Turkey in Review: November 19-December 6, 2021

Turkey Seeks to Mend Ties with the United Arab Emirates

By Ezgi Yazici

Turkey and the United Arab Emirates normalized bilateral relations after a decade of tensions. Turkish President Recep Tayyip Erdogan and United Arab Emirates (UAE) Crown Prince Sheikh Mohammed bin Zayed Al Nahyan (MBZ) met for the first time since 2012 in Ankara, Turkey, on November 24, 2021.[1] Turkish and Emirati officials signed several cooperation agreements, including agreements to facilitate new Emirati investments into Turkey’s weakening economy.[2] The Erdogan-MBZ meeting followed months of high-level engagements since Emirati Foreign Minister Anwar Gargash expressed interest in improving relations with Ankara in January 2021.[3] Turkey and the UAE’s opposing interests in Libya, Syria, and the eastern Mediterranean have strained their relations over the past decade, as has Turkey’s cultivation of close ties with rival Qatar.[4]

Erdogan’s political vulnerability on economic matters serves as a key incentive for Turkey to work with Gulf countries. Rising inflation and depreciating Turkish lira values caused by Erdogan’s unconventional monetary policies pose the greatest threat to Erdogan’s political survival. However, Erdogan is unwilling to soften his grip on Turkey’s financial institutions, rejecting proposed solutions to counter the estimated annual inflation rate of 50 percent.[5] Erdogan and MBZ signed agreements that amount to up to $10 billion in upcoming Emirati investment to Turkey in energy, trade, technology, and finance areas. [6] Such investment commitments can bolster public and investor confidence to maintain capital within Turkey’s economy. However, the UAE’s investment pledges rarely materialize in full. Moreover, confidence-building alone will not address Erdogan’s waning electoral support or counter the price hikes of basic goods that the Turkish public is enduring.

Instead, Erdogan needs rapid cash injections to alleviate the impact of inflation and depreciating currency. Turkey and the UAE signed cooperation agreements between their central banks and between the Abu Dhabi Development Holding Company and the Turkish Wealth Fund—Turkey’s new sovereign wealth fund that is controlled by Erdogan and worth $33 billion.[7]  Turkey also seeks to sign a $5 billion currency swap agreement with the UAE that could boost Turkey’s currency reserves.[8] Central Bank cooperation and a possible swap deal may offer temporary relief to the Turkish economy; however, the details of these agreements are currently unknown or not finalized to forecast their effectiveness.

Ankara still holds several cards to incentivize the UAE’s engagement but will seek to protect its partnership with Qatar. Ankara likely recognizes and capitalizes on the Emirates’ desire to dilute the Turkish-Qatari axis. Turkish officials also incentivize Emirati interest with investment opportunities in Turkey’s profitable economic sectors, including its growing defense industry that has produced Bayraktar TB2 drones and other low-cost products popular in the region.[9] However, Ankara is careful in framing its cooperation with the Emiratis as a Gulf-wide outreach and not one at the expense of Qatar. Qatar remains an important political, economic, and security ally for Turkey—particularly as a major financial backer to Erdogan. President Erdogan and top Turkish officials traveled to Doha on December 6 after Erdogan met with MBZ on November 24 likely to reaffirm Turkey’s commitment to Qatar through new bilateral deals.

The normalization attempt is part of both Turkey’s and the UAE’s larger regional outreach campaigns.  In 2021, Turkey reached out to a wide range of countries that previously had broken or struggling diplomatic relations with Ankara: Israel, Egypt, Armenia, the UAE, and Greece. Ankara’s diplomatic initiative has yielded mixed results so far. Erdogan likely seeks to break Turkey’s regional isolation that resulted from Ankara’s assertive foreign policy in recent years. The Emiratis, similarly, have prioritized reestablishing ties with Israel, Qatar, Syria, Iran, and most recently Turkey as part of their diplomatic diversification efforts.

Ankara’s similar efforts with Israel, Egypt, and even Armenia demonstrate a willingness to reevaluate and soften Turkish outreach in the region—even if temporarily. However, the UAE likely holds greater political and economic leverage and will set the pace of the Turkish-Emirati efforts and define the extent of its success.

