13.07.2023

King Brinkman in action

Erdoğan has run out of room for manoeuvre. Facing a major financial crisis, he had to accept Sweden’s Nato membership and pivot away from Moscow. Esen Uslu thinks there will be consequences, however

With the July 11-12 Nato summit in Lithuania approaching, the pose adopted by president Recep Tayyip Erdoğan of being an important influence on international affairs, had already worn thin. He and his cohorts in the media had tried to present him as the ‘Brinkmanship king’ - always getting what is best for Turkey by dragging his feet and resisting US pressure.

However, the economic and financial policies pursued over the last few years and the promise to spend non-existent funds in gay abandon - all this is now coming home to roost. Following Erdoğan’s re-election as president and the victory of his Justice and Development Party (HDP) in May’s general election, it has become apparent that Turkey is on the threshold of a major financial crisis.

Erdoğan’s unorthodox ‘High interest rates are the cause, and high inflation is the result’ financial policies were quietly set aside, and more ‘traditional’ measures (that is, those accepted by the major capitalist powers) were introduced. Key personnel running the central bank and the finance ministry were replaced by those with more clout in the west. True, the minimum wage and pension increases promised before the elections were implemented grudgingly, but there were also massive tax rises. Erdoğan did his best to reassure the US in particular, but it has not yet been enough to resolve the crisis.

Ministers had been sent to various Gulf countries, where they begged for short-term support to help prop up the regime and support Turkey’s Islamist government. However, as had been expected, the results of such a begging tour were not fruitful. That despite the fact that potentially ‘profitable’ state-owned assets, such as ports and telecommunication networks, were offered as collateral.

So now support from the major western powers is back at the top of Erdoğan’s agenda. To get them to open the taps and allow the flow of international finance capital once more, the brinkmanship of previous policies were to be set aside for the time being, and replaced by a return to a more docile relationship.

However, making such twists and turns in the international arena requires two things. First of all, for the sake of the domestic audience Erdoğan had to be presented not as a turncoat, who had discarded the Islamist-nationalist, crony-capitalist policies he had previously pursued. Instead, Erdoğan had to be presented as a realistic, cool and calculating politician, now bending as a reed before the floods in order to stand upright once again afterwards.

International

Secondly, in the international arena Erdoğan could not please everybody. He had to make choices, and by doing so he would lose the support of one or other of the major players. The obvious choice was to please the US and Nato powers, so Erdoğan had to accept that this would not be to Vladimir Putin’s liking and he would then have to try to limit the damage done.

Putin had supported Erdoğan and tried to play his part in relieving the financial pressure he had been under. The payment of the massive bill for the gas used during the winter months, after the Ukraine war pushed gas prices sky-high, was deferred to a suitable time after the elections. A substantial amount of foreign currency was deposited in the central bank from Russian sources for the construction of a nuclear power plant. However, taking everything into account, all this was just peanuts compared to Turkey’s actual economic needs.

And now, to win brownie points from the west, concessions had to be made in that direction. The first opportunity came with the visit of Ukraine’s president, Volodymyr Zelensky, to Turkey last week. He was sent home with two highly pleasing gifts: Erdoğan had stated that in his opinion Ukraine deserved to be accepted as a member of Nato very quickly; and, secondly, coinciding with Zelensky’s return flight, the five commanders of the Azov brigade who had been interned in Turkey were allowed to depart. They were supposed to remain in Turkey until the end of the war as a condition of the prisoner exchange deal agreed between Ukraine and Russia, and facilitated by Turkey, last year.

Putin’s spokesperson, Dmitriy Peskov, immediately condemned this move: “No-one informed us about this. According to the agreements, these ringleaders were to remain on the territory of Turkey until the end of the conflict.” He added that, despite Erdoğan’s statement that Putin was expected to visit Turkey in August, such a visit was merely a possibility, with “no exact dates set as of yet”. That means, in practical terms, that the visit is now off the agenda.

Erdoğan and Turkey are also awaiting other consequences. An immediate Russian response came in the form of the blocking of the UN security council’s proposal to maintain humanitarian aid to north-eastern Syria via Turkey’s Bab al-Hawa border crossing. Expect the same kind of stubborn refusal for the upcoming extension of the deal relating to Ukraine’s grain exports through Turkish straits.

Erdoğan is bracing himself for more to come, and will surely attempt to placate Russia as much as possible in the near future. Despite the current hot summer, cold winter months are not far away - when gas procurement will once again become vital.

Pleasing

Meanwhile, the opportunity to make up with the west has presented itself at the Nato summit. As expected, Erdoğan attended a meeting with Nato secretary general Jens Stoltenberg and Swedish prime minister Ulf Kristersson on July 10, and shook hands on the proposed deal for Sweden to join Nato despite what had been portrayed in Turkey as a recent provocative burning of the Quran by demonstrators in Stockholm.

One of the photos released was very symbolic, with its subliminal messages to the Islamic world: on one side of a long table sat Erdoğan and Stoltenberg, with Erdoğan’s head-scarved female Turkish interpreter between them; and on the other side Kristersson was sitting alone.

President Joe Biden also had a face-to-face with Erdoğan during the summit and said he was very pleased that Turkey has removed its veto on Sweden’s Nato membership. Just how pleased will be known when the lip service ends on Turkey’s purchase of advanced F16 jets from the USA, with export licences granted and credit lines approved.

There are still many hurdles for Turkey to jump before it gets at least a resemblance of parity with the purchase granted to Greece. The US congress could still block the sale and, in view of Erdoğan’s known weaknesses, there will probably be a long list of demands presented to him.

For the time being, Erdoğan’s last-minute attempt to link Turkey’s prolonged wait on the doorstep of the European Union with Sweden’s application for Nato membership does not seem to have perturbed anybody in Europe. Despite Sweden’s promise to support Turkey’s EU membership, no movement is expected on that front in the short run.

The next hurdle for Erdoğan’s charm offensive will be the coming meeting with the Greek prime minister. When the US beefed up its military capacity in the Balkans and eastern Europe by creating a logistics base at the Greek port of Alexandroupoli, the price paid was allowing Greece’s massive purchase of military hardware despite its own severe financial problems.

The current proposed changes to the balance of power would reduce to a pipe dream Turkey’s agreement with Libya on a ‘Blue Homeland’- ie, a zone controlling the Mediterranean up to the coast of Libya, to the detriment of Greece and Egypt. So now is the time to make concessions to Greece and the west by accepting talks aimed at reducing tensions in the Aegean.

So, if things go Erdoğan’s way, Ukraine will get verbal support for Nato membership, while continuing to receive military hardware for its war with Russia; Nato will be happy to have Sweden as a member, and the US will be pleased to continue operating in the Aegean Sea without further need to pressurise Turkey on the straits issue. That may be sufficient to let Erdoğan off the hook this time and help him avoid a financial crisis. On the other hand, it may not be enough - we must wait and see.