14.12.2023 Author: Alexandr Svaranc

Palestinian military crisis cuts Turkey’s economic prospects

Palestinian military crisis cuts Turkey's economic prospects

The Palestinian-Israeli continued conflict in the Middle East has presented numerous obstacles to the nations’ ability to develop steadily. Regretfully, war invariably results in a large number of deaths and material destruction, as well as internal displacement and refugee movements, an uneven pace of economic growth, and social unrest. This is true for both direct participants (parties) in the conflict and co-participants (partners) of a party.

For obvious reasons, the Israeli army’s savagery against the civilian populace of the Gaza Strip has led to a widespread spike of anti-Israeli sentiment throughout the world, but primarily in the Middle East. Even if the Arab East and the Islamic world as a whole have not yet united or formed a military and political coalition against Israel, the effects of the current crisis are becoming noticeable on the economies of several Middle Eastern nations.

For political and socio-economic reasons, Saudi Arabia, the UAE, Egypt, and Jordan, for instance, are not particularly willing to receive Palestinian refugees from the Gaza Strip. The arguments made are that doing so would have a number of unfavorable effects, such as the exodus of Arabs from Palestine and Israel’s eventual occupation of Gaza; additional strain on the host economy; social protests by the disgruntled populace against the government; and, finally, an internal political crisis.

As a result, the identified group of significant Arab countries has issued broad appeals for a ceasefire, the restoration of calm, and humanitarian aid. However, none of them are prepared to give the same Hamas significant financial or military backing. Furthermore, the Persian Gulf oil-rich Arab monarchies are reluctant to put an economic embargo on Israel and its Western allies because, despite all other Middle Eastern nations’ economic achievements, oil continues to be their primary export good, filling their coffers to the brim and providing a steady stream of revenue.

In one way or another, though, the ongoing conflict has complicated American economic efforts to build trade, communication, and transportation links between Israel and Saudi Arabia. Whether temporarily or permanently, Riyadh was forced to halt any conversations with Tel Aviv under the auspices of Washington.

One could argue that the Arab-Israeli conflict has comparatively less of an effect on the social and economic stability of Iranian autarky. Teheran Times even mentions a possible geo-economic upside for Iran in the Gaza Strip conflict. The interruption of US diplomacy’s attempts to create “bridges” between Riyadh and Tel Aviv is the main concern here.

To put it differently, Iran has a legitimate fear that the Abraham Accords, which were signed in 2020–2021, mediated by the US, between Israel and a number of Arab nations, including the UAE, Bahrain, Morocco, and Sudan, may eventually lose their potential. Furthermore, the Persian Gulf Arab monarchs would prefer not to be part of the Israeli-American military alliance against Iran, considering Tehran’s primary role in assisting the Palestinian liberation movement.

It is evident that the Iranian authorities, despite the influence of the West and Israel, have had to adjust in one way or another to the emergence of an independent national economy throughout the course of the last 44 years following the revolution of February 1979, as a result of the severe economic sanctions imposed against Iran. This is because Iran’s reliance on ideology and a despotic regime has greatly reduced the emergence of corruption, brought the country’s society together around Shiite Islamic values, and made significant progress toward the advancement of domestic education, science, technology, and the economy—particularly in the areas of energy, engineering, the military industry, and agrarian industry.

Even Iran, however, cannot be completely protected from the detrimental effects of the Israeli-Palestinian conflict, such as those on the country’s social structure and political stability at home. It is no secret that information warfare and the destabilization of the internal political situation in Iran through the use of the ethnic map and conjecture on the subjects of human rights and democracy are two of the directions and forms of the hybrid war unleashed by the West and the Zionist regime of Israel against Iran.
As a result, as Iran’s military and political involvement in the conflict with Israel continues to grow, we are likely to see an increase in the degree of US-Israeli provocation of Iran’s internal crisis, combined with precision missile and air strikes against vital civilian and military facilities in Iran.

