Bloomberg News

Erdogan Punishing Israel May Test Turkey’s ‘Great Power’ Claim

September 11, 2011

Sept. 12 (Bloomberg) -- Turkish rulers in past centuries held sway from Palestine to the Persian Gulf. Prime Minister Recep Tayyip Erdogan’s bid to emulate them may mean casting aside a once-valued ally.

Erdogan has frayed relations with Israel with his demand for an apology for the killing of Turkish activists on a flotilla to Hamas-controlled Gaza Strip last year. In the past week, he expelled the Israeli ambassador, halted defense purchases, announced plans to send more warships to the eastern Mediterranean and said he may visit Gaza.

In a Middle East transformed by war and revolution, Turkey is playing a growing role in issues such as the Palestinian campaign for statehood. Erdogan, whose bid to fast-track his country into the European Union was rebuffed, now says the heritage of the Ottoman Empire gives Turkey an historic charge to be a “great power.” The costs of his shift away from Western-centered foreign policy include a wrecked partnership with Israel and strained ties with its backer, the U.S.

“Turkey championed the cause of the Palestinians and has taken a tough stance against Israel -- the question is whether at some point that has an impact on the Turkish relationship with the West,” Bulent Aliriza, director of the Turkey Project at the Center for Strategic & International Studies in Washington, said in an interview. “A lot of Turkey’s influence in the region comes from the fact that it has relationships with the West and that it belongs to both worlds.”

Gaza Trip

Erdogan is in Egypt today on the first leg of a tour of three countries that toppled leaders this year; he has signaled an interest in visiting Gaza while there, and is later due to meet transitional rulers in Tunisia and Libya. Accompanying him are dozens of Turkish executives -- a sign of the way Erdogan’s new diplomatic priorities overlap with business interests.

Trade with the Middle East and North Africa has surged sixfold since Erdogan came to power, reaching $30 billion last year. That’s 27 percent of all overseas sales, more than double the 2002 share. Two-way trade with Israel was $2.7 billion in the first seven months of the year, according to Turkish Trade Minister Zafer Caglayan.

Erdogan’s criticisms of Israel won praise in Arab countries and he dedicated his latest election victory in June to Islamic countries seeking democracy.

“Among the public in the Muslim world, the ‘made-in- Turkey’ brand’s prestige has definitely increased,” said Seyfettin Gursel, a professor in the economics department of Bahcesehir University in Istanbul.

‘Hard Line’

The growth has slowed this year as unrest spread across the region. Countries affected included Libya, a key market for Turkish builders such as TAV Havalimanlari Holding AS, and Syria, where Turkey has sought to ease cross-border commerce.

Turkey has also attracted Middle Eastern investment. Saudi Oger Ltd.’s $6.6 billion acquisition of Turk Telekomunikasyon AS in 2005 remains the country’s biggest takeover. Saudi Arabia’s biggest lender, National Commercial Bank, bought 60 percent of Turkiye Finans Katilim Bankasi AS in 2008.

Erdogan’s latest diplomatic offensive, even if it impresses Arab public opinion, won’t help attract more such investments from the Persian Gulf, Gursel said. “No one will give money to Turkey because it’s taking a hard line on Israel,” he said. “Money has no religion or faith.”

Trade Risk

Europe is still Turkey’s biggest trade partner, yet the share of Turkish exports going there was shrinking even before the debt crisis of the last two years. With Turkey’s membership application frozen and senior European leaders including French President Nicolas Sarkozy openly opposing it, Erdogan has accused the bloc of applying “double standards” to its application. That disappointment has probably encouraged his push for Middle East influence, said Ilan Berman, vice president of the Washington-based American Foreign Policy Council.

“Having spent a tremendous amount of time, far longer than it should have, on the outside of western civilization in the context of the European Union, the Turks have made a decision that they’re going to go a certain way,” Berman said in a phone interview.

Turkey is Israel’s sixth-biggest export market, according to Caglayan, with companies including arms supplier Elbit Systems Ltd. and Oil Refineries Ltd. among exporters. Bank of Israeli Governor Stanley Fischer warned last week that the diplomatic dispute with Turkey will hurt the economy, and Prime Minister Benjamin Netanyahu said Sept. 9 his government’s main policy is “to prevent a deterioration in relations.”

‘Cool It’

“Israelis would like to have better relationships with Turkey, but have come to the conclusion, because of Erdogan’s policies, that there’s nothing more Israel can do,” Michael Rubin, a Middle East scholar at the American Enterprise Institute in Washington, said in a phone interview. The standoff “may help Turkey in the Middle East, but then again it’s easier to burn bridges than to build them.”

The U.S., which has helped foster ties between two of its closest regional allies, expressed concern at their falling out. Both countries should “cool it and get back to a place where they can have a proper relationship,” State Department spokeswoman Victoria Nuland said Sept. 9.

The Turkish-Israeli alliance has been driven by cooperation between the country’s armies. Erdogan, whose party has Islamist roots, has sought to curb the influence of Turkey’s military, which has ousted four governments since 1960, and make it subservient to civilian politicians.

Plan B

Relations with Israel were shaken when Turkey invited Hamas leaders after they won the 2006 Palestinian legislative elections. They worsened after Erdogan criticized Israel’s December 2008 assault on Gaza, which killed more than 1,300 Palestinians, and walked out of a panel discussion with Israeli President Shimon Peres at the World Economic Forum in Davos, Switzerland, a month later.

After Israel’s deadly raid on the aid ship last year, Turkey demanded an apology, compensation for the relatives of people killed aboard the ship and the lifting of Israel’s naval blockade of Gaza. A United Nations report found that while Israel used “excessive and unreasonable” force, it has the right to enforce the embargo.

Turkey also says it will back the demand for statehood that the Palestinian Authority plans to bring to the UN General Assembly this month. “We will do everything in our power to make sure that negotiations in the UN General Assembly are guaranteed,” Erdogan said last week.

The premier called the latest measures against Israel Turkey’s “Plan B” and said more may follow. That probably would involve severing ties completely, said Kemal Kirisci, a professor of international relations at Bogazici University in Istanbul.

“I don’t suppose Plan C means going over there and hugging Israelis,” he said.

--Editors: Ben Holland, Andrew J. Barden

To contact the reporter on this story: Emre Peker in Ankara at epeker2@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.


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