by Leo Kendrick
Russia’s attack on Ukraine, now stretching into its fifth day, has been met with no direct military action but with forceful condemnation and a slew of economic sanctions against Moscow by western powers and NATO member states.
Turkey, NATO’s easternmost member which possesses the alliance’s second largest military, has delivered a relatively muted response to the conflict thus far. One day prior to the initial attack last Wednesday, President Recep Tayyip Erdoğan made a statement saying “We have political, economic, and military relations with both Russia and Ukraine. We cannot give up on either. NATO must determine a definitive stance.”
As Russia’s attack on its western neighbor was underway last Thursday, President Erdoğan made a second statement denouncing Moscow’s moves, saying “I hereby state that we find the military operation launched by Russia against Ukraine as unacceptable and we reject it. This step is in violation of international law and is a heavy blow to the peace, tranquility, and stability of the region. We repeat our calls to resolve this conflict through diplomacy within the framework of the Minsk agreement.”
Despite the stern words by the president last week, Turkey’s response to the conflict has yet to be met by strong action in Ankara. Russia is a major supplier of natural gas for Turkey, and the diplomatic relationship between the two countries has grown closer in recent years as Ankara has drifted away from strict alignment with western powers. Ankara’s controversial 2017 purchase of the S-400 Russian missile defense system and subsequent dismissal from the United States’ F-35 fighter jet program are two of the most prominent examples of its recent rifts with NATO partners.
Medyascope’s Murat Türsan interviewed Eastern European International Relations expert and Professor at Istanbul Okan University Dr. Habibe Özdal and Dr. Öner Günçavdı, Professor of Economics at İstanbul Technical University, on the most recent This Week in Turkey segment, in which the two experts weighed in on what the conflict in Ukraine means for Turkey. Noting Ukraine’s physical proximity to Turkey, Özdal noted that Turkey had previously sought a mediator role leading up to the conflict specifically to prevent a situation like we see today. “Turkey has very good relations with both parties, on a different basis. Russia and Turkey have a very complicated relationship but leader-to-leader they have extremely strong relations and Putin and Erdoğan have invested a lot on that. Even though important differences exist, it is very hard for both leaders to ignore relations, so there will be a necessity to manage differences.”
Regarding Ankara’s relationship with Ukraine, Özdal said that the relations between the two states transcends just their shared Black Sea coastal position. “There is a necessity for the two states to work together. Their cooperation also includes defense and this is a critical asset.” While Ankara would like to play a neutral mediator role in the conflict, Özdal said that this is nearly impossible because of Turkey’s NATO membership which makes it obligated to support Ukraine territorial integrity, including denouncing Russia’s 2014 annexation of Crimea and its recent recognition of the eastern Donbas breakaway regions. As far as what further action on the conflict might look like, Professor Özdal says she does not expect President Erdoğan’s denunciation of the conflict to go beyond political speech level. As a non-European Union member, Turkey is unlikely to participate in sanctions against Russia implemented by the EU. “This is likely to remain on the diplomatic level only.”
As it attempts to take a measured diplomatic approach to the conflict, Turkey has not been fully insulated from the economic fall-out resulting from the conflict. Last week’s attack on Ukraine saw the Turkish Lira fall to a 14.5 to the US Dollar, while Istanbul’s stock exchange took a major dive last Thursday morning. Professor Günçavdı highlighted the importance of the European market to the Russian economy, saying “Without the European market, Russia’s vast natural resources are meaningless.” Nevertheless, Günçavdı noted that western Europe, like Turkey, remains dependent on the raw materials coming out of Russia. “The Turkish economy is extremely dependent on natural gas [from Russia],” Günçavdı said. Another point of Turkey’s dependence on Russia is a recent project involving the construction of two nuclear power plants on Turkish soil, with help and funding from Moscow: “These nuclear power plants make the Turkish economy even more dependent on Russia. This is yet another dimension that provides a direct link between Turkey and the Russian economy.”
Regarding the Ukraine conflict’s potential to affect Turkey’s perennial struggles with inflation, Günçavdı said that “The most important factors that create inflation in Turkey are energy prices and food prices. Both are affected by this conflict between Ukraine and Russia.” Slow-downs in the European economy caused by the conflict could create complications for Turkish businesses as well, noted Günçavdı: “The European market is our number one export market. Therefore, that exportation is dependent on the growth rate of those countries.” Because of expected slow-downs in growth caused by the Ukraine conflict, Günçavdı said that he expects these changes to have repercussions for Turkish exporters as well: “Exportations will suffer dramatically and there will be a loss of foreign currency in the medium and long term.”
Another perennial economic issue in Turkey– the interest rate instituted by the country’s central bank– could also be affected by the conflict. The instability caused by the Ukrainian conflict is likely to result in higher risk in the international economy, said Günçavdı, and inflation in the European economy is expected to increase even further. “This inflation will cause central banks in Europe to take extra measures, including higher interest rates. Therefore, Turkey will suffer from high borrowing costs from western markets in the medium and longer term.” A highly controversial and widely publicized lowering of interest rates at Turkey’s central bank in December led to record devaluation of the Lira before emergency measures were implemented. As interest rates rise in Europe, Turkey’s low interest rates policies may become untenable: “I would say that the bells are ringing– badly ringing– for the Turkish economy in the end.”
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A statement by Turkish Foreign Minister Mevlüt Çavuşoğlu yesterday (27 February) was the first by Turkish officials to describe the events in Ukraine as ‘war’, a change in rhetoric noted as significant by analysts and observers. Nevertheless, economic and diplomatic concerns have guided a restrained Turkish response to the conflict thus far as Ankara attempts to delicately maintain relations with both warring sides amidst rising outcry against the conflict both domestically and abroad.
