Turkish President Tayyip Recep Erdogan has a lot to worry about. He’s running out of money, his Arab neighbors are boycotting his exports, he’s provoked Russia and China, and the European Union wants to sanction him. Worst of all, the frontrunner in America’s presidential race, Joe Biden, says he wants to depose him. But don’t count Erdogan out just yet. Turkey’s leader knows that he can make it expensive for his enemies to go after him. That probably explains Turkey’s backing for Azerbaijan’s attack on the Armenian-controlled enclave of Nagorno-Karabakh, which escalated into a full-scale offensive in late September.  Turkey has reportedly recruited 1,000 Syrian mercenaries for the Nagorno-Karabakh front, a reminder that Erdogan has the means to stir up trouble elsewhere
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Turkish President Tayyip Recep Erdogan has a lot to worry about. He’s running out of money, his Arab neighbors are boycotting his exports, he’s provoked Russia and China, and the European Union wants to sanction him. Worst of all, the frontrunner in America’s presidential race, Joe Biden, says he wants to depose him.

But don’t count Erdogan out just yet. Turkey’s leader knows that he can make it expensive for his enemies to go after him. That probably explains Turkey’s backing for Azerbaijan’s attack on the Armenian-controlled enclave of Nagorno-Karabakh, which escalated into a full-scale offensive in late September. 

Turkey has reportedly recruited 1,000 Syrian mercenaries for the Nagorno-Karabakh front, a reminder that Erdogan has the means to stir up trouble elsewhere in the region, including in Russia’s Muslim-majority Caucasus. 

It also may explain why Erdogan’s Justice and Freedom Party last week suddenly rediscovered the cause of China’s Uighurs, a Turkic-speaking Muslim minority subject to a comprehensive crackdown by Chinese authorities, eliciting a sharp protest from China’s embassy in Ankara. 

Don Corleone kept his friends close and his enemies closer; China and Russia do the same thing, except that they don’t have friends. Russian soldiers and contractors are fighting Turkish-backed militias in Libya and Syria, but Russia needs Turkish acquiescence for its naval buildup in the Black Sea and its access to the Mediterranean through the Turkish Straits. 

Russia fought a long and bloody war against Muslim separatists in Chechnya, and sent troops into Syria in 2015 in part because Turkish-backed Sunni jihadists were training Russian Muslim fighters from the Caucasus. Russia wants a stable Turkey, because chaos in a heavily-armed Muslim state bordering the Caucasus would spill over into Russia’s Muslim-majority North Caucasian Federal District. 

A serviceman of Karabakh’s Defense Army fires an artillery piece towards Azeri positions during fighting over the breakaway Nagorno-Karabakh region, September 28, 2020. Photo: Handout/Armenian Defense Ministry/AFP

China also is vulnerable to Turkish subversion; it has corralled over a million Uighurs into re-education camps in its westernmost province of Xinjiang, which Erdogan used to call “East Turkistan.”

China’s support for Turkey’s economy constitutes a bribe to an unruly barbarian in China’s time-honored approach to such problems, and it includes infrastructure projects under the Belt and Road Initiative as well as swap lines with Turkey’s central bank. 

Erdogan used to denounce Chinese “genocide” against the Uighurs, whose cultural ties to Turkey are close, and provide refuge for Uighur separatists fleeing China. Thousands of Uighurs joined Sunni jihadist groups in the Syrian civil war. More recently, though, Turkey has quietly repatriated Uighur refugees to China via cooperative third countries.

Erdogan’s newfound sympathy for his Turkic cousins in Xinjiang province denotes a shift. As China’s Central News Agency reported on October 1, “Turkey’s ruling party, the Justice Development Party, criticized Beijing’s policy in Xinjiang on the [September] 29th on the eve of China’s eleventh for ‘containing arbitrary practices against Uighurs’ and urged respect for human rights.”

The Chinese Embassy in Turkey issued a statement on September 30 expressing “strong protest.”

According to Anadolu Agency, AK Party spokesperson Omer Celik pointed out at a press conference on September 29 that Turkey has been paying close attention to human rights and freedom of belief in China’s Xinjiang Uighur Autonomous Region. He said the ‘De-radicalization Regulations of the Xinjiang Uighur Autonomous Region’, implemented in 2017, “contains negative and arbitrary practices against Uighurs.”

Turkey’s foreign exchange reserves probably explain Ankara’s concern more than pan-Turkic sentiment. During the past six months, the Turkish lira has lost about a third of its value against the US dollar, while Turkey’s foreign exchange reserves have diminished nearly by half, from about US$80 billion in March to just over $40 billion in August. 

That suggests a failed Turkish attempt to slow the depreciation of the lira by purchasing Turkish currency with US dollars. If Turkey’s reserves run out, the lira could go into free fall. 

