23 Temmuz 2014 Çarşamba

Geopolitical risks are increasing

Foreign Minister Ahmet Davutoğlu declared recently that the government will not allow the Middle East to become a swamp that includes the Holy Cave of Hira.

I presume that Mr. Davutoğlu is alluding to critics in the opposition who claim that the government of the Justice and Development Party (AKP) has pushed Turkey into the “Middle East swamp” because of wrong foreign policy decisions which have resulted in the loss of any and all tools that might allow Turkey to play a role of mediation in the conflicts that are shaking the region. In fact, the Middle East is full of holy places, not only for Muslims, but also for Christians and Jews. This might be one of the factors which has kept the region locked in a cycle of violence and intolerance since the old order disappeared, while a new order cannot emerge.

AKP foreign policy might have taken into consideration the highly complex social and political imbroglio of the region more realistically and not put all its eggs in the basket of its “morality” claims. If this morality was not suspect due the double standards of its claimants it might be less questionable, but this is not the case. Regardless, the results of the deadly realities of the Middle East and those of AKP foreign policy remain. So, let's focus on the consequences of this state of affairs on political economy.

The bloodbath perpetrated by the Israeli army in Gaza is certainly a great human tragedy, but this bloodbath has also torpedoed recent hopes of reconciliation between Turkey and Israel. Prime Minister Erdoğan made clear that as long as he is in power there will be no reconciliation with this “terrorist state.” The impotence of Turkey in protecting Gaza civilians from Israeli violence has pushed the prime minister to raise his verbal violence against Israel. The opposition criticizes the prime minister for contenting himself with great bouts of shouting, pushing him to instead take concrete measures such as the suspension of diplomatic and economic relations with Israel.

We are, for sure, in a game of losers for all parties, but the main loser would be the US, which expended enormous effort, including the personal prestige of President Obama, for this reconciliation. This means that Turkey's strategic importance for the US will not always be sufficient to prevent harsh actions against the economic interests of Turkey. For example, the allegation that some state-owned banks in Turkey violated the international embargo against Iran may have serious consequences.

The presence of “Islamic State” (IS) in Syria and northern Iraq seems as though it will last for a very long while. This terrorist organization (or state?) continues to hold Turkish diplomats and their families hostage. These hostages are blocking the Turkish government from instituting coercive policies against IS. Autonomous Kurdish regions in northern Syria are under attack by IS, and the AKP government hesitates to defend them. Turkey's policy against Assad is becoming more and more uncertain.

The AKP does not know how to deal with Bagdad or Arbil. The Kurdish regional government seems like it has decided to progress in its efforts to form an independent state. They have long been allies of Turkey, while Maliki became an adversary. Meanwhile, Israel is encouraging Arbil to declare its independence from Iraq, while Iran and the US oppose it.

What is the strategic stance of Turkey in the face of these issues? I am not sure that AKP leaders have a strategy with clear goals and appropriate tools for the achievement of these goals. The result is that the exports to Iraq which the Turkish economy sorely needs are now declining rapidly, and the hopes put in the increasing oil exports from northern Iraq are in jeopardy because of IS expansion in the region. A decline of exports to Israel is also in sight.

Another important geostrategic threat is the nuclear talks with Iran. The negotiations have not been successful; the deadline has passed. But, as all parties are afraid of the consequences of failure, an additional four months have been given to the talks. Iran is not ready to give up its right of uranium enrichment for civilian use. The 5 + 1 countries (US, Russia, China, France, the UK and Germany) are ready to accept this right if the amount of enriched uranium is limited and if its production is strictly controlled. However, Israel, the main antagonist in the affair, requires the complete abandonment of uranium enrichment and is pushing its Western allies not to compromise. In the meantime, the embargo against Iran is still in place and risks becoming more severe in the near future. This is another serious risk to the Turkish economy.

I have already reached the word limit of my column without being able to treat the Ukrainian crisis, which must be added to the threats from the Middle East via its effects on the Russian economy. At the end of the day, the Turkish economy -- which is already suffering from low growth -- may face further difficulties in the near future. 

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