Another issue is Turkey in this set-up. Despite being an Islamist and a supporter of a politician free of undue Western influence, Erdoğan remains the head of state and is responsible for Turkey’s present and future. On the one hand, Erdoğan wants to bring Turkey into the club of world powers, secure a place among the UN Security Council’s permanent members, and become the leader of the Turkic-Islamic world. However, given Erdoğan’s inconsistent abilities and aims, it appears that accomplishing all of these objectives in the five years he has left in office will be a challenging, if not unattainable goal.

As a contender for the Islamic world’s top job, Erdoğan is compelled to back Hamas in its quest for freedom. Furthermore, the extreme Palestinian movement and the Turkish politician are linked by their same ideological background with the Muslim Brotherhood. Saudi Arabia and Iran are only two of the many contenders for leadership in the controversial Islamic world. However, Turkish history during the Ottoman Empire demonstrates that the Ottomans used force to usurp the Arabs’ position as caliph. Neither the Arabs nor the Persians are likely to support such a return to the past. From a military perspective, modern Turkey is not an Ottoman Empire anymore and is more reliant on NATO.

Israel has been and continues to be a crucial Middle East partner of the United States and the Collective West. Erdoğan is accusing the United States and Europe of aiding Tel Aviv in its discriminatory practices against the Palestinian people, in addition to deploying strong anti-Israeli language. However, Erdoğan’s stance is exactly what keeps Turkey from taking a constructive stance on US military assistance and the execution of agreements for the acquisition of 40 upgraded F-16 Block 70 fighters (as well as the fifth-generation F-35 fighters). This is the reason Germany opposed the sale of Eurofighter Typhoons, built by a consortium of Germany, Britain, Italy, and Spain, to Turkey.

How the effort to replace American F-16s with designated European aircraft turns out is still up in the air. It is known that on November 23, in Ankara, Yaşar Güler, Minister of Defence of Turkey, and Grant Shapps, UK Secretary of State for Defence, met to discuss a number of topics, including the Gaza Strip situation and the sale of Eurofighter Typhoon multirole fighters to Turkey. London cannot resolve this matter on its own without at least the views of the same Germany and Spain. However, Turkey intends to buy 40 of these 5th Gen fighters.

Is Ankara’s attitude toward Tel Aviv indirectly to blame for this kind of military embargo by major NATO members? There’s no denying that the Jewish lobby and the West may respond in this way.

Following the Israeli special forces’ 2010 seizure of the Mavi Marmara, a Turkish passenger vessel, which resulted in the deaths of nine Turkish citizens, Turkey recalled its ambassador and relations with Israel were suspended for a period of twelve years. Erdoğan has been intensifying his criticism of Israel, presumably for local consumption, but he has also attempted to forge closer ties with the Jewish state as part of a neo-Ottomanist strategy based on the idea of “Zero Problems with Neighbors.” Ankara has made good advantage of its partner Azerbaijan’s advanced relations with Israel in this area.

But Turkey, against Israel’s interests, kept Hamas offices on its soil for a long time and refused to remove the group’s supposed terrorists (ironically, Turkey now accuses Sweden of supporting the Kurdish PKK for essentially the same reasons). The latter did little to appease Israel, which does not discount the possibility of actual action against Hamas leaders and officials by the Mossad in Turkey. For this reason, during the early stages of the most recent conflict, Ismail Haniyeh and other Hamas representatives were advised by MIT representatives to leave Turkish territory in order to evade Israeli intelligence’s terrorist strikes. As we can see, Turkey may become involved in the military conflict originating in the Gaza Strip.

Erdoğan’s goal is undoubtedly to end the Israeli-Palestinian problem through diplomatic negotiations in which Turkey will play a significant role. Ankara has been demonstrating active diplomacy in these months, combining its “telephone” and “shuttle” varieties. In their efforts to mediate the captive release, Erdoğan and Fidan have been quite active in their negotiations with the Americans.