US disengagement from the region is likely shaping these diplomatic realignments. The gradual US pull back from the Middle East is likely pushing regional actors like Turkey and the UAE to reevaluate their partnerships and alliances to position themselves for a future without the United States as the principal external actor in the region. Ankara, Abu Dhabi, and others may be diversifying their diplomatic ties with past regional enemies to alleviate their insecurities of potential isolation and to generate opportunities for greater influence.

1. Turkey and Iraq explored drone sales and the first joint Iraqi-Turkish military exercises since 2017. Turkish Chief of the General Staff Yasar Guler and his Iraqi counterpart, Amir Rashid Yarallah, held a phone conversation on December 1 to discuss holding Turkish-Iraqi military exercises.[10] The Turkish and Iraqi militaries held their last joint exercise in September 2017 as a response to the Iraqi Kurdish independence referendum, which both Ankara and Baghdad opposed.[11] Separately, the Iraqi government approved a $100 million budget to buy Turkish combat drones on December 2, according to anonymous Iraqi military sources.[12] Turkey and Iraq signed a defense cooperation deal after Iraqi Defense Minister Juma Inad stated Iraq’s interest in procuring Turkish weapons systems—including Bayraktar TB2 drones—in August 2021.[13] The Iraqi government signed another deal with Otonom Technology, a privately owned Turkish defense company, on October 17 for airship systems.[14] Iraq’s interest in purchasing Turkish defense products likely creates a new avenue for Turkish influence in the country.
2. Turkey offered to mediate between Russia and Ukraine amid the Russian military buildup near the Ukrainian border. Turkish President Recep Tayyip Erdogan offered to mediate between Ukraine and Russia on November 29.[15] Turkish Foreign Minister Mevlut Cavusoglu underlined Turkey’s support for Ukraine’s accession to NATO and said that Turkey would be willing to discuss the process with Russia on December 1.[16] Cavusoglu then had a phone call with Russian Foreign Minister Sergey Lavrov on December 2.[17] Erdogan and Russian President Vladimir Putin further discussed the issue, and other areas of Turkish-Russian relations, on December 3^.[18] Turkey likely seeks to position itself as the bridge between Russia and Turkey’s NATO allies to mediate and de-escalate after NATO warned Russia against military action in Ukraine. Turkey’s ability to shape Russian planning is likely limited, however. Turkey also seeks to balance Russia in its region by supporting Ukraine’s NATO accession and to maintain its defense partnership with Ukraine, a key buyer of Turkish combat drones. Russia may offer Turkey a limited mediation role if Turkey’s cooperation will reduce Turkish defense sales to Ukraine.
3. Erdogan’s unconventional monetary policies triggered protests and public dissatisfaction with rapid inflation. The Turkish lira’s value against foreign currencies crashed to a historic low on November 23; the lira has lost 40 percent of its value since September 2021.[19]  Protesters have gathered in at least four provinces since November 23 to call for the government’s resignation.[20]  Erdogan replaced Finance Minister Lutfi Elvan with Erdogan loyalist Nureddin Abadi on December 1 after the former expressed opposition to Erdogan’s tight control over Turkey’s monetary policies.[21] The currency depreciation skyrocketed the prices of basic import goods—including gas, oil, and produce—which then caused inflation across a wider spectrum of goods and industries.[22] Erdogan argues that high interest rates precipitate high inflation, and instead encourage interest rate cuts to stimulate domestic investment and exports.[23] Erdogan’s policies are counter to standard economic theories that see the inflation-interest rate relationship as the opposite. Erdogan’s policies will continue to aggravate rapid inflation, which is estimated to be 50 percent in the past year. The demonstrations are unlikely to expand into coordinated nationwide protests in the near term. However, they are a strong indicator of growing discomfort toward Erdogan’s monetary policies as Erdogan looks for short-term relief through economic cooperation with the United Arab Emirates and elsewhere.
