With the unfolding disaster for the West in Ukraine, Washington’s desperation for some sort of good news to emerge from this week’s NATO summit is growing.
While Kiev has been outspoken about its desire to join NATO, that almost certainly isn’t going to happen. Another option is for Sweden to get the green light, but that would require Turkiye to drop its opposition.
Biden is apparently “anxiously” waiting for Sweden’s approval, which is a scary thought because he doesn’t come across as someone who handles anxiety particularly well.
Turkish President Recep Tayyip Erdoğan, knowing that Western officials with the slightest degree of sanity are against Ukraine in NATO, might have deftly added to the alliance’s predicament when he declared on Saturday that “there is no doubt that Ukraine deserves NATO membership.”
With that very unlikely to happen it could put even more pressure on the West to give Erdogan what he wants in order for him to drop his opposition to Sweden’s bid and prevent the summit from looking like a failure.
Erdogan has been consistent with his demands since Sweden applied for NATO membership: Stockholm must deport individuals Turkiye accuses of involvement in terrorism, including followers of US-based Sunni cleric Fethullah Gulen, as well as groups and individuals allegedly linked to the outlawed Kurdistan Workers Party.
Erdogan had this say on July 7:
The essence of the alliance is the institution of mutual trust and solidarity. Without it, it’s meaningless to talk about other subjects.Those who advise us should first reply to these questions frankly: How can Turkiye trust a country where terrorists wander around on its streets?
That’s not to say that behind-the-scenes deal sweeteners couldn’t play a role, but so far what the west has offered (selling F-16s to Ankara) doesn’t appear to be enough. Protests in Sweden that involve the burning of the Quran likely also upped the price (Stockholm is apparently now considering a ban on Quran desecration).
Barring some major concession, it’s hard to see how the divide is bridged. While Secretary of State Antony Blinken declared in June that Sweden had addressed Turkiye’s concerns “appropriately and effectively,” simply making such a statement does not apparently make it true.
Talks last week ended with the same stalemate that has been present for months. From Al-Monitor:
Thursday’s high-level talks between Turkish and Swedish foreign ministers and NATO’s chief appeared to yield no sign of progress with both sides reiterating their competing positions. Turkish Foreign Minister Hakan Fidan pressed for more concrete steps from Stockholm, while his Swedish counterpart Tobias Billstrom insisted that his country had fulfilled its commitments to Turkiye.
Sweden changed its counterterrorism laws and amended its constitution in accordance with Ankara’s demands. Turkiye, however, is still pressing Sweden to further restrict the activities of groups it deems terrorist organizations and extradite or deport their members.
If Erdogan wants other sweeteners outside of the demands on accused terrorists, well, Turkiye certainly needs economic help, as it has been struggling with runaway inflation, a growing budget deficit, and dwindling reserves. While Erdogan won reelection, if he and his AKP ruling party can’t return to their old ways of delivering economic growth and rising living standards, they face the prospects of internal upheaval and a rude awakening in future elections.
The government-run Turkish Statistical Institute reported last week that the annual inflation rate was 38 percent in June (the independent inflation group ENAG put the figure at 109 percent). Erdogan and his ruling party a receiving criticism for increasing taxes 2 percent on a range of goods and services, including basics like toilet paper, detergents, and diapers
The government also hiked the tax collected from lending institutions on consumer loans. The moves are part of an effort to reduce the country’s ballooning budget deficit.
According to Reuters, Turkiye “recorded a deficit of 263.6 billion lira ($10.21 billion) in the first five months of the year, compared to 124.6 billion lira a year ago due to increased spending ahead of May elections and the impact of February’s devastating earthquakes in southern Turkiye.”
Other countries – from Russia and China to the UAE and Saudi Arabia – have been helping Ankara with its currency reserves and/or infrastructure projects, but the West has offered little other than the possibility of F-16 sales. It’s unclear, however, if such a sale could even gain congressional approval as key senators have already voiced disapproval and the Armenian lobby is opposed.
Aside from that, it’s mainly been threats of sanctions. The Wall Street Journal came out with another report June 29 about Turkiye’s increasing trade ties with Russia. It was portrayed as if this was some sort of scandal despite the arrangement being well known since the beginning of the war in Ukraine. The WSJ report again raises the threat of US sanctions on Turkish businesses for allegedly aiding Russia and hurting the Western efforts to isolate Russia.
