Turkey expands economic influence in post-Assad Syria

Syrian transitional President Ahmed al-Sharaa was discussing economic ties on a visit to Turkey on Tuesday, as Turkish transport and manufacturing firms eye big expansion plans for Syria in what some expect will be a tripling of trade.

Turkish exports to the neighbouring country rose 20% in December, when Sharaa's forces ousted former Syrian president Bashar al-Assad, and jumped by more than 38% in January, Turkish Exporters Assembly data show.

Heads of Turkish companies and associations told Reuters they were making new freight connections and capacity investment plans in war-scarred Syria, and they expect economic ties to grow significantly.

Turkish President Tayyip Erdogan's office said it would discuss with Sharaa "possible joint measures to rebuild the country's economy".

Turkey - which has emerged with the closest ties with Damascus after having backed anti-Assad rebels during Syria's 13-year war - is Sharaa's second foreign visit since he became transitional leader, following his trip to Saudi Arabia.

Underscoring Syria's immediate need to rebuild, Turkish machinery exports there soared 244% last month, while cement, glass and ceramics jumped 92% and metals rose 73%. Fruit and vegetable exports also more than tripled.

Exports "could be more than $6 billion if trade were not hurt by developments in Syria in the last 13 years", said Bilgehan Engin, president of the Turkish Forwarding and Logistics Association, adding it could reach this level in 2-5 years.

Last year, Turkish exports to Syria stood at $2.2 billion while its imports from Syria were $437 million, official data show.

Trade currently runs through a buffer zone at the Bab el-Hawa border crossing, where Turkish trucks transfer cargo to Syrian trucks due partly to security concerns. Exporters and business leaders said this raises costs and shipping time.

Engin said a bilateral agreement to eliminate the buffer zone and free up Turkish transport movement inside Syria would allow trade to expand.

Turkey's trade ministry said last month that Syrian and Turkish authorities agreed to start talks to revive a free trade agreement and deepen cooperation in transport, contracting and investment across Syria.

Ibrahim Fuat Ozcorekci, head of the Turkey-Syria Business Council, has said that Turkey aims to reach $10 billion in bilateral trade in the medium term.

Turkish Airlines is one of a handful of carriers to have resumed flights to Damascus after a 13-year suspension.

ECONOMIC OVERHAUL

In a major shift from decades of corrupt state control, Syria's new Islamist leaders are undertaking a radical overhaul toward a free-market economy welcoming investment, the new economy minister, Basil Abdel Hanan, told Reuters last week.

In response, Turkey has moved to assist in providing electricity, setting up a maritime demarcation deal and re-establishing banking ties.

"Syria will offer great opportunities in logistics and we are making preparations (including) new investment plans in the Iskenderun and Mersin" dry ports, said Mehmet Altinsoy, general manager of Pasifik Euroasia, which operates terminal services, railway, air and sea transportation.

The company will ramp up terminal investments to meet new Syria-related business, he said.

Serdar Ayirtman, chief executive of Catoni Group, a freight forwarding and shipping services company, said shipowners have been reaching out to his firm to offer supplies for the expected rebuilding of Syria.

"There is talk of a $400 billion cake for the reconstruction of Syria (including) infrastructure investments, power plants, other major construction and project transportation," he said.

"Turkish companies may or may not undertake these projects, but logistically Turkey's port and road infrastructure will be the key hub for transportation of goods."

Syria's nearest ports are in Turkey and Lebanon.

Along the 900-km land border, some Turkish manufacturers are calling for a designated zone within Syria where they can produce at lower costs.

"It is becoming more difficult to find the labour force in Turkey and costs are increasing," said Ahmet Oksuz, chairman of Istanbul Textile and Raw Materials Exporters' Association.

He said such a zone could also contribute to the return of some of the more than 3 million Syrian migrants in Turkey.

Hakan Bucak, a former board director at Turkish-Syrian business council, said he was considering reopening a quarry in Akcakale, 40 km from the border, that had mainly served Syrian buyers but that he had shut due to war there.

"Now we can reopen it as the demand reappears," said Bucak. "This means employing at least 150-200 people in the region. Many other investments will come back - not just ours."