WPR Erdogan’s Foreign Policy Pivot Is All About Domestic Politics Borzou Daragahi Jul 24, 2023July 24, 2023

 WPR  

Erdogan’s Foreign Policy Pivot Is All About Domestic Politics

Borzou Daragahi

Jul 24, 2023July 24, 2023

Erdogan’s Foreign Policy Pivot Is All About Domestic Politics

Turkish President Recep Tayyip Erdogan attends the NATO Summit in Vilnius, Lithuania, July 12, 2023 (photo for NurPhoto by Beata Zawrzel via AP Images).

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Fresh off an impressive election victory and a NATO summit where he played the role of both wily villain and sought-after star, Turkish President Recep Tayyip Erdogan headed to the wealthy states of the Persian Gulf last week on a tour meant to show off his status as an interlocutor between east and west, north and south—while also drumming up business to keep his country’s economy afloat.

But it remains uncertain if the momentum from Erdogan’s May 28 reelection, the victories he pocketed in Vilnius earlier this month and Gulf cash will be enough to win his next goal: bucking demographic trends and grave economic troubles to win Istanbul back from the opposition in municipal elections next March.

For now, Erdogan is riding high both domestically and internationally after winning an election many thought he would lose. In Vilnius, he gave way on Sweden’s accession to NATO, which he had been blocking, in exchange for a U.S. assurance to sell Turkey F-16 fighter jets, favorable trade agreements with the West and a vague promise from Brussels to resume talks on Turkey’s European Union membership bid. Erdogan also won Western praise for defying Russia and allowing Azov Battalion commanders to return to Ukraine, after having promised they would wait out the war in Turkey as part of a prisoner swap Ankara brokered between Kyiv and Moscow last year. In recent days, he eased tensions with Greece after their years-long rift, with the two countries now participating in their first joint naval operation in years.

Erdogan the master politician can now also reclaim the mantle of master statesman and global player that he had cultivated during much of his first decade in power from 2003 to 2013, before subsequently pursuing a more autonomous and often inflammatory approach to ties with the U.S. and Europe.

But Erdogan’s foreign policy moves almost always have a domestic angle. His pivot back to the West and attempts to curry favor with NATO, as well as his return to orthodox economic policies after having disastrously insisted on keeping interest rates low for the past several years, could all be aimed at winning favor with urban voters ahead of the 2024 municipal elections. And the Gulf states, which helped shore up Turkey’s economy with billions of dollars in central bank deposits and trade deals just before May elections, appear to be a cornerstone of Erdogan’s plans to address the country’s economic malaise in the coming months. New cash injections from the Gulf could stabilize the Turkish lira, which has been a primary victim of Erdogan’s economic mismanagement, and help his chances in Istanbul and other cities across the country.

Erdogan was accompanied on his visit to Saudi Arabia, the United Arab Emirates and Qatar by an entourage of 200 senior officials and Turkish business leaders seeking investment in Turkey’s economy and markets for its goods. And according to initial reports, they found both.

In what was described as Turkey’s biggest arms sale ever—meaning above the $1.5 billion range—the politically connected defense contractor Baykar Technologies signed a deal to supply Saudi Arabia with Akinci armed aerial drones, which are larger, faster and more complex than the Bayraktar drones made famous by the war in Ukraine. Turkey and the UAE also signed flimsier memorandums of understanding worth $50 billion that included unenforceable pledges to do business in the energy, natural resource, space and defense sectors, as well as a potentially more tangible agreement for Abu Dhabi to commit $8.5 billion to help rebuild after the February earthquakes in the southeast.

Erdogan’s foreign policy moves almost always have a domestic angle. His pivot back to the West and return to orthodox economic policies could be aimed at winning favor with urban voters ahead of municipal elections next year.

But despite the successes, there was a note of desperation in the pomp and scale of Erdogan’s Gulf visit, underscoring his lack of alternative sources of investment. Back in the mid-2000s, European investors impressed by Turkey’s growth rates and business-friendly rules rushed into its financial, automotive and other sectors, providing them with cheap capital without needing much of a sales pitch. But that has changed in the past few years, as Erdogan’s controversial insistence on keeping interest rates low and his appointment of loyalists—including his son-in-law—to important economic policymaking positions led to a collapse in the Turkish lira and declining foreign investment.

