Turkey & Israel: The Turkeys in Turkey – Business Still Flourishing

by Gedalyah Reback

So I’m sitting in class at Hebrew University listening to the latest lecture on Ottoman history. Going over the economic history of the empire, it can get relatively boring: the social structure brought on by hyper-organized guilds, economic protections, imports & exports, etc.

It’s all boring, but extremely relevant from where I sit in the academic capital of the Jewish State. Today, Haaretz posted a report that Israeli tourists were starting to go back to Turkey for cheap, close-by vacations.

Turkey has always been an economic hub being a fertile, particularly after the mass import of American products hit Europe. They went on to become niches for the cuisine in certain countries: the tomato sauce of Italian pasta & pizza; the potato in Ireland; the renown industry for Swiss chocolate. Gold proved to be a much bigger influence. Because so much extra entered Europe, the price of it went down and caused tremendous economic problems, particularly in the Ottoman Empire. It has always been a large market sitting between the centers of trade in India & Europe. That status is extremely true today, as its economy has grown roughly 10% annually like clockwork for the last ten years. That even includes strong economic relations with Iraq and especially Iraqi Kurdistan, even though there is a long-standing rivalry between the Kurds & the Turkish government.

But while we’re talking Turkey, we have to mention the recent failures in the relationship between the growing economy there and the strong one in Israel. The context of today’s trade is remarkable, because both sides have seen a massive collapse in military and diplomatic relationships. On the military side, the Turks have gone out of their way over the last three years to keep Israel from joining military exercises with NATO or bilateral games between the two countries on their own. In turn, Israel has scrapped some lucrative military industrial deals with the Turks, including a project to develop unmanned drones that Israel ended up shifting to Azerbaijan, costing Turkey access to new technology and massive economic losses. Prime Minister Reccip Erdogan was apparently livid when the Azeri deal was announced.

But other trades seem to be on the up & up despite the threats by diplomats and ministers to break the relationship further. In fact, the economic relationship seems to be completely independent of the military and diplomatic ones.

Traditionally, Turkey was a hub for agricultural exports to Europe from Asia, mainly in livestock. That included a breed of guineafowl nicknamed the “turkey hen” or “turkey cock” (i.e. a Turkish chicken). Peacocks and pheasants made their way through in addition to all the raw materials and silks from India & Persia. Livestock isn’t the main staple of the economy now. That would be manufacturing and machinery, in which Turkey is heavily involved in an international market where parts are imported or exported, assembled, then redistributed. Today, Israel is heavily involved and invested in that industry. About 900 Israeli companies are apparently active in Turkey and the Turks are the 8th largest export market for Israeli industry. Israel is only 17th to Turkey for centers of export, about 1.5% according to the article linked above. But Israel has free trade agreements with the United States and is a member of the European economic alliance, the OECD. Turkey is also a member, which not only means the two economies have easy access to each other but also are forbidden by organizational rules from boycotting other members of the alliance.

Turkey’s name has been significant in American exports since before the United States’ founding. The name of the newest discovery in cuisine, the turkey, came from being mixed up with the above mentioned “turkey hens” that came from India (India, “Hodu” in Hebrew, also being the origin of the Hebrew name for the turkey: “hodu”). What was once the tomatoes, turkeys and gold of the Americas has become chemicals, manufacturing and consulting services between the Turkey and the New World. With the US so close to Israel, it’s imperative that Turkey maintain its economic ties with Israel if it wants to maintain some level of diplomatic niceties with the United States. So while the reasons Turkey is stuck with Israel are apparent, they’re intertwined with the reasons Turkish businessmen aren’t looking for ways to divorce themselves from the Jewish State’s economy.

Turkish merchants haven’t forgotten Israel’s tech industry either, and their pressure on the government in Ankara has made it tough for politicians to follow through with threats against Jerusalem. The military is not the only interested consumer. Israelis are known for selling start-ups, but now they seem to be buying them. An example is the Turkish company Med Ilac, a medical tech company gobbled up by pharmaceutical giant Teva for 10s of millions of dollars. With medical and digital tech hubs in the Middle East located in Israel, the Turkish government has little pragmatic reason for severing the relationship with the Israelis to that degree.

As Turkey tries to break into the tech and R&D worlds, it’s previously close connection with Israel effectively makes the relationship indispensable. The Turkish military will look for ways to renewed cooperation, especially in weapons and communications. This is a general analysis, and it even reflects some of the points Israeli PR makes about industry and technology when it tries to draw attention from contentious Israeli issues like politics and the Palestinian territories. But it’s indispensable truth. Israel and Turkey will probably repair their relationship on financial grounds more than on strategic ones, but it seems inevitable.

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