In August last year, I had written about how Turkey was in a hopeless economic situation. Not quite learning the lessons of the financial crisis from the last decade, Turkey had continued to borrow billions of dollars from foreign banks to fund real estate construction. At the peak of this activity, in May 2014, the lira was riding high, fetching 2.07 to a US dollar. When returns from this massive investment came to be lower than expected, the country’s heavy debts began driving down the lira. On August 18, 2018, it fell to a record low of 6.82 lira — a steep drop. The currency has recovered somewhat, fetching 5.60 lira today.
Then there was the needless economic war that it engaged in with the US. Turkish President Recep Tayyip Erdogan initially refused to release Andrew Craig Brunson, an American pastor in Turkey, who had been arrested in October 2016 and charged with helping orchestrate a coup to bring Erdogan down. The pastor claimed his innocence, but Erdogan was unmoved.
Then, President Trump, always ready to use trade as a weapon, announced that America would impose a tariff of 50 per cent on Turkish steel and 20 per cent on Turkish aluminum. This created havoc in international markets because Turkey relies on metal exports to the US to earn valuable foreign exchange. The lira dropped 20 per cent on a single day, on August 18. On October 12, Turkey released Brunson after all.
NATO member, volatile neighbours
Turkey is a member of the vaunted North Atlantic Treaty Organisation (NATO), a military alliance of 29 countries from North America and Europe that has acted as a unified deterrent force to thwart the power of the erstwhile Soviet Union throughout the Cold War and, since its end, Russia.
As the only Muslim-majority country in the alliance, Turkey shares borders with some of the world’s most volatile countries, including Syria, Iran, and Iraq. Turkey has been at the receiving end of the war in Syria, accommodating over 3.5 million refugees within its borders. This resettlement has been, to date, the world’s largest; Europe, especially, owes Turkey a lot because most of these refugees would have otherwise migrated to EU countries.
Turkey hates the Syrian regime under Assad and considers the YPG militias in Kurdistan, a province of Iraq that has the proud heritage of trying for generations to become an independent country, a key enemy. Erdogan is convinced that YPG is a terrorist organisation that is responsible for the poor state of security in Turkey.
The Russian connection
The US, through much of the Syrian conflict, outsourced its fighting against Assad’s forces to the YPG militias in Kurdistan. So, something strange is happening within NATO. One powerful NATO member, the US, has been supplying arms and cash to a militia organisation, the YPG, considered an enemy of another NATO member, Turkey. It is little wonder that Turkey’s relationship within NATO is strained.
With Trump’s decision to pull US forces out of Turkey coinciding with the full and complete defeat of ISIS — resulting in lower transfers of cash and munitions to YPG — Turkey’s relationship with the US had been showing signs of improving. But Turkey has insisted that it has the sovereign right to go after YPG, irritating the US. Things have become so bad that US Secretary of State Mike Pompeo practically threatened Turkey with grave consequences if it went through with its plans to fight YPG.
There have been other issues. The US has refused to sell Patriot missile technology to Turkey although Turkey has been asking for it for nearly ten years. Frustrated, Turkey took the extreme step of signing a deal with staunch NATO enemy, Russia, to supply Turkey with its advanced S400 missile battery technology. This infuriated the US, which immediately issued an order to stop deliveries to Turkey of its advanced F-35 military aircraft fearing that Russian engineers working on S400 systems could easily steal F-35 technology. If Turkey does not cancel out of its agreement with Russia, it could well be expelled from NATO, dealing a severe blow to its desire to ultimately join the EU.
Regional pressures
Turkey has also been a thorn in US-Saudi relationships by keeping alive the story of the killing of Jamal Khashoggi. The US has pivoted heavily towards Saudi Arabia in its efforts to pressure Iran and it does not want a constant drumbeat of negative news to come out of the Kingdom.
Recent domestic events have not been good for Erdogan. His party lost the majority in key local elections in Ankara and Istanbul, an indication of what may happen in the next national elections.
The sly Russia, in the meantime, is enjoying the show. Already firmly established in neighbouring Syria, it has been a remarkable diplomatic achievement for President Putin to become so close to Erdogan. Turkey has been at the centre of the world’s battles, going back to the Ottoman Empire and World War I. For nearly 70 years after NATO’s founding, Turkey had been a quiet player aiding and abetting western allies. Now, its pivot towards the Russians could have major implications on the world stage.
This is how cold wars worsen.