Turkish foreign policy is premised on several drivers: domestic political considerations, the nationalist governing coalition’s needs and aspirations, the weight of the Kurdish question, economic constraints, and the geopolitical balancing act between Russia and the West and regional realignments. Each factor impacts the formulation of Turkish foreign policy to varying degrees. Within the context of the current coronavirus pandemic, Turkey’s economic imperatives have become more urgent and pressing and Turkish foreign policy will reflect this going forward. Coronavirus hit Turkey at a particularly vulnerable moment for its economy. Moreover, this pandemic also put a spotlight on the on the structural economic issues facing the country, to which Ankara has not allocated sufficient attention in recent years. To be more precise, on almost all counts, the Turkish economy is intricately intertwined with and heavily dependent on the West. Yet, in recent years, the motto of Turkish foreign policy has been the search for strategic autonomy, which effectively means reducing Turkey’s dependency on the West. Therefore, the coronavirus has brought to daylight the inconsistencies between the structure of Turkey’s economy and Ankara’s declared foreign policy/strategic aspirations. To be sure, Turkey’s economic downturn is unlikely to alter Ankara’s geopolitical aspirations. Ankara will continue with its hard-power based and proactive foreign policies in Libya and the eastern Mediterranean. The main goals of Turkey’s Syria policy are likely to remain intact. Domestically, Turkey’s political polarisation is unlikely to abate, nor does the ultra-nationalist narrative and politics of the governing coalition. Yet, the question remains: what should be the main tenants of foreign policy for saving the Turkish economy?
Since the beginning of the 2000s, Turkey experienced nearly a decade of considerable economic growth. This economic growth underpinned Ankara’s assertive posture on regional issues. Beefed up by a burgeoning economy, Ankara became increasingly self-confident in its relations with its interlocutors. Starting in 2013, however, the country began to enter a cycle of successive political crises which gave birth to a political landscape completely different from the one which characterized the previous decade. Power in Turkey has become increasingly personalised. This trend was later legalised and institutionalised in the form of changing Turkey’s political system from a parliamentary system to a super-executive presidency. At the international level, Turkish foreign policy has been increasingly encumbered by the ever complex and growing numbers of interlocking regional crises, particularly in Syria. In the same vein, as Turkey’s relations with the West have quickly deteriorated, Turkey’s ties to Russia have dramatically improved starting from the second half of 2016. In fact, Turkey effectively engaged in a geopolitical balancing act between Russia and the West. Ankara's purchase of the Russian S-400 missile represented the climax of the honeymoon in Turkish - Russian relations and the low point in Turkish-Western ties.
Yet, Turkey’s new foreign policy orientation has carried economic baggage and the pandemic has only aggravated this. As previously mentioned, structural characteristics of the Turkish economy were not in accordance with the country’s new foreign policy trajectory, particularly its equidistance approach to the West and Russia, Turkey has a relatively open economy, with most of the country's investments coming from the West, particularly Europe. For instance, almost half of Turkey’s trade is conducted with the West. When it comes to the economy, the weight of EU countries is incomparably higher than that of the United States. But that doesn’t mean that the US does not have economic leverage over Turkey. Given the US dominance of the international financial system and Turkey’s reliance on international finance as a credit driven economy, the US possesses many levers of influence over Turkey in economic and financial terms.
The current vulnerability in the Turkish economy only increases the financial leverage the US holds over Turkey. The Turkish economy had problems even before the pandemic and a pandemic induced additional economic shock could push it over the edge. On top of the fragility of the financial situation in Turkish industry and its services sector – particularly tourism –, Turkey is experiencing a currency crisis. For instance, following the outbreak of the pandemic, the exchange rate for the dollar jumped from around 6.2 to 7.0 liras, it even temporarily hit 7.25, which is the historic low. Moreover, the International Monetary Fund forecasts a 5 percent contraction of the economy in 2020 (prior to the pandemic, the government was envisaging a 5 percent growth for 2020). This limits Ankara's ability to respond to concerns about its depleted foreign reserves and its relatively high debt obligations (Turkey’s 12-month foreign debt obligations are almost $170 billion). Therefore, Turkey seeks global financial aid to satisfy itsneed for liquidity by concluding swap agreements with the Fed or with other central banks, including with the UK and Japan, on the top of existing currency swap deals with Qatar and China .
Turkish economic interests, therefore, require a certain level of good relations with the West, which has not been the case for many years. Ankara, on the one hand, has a conflictual relationship with the West on many issues. At a time when Turkey needs external funds, and access to international finance, patching up relations with the West, at least partially, is imperative.
As of recently, the most important step towards repairing relations with the West came in the form of Turkey deciding to delay the activation of the S-400 missile system. The S-400 system was due to be activated by the end of April 2020. Activating this S-400 system would have triggered the US CAATSA sanctions, and this would have led to a further deterioration of Turkish-Western relations. Though this decision to not activate the S-400 in April bought Turkey some time, it did not solve the crisis. Ankara will still have to tread a fine line on this point, as it also does not want to irritate Russia. This is why Turkey is engaged in public messaging towards Russia by saying that there is no change of heart on the activation of the S-400. In any case, the S-400 saga hangs over Turkey’s head when it searches for a financial buffer, particularly the unlikely option of a SWAP line with the FED, to beef up its trailing economy.
In these new circumstances, Ankara, which had been using harsh rhetoric towards the West in order to resonate with its nationalist domestic constituency, has now more recently softened its tone.
Turkey, being a producer of masks, personal protective equipment and disinfectants has also initiated a coronavirus diplomacy and has sent aid to several countries in an effort to strengthen Ankara's standing and to repair the frayed ties to the West at a time of economic downturn. In particular it has undertaken a public diplomacy campaign of highly publicised “aid diplomacy” towards the UK, Spain, Italy and the US. At home and abroad, Turkey is trying to restore its image by establishing itself as a major humanitarian power. It also aims to mend ties with the West without changing the fundamentals of its foreign policy orientation. However, this recent trend is unlikely to do the trick for Turkey for real. As the name suggests, public diplomacy can improve your image, but it cannot solve geopolitical and strategic disagreements.
Particularly, when it comes to US, Turkey’s public diplomacy efforts face institutional constraints. Turkey put all its eggs in Trump’s basket, yet its troubles are mainly with the US Senate, Congress and Judiciary. Temporary public diplomacy efforts cannot sort these troubles out.
The major objectives of this charm offensive policy when it comes to the EU are twofold: to reduce the extent of an economic recession resulting from the coronavirus and to take advantage of new opportunities on the horizon which may be emerging for Turkey as a market for Europeans. The expected changes in supply chains and shortening of trade distances may present as new opportunities for Turkey thanks to its proximity to Europe.
The 2018 currency crisis has clearly illustrated the shaky economic foundations of Turkey’s ambitious new foreign policy. The pandemic is likely to further exacerbate this. The decoupling between Turkey’s foreign policy aspirations and its economic necessities will produce at least one victim, either its economy its foreign policy or both. This is the dilemma that the policy makers in Ankara need to address in earnest (charm offensives are not sufficient) before it is too late.