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Turkiye in July 2023

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Turkiye in July 2023

July 3,2023

Turkish Foreign Minister and Saudi Counterpart Discuss Burning of Quran in Sweden (Anadolu Agency). Turkish Foreign Minister Hakan Fidan and his Saudi counterpart, Faisal bin Farhan Al Saud, had a phone conversation discussing various issues, including the recent burning of the Quran in Sweden. They also talked about the preparations for an extraordinary session of the Organization of Islamic Cooperation’s executive committee, which aims to address the consequences of the desecration…The burning of the Quran in front of a Stockholm mosque during the celebration of Eid al-Adha has sparked widespread outrage and condemnation in the Islamic world.

July 4, 2023

  1. Turkish Intelligence Uncovers Clandestine Mossad Network in Turkiye (Mehr News). Turkiye’s National Intelligence Organization MIT has uncovered a group of 56 operatives working for Mossad, Israel’s intelligence agency spying on non-Turkish nationals in Turkiye….They operated internationally and were linked to Mossad agents based in Tel Aviv. The spies used fake websites and phone lines and received cyber training from a spy software firm in Tel Aviv. Mossad sent its spies to gather intelligence in Lebanon, Syria, and other countries. Turkiye has previously uncovered espionage networks working for Russia and thwarted an Iranian plot to assassinate Israeli citizens.
  2. Türkiye Rescues 84 Migrants Pushed Back by Greece (TRT World). The Turkish Coast Guard’s Northern Aegean Group Command conducted the rescue operation off western Canakkale province. The migrants, mainly from Afghanistan, were transferred to the Ayvacik Foreigners’ Removal Center. Human rights groups and media have highlighted illegal pushbacks and human rights violations by Greek authorities. Turkiye and global rights groups have criticized Greece’s actions for endangering the lives of vulnerable migrants.

July 5, 2023

  1. Greece is Ready to Talk with Türkiye to Resolve the Sea Borders Dispute (Daily Sabah). Greece’s newly appointed Foreign Minister, Giorgos Gerapetritis, has announced that Athens is ready to talk with Turkiye to resolve the longstanding dispute over maritime borders. Greece aims to reach an agreement on delineating exclusive economic rights, including natural gas exploration, taking advantage of the current positive climate. The dispute revolves around contested areas with potential gas reserves in the Eastern Mediterranean. Another critical issue is the extent of the continental shelf and Greek sovereign territory near Turkiye’s coastline. Gerapetritis stated that Greece is willing to pursue rapprochement if Turkiye shares the same intention. Both countries have expressed hope for improved relations following recent positive developments.
  2. Türkiye and Egypt Raise Diplomatic Ties to the Level of Embassies (Anadolu Agency). Turkiye and Egypt have elevated their diplomatic relations to the level of embassies. The two countries have nominated ambassadors to each other’s capitals, indicating a step towards normalization and developing bilateral relations. Previously, diplomatic relations had been at the level of charges d’affaires since 2013.

July 6, 2023

  1. Ahead of Vilnius Summit, Turkiye Refuses to Bow to Time Pressure Regarding Sweden’s NATO Membership (Al Sharq Al Awsat). Turkiye preempted the high-level meeting of its foreign ministers, Finland and Sweden, which will be held in Brussels on Thursday, with the participation of the heads of intelligence services and national security advisers in the three countries to discuss Stockholm’s accession to the North Atlantic Treaty Organization (NATO), stressing that it will not be subject to time pressure because of the NATO summit that will be held in Lithuania on the 11th and 12th of July.

July 7, 2023

  1. Zelensky to Meet Erdoğan in Istanbul (Hurriyet Daily News). Ukrainian President Volodymyr Zelensky is set to meet with Turkish President Recep Tayyip Erdoğan in Istanbul to discuss the ongoing Russian occupation of Ukraine and its implications just before the NATO summit. Zelensky will seek Turkiye’s support in obtaining security assurances from NATO, pushing for heavier weaponry and jet fighters to counter Russia, as well as address the ongoing grain initiative and Türkiye’s efforts to extend it through talks with Russia, Ukraine, and the United Nations. 
  2. Ankara and Athens to Resume Confidence-Building Talks (Hurriyet Daily News). Ankara and Athens have agreed to resume confidence-building talks, according to a phone call between Defense Minister Yaşar Güler and his Greek counterpart, Nikos Dendias. The ministers agreed to meet during the upcoming NATO summit in Vilnius to discuss the matter…Recent gestures, including mutual assistance after natural disasters and a tragic train crash, improved relations. In another development, the Greek police cleared the Lavrion Camp near Athens, which had been a source of contention as it was known to house members of the PKK terrorist organization.

