Playing both sides has prevented Turkey from charting independent economic strategy

Ensuring Socio-economic Justice

Crescent International

Ramadan 28, 1441 2020-05-21

Daily News Analysis

by Crescent International

As the economic burden of the coronavirus continues to weigh heavily on most countries, Turkey has had to resort to Qatar for $10 billion in foreign currency swap deal in order to arrest the rapid depletion of its foreign currency reserves.

Cevdet Yilmaz, the ruling AK Party's deputy chairman for foreign affairs, stated last week that Turkey is seeking currency swap agreements with several countries.

Yilmaz was quoted by Qatari government channel Al Jazeera, as saying that Turkey is in "negotiations with different central banks for swap opportunities… it is not only the US, there are also other countries."

Reuters reported that “Turkey has moved on from its preferred source of dollar funding, the U.S. Federal Reserve, which appears unlikely to extend a swap line based on comments from current and former Fed officials.”

Speaking to Washington based al-monitor, Selva Demiralp, a professor of economics at Koc University and director of the Koc University-TUSIAD Economic Research Forum, stated that “this [situation] is more challenging in emerging markets because the local money that is injected into the system may feed the dollarization cycle.”

Apart from the economic aspect, Ankara’s appeal to Qatar and Doha’s positive response is a political message to the Saudi regime.

Both Turkey and Qatar back the Muslim Brotherhood trend within the global Islamic movement.

Riyadh sees the Ankara-Doha cooperation as an existential threat to its influence over the Muslim masses through its network of Salafi palace scholars.

Thus, the Saudis will try to utilize their economic proxies in Western countries to pressure Qatar over its assistance to Turkey.

Ankara is the only real force to undercut Riyadh’s leadership role among the Sunni Muslim masses.

The economic landscape of the world is being reshaped by the coronavirus pandemic and will look very different going forward.

Qatar’s heavy dependence on the US established economic set-up exposes Turkey not only to fallacies of the conventional capitalist economics, but also to political pressures of the US.

Since President Recep Tayip Erdogan came to power in Turkey almost twenty years ago, the AKP government has constantly tried to play both sides of the field, be part of NATO’s political and economic architecture and at the same time be the vanguard of Islamic revival in the Muslim world.

This double game prevented Turkey from forming an economic strategy outside of NATO’s direct influence.

For short term gains, the AKP government has compromised Turkey’s long-term economic gains.

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