Since the election in May, Erdogan reversed his position on interest rates and appointed globally respected technocrats to helm Turkey’s Central Bank and Finance Ministry. But except for globally successful tech firms, like the ubiquitous food delivery service Getir, Western investors still will not touch the country. As Mustafa Erdemol wrote for the opposition HalkTV, “Erdogan could not get what he wanted from Western allies or give confidence to Western capital, despite all his attempts to ingratiate himself with them.”

Financial industry professionals confide that they are concerned about the hyper-empowered presidency enshrined in the constitution Erdogan rammed through in 2018, which would allow him to change course on interest rates in the future just as easily as he did after May 28.

Both financial industry figures and diplomats also say that an unpredictable Erdogan could still opt to reverse course on Sweden’s accession to NATO between now and the time parliament convenes by early October to ratify its membership, which could once again torpedo Ankara’s relations with the West. Anything from an offensive political cartoon to another burning of a Quran in Stockholm could serve as a pretext for a new crisis, should Erdogan find one politically expedient.

More worrisome for Turkey, their memorandums of understanding notwithstanding, the Gulf states that Erdogan is courting have traditionally shown very little interest in investing in the Turkish knowledge, tech and energy sectors that would create jobs for the educated young Turks now desperately trying to flee the country for the West. For decades, wealthy investors from Saudi Arabia, Iraq, Kuwait, Qatar and the UAE have almost exclusively poured money into Turkey’s real estate sector, buying billions of dollars’ worth of land and luxury properties as speculative gambits or vacation homes.

These land and condo sales enrich Turkish developers but exacerbate, rather than resolve, Turkey’s core economic problems: Skyrocketing rents and real estate prices, combined with a raft of recent tax and fuel price hikes, are the primary factors fueling domestic discontent. In response to public anger, authorities recently expanded and tightened the list of neighborhoods in Istanbul and other cities where non-Turks are forbidden from moving—even as developers close to the government are courting investors from the Gulf and elsewhere who will be seeking out properties in some of those very same neighborhoods.

This is just one of several binds that Erdogan finds himself in and why many fear that the disruptive figure that turned off investors and Western capitals over the past decade could still reemerge from wherever he is currently hiding.

Erdogan and his Justice and Development Party, or AKP, have declared that they are keen on winning back control of Istanbul from the opposition mayor, Ekrem Imamoglu. The city of more than 16 million is Erdogan’s hometown as well as where he got his political start as a reformist mayor in the 1990s. More crucially, Istanbul and other cities where AKP support has been steadily plummeting for years are important arenas for Erdogan’s allies to dole out political patronage in the form of aid, welfare programs, jobs and contracts.

Imamoglu is arguably Turkey’s most popular politician after Erdogan, having successfully helmed the country’s largest city through the COVID-19 pandemic. More recently, he effectively mobilized resources and personnel to respond to the February earthquakes. But in late 2022, a court system largely controlled by the AKP convicted him on a specious charge of insulting judiciary officials back in 2019, which effectively knocked him out of the running for this year’s presidential election. The conviction continues to hang over Imagoglu’s political future like a sword of Damocles.

Although it is unlikely Imagoglu will be jailed, Erdogan could seek to engineer his removal from next year’s mayoral race in order to set up a contest between a lesser opposition figure and a high-profile AKP candidate, such as former Interior Minister Suleyman Soylu. But given growing economic troubles and political polarization, knocking Imamoglu out of the race may not be enough to secure an AKP victory. It could also exacerbate tensions with the West, where Imamoglu has become a known and liked figure, potentially causing yet another crisis in relations. But whether or not Gulf money, statesmanship and orthodox economic policy are enough to win Istanbul, the ornery old Erdogan could easily reemerge after the vote in March.

Borzou Daragahi is an Istanbul-based journalist and a senior nonresident fellow at the Atlantic Council.