Have you visited seen Gaziantep or Diyarbakir? If you have, you can notice that the former is rich and the latter is poor. When I first visited Gaziantep, I felt myself in Bursa where I grew up. In fact, Gaziantep is now sort of like Bursa, the developed western province. It is the industrial center of the Southeastern Anatolia. It now is. Gaziantep is one of the primary examples to how industry was expanded towards Anatolia following the liberalization reforms of 1980. However, a similar development could not be observed in Diyarbakir, which is at 3-hour distance to Gaziantep. Then, why did the industry, which could reach to Gaziantep bypassed Diyarbakir? What difference does the three-hour distance make? Nowadays in Turkey the main agenda item is the Kurdish issue. And when thinking on this we should not overlook the economy. But in fact the economic aspects have been ignored in this respect for long. So what does Gaziantep have that Diyarbakir does not? How can we approach this issue? If you wonder what I see, please join me down in the article.

Have you seen the statement by Mr. Galip Ensarioglu, President of Diyarbakir Chamber of Commerce and Industry, published in The Economist magazine? According to this, the main difference between Gaziantep and Diyarbakir is the issue of security. Because of this, Gaziantep focused on commerce while Diyarbakir concentrated on politics. I guess this could be the summary of the last three decades. So, let us put the first point as reads: Diyarbakir had to deal with politics intensively. Kurdish citizens had to deal with politics intensively over the last three decades. Daily concerns of security have replaced the efforts for and dreams of prosperity. As their attention focused on security, there were not much means to seek for prosperity. But it is a wonderful thing that the toxic climate of then is being replaced with a climate of hope. The path has ups and downs. But as Çetin Altan says, here is no need to be pessimistic. "End of the talking through the hat" period is the first step for the transformation of Diyarbakir.

However security concerns do not only lead to waste of energy. Cost of doing business also increases directly. What you see as security concerns is a hike in the cost of doing business for businesspeople. And this is a fact applying all around the world. So, the underlying element of the Diyarbakir-Gaziantep comparison must be the comparison of investment climate. Do not you think so? What is the difference? Again as Mr. Ensarioglu maintained that "in Diyarbakir you have to provide four times the collateral in Gaziantep to receive a bank loan." And he goes on saying that public banks also pursue this practice. He could have added that banks would be expressly happy, if not told explicitly, if the collateral property is located in the western part of the country. What is the situation here? To do business in Diyarbakir one should provide more collateral to the same bank for the equal amount of loan denominated in the same currency unit. So, it is of use to acquire a property in the western part of the country. This has been the case in Turkey over the last three decades. For now, let us skip the 'why banks not check the balance sheets but extend loans in exchange for collateral' debate. The second point in today's discussion is that the security concerns push up the cost of doing business in Diyarbakir. Security is essentially what Gaziantep does have and Diyarbakir does not. Thus the solution must be sought in this framework.

Ho can you improve competitiveness of a place where security problems push up the cost of doing business significantly? How can you compete with other traders? It is hard. Gaziantep ranks above Diyarbakir in exports to Iraq. In fact, it ranks way above Diyarbakir: As of 2009, exports of the former to Iraq worth US$1.3 billion while that of the latter worth only US$56 million. However, relatives of Kurdish citizens in Diyarbakir mainly live in Iraq. There also are a number of Diyarbakir residents opening shops and diners in Arbil or in Suleymaniye. But the largest share in trade is hold by Gaziantep, exporting 23 times that of Diyarbakir's exports.

Why is this so? Thanks to the improvements in industrial infrastructure, Gaziantep can produce goods to offer to the Kurdistan Regional Government. Gaziantep exports to the region in almost 20 product groups, predominantly rugs, textiles, food and chemical substances. It appears that if you have anything to sell, you can sell. On the other hand Diyarbakir can export nothing much except marble.

And this is the outcome of the ongoing fierce battle over the last three decades. Neither commerce nor prosperity can be achieved if the people of the region do not feel secure. Then, does this mean there is nothing to do for Diyarbakir? Of course, it does not. The trick is to improve the investment climate and reduce costs. It is time for creative thinking.

This commentary was published in Referans daily on 14.10.2010