The West Went Turkey on Russia Giving Turkey a Boon of a Lifetime

Two and a half years ago, Vladimir Putin launched a special military operation in Ukraine, a.k.a. a war everywhere bar Russia.  On the surface, this fateful decision made everybody worse off.

Moscow’s failed gambit, on the back of a global pandemic, catapulted prices, exacerbating the cost-of-living crisis around the world.  Since 2020 inflation has spiked in 179 out of 194 countries.  Now that inflationary pressures are finally, yet unevenly receding, most central banks are still reluctant to shelve hawkish monetary policy that retards growth and precipitates a recession.

On the ground, Ukraine, with roughly 20% of the territory under occupation, is attempting a revanche.  Russia is the most sanctioned pariah state in the world.  Germany is in a recession. The UK is tepidly recovering from one.  Meanwhile, international sanctions constrict the flows of goods, services, and people.  Taken together, the world economy is hamstrung, making everyone a loser.

Yet, one country, heeding the advice of Winston Churchill “Never let a good crisis go to waste”, took advantage of this predicament.  While still experiencing the same seismic shocks, this state has masterfully navigated the geopolitical tsunami, unleashed since February 2022.  The unlikely maverick that performed this act of aikido is Turkey.

At first glance, with a depreciating currency and inflation above 60%, Turkey does not seem to be an obvious beneficiary from the internecine Russian-Ukrainian conflagration.  However, right from the start Ankara proved to be an indispensable partner to all sides in this geopolitical turmoil and in return received multiple benefits.  The country was one of the first to supply Kyiv with drones which delayed the advancement of Russian troops.  Faced with the perennial Kurdish insurgency at home, Turkey has remained committed to the territorial integrity of Ukraine.

For Ankara, heroic resistance of Ukrainian defenders armed with Bayraktar TB2 and other Made in Turkey hardware provided the nascent defense industry with international publicity.  A 24/7 coverage from the frontlines lifted the indigenous military-industrial complex from obscurity.  As a result, defense exports increased by 37%, reaching $4.4 billion in 2022 and $5.5 billion (+25%) by the end of 2023, making Turkey the 11^th largest arm exporter in the world with a market share of 1.6%.

At the same time, the country defied Western pressure to make Moscow an international outcast.  Mostly undeterred by secondary sanctions, Turkey continues to reap war-fueled profits from surging trade with the import-starved Kremlin.  In 2022 Turkish exports to Russia increased by 60% to $9.34 billion from the year earlier.  In 2023 Russia was among the top three export destinations for Turkish manufacturers.

Although trade between the two countries is tempering from the unprecedented heights of 2022, not without US clampdown, this trend may be indicative of a reversion to the mean.  Trade with Russia is requisite to rectify Turkey’s economic woes.

Previously, Ankara had also shrugged off US criticism over purchasing Russian-made S-400 air-defense systems.  Construction of the first nuclear plant, built by Rosatom, continues as planned.  Moreover, Erdoğan and Putin are already in talks over a second one.  A partial Western energy embargo also rendered Turkey one the largest consumers of discounted Russian commodities.

In parallel, Turkey is securing energy concessions from weakened Moscow.  One of such is an agreement to pay for a quarter of Russian gas in rubles.  Another is a deferment of a $600 million gas payment to 2024.  Both favors save Ankara’s scarce foreign exchange reserves and prop up the economy.

Moreover, a reduction in EU gas imports from Russia from 45% in 2021 to 15% in 2023 is helping materialize Turkey’s decades-long ambition to become a regional gas hub.  The eruption of war in Ukraine actually expedited these aspirations.  On the supply side, the Kremlin, in the aftermath of Nord Stream sabotage, granted a tentative blessing to divert more deliveries via Turkey.  On the demand side, in 2022 Brussels and Baku, a de facto protégé of Ankara, pledged to double gas flows via Turkey by 2027.

These structural changes may have a net effect of transforming Turkey from a primary consumer of natural gas into a regional distributor.  Gas received from Russia, which is increasingly a taboo in the EU, may be strictly used domestically, while diversified imports from other sources can be redirected abroad.

In addition, Turkey scored a number of geopolitical victories.  For example, Ankara had brokered the landmark Black Sea Grain Initiative, which for a while helped Ukraine deliver sea-borne exports.  Although the agreement eventually fell apart, President Erdoğan personally engages with Putin to revive this maritime lifeline for Ukraine.

All these moves are part and parcel of Ak Saray’s postwar geostrategy.  Kyiv, which is on an expedited path to the EU, will be an important partner of Turkey inside the largest single market area in the world.  Moreover, the Turkish construction sector will certainly secure a large slice of the Ukrainian “Marshall Plan”, estimated at $411 billion, once peace prevails.  All is due to camaraderie forged during the incessant Russian shelling.

Ankara is also vital to Washington and Brussels.  Having gone cold Turkey on Russia, Western capitals left Ankara the only major NATO member with direct links to Moscow.  Turkish refusal to isolate Russia also sends a crucial signal that Ankara is not just a Western puppet.  This may explain the half-blind eye of Washington on Turkish noncompliance with most Western resolutions on Russia.  Thus, while almost all NATO allies distanced themselves from Russia, Ankara effectively abstained from blanket isolation of Moscow.

Further, in the midst of the Russian invasion, Ankara leveraged its NATO membership to break an impasse with the EU.  Having unblocked Sweden’s ascension into the military alliance, Ankara revitalized an EU membership dialogue.

Finally, the Russian-Ukrainian inferno emboldened Turkey in other regions.  For instance, under the auspices of Turks, Baku finally regained full control of Nagorno-Karabakh, consolidating Turkish influence in South Caucasus with Moscow’s acquiescence.

Thus, while most countries are still minimizing collateral damage from the Russia-Ukrainian collision, Turkey has been busy maximizing opportunities.