Erdogan's Turkey: three geopolitical, geo-economic and strategic analyzes of the Ottoman challenger

(To David Rossi)
11/01/22

One is an entrepreneur in the footwear sector, the other has extensive knowledge in the footwear sector, but also in oil, sport business, Italian and international entrepreneurship, the third acts as a consultant to Italian and foreign entrepreneurs.

All three are known to readers of Online Defense for their articles and / or interviews.

We consider this contribution by Paolo Silvagni, Gino Salica and Andrea Gaspardo to be precious to understand what is happening in Turkey, how to read the action of the Ottoman "challenger" and how much Italy should / will have to do to stand up to comparison, not only economically, with the empire of Erdogan.

It's the economy, baby!

President Erdogan, not from today, is violating the standards of the international banking and financial system, starting right from the independence of the central bank. What is happening in Turkey? How much are the industrial system, the economy, the banking system and the currency of Turkey really worth today, compared to the values ​​expressed by the markets?

SALICA: President Erdogan is no stranger to "eccentric" attitudes and reactions to problems related to the economy. Many will remember when Trump's US launched a currency war against Turkey in 2018, after the Turkish government's denial of the request for the release of an evangelical pastor arrested in 2016 on charges of espionage and terrorism. In reality, for some time, the USA had observed with annoyance the almost provocative ease with which a historic NATO member consolidated not only commercial relations with China and Russia. Erdogan reacted to the severe currency crisis by pointing on the one hand the finger at an undefined "interest rate lobby", he urged his fellow citizens to change the foreign currency into the local one ("If you have euros, dollars and gold under your pillow, go to the bank and exchange them for Turkish lira. This is a national struggle "), on the other hand putting his son-in-law at the head of the Ministry of Finance (Berat Albayrak then resigned in 2020 due to the economic difficulties linked to the pandemic). Turkey faced its first major economic crisis at that time, after many years of significant development. And the president reacted using the typical tools of authoritarian regimes: there is always an internal / external enemy who aims to destabilize the country, the people "patriotically" must support the fight against the enemy, it is necessary to centralize even more power in their own mani (appointment of son-in-law to Finance and aligned Governors). Consolidating patronage public spending and artificially controlling interest rates were the direct consequences of those choices.

It should be remembered that Turkey entered the club of the top 20 countries in the world with an economy that has significant strengths both in manufacturing (steel, mechanics, textiles) and in the service sector (tourism, finance) while agriculture continues to represent an essential and dynamic resource in many areas of the country (cereals, cotton, tobacco, mohair wool, fishing, etc…). With a population of 85 million inhabitants in constant growth, Turkey is now a regional power which, however, still needs to solve many problems related to the modernization of its economic structure.

Runaway inflation (36%) and the devaluation of the lira (45% in one year) caused the collapse of the purchasing power of the population, especially the weakest (but the middle class is also suffering greatly in the current situation). If it is true that the devaluation of the lira helps exports, it is equally true that the trade balance is negative (the strong dependence on external energy sources, obviously paid in currency) and this further fuels the devaluation. There is no international economist who approves of Erdogan's moves and choices and, even allowing him the benefit of religious motivations (Islam considers lending at high rates impure) or wanting to "dop" the economy in strong recovery in early 2021 (for example by promoting international tourism, a key factor in the Turkish economy), everyone agrees that the risk of Turkey entering a dangerous phase of instability is very high.

SILVAGNI: It does not seem appropriate to me to speak of "violations of standards of the international banking and financial system", given that Turkey is an OECD member country that does not appear on any "black list" in terms of taxation or anti-money laundering, and whose currency ( the Turkish lira) is freely convertible. Rather, Turkey is characterized by a historically very volatile economic and financial situation, the evolution of which over time has been intertwined with a series of political events.

The very serious crisis of 2000-2001 coincided with the end of the tenure of secular parties in the government of the country and the coming to power of an Islamist party led by a "strong man" who, in the fifteen years 2002-2015, built and maintained a very high consensus thanks to the start of a phase of economic expansion, the construction of infrastructures, financial stabilization and the creation of an industrial fabric aimed at exports. The problem is that in this period there has also been an involution in an authoritarian sense on the political level (which has led, among other things, to an increasingly less independence of the Central Bank), while on the financial level there has been a progressive accumulation of macroeconomic imbalances that exploded with the advent of the pandemic. The result is that the strong man in question, that is President Erdogan, has for at least two years been engaged in a very delicate attempt to maintain consensus and power, and at the same time resolve the serious financial imbalances accumulated over the years. To do this, he is imposing economic recipes on the country that it is no exaggeration to call reckless.

Coming to the last question, to date the progress made in the last twenty years by the Turkish industrial system is still intact, the banking system is in an acceptable state, even if subjected to stress, while the trend of the Turkish lira (characterized in the last months from a very strong depreciation) accurately reflects the monetary policies that have been implemented.

GASPARDO: Compared to what is happening in Turkey today, the answer is very simple. For years now, the president-master of the country Recep Tayyip Erdogan has been engaged in a relentless fight against everyone, both internally and externally, to achieve the dual objective of achieving absolute control of the country and transforming it into a great power. worldwide, and this explains the purges that have struck with increasing intensity against the leaders of the Turkish Central Bank.

