15 November 2018

Thursday, 06:18

CURRENCY

SHOT IN THE FOOT

The US initiated a process of anti-Turkish sanctions, which has never been practiced between the Allied states

Author:

01.09.2018

The relations between Turkey and the US have reached unprecedented acuteness. The worsening dialogue between the two NATO allies is the result, on the one hand, of Ankara's increasingly independent foreign policy, which is trying to break free from the captivity of pro-Western politics, and the neo-imperial strategy of Washington, which does not tolerate any manifestation of dissent in global politics, even if it comes from its allies tested for decades, on the other hand.

 

Erdogan's course

Recep Tayyip Erdogan has been leading the country since 2002. Under his leadership, Turkey has clearly demonstrated to the West, which does not consider it an equal partner (especially the EU, whose unwillingness to accept the heir of Ottomans into the Union is clear to the Turks as well), that it will not tolerate the role of a geopolitical appendage ever. However, even the most self-sustained state needs to maintain equal and friendly relations with its neighbors such as Russia and Iran, which have a special place and do not want to bow before the West either. In this context, maintaining a dialogue with Moscow, which is promoting integration in the post-Soviet space, is the priority is for Ankara. Turkic states, which gained state independence after the collapse of the Soviet Union, play an instrumental role in this process.

The expanding strategic partnership and equal dialogue between the two Eurasian powers causes extreme irritation in the West, especially in the US, which has long imposed sanctions on Moscow.

Following the implementation of the Turkish Stream gas project and the construction of the Akkuyu nuclear power together with Russia, Ankara agreed to a deal with Moscow, which concerns an area that the US considers untouchable for its allies; that is, military-technical cooperation manifested by the purchase of Russian S-400 Triumph air defense missile systems by Turkey. Washington repeatedly expressed its discontent with the Russian-Turkish deal and finally, used its favourite trick on Ankara, the sanctions. In particular, banning the fifth-generation F-35 fighters previously approved by the US Senate.

"We are against the possible purchase of S-400 missiles by our partners and allies around the world. We made it clear that it could provoke sanctions around the world," the US State Department spokesman Heather Nauert said.

Washington's implicit support for Turkish political forces opposing President Erdogan, including supporters of the Pennsylvania-based Muslim preacher Fethullah Gülen, accused of the coup attempt in Turkey back in July 2016, further pushed the AK Parti government to search for new geopolitical allies. Hence the growing shift of Turkey towards organizations such as BRICS (Brazil, Russia, India, China, South Africa) and the Shanghai Cooperation Organization (SCO), of which Russia is an indispensable participant.

In this context, it is remarkable that Ankara has considerably changed its position on the Syrian conflict. If in the first years of the conflict Erdogan's position almost completely matched that of the West, later he, in spite of the still remaining support for the withdrawal of the current Syrian leadership from power, began advocating the cessation of the war on categorical conditions for respecting the territorial integrity of Syria. The issue of the change of power in the neighboring Arab country has clearly moved to the second position in the agenda of the Turkish president. In many respects, this is a result of the growing pressure of the US and EU personally on President Erdogan.

 

Financial warfare

The latest developments around the American pastor accused by Ankara of complicity in the attempted military coup two years ago, only increase fears that Erdogan, as a principal guardian of the independent course of Turkey, can expect the fate of the tyrannical Arab leaders.

The US President Donald Trump openly stated that the Turkish authorities make a big mistake not willing to release Brunson and initiated the process of anti-Turkish sanctions, unprecedented in the practice of the allied states. It was especially painful for Turkey when the US increased import duties on Turkish steel and aluminum, which led to the collapse of the Turkish lira. The US President's Assistant for National Security, John Bolton stated that the financial crisis in Turkey will end immediately after the release of the American pastor.

But not so fast. Turkey traditionally does not accept the language of force, hence it made it clear that it was not going to obey the American ultimatum on the release of Pastor Brunson. "Turkey is a legal state, and the case of Pastor Andrew Brunson is a legal process. At every opportunity, the US authorities make recommendations to Turkey and a number of other countries on the independence of justice and even reproach them, but at the same time, they themselves voice unjustified comments and demands on the ongoing judicial process, which leads to a number of questions," the Press Secretary of the Turkish president, Ibrahim Kalin said.

As for US economic sanctions, President Erdogan called them a "financial war" against Turkey. "Anyone can see that the events on the foreign exchange market have no financial basis; this is an attack on our country... On the one hand, you are a strategic ally, but on the other - you shoot us in the foot. Is something acceptable like this?" asked the Turkish leader from his American counterpart.

Undoubtedly, the fall of the Turkish lira, as well as the unenviable position of the Russian ruble, convincingly prove the power of the American economy, which even by the threat of severe sanctions can shake the economy of unwanted states. But how effective is American policy in the long term?

Obviously, the pressure on Turkey by the Western powers only contributes to its further separation from the Euro-Atlantic system. In particular, concerning the US, this can undermine the domination of the dollar on a global scale. "We are preparing to switch to national currencies in trade with our major trade partners, such as China, Russia, Iran," Erdogan warned.

Russian Foreign Minister Sergey Lavrov made a remarkable statement at the meeting with his Turkish counterpart Mevlut Cavusoglu: "I am sure that such a gross abuse of the role of the US dollar as a global reserve currency will undermine this role. In an attempt to ensure their own security, an increasing number of states, including those that are not affected by American sanctions, will gradually reduce the use of the dollar and rely on more reliable partners with whom they can agree on the use of their national currencies."

Incidentally, in recent months, Russia and Turkey have sharply reduced the amount of their reserves in the debt bonds of the US Treasury. Their rapprochement in the economic sphere with China, which also seems interested in undermining the leading position of the dollar in the global financial system, is explicit. Beijing needs partners to strengthen the international status of its currency, the yuan, the second currency in global operations.

According to Yeni Akit, "the trade wars initiated by the US to reduce the foreign trade deficit continue to shake the world. The primary targets of the US are China, Russia, Iran and Turkey. Jointly, these countries accelerate production and unite forces in trade relations in an effort to stop Trump's delirious actions."

This statement manifests the Eurasian path of Turkey. Apparently, Ankara's choice will become one of the most significant features of the fundamental perturbation of the world order in the 21st century.



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