Turkey’s decision to block US military deployment from itsterritory has yielded economic success. Turkey is now Iraq’ssecond biggest supplier, when thirty years ago its goods werebanned from Iraq, The Wall Street Journal reports.Turkey has diverted its exports from a sluggish European marketand Iraq is likely to replace Germany as its number one exportmarket by the end of the year, Turkey’s Central Governor ErdemBasci told CNBC.”Probably this year Iraq is going to replace Germany whichhas been our number one export destination,” Basci said.”Iraq will probably become number one by the end of nextyear.”In 2012 Turkish exports to Iraq rose to $10.83 billion from $8.3billion a year earlier, while German exports fell slightly to$13.13 billion from $13.95 billion.Iraq has replaced Italy as the second biggest importer ofTurkish goods, according to Basci. Around 30 percent of theTurkey’s exports currently go to Iraq and that’s likely torise.”Europe has been our main trading partner. As of 2010 we had60 percent of our exports heading to Europe but now there has beena big effort to diversify our markets,” Basci said.Ozgur Altug, an economist at BGC Partners in Istanbul, forecastsa strong symbiotic relationship between the two nations.As Iraq begins to accumulate wealth from its oil reserves (thefourth largest in the world, estimated at over 150 billion bbl),demand for Turkish goods will increase, by more than $2 billion ayear, Altug predicts.Iraq is also expected to look to Turkey to help redevelopinfrastructure after the 10 year war.Last year, Turkish contractors secured about $3.5 billion inconstruction projects, according to Altug.Calik Energy, a Turkish company, is building two gas turbineplants in the Monsul and Karbala regions, with a $800 million pricetag financed by the Iraqi government.Markets exist beyond oil and construction, ranging from servicesto even diapers.Adman Altunakaya and his family run a family-owned diaperconglomerate, which accounts for two thirds of the Iraqi diapermarket. Sales to Iraq are 90 percent of the company’s revenue, andhave risen 50 to 60 percent in the last two years, since the UStroop withdrawal.”Our business with Iraq is increasing constantly,” Altunakayasaid. “But of course it is affected by political tension.”A huge chunk of Turkey’s success is dependent on the Kurdishregion, the unofficial nation state situated between Iraq, Iran,and Turkey. The Kurdish market drives the Turkish exports, andaccounts for about 70% of exports. Almost 1,000 Turkish businessesexport in the northern region, including banks and hotels.