Turkey, Iran battle for clout, deals in Iraq

* Iraq battleground for Turkey, Iran in markets, diplomacy

* Neighbours using investment to secure influence

By Rania El Gamal

BAGHDAD, Dec 8 (Reuters) – Turkish clothing and beer are hot sellers in the streets of Arbil, the capital of Iraq’s Kurdish north. Far to the south, Iranian cars roam the streets of Basra and Iranian pilgrims flock to Iraq’s holy sites.

Sunni Ankara and Shi’ite Tehran, old rivals turned friends, are vying for post-war economic clout in neighbouring Iraq to capitalise on an expected oil boom, and have been flexing their muscles in Baghdad’s government formation talks, diplomats and politicians said.

Already one of Iraq’s main trade partners, Turkey wants a bigger foothold in its southern neighbour through increased investment to counter Iran’s growing influence and to boost its stature as a regional economic and political power.

Turkish companies are top investors in hotels, real estate, industry and energy in Iraq’s semi-autonomous northern Kurdish region, and increasingly in the Shi’ite south where Iranian influence had been almost unchallenged.

Iran is Iraq’s main trading partner and has been one of the largest investors in its construction and industrial sectors since the fall of Sunni dictator Saddam Hussein.

“It is clear that they are competing, specifically in Turkey’s effort to dam in Iranian influence. Iran has undoubtedly gained a significant role in Iraq since 2003, and from about 2007 on, Turkey has started to push back,” said Joost Hiltermann of the International Crisis Group.

via Turkey, Iran battle for clout, deals in Iraq | Energy & Oil | Reuters.