Turkey: the asymmetric force of sanctions

(To Gino Lanzara)
04/09/18

Examining a phenomenon, for each researcher, is an exceptional opportunity to study on dynamic slide otherwise only theoretical; Turkey, with similar cases that are affecting the international scene, is a unique geopolitical laboratory that should not be missed. Geopolitics and geoeconomics are interwoven in a single plot conditioning one another, and involve different and interacting political subjects.

The economic crisis that is upsetting the Turkish state has deep roots, and the American sanctions complex has only acuaded an already existing evil; in fact, the sanctions imposed by the USA fall within a broader framework, where they take on the aspect of a weapon that contributes to bringing an attack on an emerging economic system but with feet of clay, in need of financing in foreign currency.

That the economy was the big sick it was also known to Erdoğan, so much so that he formed a technical government capable of inspiring confidence in the markets; the variable linked to the ego of the sultan, however, helped to frustrate the intent. The nepotist nomination of Berat Albayrak, Erdoğan's son-in-law, with joint appointment between Treasury and Finance, and the unprecedented presidential faculty to intervene on economic policy delegitimizing the independence of the Central Bank, are both daughters of a neo-Roman confessional imperialism, and have a destabilizing effect on the credibility of the state economic apparatus, assimilated by investors to a family business without guarantees.

Erdoğan, assured the support of the FF.AA., never so far from the secular guarantee function assigned to them by Ataturk and engaged in the Siraq, acted on two directions: inside promised to continue to support loans to companies and families; abroad has confirmed its intent to pursue a power policy that, in fact, already with diplomatic incidents with Israel, has long surpassed the doctrine of the strategic depth of Davutoglu, and ushered in a kind of Erdoganesimo assertive and broken towards the consolidated regional balances. However, both initiatives have an essential need: financial coverage. The structural economic crisis therefore assumes a geopolitical value, and exalts inflation that thwarts the growth of GDP; the entrepreneurial middle class, enriched by an expansive monetary policy, has guaranteed a fundamental pool of votes to the AKP, which has thus become the predominant party. The model, based on the need for a significant inflow of foreign capital necessary for the financing of infrastructure works, has however exposed the system to speculable contrasts only with a strong national currency; the torpedo of US sanctions, resulting in a sudden liquidation, has increased the cost of refinancing, however, worsened by the current account deficit, where the import of goods and services exceeds exports, and by the decision to keep interest rates low with an accommodative tax policy. In addition, it should be considered not having foreseen the end of Quantitative Easing in the US and in the EU area, which is causing investors to shift the focus from emerging countries to more stable markets even if with lower yields of government bonds, and the introduction of American sanctions against Iran, a fundamental energy supplier.

In short: the perfect storm of the speculator, with examples of Argentina, which as an emerging Turkish market, had to resort to the impolitic IMF, South Africa and Russia that have lost significant currency percentages. Here sanctions become an instrument of asymmetric war, at a time when the restructuring of international relations after the Cold War led Turkey to assume a different posture at the regional level, with the US annoyed by Erdoğan's proximity to the Russian-Iranian axis on Syria, perceived as a threat to Saudi and Israeli allies.

The geographical position, straddling strategic and contiguous regions (and capable of allowing access to the Russian fleet to the Mediterranean) has on the one hand led Turkey to aspire to a more central and assertive role, with destabilizing foreign policy openings, on the other hand it persuaded the US to block any regional expansionist ambitions, to freeze the sale of F35, also in connection with the acquisition of the Russian missile system S-400 in place of the Italian French system Eurosam, and to support the Syrian Kurdish forces of the YPG.

Beyond Turkish rhetoric, the search for new partners is part of an attempt to safeguard the economic and energy interdependence of the country, where the possible exit strategies they are 4, and all impervious: IMF loan with austerity, cuts and perceived as a forced approach to the difficult Western context and a move away from the temporary Russian ally; selective default; an unlikely international debt moratorium; a new gold exchange standard, by linking the lira to the gold reserves, which also fell during the month of July. These keys should be interpreted as the steps taken, both in Franco-German direction, with fearful Germany and of a possible financial contagion and of a subsequent migratory wave fed by the Syrian offensive on Idlib, and towards Qatar, ready to support with ad hoc loans the Anatolian economy.

But is it possible to exit from the NATO system under these conditions, bind itself to a regional coalition while remaining tactically linked to the West? Difficult, also because Russia remains a strategic opponent even if with limited availability; because the other Gulf countries, inspired by Saudi Arabia, will hardly rush to the aid of Ankara; because China is interested in business, but not at regional political implications that could affect its interests.

Is the American refusal to trade between Gülen, the imam opposed to Erdoğan and a long time resident in the US, and the American pastor Brunson detained in Turkey, is it worth the crisis that the sanctions on steel, aluminum and two ministers have worsened? Europe certainly cannot be called out of the game, both for the financial exposure of important credit institutions in Turkish territory, and for the fact that, after action, Erdoğan remains the guarantor of the containment of the migratory wave from the east, and because Anatolia is the energy hub capable of reducing dependence on Russia. It is therefore reasonable to expect, in the absence of an agreement with the USA, the presentation in Brussels of one expense report relevant, aimed at exploiting the European geopolitical inconsistency. In short, the sanctions imposed by the USA, affect more than one country; a weapon, no doubt, capable of heavily influencing the global balance; Russia, Iran, Turkey, all compressed by the imposition of significant economic constraints, all obliged to have to reckon with the strong reference currency, the dollar, despite the attempts to disengage from the greenback also using the Venezuelan cryptocurrency, the Petro, potentially enhanced by the extraction of crude oil but in fact of little intrinsic weight and, above all, already indexed by the US State Department; Countries united by internal economic crises and social instability that American sanctions could further detonate. The real sanction, in fact, is the attack on the Turkish currency, legitimized by the 232 section of the US commercial law.

Turkey therefore suffering financially; he uses? The returns of the sanctions regime in financial terms certainly have their importance, but what is most interesting are the geopolitical implications. The Americans, in their relative disengagement from the MO and with an asymmetric instrument, hit a reluctant ally with a domino effect action on both European and Iranian and Russian finance, already tested by the provisions relating to the JCPOA and the enduring Ukrainian querelle. The call to Turkey, on the one hand, in wanting to soften the positions of Erdoğan, has meant to recall how the decline of US hegemony is still to come, and on the other hand wanted to give a further warning also to Iran: the regional power projections have not been contracted out to anyone, nothing can be accepted or imposed, even if it involves the exchange of simple "hostages".

Fundamental, in this action, will be, for the Americans, not to prostrate permanently the sanctioned countries, running the risk of creating dangerous gaps of power, for the Turks, be able to discern in time what is the road to a possible survival.

(photo: Türk Silahlı Kuvvetleri / MoD Russian Federation / web)