subcontinent to European markets via the United Arab Emirates, Saudi Arabia, Jordan and Israel. The proposed corridor, which is backed by the United States and the European Union in an attempt to push back China’s growing influence, would bypass Turkey entirely.
Turkish President Recep Tayyip Erdogan said after the G20 summit that “without Turkey there is no corridor”, adding that “the most suitable trade route from east to west must pass through Turkey”.
His foreign minister, Hakan Fidan, has since doubled down on the suspicions, insisting this week that “experts doubt the main target” [of the India-Middle East corridor] is rationality and efficiency,” and suggested that “more geostrategic concerns” were at play.
“Trade routes do not just mean meeting trade. It is also a reflection of geostrategic competition.” Fidan said in response to a question from the Financial Times.
Turkey is keen to emphasize its traditional role as a bridge between East and West, dating back centuries to the Silk Road.
Instead, Ankara proposed an alternative called the “Iraq Development Path” initiative, with Fidan insisting it was in “intensive talks” with Iraq, Qatar and the United Arab Emirates on a project to be built “in the coming months”.
According to diagrams released by the Baghdad government, the proposed $17 billion route would carry cargo from the oil-rich port of Grand Fau in southern Iraq, passing through 10 Iraqi provinces and finally into Turkey.
The plan will rely on 1,200 kilometers of high-speed rail and a parallel road network. The plan is divided into three phases, with the first phase scheduled to be completed in 2028 and the final phase in 2050.
However, analysts say there are concerns over the viability of developing road projects for financial and safety reasons.
“Turkey lacks the funds to realize the full scale of the project and appears to be counting on the support of the UAE and Qatar to build the proposed infrastructure,” said Emre Peker, director of Europe at the Eurasia Group think tank. “To do this For one thing, the Gulf countries need to believe in good returns on investment – something that is not evident in the Gulf countries. [Development Road] project. “
“There are also security and stability issues that threaten the project’s construction and long-term viability,” Peck added.
Iraq suffers from rampant corruption, dilapidated infrastructure, weak government, and political instability. It is unclear how Iraq will fund the project.
Analysts and Western diplomats also note that the proposed G20 corridor, if ultimately realized, could take decades.
Turkey seeks to straddle the strategic line between East and West by maintaining strong relations with the United States and the European Union, as well as Russia and China. This approach has sometimes heightened tensions with the West. This week, for example, two Turkish companies were slapped with U.S. sanctions for allegedly aiding Russia’s war in Ukraine.
Peker added that Ankara generally supports China’s Belt and Road Initiative, but said Ankara’s role in the plan is limited. A recent study by the Carnegie Endowment for International Peace showed that Beijing invested approximately US$4 billion in Turkey through the Belt and Road Initiative, accounting for only 1.3% of the total.
Murat Yeşiltaş, director of foreign policy research at Seta, a think tank linked to Erdogan’s government, said Ankara may push to join the Indo-Middle East Initiative despite alternatives.
Erdogan could have a chance to make his case as early as next week if he meets U.S. President Joe Biden on the sidelines of the United Nations General Assembly next week.
Yesiltas said that in addition to demonstrating Turkey’s convenient geographical location for trade, the country can also exert its influence in the region, especially after the recent warming of relations with Saudi Arabia and the United Arab Emirates.
“Türkiye has considerable political influence in the region [and is] Ability to facilitate trade negotiations and resolve disputes among corridor participating countries,” Yesiltash said.
Additional reporting by Funja Güler in Ankara