In addition to the sanctions threats, the US has also been sending military support to Cyprus and Greece as part of an effort to pressure Erdogan to toe the NATO line – at least that’s the way Turkiye sees it.
That strategy has not worked, and won’t work as the West is no longer the only game in town. The same denial that led the Biden administration to believe it could isolate Russia and crash its economy continues to play out with Turkiye.
Using sticks with probably the second most important NATO, which controls passage through the Turkish Straits and hosts US nuclear weapons at Incirlik Air Force Base, is a questionable decision. It also ignores the fact that Erdogan can turn eastwards. As mentioned above, Turkiye is increasingly receiving assistance from the East to help its floundering economy.
Moscow has helped Ankara prop up its foreign currency reserves with the purchase of Turkish bonds via a scheme involving the construction and development of Turkiye‘s Akkuyu nuclear power plant. Ankara and Moscow recently celebrated the loading of fuel into the first reactor at the Russia-built plant. It was a major milestone for Turkiye, which joined the ranks of countries with nuclear energy.
Turkiye had been trying to get a nuclear power plant built for 50-plus years. Back in the 90s Ankara had bids from Westinghouse + Mitsubishi, AECL, and Framatome + Siemens but had to cancel because it was going to cost more than the Turkish government could afford at the time.
Instead, Russia financed, built, and is delivering the fuel to Akkuyu under a build-own-operate model. Turkish nuclear engineers are also receiving training from the Russians.
On the military hardware front, after years of ignored requests for the US Patriot system, Türkiye purchased the arguably superior Russian system in 2017.
Saudi Arabia deposited $5 billion into the Turkish central bank a few months back to help Ankara firm up its long-weakening currency. The UAE did the same. Turkiye is also expecting another $10 billion soon in investments from the UAE, Qatar, and Saudi Arabia. In addition to better relations with Riyadh and Abu Dhabi, Erdogan is successfully mending ties with Bahrain and Egypt in an effort to boost Turkish trade and investment.
Beijing is also becoming a more important player in Turkiye. Imports from China doubled from 2019 to 2022 (only Russia sends more), while EU exports have seen a corresponding spike, leading some to argue Turkiye is trying to save its economy by buying half-finished goods cheap from China, finishing them domestically, then selling them to the EU.
Starting an EV business from scratch is hard; making batteries—the most important part of an EV—is even harder. That’s why Turkiye isn’t going it alone and is instead partnering with Farasis, one of the top Chinese battery companies, just behind the industry leaders like CATL, BYD, and CALB. In 2019, Togg and Farasis formed a joint venture named SIRO, each taking a 50% stake, to build a battery plant in Gebze, Turkiye, that will produce lithium-ion batteries to power Togg’s electric cars.
Farasis is not the only Chinese tech company making its way into Turkiye. In January, a Turkish newspaper reported that Alibaba is planning on investing more than $1 billion to build a data center and a logistics center in Turkiye. Alibaba owns Turkiye’s biggest e-commerce company, Trendyol, and its overseas shopping app AliExpress is often the most downloaded free app in Turkiye’s Google Play store. Shein, another important Chinese player in the fast-fashion industry, has also started manufacturing in Turkiye after producing exclusively in China for a decade, the Wall Street Journal reported in December.
…But Turkiye is also important because, sitting at the intersection of Europe and Asia, it can be an entry point for Chinese tech companies aiming to go into the European market.
All of this is not to say Turkiye is about to turn its back on the West, but it does mean that the West’s pressure campaigns are increasingly futile. It would be a mistake for Turkiye to abandon its spot on middle ground. In fact, it is well-placed to emulate Germany’s previous model of turning cheap energy imports from Russia into manufacturing prowess for exports. As War on the Rocks points out:
As cliched as the platitude about Turkiye being a bridge between East and West is, it helps to describe trade flows: Turkiye imports energy from Russia and goods from China to cover domestic demand, and local factories assemble components for Europe. Turkiye’s greatest trade surpluses are close to home — with countries like Azerbaijan and Iraq — but it is the European market that allows Turkiye to maintain an export-oriented manufacturing sector of scale.
Following nearly a decade of an aggressive foreign policy that caused nothing but problems with neighbors in the region, Turkiye is back on more comfortable ground: using its geopolitical and geographical position to its advantage.