4. President Erdogan and top Turkish officials traveled to Turkmenistan for a state visit and regional summit. Turkish President Recep Tayyip Erdogan traveled to Ashgabat, Turkmenistan, with top Turkish government officials on November 27. Erdogan met with his Turkmen counterpart Gurbanguly Berdimuhamedow and signed several bilateral cooperation deals. The Turkish delegation then attended the Economic Cooperation Organization (ECO) summit in Ashgabat on November 28.[24] Erdogan also met with Iranian President Ebrahim Raisi and Azerbaijani President Ilham Aliyev on the sidelines; military tensions spiked between Azerbaijan and Iran in October.[25] The Turkish government values expanding its bilateral partnership with Turkmenistan—an energy-rich hub with current and upcoming pipeline routes. These routes include the TAPI pipeline that Turkey and Azerbaijan seek to access and expand westward through the Caspian Sea. Ankara leverages regional organizations like the Turkic Council and ECO to strengthen bilateral relations and to further integrate the countries in the region into Turkey-led security, diplomatic, and economic networks.
5. Cyprus greenlit an energy exploration deal with Qatar in an eastern Mediterranean zone under dispute with Turkey. The Cypriot Energy Ministry announced a deal to award hydrocarbon exploration and drilling rights of “Block 5,” southwest of Cyprus, to ExxonMobil and Qatar Petroleum on December 3. Block 5 is a disputed maritime zone between Turkey’s and Cyprus’s competing exclusive economic zone (EEZ) claims. The Turkish Foreign Ministry condemned the deal as an “unauthorized search” that “violates Turkey’s continental shelf.” An EEZ dispute would normally lead to direct negotiations between two states, but such a process between Cyprus and Turkey is unlikely with no recent progress on Cyprus negotiations.[26] Instead, Turkey will likely reciprocate by redeploying its own drilling vessels to contested areas when Cyprus begins hydrocarbon exploration in Block 5.
6. Turkish military leadership visited the Turkish-Syrian border after the Syrian People’s Assembly vowed to return Turkey’s Hatay Province to Syria. Turkish Defense Minister Hulusi Akar and top Turkish Armed Forces (TSK) generals visited Hatay Province near the Turkish-Syrian border on December 3 to inspect troops under Operation Spring Shield Command of the 6th Corps.[27] Akar’s visit was in response to the Syrian People’s Assembly’s November 29 statement that Turkey’s Hatay Province should be returned to Syria.[28] The statement also criticized the Turkish military presence in northern Syria and water cutoffs for civilians there as human rights and international law violations.[29] The French Mandate of Syria transferred Hatay to Turkey after a 1939 referendum in the province. However, Syria has not officially renounced its claims over the province. Akar’s inspection of TSK troops on the border is a significant response and would normally be an important leading indicator ahead of a potential Turkish incursion into Syria.[30] However, Turkey reversed its plans for a military campaign in early November after likely Russian and US opposition.[31] A TSK incursion remains unlikely; Ankara likely sought to showcase the Turkish military as a threat against the Assembly’s statement.
7. Turkey faces expulsion from the Council of Europe after a Turkish court extended the imprisonment of a jailed philanthropist. A Turkish court ruled to extend philanthropist Osman Kavala’s arrest on November 26 despite the Council of Europe’s decision that it would begin infringement proceedings against Turkey if Kavala remained in custody.[32] The Council voted to initiate the process on December 3, making Turkey the second country to ever face expulsion, after Azerbaijan.[33] Turkey arrested Kavala in November 2017 on charges of “attempting to overthrow the government.”  The Turkish government often uses long pre-trial detention times to silence opposition politicians and activists without appropriate legal proceedings. Turkish President Erdogan argues that international treaties and institutions undermine Turkey’s sovereignty and rule of law.[34] However, the judgment of the Council of Europe's judiciary body, the European Court of Human Rights, is binding for Turkish courts under the Turkish Constitution.[35] The infringement procedure is unlikely to result in Turkey’s expulsion or suspension within the next six months with the likely months-long bureaucratic process. Turkey will submit its view on the proceeding by January 19, 2022.