July 10, 2023

  1. Erdoğan Hosts Zelensky, Says Ukraine Deserves Membership in NATO (Hurriyet Daily News). Erdoğan stated that Ukraine should join the alliance once the war with Russia concludes. At an upcoming meeting, NATO leaders are expected to reaffirm Ukraine’s future membership. Erdoğan also mentioned that Turkiye is working to extend a grain deal with Ukraine, facilitating the shipment of millions of tons of Ukrainian grain through the Black Sea. He mentioned that Russian President Vladimir Putin is expected to visit Turkiye in August, where they may discuss the renewal of the grain deal and a possible prisoner swap. 
  2. Greece Ups Arms Purchase While Seeking Better Ties with Türkiye (Daily Sabah). Greek Prime Minister Kyriakos Mitsotakis plans to increase Greece’s arms purchases while seeking to improve ties with Turkiye. Greece is expected to spend an additional 11.5 billion euros on arms over the next four years, including fighter jets, frigates, and other military equipment. The aim is to enhance Greece’s military capabilities, and these procurement plans come at a time when both countries are looking for ways to restore their strained relations. Greece is also seeking improved neighborly relations, working towards talks and collaboration on a positive agenda with Turkiye. Prime Minister Mitsotakis is expected to meet President Recep Tayyip Erdoğan at the upcoming NATO summit in Lithuania.
  3. Ukrainian Azov Commanders Return Home From Türkiye After Prisoner Exchange  (Daily Sabah). Ukrainian President Volodymyr Zelensky announced that the commanders of five Azov Battalions in Turkiye have returned to Ukraine for security reasons. These commanders were included in a prisoner exchange between Russia and Ukraine. Zelensky expressed gratitude for Turkiye’s constant support for Ukraine’s sovereignty and territorial integrity.

July 11, 2023

  1. Turkish Police Arrest 22 ISIS Terrorists in Ankara (Anadolu Agency). Turkish police have arrested 22 foreign nationals associated with the ISIS terrorist organization in an anti-terror operation in Ankara. The operation targeted suspects believed to have been in contact with ISIS members in conflict zones and involved in activities for the organization in recent years. The arrests were made across Ankara, and the police sought additional suspects. Turkey has declared ISIS a terrorist organization and has faced multiple attacks by the group, leading to the launch of domestic and international anti-terror operations.
  2. Erdogan and Biden to Hold One-on-One Meeting at NATO Vilnius Summit (TRT World). Turkish President Recep Tayyip Erdogan and US President Joe Biden have agreed to hold a one-on-one meeting at an upcoming NATO summit in Vilnius, Lithuania. During a phone call, they discussed various topics, including Sweden’s bid to join NATO and the sale of F-16 jets to Turkey. Erdogan expressed concerns about security and terrorism-related issues regarding Sweden’s membership bid but acknowledged the correct steps taken by Stockholm. They also discussed Turkey’s EU accession process and Ukraine’s position vis-a-vis NATO, with Erdogan emphasizing Turkey’s desire for strong support from leading EU countries at the Vilnius summit.
  3. Erdoğan-Putin Talks Seen as Only Hope for Grain Deal Extension (Daily Sabah). Negotiations between Turkish President Recep Tayyip Erdoğan and Russian President Vladimir Putin are seen as the only hope to extend the Black Sea grain deal, which is set to expire next week. The deal, brokered by the UN and Turkey, aimed to allow Ukrainian grain to be safely exported from Black Sea ports amid the Russian invasion. However, Russia has threatened to quit the deal due to unmet demands, and there is little optimism for an extension. Erdoğan plans to discuss the issue with Putin during their meeting in Turkey.
  4. NATO Chief Says He Supports Türkiye’s EU Membership Bid (Anadolu Agency). NATO Secretary General Jens Stoltenberg expressed his support for Turkey’s ambition to become a member of the European Union during a press conference in Vilnius, where the NATO summit is taking place. This follows Turkish President Erdogan’s statement that he would urge the NATO summit to pave the way for Turkey’s EU membership. Stoltenberg also mentioned that a deal on Sweden’s NATO bid could still be reached during the summit. Turkey has approved Finland’s NATO membership but is waiting for Sweden to fulfill its commitments before approving.
  5. Erdogan links Sweden’s NATO Membership to Turkey’s EU Accession (Reuters). Turkish President Erdogan has called for the European Union (EU) to open the way for Turkey’s accession to the bloc before Turkey approves Sweden’s bid to join NATO. Erdogan linked Ankara’s approval of Sweden’s NATO bid to Turkey finally joining the EU. However, the European Commission stated that NATO and EU enlargement are separate processes, and the spokesperson emphasized that the accession process for each candidate country is based on its merits…Erdogan also mentioned that ending the war between Ukraine and Russia would ease Kyiv’s NATO membership process.

