Views from the Bosphorus

The past few weeks have been an interesting transition in both Ankara and Riyadh. Saudi Arabia is continuing its seismic geopolitical and economic-reconfiguration, while Turkey is inching ever closer to a Presidential system of governance.

Both nations have been garnering significant derogatory and derisive comments, indeed Prince Bin Salman’s bold vision to transform oil dependent Saudi into a services and industry led economy has been met with howls of derision in sections of the British media. However, as we have argued elsewhere, such reform is long overdue and much needed. Furthermore, the partial privatisation of Saudi Aramco, if executed correctly, will be a grand masterstroke, as he seeks to monetise future oil cash flows.

Meanwhile Turkey has been taking a battering in the Western media for the better part of 2 years, of which the criticism of the Turkey-EU refugee deal is merely the latest manifestation. Erdogan has been simultaneously labelled as a Dictator, Oriental Despot, Neo-Ottoman Sultan and ‘Putin light’. The removal of former PM Ahmet Davutoglu is apparently a further sign of Turkey lurching towards ‘Putinism’ and therefore cannot be seen as a reliable partner for the EU and US.

The Professors Removal

While it may have taken Europe and the US by surprise, analysts in Turkey were nonchalant at the removal of former PM Ahmet Davutoglu, commenting it was a question of ‘when’ as opposed to ‘if’. Ahmet’s premiership was meant to be a stop-gap on to the road of Presidentialism, and the former Prime Ministers views to the contrary expedited his exit. The new Chairman – and Prime Minister designate – Binali Yildirim is a successful technocrat, who is viewed as a humble, pro-active overachiever. He is much unlike Davutoglu whom many derided as a bookish intellectual dreaming up unrealistic and grandiose theories’ – though to his credit he did try to protest against some of the more objectionable policies of President Erdogan.

Yildirim is very much seen as Erdogan’s man, and both share a long association dating back to Erdogan’s tenure as Mayor of Istanbul, as well as shared experiences – both were educated at imam-hatip religious schools. His business credentials are impressive, and he served as the minister of transportation, maritime affairs and communications in 2002, and he deserves much credit for development of Turkey’s high-speed rail network.

Some observers were surprised that Erdogan did not push for his son-in law Berat Albayrak – the current energy minister – to be the new Prime Minister, however this was never going to be the case. Erdogan is not setting out to establish a ‘Republican Dynasty’ in the same vein as the post-colonial Arab states, rather he is seeking to change the Turkish constitution, and leave an indelible mark on the history. He sees himself as a latter day Sultan Abdul Hamid II – much maligned in the west, however an extremely capable Sultan who ruled from 1878-1909, and kept the Ottoman Empire intact before its disastrous dismemberment under the Young Turks. In order to do this, he requires a Prime Minister – grand vizier, who apart from unwavering loyalty to the regime, is an extremely capable technical operate. Those who think Yildirim will be a low profile appointment are mistaken, as his track record indicates he is a shrewd operator, a go-getter and is loyal to Erdogan, all of which suggests, a harmonised and dedicated vision to achieve results.

Increased Turkish and Saudi Militarism

The building of Turkish military bases in Qatar and Somalia point towards Turkey seeking to play a bigger role in contributing towards regional stability. Concurrently the annexation of the Tiran Islands by Saudi, its role in Yemen and the conducting of military exercises in the Northern Desert also confirm that Saudi too wishes to be an active participant and not merely a passive onlooker when shaping regional dynamics.

Obama’s Complaint

In the Atlantic review, Obama lashed out at ‘freeloaders’ who wanted the US to front up the cost – monetary and material – of foreign campaigns. While this may have been true of America’s Gulf allies in the past – when military capabilities of the GCC was woefully lacking – it cannot be said now, as Saudi and The UAE have committed extensive resources in Yemen. Furthermore, the Turks have been lobbying for the US to provide air cover, while it commits ground troops for a concerted invasion of Syria. One cannot make accusations of freeloading on one hand, and thereafter rebuff offers of assistance.

This may indeed point to another factor, that perhaps the US does not feel it can trust Turkey, or that it does not wish for strong regional players outside of its control. In the same vein, the Saudi establishment is seeking to move away from US military dependency, with Prince Bin Salman adamant that by 2030, Saudi needs to operate a significant level of indigenous armament production.

