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Analysis

As Russian missiles arrive in Turkey, Erdogan crosses a Rubicon

Turkish President Recep Tayyip Erdogan, right, and Russian President Vladimir Putin shake hands in Istanbul on Nov. 19, 2018

KOSTAS TSIRONIS/BLOOMBERG

By MARC CHAMPION AND SELCAN HACAOGLU | Bloomberg | Published: July 13, 2019

By taking delivery of Russian air-defense systems, Turkey's President Recep Tayyip Erdogan has crossed a second political Rubicon in as many weeks at the risk of lasting damage to his country's economy and relationship with the West.

That's partly by design: Erdogan has long sought to transform the Westward-facing Turkish republic that emerged from the former Ottoman Empire. His aim is to reshape Turkey as a distinctively Muslim power, less dependent on U.S. weapons systems and security guarantees, and no longer in thrall to Western credit markets and values.

Buying the S-400s, as one Turkish Cabinet minister has put it, amounts to a declaration of independence. Turkey sees the balance of power shifting away from Europe and the U.S. and envisions itself as a more independent actor in a changing global order, according to two senior Turkish officials who asked not to be named discussing government strategy.

"Turkey has decided the U.S. is no longer an indispensable partner,'' said Soli Ozel, professor of international relations at Istanbul's Kadir Has University, describing the Russian missile purchase as a strategic break. "Don't make the mistake of thinking this is just about Erdogan.''

Turkey's government expects President Donald Trump to block or dilute any harsh U.S. sanctions response to the S-400 purchase, according to the officials, who are involved in planning defense and foreign policy. They also said that Turkey -- a North Atlantic Treaty Organization member -- was too vital to U.S. security interests, and too important to Europe as a potential gateway to millions of refugees, for the West to risk forcing a complete break.

But the Pentagon has long warned it would cut off Turkey from purchasing -- and helping to build -- Lockheed Martin's F-35 fighter jet if it obtained the Russian system that the U.S. says was designed to shoot down those planes.

"We are aware of Turkey taking delivery of the S-400," Acting Defense Secretary Mark Esper told reporters Friday at the Pentagon. "Our position regarding the F-35 has not changed and I will speak with my Turkish counterpart Minister Akar this afternoon. So there will be more to follow after that conversation."

The decisions of recent days still represent a significant gamble. In a further declaration of independence -- this time from Western economic orthodoxy and the tyranny of global financial markets -- Erdogan fired Turkey's central bank governor on July 6. On Wednesday, he said in a speech that the bank was to blame for the economy's weakness, because it had failed to follow his instructions on interest rates. Erdogan believes, contrary to central bankers around the world, that raising interest rates causes inflation.

The combination of U.S. sanctions and lost market confidence in the independence of Turkey's central bank could severely test whether a mid-size military power, with a population of 82 million and few natural resources, can -- like China, India and Russia -- succeed alone in an emerging multipolar world.

The $85 billion emerging markets fund, Ashmore Group Plc, warned this month that Turkey was at risk of a Latin America-style meltdown, in which doubling down on policy mistakes leads to capital controls, nationalizations and penury. Erdogan said in his Wednesday speech that he was shutting the door to the International Monetary Fund.

An ailing economy has begun to eat away at support for the Turkish president, who has ruled since 2003. After his party lost municipal elections in major cities in March, Erdogan forced a re-vote in Istanbul only to see his candidate crushed by a much wider margin. In a sign of concerns even within the ruling party, former deputy prime minister Ali Babacan resigned his membership on July 8, saying the country needed "a brand new vision for its future."

The S-400 is part of Erdogan's vision. Also known within NATO as the SA-21 Growler, the system has advanced radars. Chief among U.S. concerns is that the routine use of S-400s to track the F-35 Lightning II Joint Strike Fighter could allow Moscow to gather data helpful to shooting down the stealth aircraft.

Turkey has offered to shut down the S-400 system when F-35s take off, to mitigate risks, but has yet to persuade the Pentagon.

Congress and the State Department have also threatened economic sanctions over the S-400, with a likely focus on Turkey's wider defense industry. In 2018, targeted penalties over the detention of a U.S. pastor caused a run on the Turkish lira.

Sanctions would risk setting in motion their own set of counter-responses in Turkey, where many government officials and supporters have long made clear that they believe the U.S. either was involved in or endorsed a failed 2016 military coup against Erdogan. The Russian delivery came days before the coup attempt's July 15 anniversary.

"My fear is that if the U.S.-Turkish relationship were to crash over this, it would take a long time -- if ever -- to repair," said Soner Cagaptay, Turkey program director at The Washington Institute for Near East Policy, and author of a new book on Turkey's ambitions as a regional power, "Erdogan's Empire: Turkey and the Politics of the Middle East.'' He described the state of relations as the worst since 1974, when the U.S. imposed an arms embargo in response to Turkey's invasion of Cyprus.

Still, the short-lived dip in the lira after Erdogan's firing of central bank governor Murat Cetinkaya suggests investors agree that U.S. responses to the S-400 purchase will be muted. And a sharp fall in Turkey's current account deficit has reduced the economy's exposure to global financial markets.

Given that Turkey remains fully committed to NATO membership, the country is re-balancing its security relationships rather than breaking with the West, according to Sinan Ulgen, a former Turkish diplomat and now Chairman of Edam, the Center for Economics and Foreign Policy Studies, in Istanbul.

That's still a huge shift, made possible only by a deep erosion of trust over perceived U.S. attitudes toward the coup attempt, and to Turkish interests in Syria. Without that loss of trust, he said, Turkey would never have resorted to buying strategic weapons from Russia.

Turkish officials have said the S-400s will be deployed in the capital Ankara, as well as in Istanbul, where they can defend the Bosporus and Dardanelles straits that link the Mediterranean to the Black Sea. The U.S. still bases nuclear warheads and combat aircraft at the Incirlik airbase in southern Turkey, close to the border with Syria.

Turkey bowed to U.S. pressure in late 2015, when it abandoned negotiations to buy a Chinese anti-aircraft missile system. But that was before the attempted coup, when rebel F-16s bombed Turkey's parliament, as well as the vicinity around Erdogan's palace in Ankara, while aircraft loyal to the plotters tracked his plane to Istanbul. By the time Russia offered S-400s, Turkish attitudes to the U.S. had changed dramatically: Defense spending rose sharply as the government accelerated efforts to build up its domestic arms industry.

At the least, the delivery of Russian missiles is likely to throw Turkey's participation in the joint strike fighter program into crisis. Turkey plans to buy 116 F-35 jets and has already paid more than $1.4 billion toward them. If excluded, Turkey would look for alternatives, including Russian jets, while trying to develop its own warplanes and missile systems, according to the Turkish officials. The country has already begun to stockpile weapons parts in anticipation of sanctions that could affect Turkey's fleet of F-16s.

Blocking delivery of the U.S. designed and partly Turkish-built jets would, according to Erdogan, amount to "usurpation."

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Bloomberg's Travis Tritten contributed.
 

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