The world is witnessing the damage caused by the Covid-19 in the economies and the change in the international system accordingly, besides the health problems arising from the virus. It’s impossible to deny the impact of those external developments over Turkey but in terms of internal dynamics, the country has also a complex agenda. As a result, exactly 101 years after the start of the national struggle in Anatolia by its founding leader Mustafa Kemal Ataturk, Turkey today has big economic and geopolitical problems that should be addressed. An integrated approach required by the geopolitical economics perspective is essential to understand what is going on in the country.
After the August 2018, Turkish economy has experienced a second currency shock. The Turkish Lira, which has lost 20% value against the dollar since the beginning of the year, tested the record low level by seeing 7.27 in early May. Although it seems to have gained some stability nowadays, future expectations for the currency are not positive in the long term. The most important reason for this is the fact that Central Bank’s gross reserves have decreased up to $ 50 billion and according to the claims, net reserves are minus when ‘swap’ transactions with domestic banks are excluded. In the 750-billion-dollar economy, while the total foreign debt is roughly 450 billion dollars, the short-term debt amount is nearly 170 billion dollars. The depreciation of the lira puts an additional burden on the current table and the cost of borrowing increases with the turmoil in the markets.
Structural problems in Turkey’s economy, of course, should not be reduced to mere discussion on exchange rate. The hottest issue is that the macroeconomic indicators, which had already deteriorated before the covid-19, have worsened further. While official unemployment figures reach up to 14%, Small and Medium Size Enterprises, which have a significant weight in Turkey’s economy, are suffering due to the heavy lockdown measures. The latest foreign trade data also contribute to the negative atmosphere. Only in April, Turkey’s exports fell by 41% though imports declined much smaller percentage. Recession in the EU, the largest export market for Turkish goods, overshadows hopes for the future. Furthermore, when international travel restrictions added to the already deteriorating situation it is already clear that the tourism, an important source of income for Turkish economy, would perform poorly this year.
On the other hand, foreign policy issues remain also immediate. In addition to the ongoing debate on maritime boundaries in Turkey’s Blue Homeland Eastern Mediterranean, which is the cornerstone of 21st century Turkish geopolitics besides Cyprus and Libya, the problems in the Aegean have recently revitalized. In addition, the threats posed by the Syrian civil war remain heated. Security concerns, originating from the east of Euphrates and Idlib are still not addressed. It is assessed that hot clashes will be repeated at any time in the region and Turkish security units will have to deal with terrorist organizations such as Al-Qaeda affiliate HTS as well as PKK.
Apart form these, above all of those issue areas, there is one bigger question: Where Turkey will position itself in the renewed world system. It seems that Ankara, which has been in the Western camp for 75 years, has not been able to determine its new geopolitical orientation yet, even though it has questioned its position in this system just after the coup attempt of 15 July 2016. Recently a rapprochement is observed in Turkish-American relations that had witnessed its worst days after 2016 and Turkey’s relationship with the Russian Federation is also deliberated. Pro-Western and Atlantic centric establishment in Turkey, from business circles and bureaucracy to academy and politics, is taking the lead in this debate. According to those pro-western groups, Turkish-Russian relations have developed asymmetrically in favour of Russia in the past four years; Turkey has broken off the West and gone into the Russian orbit.
However, when the current relations between Turkey and Russia are examined closely, the narrative of ‘asymmetric’ seems to be devoid of reality. First of all, Russia does not have sufficient capability to play the big brother role over Turkey, as USA does have. At the outset, her economic constraints do not let it be. In addition, any structural change is not observed in the economic dimension of Turkish-Russian relations. In the bilateral relations, while the trade in goods is still for the benefit of Russia, as it was in the past, the trade in services, such as the sectors of contracting and tourism, maintains its position for the benefit of Turkey. When it is looked at the other issue areas and geopolitical situation, it is seen that Ankara is benefiting its relations with Moscow for its own good.
For instance, Turkey’s external dependence in the two vital sectors; namely energy and defence industry, had been discussed a lot until the recent past. Indeed, Turkey was considerably dependent on US in the armament and on Russia in the gas purchasing. As for today, Turkey has reached to an over-70% national sufficiency in armament by developing national defence industry. In the products which are not produced domestically and required to high technology, such as high altitude air defence systems, American dominance have been balanced with S-400 missile procurement from Russia. On the other hand, although it cannot be replaced by domestic production, dependency on Russian gas has been diversified by purchasing Liquefied Natural Gas (LNG) from different sources, including the US. Thus, Turkey’s dependency rate on Russian gas, which had been widely criticized, fell to the lowest level in the history last year by decreasing to the numbers of %30. Moreover, Turkey has revealed determination for domestic production by increasing natural gas exploration works in the Eastern Mediterranean with the newly bought seismic and drill ships.
Security dimension, only by purchasing of S-400 missiles and co-operation on the Syrian field, has been incorporated into the Turkish-Russian relations which have trade-oriented developed until 2016. Turkey has undermined the ‘Greater Kurdistan’ project, which it has put on the first place for its own threat perception (would reach to the Mediterranean and threaten Turkey’s territorial integrity), through the co-operation with Russia in Syria. However, Ankara has not made piece with Syrian government; Russia has not closed down PYD office in Moscow and the parties continue to pursue their different interests in Idlib. Apart from that, there is not any concrete attempt towards an alliance system between the two at institutional level. Far from being member of Shanghai Cooperation Organization, Turkey even does not take any concrete step for joining to an economic organization, such as BRICS. The old status-quo is preserved as Turkey institutionally maintains to stay in the treaties such as Customs Union and NATO. All of these show that Turkey has been trying to follow a relatively different and tactical path in the West-Russia-Turkey triangle during the recent years, rather than a narrative of asymmetry in Turkish-Russian relations.
Nevertheless, even the questioning of past Turkey-West relations, which could really be considered as asymmetric until 2016, is worrying the pro-Western groups in Turkey. It is understood that the aim here is to rotate Turkey back to the position of loyal and secondary ally of the West in the region, like it was before 2016. Turkey’s return to its unquestionably loyal position in the Western camp, which dates back many years, is not easy and contrary to its national interest because it would cause geopolitical loss for the country. To follow a new geopolitical route by leaving the Atlantic system officially under the current conditions is also unlikely under current circumstances. The first reason for that, multi-polarity has not completed its formation in the international system, yet. The second reason is that current Turkish government is not eager for this policy preference and it keeps door open for ‘returning back’ to the past because of the economic challenges mentioned at the beginning.
It is better to underline a reality in the world where neo-liberalism is coming to an end: It is not possible to determine a national geopolitical orientation with an economic policy based on foreign debt circulation, floating exchange rate regime and free international capital movements. On the other hand, it is not possible either to maintain incompatible policies to the Western camp, while staying in it. The geopolitical economic conditions are taking Turkey to a critical decisive moment. So, it is understood that to take the critical decision will not be painless when the complicated Turkish domestic politics and political structure are taken into consideration.