Contributors: Ezgi Yazici, Fatih Cungurlu, Fem Koymen

[1] https://www.aa.com.tr/en/turkey/abu-dhabi-crown-prince-in-turkey-for-first-visit-in-nearly-a-decade/2429431

[2] https://www.iletisim.gov.tr/turkce/haberler/detay/turkiye-ve-birlesik-arap-emirlikleri-gorusmesinden-10-anlasma-ve-10-milyar-dolarlik-yatirim-karari-cikti

[3] https://www.duvarenglish.com/uae-official-says-time-to-manage-rivalry-with-iran-and-turkey-news-59052

[4] https://www.mei.edu/publications/turkey-and-uae-strange-crisis

[5] https://apnews.com/article/business-middle-east-turkey-global-trade-europe-e7d2a1eab7920304e8ea13bac75cdb0b

[6] https://www.dailysabah.com/politics/diplomacy/uae-media-hail-erdogan-mbz-meeting-prospects-for-future-ties

[7] https://www.ft.com/content/ecffb6d6-4f2c-11ea-95a0-43d18ec715f5

[8] https://www.hurriyet.com.tr/yazarlar/hande-firat/yeni-ekonomik-model-hedefler-ve-yoldaki-swap-anlasmasi-41947609

https://www.middleeasteye.net/news/turkey-uae-explores-currency-swap

[9] https://www.dailysabah.com/business/defense/turkey-uae-have-potential-in-defense-industry-cooperation

[10] يحيى رسول | Yehia Rasool on Twitter: "Army chief of staff , General Abd Al - Amir Rashid Yarallah, made a telephone call to the Chief of Staff of the Turkish Army, General Yaşar Güler. Twitter https://twitter.com/IraqiSpoxMOD/status/1466098893419126786?s=20

[11] Iraqi soldiers join Turkish exercises near shared border: witness | Reuters https://www.reuters.com/article/us-mideast-crisis-kurds-referendum-turke/iraqi-soldiers-join-turkish-exercises-near-shared-border-witness-idUSKCN1C1113

[12] مصادر عراقية تكشف عن صفقة لشراء طائرات "بيرقدار" التركية (alaraby.co.uk)  https://www.alaraby.co.uk/politics/%D9%85%D8%B5%D8%A7%D8%AF%D8%B1-%D8%B9%D8%B1%D8%A7%D9%82%D9%8A%D8%A9-%D8%AA%D9%83%D8%B4%D9%81-%D8%B9%D9%86-%D8%B5%D9%81%D9%82%D8%A9-%D9%84%D8%B4%D8%B1%D8%A7%D8%A1-%D8%B7%D8%A7%D8%A6%D8%B1%D8%A7%D8%AA-%22%D8%A8%D9%8A%D8%B1%D9%82%D8%AF%D8%A7%D8%B1%22-%D8%A7%D9%84%D8%AA%D8%B1%D9%83%D9%8A%D8%A9

[13] Iraq Closes In On Drones, Helicopters And EW From Turkey - Breaking Defense Breaking Defense - https://breakingdefense.com/2021/08/iraq-closes-in-on-drones-helicopters-and-ew-from-turkey/

https://www.trthaber.com/haber/gundem/turkiye-irak-arasinda-savunma-sanayii-isbirligi-anlasmasi-603231.html

[14] Turkish producer to supply aerostat systems to Iraq (defensenews.com) https://www.defensenews.com/global/mideast-africa/2021/10/19/turkish-producer-to-supply-aerostat-systems-to-iraq/

Otonom Technology said that the deal involves “technological know-how transfer and co-production options in the future”

[15] https://www.reuters.com/world/middle-east/erdogan-says-turkey-ready-mediate-between-ukraine-russia-ntv-2021-11-29/

https://www.dailysabah.com/politics/turkey-could-mediate-between-russia-ukraine-erdogan/news

[16] https://t24.com.tr/haber/disisleri-bakani-cavusoglu-ndan-ukrayna-sorusuna-yanit-nato-nun-genislemesini-destekliyoruz-cumhurbaskani-putin-ile-gorusecek,997488

https://www.aa.com.tr/en/turkey/-turkish-foreign-minister-urges-calm-amid-russia-ukraine-tensions/2435591

[17] https://www.yenisafak.com/en/world/turkish-russian-foreign-ministers-discuss-bilateral-ties-regional-issues-3585391

[18] https://www.dailysabah.com/politics/diplomacy/erdogan-discusses-turkey-russia-relations-with-putin