Regarding the overall value of the “Turkey System”, here it depends on the interpretations we want to adopt. In a narrow perspective, it would be enough to look at the "credit ratings" expressed by the international rating agencies (Standard & Poor's, Moody's, Fitch, Scope) which all hover around "B", moreover tending to negative (therefore in words poor: garbage). However, I am the first to admit that making such a simplistic judgment is not serious.

Turkey is and will remain a financially vulnerable country as long as the system is characterized by distortions that do not exist in other economically advanced countries (such as post-dated checks), but at the same time over the past 20 years it has also built a robust industrial system that allows it today to be the eleventh economic power in the world with purchasing power parity, overtaking Italy and Mexico and immediately behind the United Kingdom, France and Brazil. A financial crisis, however serious, is not enough to eliminate a structured manufacturing power.

A policy ... imperial?

In a recessionary phase of the economy, do imperial adventures represent an added value or a loss?

SALICA: For years Erdogan has been moving in line with the role of regional power that he himself and many domestic supporters believe Turkey has acquired. The advantages of this geo-political strategy accumulated in recent years are indeed significant, also from an economic point of view. The military presence in Tripoli and other African states also has obvious implications in terms of obtaining mineral resources at advantageous conditions. It is clear that this strategy has costs that are difficult to bear in the long term, especially if the recession were to continue. But here is also Erdogan's personal variable, which already has the 2023 elections in his sights. And considering that in the current situation Erdogan (like all autocrats) tends to superimpose his own destiny on that of the nation, his presence on many international chessboards is also the result of a personal political calculation.

SILVAGNI: In my opinion, the foreign policy adventures of Erdogan's government were made possible by the strong expansion of the Turkish economy in the period 2002-2015 together with the political stability of the country in the same period and the approval of Turkey's allies in NATO with respect to the actions taken. . In the current phase of crisis, these adventures are tolerated and / or actively supported by the population if they bring political, diplomatic or military victories. Instead, they turn into a dangerous boomerang for those in government if they bring defeat.

GASPARDO: From my humble point of view, recession or not, imperial adventures ALWAYS represent a dangerous gamble, no matter if the Gambia or the United States of America carry them out. Certainly, states must NEVER HARM on the expenses related to the Defense budget and must always maintain adequate Armed Forces to protect their national interests and to preserve the status that a particular country possesses in international chess, but this must ALWAYS AND IN ANY CASE happen in a context of DETERRENCE, which is the key to global peace. A wise man once said that "in the ring of international politics, only the STEEL DOVES can be saved" avoiding the end of the "lambs", who are eaten, but also of the "lions" who with their too aggressive attitude they push the aforementioned "steel doves" to unite and make a common front against them to the point of suppressing them. For 10 years now, Turkey has decided to play the role of the "lion" and is no longer able to project around itself the slightest semblance of "soft-power". Result: very few today consider it a reliable and reassuring international player.

Italy and the challenges launched by the "sultan"

How should Italy position itself in relation to Turkey's "imperial" attitudes in the Balkan regions and in the eastern Mediterranean?

SALICA: Italy has a vital interest in containing the assertiveness of Erdogan's Turkey, by virtue of its history and its strategic position in the Mediterranean. Although belatedly, our country is giving encouraging signs that go in the direction of strong attention to Turkey's moves both in North Africa and in the Balkans. At the same time it should be remembered that Turkey is an important trading partner for Italy as well as a member of NATO; this means that the tables for confrontation are many, and can lead to strengthening the synergies between the two countries, rather than enhancing their muscular competition.

As a founding member of the EU, Italy must be able to play a more incisive role in relations with Turkey, trying to convince Germany and France that a different political agenda can be identified from those (however opposing) that the two friendly powers have. carried out in recent times towards the Anatolian country. Finally, let us not forget that Turkey has been one step away from joining the EU. What interest can Europe and Italy have in losing it as a privileged partner?

SILVAGNI: In the first place, Italy must encourage the adoption of a time schedule for the entry into the European Union of all the countries of the Western Balkans that are not yet part of it, i.e. Serbia, Bosnia-Herzegovina, Montenegro. , Kosovo, Albania and North Macedonia. The entry into the Union of each of these countries must be the culmination of a process of internal pacification, normalization of reciprocal diplomatic relations, full democratization and the eradication of corruption. Italy must therefore act as the first sponsor of this process, and at the same time exercise a "moral suasion" towards all these countries aimed at preventing Turkey from obtaining the maintenance of military outposts in this region.

As far as the Mediterranean is concerned, Italy will have to take sides with all those players on the international stage who have an interest in maintaining political stability in all the countries of North Africa. It is clear that political stability in this area of ​​the world necessarily depends on supporting adequate measures to contain and eradicate political Islamism in all coastal countries.

GASPARDO: The only reason why the so-called "West" has not yet moved militarily against Turkey (even if in the past it has done so against other states guilty of much less serious acts, for example Serbia!) Is because the United States America still think they can use the Turks as "third party infantry" to storm traditional Russian spheres of influence in Ukraine, the Caucasus and Central Asia while inflicting a severe blow to the so-called "New Way of Chinese silk ”.