Turkish Protestations

For all the talk of increased Turkish soft power, it is now facing a debilitating insurgency on two fronts, which are severely hampering its ability to project power on the international stage. The low level conflict with the PKK has now hit many of the main cities such as Ankara, Istanbul and Bursa, illustrating the PKK’s willingness to escalate the violence. Such boldness from the PKK suggests tacit approvals from outside supporters and sponsors, with many commenters pointing towards Russia.

NATOs reticence to assist in its war with the PKK, and the US insistence that the PYD is a partner in its war against Daesh, confirm Ankara’s fears of an international conspiracy to keep Turkey provincial.

The war with Daesh has also been bought inside Turkeys border, with almost daily shelling of the city of Kilis – a city which hosts 130,000 Syrian refugees. Again, Ankara is seething in what it views as NATOs intransigence and refusal to set up a buffer zone within Syria. Turkey has communicated that it is willing to commit ground troops – it has the second largest army in NATO – on the condition it receives air cover. Despite recent German support, as yet all requests have fallen on deaf ears.

Some officials think Daesh maybe goading Turkey into a unilateral ground operation in Syria, something which President Erdogan has not ruled out. ‘We will not hesitate to take the required steps.’ A few days after his announcement a small team of Turkish special forces crossed into Syria to help coalition air strikes. However, beyond such limited operations, it simply would not be feasible to launch a unilateral ground operation particularly with Russian forces patrolling the skies.

Russia

Turkish foreign policy has now re-calibrated itself around the Russian threat, with both nations on opposing sides of a variety of issues, while the Saudi mistrust of Russia revolves primarily around its unwavering support for the Iranian regime and policy objectives across the region. Notably the media war between both nations has ramped up, with the Turkish government continually pilloried in Russia Today.

Economy

The fact that despite the political tumult and terror on multiple fronts it faced, the Turkish lira has been surprisingly robust, particularly in comparison with other EM currencies. While the Russian sanctions have continued to bite, President Erdogan recently concluded a 4-day trip to West Africa, where he hopes to increase trade to $20billion (it currently stands at just under $1bn) over the next 5 years. The expansion of Turkish firms into Africa and other frontier markets represents a continued confidence of Turkish firms, and the presidency in leveraging off ‘Brand Turkey’. The IMF has revised upwards its growth forecast for Turkey to 3.2%, and while acknowledging the precariousness of the current situation, was suitably impressed by the level of industrial activity in Turkey.

With regards to Saudi, the growing budget deficit is no doubt a worry however The Saudi’s are proactively seeking mitigants to falling oil prices. While we have written extensively on the state of the Saudi economy elsewhere, it bears repeating, we feel that The Saudi 2030 vision will be a game changer for the economic climate of the Arabian Peninsula.

Conclusion

In a recent state visit to Turkey, King Salman was afforded the highest honours of state and an extremely warm and cordial reception. The warm reception lies in the realisation that both countries are leading power brokers in the region, and that they are aware of their increasingly common interests.

Both Turkey and Saudi Arabia have been pushed together by force of circumstance. Turkey will continue to protect its regional interests, and seek to fill the historic role it once played. Its current role in the Caucasus and the Balkans is testament to this.

Saudi Arabia, as we have argued elsewhere is jostling for a global leadership position amongst the Muslim community. However, Turkey is also attempting to occupy this space, as recent mosque building efforts in Accra, Maryland and Banka Luka confirm. However, it is a space it feels it can co-habit and work with Saudi Arabia, as the Kingdom has moderated its literalist interpretation of the faith.

Economically, the removal of former PM Ahmet Davutoglu, has led to a depreciation in the lira and an increase in its risk premium. However relative to other EM’s it has been surprisingly robust. There is no doubt however, that the remainder of the year will be a challenge as Turkey looks to explore new markets and shore up its flagging tourism industry.

The alignment of geopolitical and wider theocratic interests, and the need to bring stability to a volatile region points to increased military cooperation by both Ankara and Riyadh, as a counter to Iranian and Russian influence. The key remains whether the US will allow this, or whether will want to keep the region divided and dependent on US. We feel a Clinton presidency will give the Turks and Saudis a freer hand, while a Trump Presidency will hand the region to Russian and Iranian interests.

On the 100-year anniversary of Kut-al-Amara – where Turks and Arabs decisively defeated the British, only for the region to plunge into a period of chaos and colonisation – we are reminded of another potential alliance which could help shape the wider region.

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