By Daren Butler SILOPI, Turkey, Feb 25 (Reuters) - Azad Urek took a risk by abandoning Turkey’s Mediterranean beaches to set up an export company on the bleak border with Iraq but says his flourishing business is now under threat from a Turkish army offensive.
Turkish troops have poured across the border into Iraq to crack down on PKK rebel bases and people on the mountainous frontier fear the operation will also exacerbate southeastern Turkey’s deep economic, social and political problems.
"This operation is having an impact on everybody. Not just economically, but psychologically, physically and spiritually," Urek, 32, said from his office on a back street in the town of Silopi, several km (miles) from the Iraqi border gate at Habur.
"Everybody here is against the operation. This won’t end the troubles. The solution is recognising the Kurds, giving them their rights and equality," said former villager Halil Arslan, 43, who spends his days playing draughts in a smoky teahouse.
Many have profited from the vital economic lifeline connecting Kurds in Turkey’s southeast to their ethnic brethren across the border in Iraq.
Urek has set up a multi-million dollar business from pest control to tourism and exports, sending goods ranging from tomato paste to cosmetics to what he calls the "bottomless well" of the Iraqi market.
Turkey’s exports to Iraq jumped nine percent last year to $2.8 billion and its influence can be felt across northern Iraq in the form of supermarkets, consumer goods, construction firms and traders from all over Turkey.
But the latest military offensive, now into its fifth day, and serious tensions between Turkey and the autonomous administration of mainly Kurdish northern Iraq are threatening future projects and undermining hopes of regional development.
Turkey says it is carrying out a limited operation in northern Iraq against separatist rebels of the outlawed Kurdistan Workers Party (PKK), which it blames for the deaths of nearly 40,000 people during a conflict that began in 1984.
The rebels, branded terrorists by Ankara, the United States and the European Union, have been using the remote mountains of northern Iraq to stage attacks on targets inside Turkey.
Hundreds of thousands of people have been uprooted by the conflict over the decades, forced to flee farming livelihoods in mountain villages, only to face long-term unemployment in nearby towns like Cizre on the banks of the Tigris river.
While the businessmen fret about the financial costs of the latest cross-border army offensive, local people say the solution to the Kurdish problem can come only through political dialogue, not through military action.
"For years our people have lived with this suffering amid the sound of warplanes and helicopters flying overhead," said Maruf Ike, deputy mayor in the border region’s administrative centre Sirnak.
"There have been many operations but you cannot solve the problems with war, only through democracy," he said.
Prime Minister Tayyip Erdogan’s government has eased some restrictions on Kurdish language and culture as part of Turkey’s bid to join the EU, but local people say more needs to be done.
Ike said a legal bid to close the pro-Kurdish Democratic Society Party (DTP) on charges of aiding the PKK were hurting efforts in this direction as the death toll mounts in Iraq.
Waiting in line to enter Iraq through the Habur gate, truckers say fears of entering a region caught up in fresh fighting are outweighed by the need to feed their families.
"I am scared but I am responsible for feeding 13 people in my family so I have no choice. If the gate is closed we will go hungry," said 26-year-old Yusuf Durak as he prepared to drive his oil tanker to U.S. forces in Tikrit.
Like the many thousands who depend directly on the trade with Iraq for their livelihood, he fears that the border could be closed because of the new land offensive.
Those worries are shared by Urek as he prepares to send an export consignment across the border and he says a worsening of the economic situation may only serve to fan the flames of discontent and conflict.
"If they close the door to Iraq it will open the way for more youths to be deceived by the PKK. If people have got something to do, if they have money in their pockets, they won’t go up into the mountains," said Urek, who is himself Kurdish.
Sour relations between Ankara and Iraqi Kurdish authorities are jeopardising a project with a Turkish airline to fly thousands of Iraqi Kurds on package tours to his former home town resort of Antalya, Urek said.
"I don’t think we can start the project this year because of the tensions. Our only hope is an end to the troubles," he said. (Editing by Gareth Jones and Peter Millership)