AL-Monitor
[War would bring Turkey under intense pressure from its Western allies
to join putative sanctions against Russia, a critical trading partner
and supplier of natural gas.]
By Amberin Zaman
Feb. 7, 2022
Turkish President Recep Tayyip Erdogan’s Feb. 3 meeting with his
counterpart Volodymr Zelensky in Ukraine yielded a string of accords
aimed at deepening economic and military ties between Ankara and Kyiv
and significantly raising the stakes for both sides should Russia
attack the former Soviet state.
Russian land and naval forces remain massed around Ukraine as Western
leaders scramble to find a diplomatic solution to defuse the crisis.
Erdogan has offered to mediate between Russia and Ukraine and for good
reason.
War would bring Turkey under intense pressure from its Western allies
to join putative sanctions against Russia, a critical trading partner
and supplier of natural gas. Turkey will do its best to remain
neutral, as signaled anew by Erdogan in comments to reporters en route
home from Kyiv. He accused Western governments of making the
Ukraine-Russia crisis “worse” and rued the absence of former German
Chancellor Angela Merkel, long accused of appeasing the Kremlin. He
said Europe was suffering “serious issues at the leadership level”
after her departure. US President Joe Biden had failed to “demonstrate
a positive approach,” he added.
His comments echoed Moscow’s accusations that the United States and
NATO are escalating tensions including through their deployment of
additional troops to eastern Europe and continued arms deliveries to
Ukraine. Many believe Erdogan’s comments are meant in part to assuage
Moscow over Turkey’s sale of combat drones and other military
equipment. During Erdogan’s visit the Black Sea allies agreed to
jointly produce Bayraktar TB2 combat drones in Ukraine and build a
maintenance and training center for operators alongside the planned
facility.
Ukraine has bought at least 20 drones from Turkey since 2018 and has
used one only once in combat against Russian-backed separatists in
Donbass in October 2021, eliciting growls from Moscow.
However, Turkey’s worries go beyond having to balance its NATO
commitments with Russia, a key economic partner and since 2016
security partner in Syria. An actual war could have crippling
consequences for Turkey’s battered economy.
The national currency, the lira, shed 44% of its value last year and
spiraling inflation hit an annual 48.69%, the highest in two decades,
according to official data released on Feb. 3.
Sharp hikes in utilities, notably electricity, have unleashed a wave
of protests across the country amid power shortages and blackouts in
major cities.
“Commodity prices, particularly oil and gas, are a lead indicator for
inflation and Turkey has struggled even without these headwinds due to
the government’s eccentric policies regarding interest rates,” said a
London-based banker who closely monitors Turkey. The banker, who
requested anonymity, was referring to Erdogan’s stubborn refusal to
raise interest rates based on the idea that it would fuel inflation,
while most economists hold that the opposite is true.
“A Russian incursion or, worse still, a full-scale invasion,” the
banker said, “would add further price pressure on commodity inputs,
which would only spur more inflation.”
It was not surprising, the banker noted, that some Western banks were
forecasting that the Turkish lira would slump to 20 to the dollar or
even lower this year, “with the myriad of dangers that lie ahead and
with Erdogan being seen to have played his last card on linkage of
Turkish lira deposits to US dollar rates last year."
Under the scheme, the state compensates Turkish lira depositors for
any loss incurred by a drop in the national currency that exceeds the
deposit rates paid by their banks. Since its December launch, the lira
has stabilized at around 13.5 to the dollar but would likely melt anew
in the event of a Russian invasion.
According to data published Monday, Turkey’s Central Bank sold its
state-run energy importer, BOTAS, a record $4.15 billion in foreign
currencies in January alone. The trade deficit, in turn, soared to a
decade high of $10.44 billion, a year-on-year increase of more than
240%, largely due to ballooning energy imports.
In Ukraine, Turkey’s flourishing defense cooperation would likely
suffer in a Russian attack as well. Motor Sich, one of the world’s
largest manufacturers of engines for airplanes and helicopters, has
been supplying engines for the Turkish drones along with Ivchenko
Progress, a stated-owned Ukrainian company, since 2020. That is when
the US Congress began blocking military sales to Turkey over its
acquisition of Russian-made S-400s and Canada over the use of Turkish
drones against Armenia in support of Azerbaijan. Experts reckon that
Ukraine’s defense industry would be an obvious target for Russian
forces.
In the event of a full-scale invasion by Russia, “defense industry
facilities as well strategic industrial and infrastructure elements
would be primary targets for the Russian military," independent
defense analyst Arda Mevlutoglu observed in the most recent issue of
the Ankara-based weekly English-language Anka Review. "The destruction
of manufacturing facilities as well as the loss of skilled personnel
would deal a devastating blow to the Ukrainian defense industry as
well as to Turkish defense projects."
“Developing defense industry relations between Kyiv and Ankara should
not be perceived as a direct threat by Moscow. However, Turkey’s
possible increase influence and activity in Ukraine would be an
undesirable outcome for Russians,” Mevlutoglu told Al-Monitor. “It’s
also a fact Russia puts great emphasis on cyber and electronic warfare
operations. Based on these premises, there is considerable risk that
Russia might conduct kinetic and/or cyberattacks on Ukraine’s defense
industry base, which in turn would affect the supply of products to
Turkey.”
Recent deals between Turkey and Ukraine include the supply of gas
turbines for Turkish-designed naval vessels by Ukraine’s Zorya
Mashproekt. Ukraine has ordered four of the MilGem class corvettes for
itself.
Tourism, which Erdogan is banking on to help with an economic recovery
ahead of parliamentary and presidential elections that are scheduled
to be held by 2023, is also at risk.
In the event of war, Russian tourists may well continue to flock to
the Turkish coast this summer. But what of the millions of Ukrainians
who jostle with them on Turkey’s Mediterranean beaches? Will they want
to share the same space?
When Russian President Vladimir Putin banned chartered flights to
Turkey in retaliation for its shooting down of a Russian air force jet
over Syrian skies in November 2015, many Ukrainians were delighted.
“We had a perfect time, no Russian tourists in Turkish hotels,”
recalled Yevgeniya Gaber, a leading Ukrainian scholar of Turkish
affairs and a senior fellow at Carleton University’s Center of Modern
Turkish Studies.
As for Erdogan’s chances of brokering peace between Zelensky and
Putin, they are pretty slim, Gaber predicted. Putin’s planned official
visit to Turkey, which the Kremlin said would take place after the
Beijing Olympics though it gave no date, is more about “testing the
waters, seeing how far Turkey can accommodate Russia in its standoff
with Ukraine and who can compromise on what,” and not about
acquiescing to Erdogan’s proposal to mediate, Gaber told Al-Monitor.
At best, Turkey can provide the two sides with “an optional diplomatic
channel of communication” through which their respective messages are
relayed.
