Erdogan Makes Some Worrying Friends

(Bloomberg Opinion) -- Relations between the U.S. and Turkey have been deteriorating almost as fast as the Turkish lira. In a speech on the Black Sea coast Saturday, Turkish President Recep Tayyip Erdogan made the ultimate dig against an ally: He threatened to switch teams.

“Before it is too late, Washington must give up the misguided notion that our relationship can be asymmetrical and come to terms with the fact that Turkey has alternatives,” he told the crowd. If the “disrespect” continues, his government will seek “new friends and allies.” On Tuesday, he doubled down, calling for a boycott on U.S. electronic goods such as the iPhone.

By new friends, Erdogan means Russia – and to a lesser extent Iran. As with Turkey, both are led by proud authoritarians, face U.S. sanctions and blame their economic woes on external enemies. They share a deep distrust of the West and have been cooperating in the Syrian conflict, while also strengthening bilateral economic ties.

No wonder the lira, despite Tuesday’s modest rebound, has been hammered; with Russia and Iran’s currencies suffering too. There is something deeply unsettling about one of America’s longest standing allies threatening to link up with a historical rival and a sworn enemy instead. But is the threat credible?

Russia and Turkey have a history of cooperation and conflict. The two have fought each other in at least half a dozen wars, won mostly by Russia. But it was the post-1917 Bolshevik government in Moscow that reached out to support Turkey’s post-Ottoman nationalists. Lenin even enthused that the new Asian leaders might prove quick studies, “go over to the Soviet system, and, through certain stages of development, to communism.” The steel and aluminum industries that are the subject of Donald Trump’s new tariffs were built with Soviet help in the 1960s.

Still, Turkey’s NATO anchor, its European Union accession hopes and its close relationship with the U.S. once meant that ties with Moscow were mostly managed on an ad hoc basis. The two were at such odds in Syria, where Turkey has long opposed Bashar al-Assad, that relations broke down completely after Turkey downed a Russian fighter plane in 2015. Erdogan apologized to Putin in 2016 and the two have grown closer ever since.

A combination of things has prompted the change. After the defeat of Turkish proxies in Syria by Russia, Erdogan’s focus shifted to containing Syrian Kurdish forces, whom he fears will link up with the PKK (Kurdistan Workers Party) in Turkey to pose a threat there.

The changes on the ground in Syria and a growing distrust between Turkey and the U.S., culminating in the dispute over the Turkish arrest of an American pastor, eased the way to a further warming of relations with Moscow. Turkey’s decision to buy Russian S-400 surface-to-air missiles, an unprecedented move for a NATO member, was like a blood bond.

And yet it’s odd that a cozy relationship with Russia carries the same imbalance of power that Erdogan so resents in his relationships with Western countries. In fact, Russia seems to be pulling all the strings.

Russia supplies more that half of Turkey’s gas resources, and the new TurkStream pipeline, which Gazprom plans to complete next year, will increase that dependency. Erdogan also handed Rosatom, Russia’s state-owned atomic energy company, the rights to build the Akkuyu nuclear power plant in Turkey – a $20 billion showcase of Russian-Turkish cooperation. Rosatom provided the financing and got 51 percent ownership. Akkuyu will reportedly supply 10 percent of Turkey's energy needs. 

Turkey’s trade with Russia is growing, but it’s nothing like its economic interests in Europe. More than 80 percent of all foreign direct investment in Turkey between 2002 and 2016 came from the West. Only 6 percent comes from Russia. Exports to Russia rose sharply in 2017, but are still less than 2 percent of the total, well behind Germany, the U.S. and even Iraq. 

It’s hard to see how Erdogan can squeeze much more from Moscow trade, given Russia's own economic constraints. He has spoken of using national currencies rather than the dollar in Turkey’s trade with Russia and other countries, an idea Russia endorses. But how is that realistic? Russia’s Soviet predecessor had to use barter, counter-trade and various bilateral clearing agreements to get around the fact that the ruble wasn’t freely convertible, mostly trading within the Communist bloc that way. A national-currency based trade doesn’t sound a long way off from the old Comecon world.

Erdogan is too wily not to recognize the limits of his Russia friendship. But Putin has astutely played to the Turkish leader’s worst fears about the West and his internal enemies. The burgeoning relationship reflects both Erdogan’s desire to distance Turkey from the U.S. and his twin domestic priorities: preventing another coup and preparing for any challenge from Kurdish insurgents. Economic considerations are secondary; at least for now.

But things can change quickly in febrile times. Erdogan has shown he can pivot when it makes sense, just as he embraced cooperation with Moscow in Syria. He may tire eventually of replacing one subservient relationship with another.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Therese Raphael writes editorials on European politics and economics for Bloomberg Opinion. She was editorial page editor of the Wall Street Journal Europe.

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