Builder-in-Chief: Erdogan’s Real-Estate Dream Drifts to Syria

EghtesadOnline: Turkey’s president looks at northern Syria and sees what others don’t: a massive real estate project.

News ID: ۷۷۰۳۱۶

13 October 2016

Recep Tayyip Erdogan, whose army is attempting to clear 5,000 square kilometers in northern Syria of Islamic State, talks about building entire cities when his soldiers’ work is done. In regular addresses, he describes a future in which refugees return home to Turkish-built apartment blocks supplemented by Turkish-built schools and social facilities. That may be the only way to get some of the nearly 3 million Syrians in Turkey to return home and begin reconstructing their country, he says.

Erdogan’s vision points to a long-term commitment to carve out an area under Turkish influence, free from jihadists and Kurdish groups, making this operation one of its largest foreign interventions since the collapse of the Ottoman Empire. To achieve it, Turkey needs to overcome daunting security risks, financing and logistical challenges, not to mention political battles with other parties including Russia, Iran and a Syrian regime hostile to Turkey’s meddling.

“Erdogan has engaged the country in a very long adventure,” said Nihat Ali Ozcan, an analyst at the Economic Policy Research Foundation in Ankara. “Turkey will have to maintain its troops there for years to come if it wants to keep that area off limits to hostile groups.”

Refugee Worries

If successful, the plan could offer a boon to Turkish contractors. He already has one volunteer: the state agency known as TOKI, a colossus responsible for building about 10 percent of Turkey’s housing units every year.

“We have a problem at our doorstep,” Ergun Turan, TOKI’s president, said in an interview in Ankara on Sept. 20. “If our state asks us to, we will do it. And we’ll do it with ease.”

In a bid to drum up support for Turkey’s deeper involvement, Erdogan is making the case that resettling refugees would mitigate the politically fraught issue of migration to Europe. EU leaders turned to Turkey for help last year after almost a million people streamed across its land and sea borders into Greece.

“Refugee problems will go away automatically when the Syrian people get the opportunity to live on their own lands in safety,” Erdogan said in Ankara last month. Irregular migration and security risks can’t be prevented unless education, employment and housing problems of the refugees are quickly solved, he told the United Nations General Assembly in New York.

Syria Carnage

TOKI, established three decades ago to build homes for Turkey’s poor, has evolved into a key source of political power for Erdogan and the ruling AK Party, stamping its logo across Turkish cities and handing out contracts to level and reshape entire regions. Under Erdogan, it also became a driver of the economy, with an annual operating budget of more than $2.5 billion and assets it values at more than $20 billion. It’s gained experience abroad -- in Indonesia, Sri Lanka, Pakistan and Somalia.

Yet none of this compares to the scale of destruction in Syria. The cost to rebuild could be as much as $180 billion, World Bank President Jim Yong Kim has said. And even if the war ends, without construction starting, the migration problem is here to stay: “Once hostilities end, many Syrian refugees will unlikely return unless schools and health clinics are rebuilt,” Kim said.

For Turkish contractors who’ve suffered from attacks and kidnappings by militants in their own country, the Syrian offer may be too risky to take, according to Zeynel Ceylan, chairman of construction company Ceylan Insaat & Ticaret AS.

Fractured State

“Syria is an inferno,” Ceylan said in an interview on Sept. 29. “How are we going to do business in an area where we have no guarantees for personal safety or property? How will we send in material or even food for our workers?”

Five years of fighting has left Syria one country only in name. The involvement of multiple regional and global powers, along with jihadists and Kurdish militants, make piecing it back together increasingly unlikely.

“While the future picture is still blurred, some of its impressions are becoming clear,” Robert Rabil, professor of political science at Florida Atlantic University, said by e-mail. “Syria will have several autonomous regions while the center and major urban centers remain with the Assad regime.”

Former Promise

That would fit the vision of Erdogan, who now talks more about the threat from Kurdish separatists than the need to topple Syrian President Bashar al-Assad. Since the Turkey-backed operation began Aug. 24, Free Syrian Army rebels and their Turkish allies have seized control about 1,000 square kilometers (390 square miles). However resistance is growing as they move deeper toward the Islamic State strongholds of Dabiq and Al-Bab.

Turkish troops are also in an uneasy standoff in Syria with Kurdish militants who control much of the rest of the Syrian side of the border.

Turks like Adnan Celtikcioglu, owner of a construction company that abandoned sewage treatment projects in Syria and Libya due to conflict, long for the days when Syria was a promising market. One project, in partnership with Austrian builder Strabag SE, was in Raqqa, now the capital of Islamic State’s self-declared caliphate in Syria.

“When Erdogan and Assad were still on good terms, we hugged Syrian businessmen at a forum in Istanbul as we rejoiced at the opportunity to do business at last,” Celtikcioglu said in an interview. “The Syrian market was opened too late for us and shut down very quickly.”