Global business perspectives

Russia, Turkey and Iran: It’s About the Money

by HBR

February 13, 2018 | 4:14 pm
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In past years Turkey, a functioning democracy and NATO’s only Muslim-majority member, often was presented by the United States as a model for the autocratic Arab Middle East. When the Arab Spring buffeted the region, President Recep Tayyip Erdoğan of Turkey saw an opportunity to promote this idea among the protesters in Arab autocracies.

The Arab Spring soon turned into winter, however, and Erdoğan’s relationship with NATO underwent a remarkable change. While retaining its NATO membership, Turkey has become part of the Russia-led triad engaged in peacemaking in the Syrian civil war outside the purview of the United Nations. To the alarm of its NATO partners, Turkey also has decided to purchase Russian S-400 missiles.

The key to understanding this phenomenon is to examine the Turkish Republic’s geopolitics and economics.

Domestically, the aborted military coup that rocked Turkey in July 2016 was a defining moment in the country’s foreign policy. As the first foreign leader to congratulate Erdoğan for crushing the coup, President Vladimir Putin of Russia won the Turkish leader’s gratitude. Foreign Minister Muhammad Javad Zarif of Iran had tweeted: “Stability and democracy in Turkey are paramount,” and President Hassan Rouhani told Erdoğan that the coup attempt was “a test to identify your domestic and foreign friends and enemies.”

With a population of nearly 80 million with steadily rising living conditions, Turkey has urgent need of a dependable supply of natural gas. Its main sources are Iran and Russia, with the rest coming from Azerbaijan.

Russia’s state-owned Gazprom supplies natural gas to several European nations through a pipeline stretching across Ukraine. To reduce its dependence on Ukraine for gas exports, Moscow came up with a plan called South Stream to transport natural gas to other parts of Europe. This project advanced until February 2014, when the Kremlin’s seizure of the Crimean Peninsula from Ukraine led the European Union to impose economic sanctions on Russia.

This opened the door to Russian-Turkish economic cooperation. In December 2017 Putin canceled the South Stream project, replacing it with the $13.74 billion Turkstream gas pipeline,

which will carry Russian natural gas to southern Europe via Bulgaria by 2020.

Erdoğan, who earlier had joined efforts to depose President Bashar Assad of Syria, a Russian and Iranian client, has moderated his opposition to the country’s regime. Instead he has focused on blocking the creation of a Kurdish enclave in Syria. This has given Putin an opening to co-opt Turkey in his efforts to end the Syrian civil war on terms favorable to Assad.

After hosting a Nov. 22 meeting with Erdoğan and Rouhani in Sochi, Russia, Putin said, “The militants in Syria have sustained a decisive blow and now there is a realistic chance to end the multiyear civil war.” He had conferred with Assad two days earlier. Notably, on Nov. 12 Turkey had announced a contract for the purchase of Russian S-400 missiles, ignoring the disapproval of other NATO members, particularly the United States.

In mid-December Putin and Erdoğan suggested the Kazakh capital of Astana as a venue for conducting peace talks for Syria. On Dec. 20 Zarif joined them at Astana. As Turkey reversed its past policies, Iran and Turkey found themselves on the same side in the Syrian crisis.

That has not always been the case. Since November 2002, when Erdogan’s Justice and Development Party won its first electoral victory, diplomatic relations between Turkey and Iran have improved—in 2009 Ankara invested as much as $4 billion in Iran’s South Pars gas field—but there have been periodic disagreements.

In the Syrian civil war that began in 2012, Turkey and Iran backed opposite camps. When Saudi Arabia intervened militarily in Yemen’s civil war in March 2015, Erdoğan said in an interview with France 24 TV: “We support Saudi Arabia’s intervention in Yemen,” and added that “Iran and the terrorist groups must withdraw.”

Nonetheless Erdoğan visited Tehran on April 1, 2015, to sign eight economic-cooperation agreements with Iran. When trade between the countries fell to $9.67 billion in 2016, he met with Rouhani for a joint news conference at which he emphasized that Turkey and Iran should join hands to bring about a peaceful outcome to the Yemeni crisis. Accompanied by Rouhani, Erdoğan has met with Iran’s Supreme Leader Ayatollah Ali Khamenei to propose joint mediation efforts.

Since then the Turkey-Iran entente has only strengthened.

(Dilip Hiro, author of “A Comprehensive Dictionary of the Middle East” (Olive Branch Press, 2013), is based in London.)


by HBR

February 13, 2018 | 4:14 pm
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