This attitude is frankly irresponsible because it does not take into account the most dangerous and treacherous of the 6 doctrines of Turkish expansionism, namely that of the "Mavi Vatan" (the "Blue Motherland"). This doctrine, formulated by former admirals Ramazan Cem Gürdeniz and Cihat Yaycı (both atheistic and secular Kemalists, certainly not Islamists!) Basically provides that Turkey creates a "blue water navy" (a deep sea combat fleet) that guarantees to dominate both the Black Sea and the Mediterranean Sea and with the ability to intervene also in the Atlantic Ocean, in the Red Sea, in the Persian Gulf and in the Indian Ocean. This strategy is completely unacceptable for Italy given that, from the First Punic War until today, the "Polar Star" of the geopolitics of all the entities that have followed one another in our peninsula is that the Mediterranean can only be either Italian or pacified but there is no such thing as a force hostile to Italy that can attest with impunity in our backyard, threatening our national security. Historical examples abound and I will not begin to list them. The Turkish threat must be faced and extinguished, if necessary "manu militare".

Advantages and disadvantages of the "regime"

The Turkey of Prime Minister and later President Recep Tayyip Erdogan appears more and more a champion of the so-called "authoritarian democracies". What is it about? What are the competitive advantages of this new kind of political regime over liberal democracies and de facto one-party dictatorships?

SALICA: Autocratic models have become "attractive", confirming the cyclical crisis of democracies (at least as we understand them). Erdogan used and uses the weapons typical of authoritarian regimes, maneuvering with great cynicism and ability both internal feelings (the great Turkey) and the geo-political opportunities offered by the historical role that the Anatolian power has always had as a bridge between Europe and Asia. In his specific case, however, it is worth noting the strong growth that Turkey has had in the last ten years and this result has strengthened its image especially in rural areas, where the regime's propaganda, supported by the increasing control of the media, has a very strong grip. The less "informed" population, sensitive above all to economic trends and nationalistic references, tends to accept favorably a re-dimensioning of democratic principles (of which often it cannot even perceive the essential outlines) if it obtains concrete advantages over its daily life. The reasoning changes in the big cities, where Erdogan's autocratic leadership is strongly contested. But only one in three citizens live in large cities.

Erdogan, like other autocrats in the world, capitalizes to the maximum the advantage of being able to decide with great timeliness in the most dramatic moments and situations (pandemics, military crises, migratory crises, etc.) and this aspect is demagogically emphasized with respect to the decision-making mechanisms of democracies westerners.

SILVAGNI: "Authoritarian democracy" is a contradiction in terms! There are three types of political regimes in the world today. First, there are totalitarian regimes, such as China, where established power cannot be legally opposed, and no dissent or any form of political opposition is tolerated. Secondly, there are authoritarian regimes, such as Russia, where elections are held, political parties are allowed and a semblance of political opposition in parliament and in the country is tolerated. However, in authoritarian regimes those who exercise power adopt a series of measures, more or less legal, so that the oppositions have no concrete chance of achieving an alternation of government, but instead remain "harmless". Finally, there are the democracies, such as the United States or the majority of European countries, where, with varying degrees of imperfection, the media are free, political parties are allowed and alternation in government is the norm.

The misnomer "authoritarian democracy" derives from the fact that, alas, in the last 20 years in all continents of the globe a worrying number of former democracies (and perhaps still considered as such by those who govern) have converted into authoritarian regimes. Turkey is fully on this list.

Speaking of competitive advantages, I agree perfectly with Winston Churchill's famous phrase, namely that "democracy is the worst form of government, except for all those other forms that have been tried so far".

GASPARDO: Quite simply: this is nonsense! The terms "authoritarian democracy" used by Erdogan, "illiberal democracy" favored instead by the Hungarian Orban or "non-liberal democracy" coined instead by the Indian Modi, are all philosophical absurdities. It can be debated whether a democracy can be more effective in a "unitary" state model (France) rather than a "federal" state (United States / Switzerland) or if a democratic state is better organized in a "republican" system (Italy) or "Constitutional monarchist" (UK), but the democratic and liberal foundations of a modern democracy cannot be questioned.

In Turkey they can afford the luxury of talking about "authoritarian democracy" because the state founded by Mustafa Kemal Ataturk was and is a state with a fascist and deeply undemocratic imprint and the so-called "allies" of Turkey have always pretended not to notice it, thinking they can "tame it "; instead, they have only moved beyond time the inevitable moment in which there would have been the institutional short-circuit and the crisis of rejection of the values ​​of the state. Moreover, it was Ataturk himself who openly said that "we did not make our Revolution to build a liberal democracy". Erdogan is neither a detour nor an accident, he is the worthy successor of Ataturk and is concluding the historical parable of the Republic of Turkey in the only way in which, historically and philosophically, it could have ended.

The so-called "competitive advantages" of this type of regimes last the space of one or two economic cycles, but sooner or later their strategies always run out of breath.

Photo: presidency of the republic of Turkey