Turkey doesn’t have a lot of prospective sources of financing. European banks, the main providers of credit to Turkish firms, won’t increase credit lines, and Erdogan won’t crawl to the International Monetary Fund, which would take economic policy-making out of his hands in exchange for fresh funds. 

He has obtained substantial help from Qatar in the past; I do not know whether the gas bubble on the Gulf masquerading as a country can or will support Turkey going forward. But there is always China, whose $3 trillion in foreign exchange reserves could tide Turkey over. 

Turkey’s economic performance looks dismal to outsiders. Its stock market delivered some of the worst returns in the world during the past year.

Turkish stock market performance doesn’t capture what is happening in the country’s economy, as reported in these pages on August 8. The value of Turkey’s housing stock is about 20 times larger than the capitalization of the country’s stock exchange, and housing prices have risen by 23% over the past year, roughly twice the rate of inflation. 

Erdogan’s cheap money policy has buoyed the real estate assets of Turkish households, but allowed the lira to depreciate, to the detriment of Turkish businesses with foreign-currency debt. In short, Erdogan’s monetary policy constituted a populist wealth transfer from corporations to households.

The problem is that Erdogan is running out of rope with which to play this conjurer’s trick. The lira really might collapse, and ruin Turkish households as well as corporations.

Erdogan’s problems are made worse by his confrontation with the Arab monarchies of the Persian Gulf, who view Ankara as the main state sponsor of the Muslim Brotherhood, a political organization in the old totalitarian mode that hopes to overthrow the feudal Arab states. 

Saudi Arabia “has already started an undeclared boycott of Turkish goods,” as Mustafa Sonmez reported on October 2 in Al-Monitor. One of the reasons that the United Arab Emirates and Oman have agreed to normalize relations with Israel is fear of Turkish subversion. 

Iran, whose ambition to make Shiite Islam the dominant current in the religion, usually is cited as the principal threat to the Gulf’s Sunni states. But the Muslim Brotherhood, deeply embedded within the bureaucracy and military of Gulf States, may be a more urgent threat.

On September 9, the Arab League—with dissenting votes from Qatar, Libya, Somalia and Djibouti—denounced “Turkish interference in Arab affairs.”

Erdogan’s longstanding practice of blackmailing his neighbors and extorting the United States as well as China have tried the patience of Turkey’s partners. The Donald Trump Administration has avoided antagonizing Ankara, including by withdrawing support for Kurdish militias in northern Iraq.

An influential current of thinking at the US Defense Department, represented by the Hudson Institute’s Michael Doran among others, holds that Turkey has “legitimate grievances” against the US for, among other things, backing Kurdish elements that Turkey considers terrorists.

A Joe Biden administration could make things hard on Erdogan. Photo: AFP

A Biden administration might not be so supportive. Turkish state television is now rebroadcasting Biden’s December 2019 call for the US to push Erdogan out of power and to rally its allies to isolate him. Biden, whose odds against Trump now stand at 61-38 on the major betting sites, said at the time: 

“We can support those elements of the Turkish leadership that still exist and get more from them and embolden them to be able to take on and defeat Erdogan—not by a coup, not by a coup, but by the electoral process … At the end of the day Turkey doesn’t want to rely on Russia. 

“They’ve had a bite out of that apple a long time ago. But they’ve got to understand that we’re not going to play with them the way we have. And I think It takes an awful lot of work for us to be able to get together with our allies in the region and deal with how we isolate his actions in the region.”

Meanwhile, the European Union has threatened Turkey with sanctions over gas drilling in the Eastern Mediterranean in Greek and Cypriot territorial waters, which led to the deployment of military vessels by both countries.

The EU’s predicament is complicated by a disagreement over how to respond to Russia’s interference in Belarus. Cyprus, which has close ties to Moscow, vetoed proposed EU sanctions against Russia. 

That is the background to Erdogan’s backing for the Azeri attack on Armenian forces in Nagorno-Karabakh, an Armenian-majority enclave that Armenia wrested from Azeri control in the aftermath of the collapse of the Soviet Union. While Russia has ties to and sells weapons to both former Soviet republics, it cannot allow Armenia to be overrun by its larger and more populous Russian neighbor.

Turkish President Recep Tayyip Erdogan has a vision to revive the ancient Ottoman Empire. Photo: Twitter

Erdogan has put himself in the center of an international conflict in which he can claim to be the champion of an aggrieved nation against a Russian ally while building up chips to be used in future bargaining with Moscow. It is a cynical maneuver, and a clever one, at the expense of extensive destruction of life and property.

The risk in Erdogan’s spoiler strategy is that the patience of his neighbors, as well as Washington, Beijing, Berlin, Paris and Moscow, may run out at exactly the same moment that his money runs dry.

It is too early to write him off, but a growing current of opinion around the world’s capitals holds that the world would be well rid of the too-clever Mr Erdogan.