[19] https://www.reuters.com/world/middle-east/turkish-lira-drifts-off-record-low-erdogan-defends-policy-rate-2021-11-23/

[20]  https://www.dw.com/tr/ankara-ve-istanbulda-kur-protestolar%C4%B1/a-59912653

https://www.cumhuriyet.com.tr/turkiye/trabzonda-hukumet-istifa-sloganlari-yukseliyor-1888036

[21] https://www.aa.com.tr/en/economy/turkey-replaces-treasury-and-finance-minister/2436294

https://www.sozcu.com.tr/2021/gundem/istanbul-ankara-ve-izmirde-vatandaslar-iktidari-protesto-etti-6788229/

[22] https://www.al-monitor.com/originals/2021/11/food-price-hikes-feared-turkey-after-currency-slump

“It’s impossible for bakeries to sell bread with the same prices as before because 50 kilos of flour was 200 liras last week, but this week it’s 380 liras due to the new exchange rates,” Cihan Kolivar, chairman of the Bread Producers Employers Union in Turkey, told Al-Monitor in a November 22 article.

[23]  https://www.bloomberg.com/news/articles/2021-11-26/erdogan-says-turkey-under-attack-by-money-barons-after-pivot

[24] ECO was founded by Iran, Pakistan, and Turkey as an economic bloc for central Asia, and ECO also includes Azerbaijan, Afghanistan, Kazakhstan, Kyrgyzstan, Turkmenistan, and Tajikistan.

[25] Iranian-Azerbaijani tensions flared up when Iran held military exercises near the Azerbaijani border on October 1. Azerbaijan held joint exercises with Turkey near the Iranian border on October 3 in response.

Erdogan and Raisi discussed economic and political cooperation, regional developments, and counterterrorism cooperation during the meeting. Raisi called for regional cooperation to tackle terrorism and help form an inclusive government in Afghanistan.

[26] https://twitter.com/sinanulgen1/status/1467111762612867078?s=20

[27] https://www.msb.gov.tr/SlaytHaber/3122021-84725

https://www.msb.gov.tr/SlaytHaber/3122021-55340

[28] https://www.yenisafak.com/en/news/turkey-rejects-statement-by-assad-regime-targeting-its-territorial-integrity-3585395

https://www.msb.gov.tr/SlaytHaber/3122021-20857

[29] https://newsrnd.com/news/2021-11-29-the-people-s-assembly-on-the-anniversary-of-the-robbery-of-the-iskenderun-brigade--the-truth-will-return-to-its-owners.SJz-ESffKK.html

[30] https://understandingwar.org/backgrounder/turkeys-threat-push-further-syria

[31] http://www.iswresearch.org/2021/11/turkey-in-review-october-29-november-17.html

[32] https://www.amnesty.org/en/latest/news/2021/11/turkey-failure-to-release-osman-kavala-must-prompt-infringement-proceedings/

[33] https://www.reuters.com/world/europe/council-europe-notifies-turkey-planned-action-over-kavala-2021-12-03/

https://pomed.org/expert-qa-the-council-of-europe-v-turkey-will-erdogans-political-detentions-cost-turkey-its-membership/

Azerbaijan faced similar proceedings in December 2017 when it failed to abide by a 2014 recommendation to release an opposition politician. Baku eventually complied with the European Court of Human Right (ECHR) ruling, closing the infringement proceedings in September 2020.

[34] https://www.dw.com/tr/erdo%C4%9Fandan-kavala-a%C3%A7%C4%B1klamas%C4%B1-%C3%BCzerimize-d%C3%BC%C5%9Feni-yapar%C4%B1z/a-59637528

[35] https://pomed.org/expert-qa-the-council-of-europe-v-turkey-will-erdogans-political-detentions-cost-turkey-its-membership/

“Article 90 of the Turkish Constitution states that domestic authorities, including the judicial, executive, and legislative branches of government, must respect international human rights treaties and duly implement their provisions. The Constitution says that where such international treaties conflict with domestic legislation, international treaties should prevail. Turkey’s failure to implement ECHR judgments, therefore, breaches a commitment to the European Convention that is guaranteed under Turkish law.”