July 12, 2023

  1. Turkiye Greenlights Sweden’s NATO Bid, and Sweden Will Actively Support Türkiye’s EU Bid (Hurriyet Daily News). A joint statement issued by Türkiye, Sweden, and NATO stipulates the Nordic state’s active support towards reviving the former’s stalled accession process into the European Union in return for getting the green light to join the security alliance. A joint statement outlines that Sweden and Türkiye have worked closely together to address Türkiye’s legitimate security concerns since the last NATO Summit in Madrid in 2022. They agreed to continue their anti-terror cooperation through a new bilateral mechanism under the Security Compact. After securing necessary pledges in the fight against terror and its bid to join the EU, Türkiye greenlighted Sweden’s accession to NATO.
  2. US to Advance Turkey’s F-16 Sales (Al Monitor). Mere hours after President Recep Tayyip Erdogan greenlighted Sweden’s membership to NATO ahead of a critical summit, Washington signaled it would sell the F-16 fighter jets to Turkey in consultation with Congress. Turkey wants to buy $6 billion worth of F-16 fighters and nearly 80 modernization kits for its existing warplanes. The Joe Biden administration gave firm backing for the F-16 deal. National security adviser Jake Sullivan said Tuesday before the NATO meeting that Biden put “no caveats or conditions” on the transfer and “intends to move forward with that transfer in consultation with Congress.”

July 13, 2023

  1. Türkiye Starting a New Process with the US (TRT World). The NATO summit in Vilnius, Lithuania, marked a new beginning in Turkiye-US ties. Turkish President Recep Tayyip Erdogan’s meetings with US President Joe Biden were seen as the start of a “new process” between the two countries. The summit also saw progress in NATO’s strategic goal of enlargement, with Turkiye’s approval of Sweden’s accession. While Ukraine’s future in NATO was acknowledged, the lack of a definite timetable for its membership invitation drew criticism from Ukrainian President Volodymyr Zelenskyy. The summit outcomes were seen as a setback for Russia, indicating the failure of its attempts to thwart NATO expansion.
  2. Turkish President Plans Upcoming Visit to Saudi to Enhance Ties (Yeni Safak). Saudi Arabia’s Minister for Municipal Affairs and Housing, Majed Al Hogail, stated that Turkish President Recep Tayyip Erdogan’s upcoming visit to Saudi Arabia will strengthen bilateral relations and increase trade between the two countries. Saudi Arabia aims to benefit from Turkish firms in contracting, housing development, infrastructure, and engineering under its Vision 2030 plan to diversify the economy. The two countries have set a bilateral trade target of $10 billion in the short term, and $30 billion in the long term, and Turkish exporters and contractors have been successful in the Saudi market. Discussions for a free trade agreement between Turkiye and the Gulf Cooperation Council are also underway.
  3. UAE Could Invest up to $30 Billion in Türkiye (Daily Sabah). The United Arab Emirates (UAE) is considering investments of up to $30 billion in various sectors in Turkiye, according to Turkiye’s Trade Minister Ömer Bolat. These investments could be made in infrastructure, logistics, food, hospital management, and other areas. The announcement comes ahead of President Recep Tayyip Erdoğan’s scheduled visit to Saudi Arabia, Qatar, and the UAE, where Turkish officials expect to attract investments from Gulf states. The investments are seen as a sign of confidence in Turkiye’s economy and can potentially strengthen bilateral ties.

July 14, 2023

  1. Türkiye More Hopeful Than Ever on US F-16 Sales (Daily Sabah). President Recep Tayyip Erdoğan expressed hope for favorable results in the US F-16 fighter jet sale to Turkiye following discussions with President Joe Biden. Erdoğan expects a clear stance from all NATO allies on terrorism and against distorted relations with the PYD and YPG. He also expects Sweden to take concrete steps against terrorism in return for Ankara ratifying Stockholm’s NATO accession. The Turkish Parliament has the final say on the Swedish NATO bid.
  2. Türkiye Rejects UNSC’s Violation of Turkish Cypriots’ Sovereign Equality (TRT World). Türkiye has criticized the UN Security Council’s statement on Cyprus, claiming it violates Turkish Cypriots’ sovereign equality. The Turkish Foreign Ministry criticized the UN Security Council’s stance on the island, stating that it is distant from reality and disregards the Turkish Cypriots’ sovereignty.