But the Turkish president hasn’t been able to reconcile his desire to maintain his international standing as a champion of the Islamic world and the “Palestinian issue” with his desire to mend relations with the Jewish state. Erdoğan escalated his anti-Israel rhetoric as the number of physical casualties and destruction in the Gaza Strip increased. He called the IDF’s actions a “massacre,” “war crimes,” and “genocide” against the Palestinian people. Erdoğan also severed all ties and communication with Israeli Prime Minister Netanyahu, ostensibly in anticipation of his impending resignation.

Turkey’s attempts to reset relations with Israel were demonstrated by Ankara’s moderate tone in the early stages of the conflict and its restrained reaction to Israeli police raids on the Al-Aqsa Mosque in the spring of 2023, according to Soner Çağaptay, director of the Turkish Research Program at the Washington Institute for Near East Policy. But Ankara’s strategy changed in favor of more aggressive relations with Tel Aviv as a result of the Gaza Strip hostilities, as well as Tel Aviv’s and Washington’s cold-heartedness toward Erdoğan’s well-known political initiatives regarding the creation of an independent state of Palestine within the 1967 borders, with East Jerusalem serving as its capital and Turkey’s mandate.

Since October 27, Erdoğan’s anti-Israel diplomacy has taken a more serious turn. For instance, he later organized a “great Palestinian rally” that drew 1.5 million participants; he charged Tel Aviv with genocide; he petitioned the International Criminal Court to convict Prime Minister Benjamin Netanyahu; he denounced the United States for dispatching two aircraft carriers to the conflict’s epicenter, etc.

This change in Recep Erdogan’s stance is justified, according to some pro-Turkish analysts, by the fact that it keeps open the potential of his having direct talks and influencing Hamas leaders on issues like the release of captives. Erdoğan is thus essentially abandoning Turkey’s chances of ties with the US, Europe, and Israel in order to maintain his own legitimacy with Hamas and the Islamic world. However, considering Erdoğan’s background in politics, pragmatic approach to the economy, and diplomatic adaptability, such a portrayal of him is unlikely accurate.

Turkey’s economy has been severely damaged by the crisis, and as a result, the Turkish Central Bank raised interest rates lately to 40%, inflation is still growing to 60%, and economic activity is declining. Although oil transit from Iraq and Azerbaijan to Israel still continues through Turkey, but Ankara and Tel Aviv’s trade and economic ties have fallen to their lowest level. For instance, Alparslan Bayraktar, Minister of Energy and Natural Resources of Turkey, is currently unable to travel to Israel to talk about involvement in the production of gas in the Leviathan gas field. Turkey may not get significant loans in the near future from the US, EU, or international financial institutions (such as the IMF and EBRD).

Recep Tayyip Erdoğan has put forward yet another pretentious, now economic proposal in recent days to organize a sizable international coalition to reconstruct the Gaza Strip after the conflict, but no concrete plans have emerged. What coalition can we talk about when the war is still ongoing and Israel’s Defence Minister Yoav Gallant vows to keep fighting for at least a few more months following a temporary ceasefire, including the exchange of hostages and humanitarian aid? Any conflict, of course, eventually comes to an end. However, what will happen in this situation—will the Palestinians stay in the Gaza Strip, who will decide who controls the enclave, who will provide funding for reconstruction, and would Jewish bankers consent to yet another “Marshall Plan”? Currently, neither Erdoğan nor anyone else is able to respond to these questions.

Furthermore, there is no assurance that the ongoing conflict between Israel and the Palestinians will extend to other Middle Eastern nations. The Turkey’s chances for economic growth are limited by all of this. Plus, in addition to Gaza, Erdoğan should rebuild part of his Turkey that was damaged by a major earthquake.


Aleksandr SVARANTS, Doctor in Political Science, professor, exclusively for the online magazine “New Eastern Outlook”.

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