July 17,2023

Canada Reportedly Unfreezes Talks with Türkiye on Arms Export Controls (TRT World). Canada has reportedly reopened talks with Turkiye regarding lifting export controls on drone parts, including optical equipment. The discussions were unfrozen after Turkiye approved Sweden to join NATO. Canada suspended the export of particular drone technology to Turkiye in 2020 due to concerns about its use in the conflict between Azerbaijan and Armenia.

Türkiye and Qatar Launch Joint Investment for Chip Production (Yeni Şafak). Turkiye and Qatar have announced a joint investment for semiconductor production in Turkiye. Qatar has decided to move its investment for producing 65-nanometer chips to Turkiye, with the projected investment worth over $60 million. Turkiye aims to attract more global investors for large-scale investments in the semiconductor industry and is also focusing on accelerating investments in new-generation, hybrid, and electric vehicles.

Istanbul Hosts ‘Business World Summit of the Century’ to Strengthen Türkiye-Azerbaijan Trade Ties (Yeni Şafak). The “Business World Summit of the Century” recently took place in Istanbul, aiming to strengthen trade ties between Türkiye and Azerbaijan. The summit celebrated the 100th birth anniversary of former Azerbaijani President Heydar Aliyev and brought together notable figures from both countries business communities. Panel discussions and networking opportunities were held to foster collaboration and enhance bilateral trade. The Albayrak Group was honored for its contributions to the Türkiye-Azerbaijan partnership, symbolizing the strong economic ties between the nations.

July 18, 2023

  1.  Zelensky: Grain Deal Can Persist Without Russia’s Involvement (Al Hadath). Ukrainian President, Volodymyr Zelensky, proactively reached out to his Turkish counterpart, Recep Tayyip Erdogan, and the United Nations Secretary-General, Antonio Guterres, urging them to continue working on the grain export agreement across the Black Sea. Meanwhile, Erdogan expressed his belief that President Putin is amenable to the agreement’s continuation.
  2.  Erdogan & MBS Discuss Joint Partnerships in Jeddah (Al Sharq Al Awsat). During an official session of talks and a bilateral meeting, the Saudi Crown Prince and the Turkish President, Recep Tayyip Erdogan, explored avenues to enhance bilateral relations between their respective nations. They sought to promote collaborative efforts in various domains and delved into discussions on regional and international developments, as well as the efforts undertaken to address them.
  3. Turkiye Open to Talks with Assad, Firmly Rejects Departing Syria Despite YPG Presence (Daily Sabah). Turkish President Recep Tayyip Erdogan reiterated Turkiye’s readiness to engage in dialogue and normalize relations with the Assad regime in Syria. However, President Erdogan firmly rejected the regime’s demand for Turkiye to withdraw from northern Syria, emphasizing his country’s commitment to addressing the YPG presence in the region.

July 19, 2023

  1. European Parliament Rebuffs Turkiye’s NATO-EU Trade-Off (Al Monitor). Turkish President Recep Tayyip Erdogan’s endeavor to link Sweden’s NATO bid to Turkey’s European Union membership faced a firm rejection from the European Parliament (EP) on Tuesday. In a newly released report, the EP underlined that these two distinct processes should remain entirely independent. The press release from the EP Foreign Affairs Committee emphasized the clear stance that the NATO accession process of one country cannot be subject to any linkage with another country’s EU accession aspirations.
  2. Türkiye, Qatar Boost Bilateral Ties (Anadolu Agency). Strengthening their diplomatic relationship, the foreign ministers of Turkiye and Qatar signed a significant declaration during Turkish President Recep Tayyip Erdogan’s visit to Qatar, commemorating fifty years since establishing their diplomatic ties. President Erdogan’s visit to the Qatari capital, Doha, featured a special gesture, as he gifted the new Turkish Gemlik blue Togg to his Qatari counterpart Al Thani.
  3. Turkish Drones Sale Deal to Saudi Arabia (Hurriyet Daily News). During Turkish President Recep Tayyip Erdogan’s official visit to Saudi Arabia, a significant agreement was struck by Turkish company Baykar to supply its Bayraktar AKINCI drones to the Kingdom. The deal encompasses not only the provision of cutting-edge drones but also includes comprehensive training, technical support, and logistics services for Saudi Arabia.

July 20, 2023

  1.  Turkiye’s Gulf Tour Yields $50 Billion in Trade Deals with UAE and Strengthens Regional Ties (Al Monitor). The accord is set to diversify the UAE-Turkey Comprehensive Economic Partnership Agreement, fostering cooperation across multiple sectors such as space, defense development, energy, and natural resource projects.
  2.  Turkish and Greek Navies Collaborate in NATO Drill in Eastern Mediterranean (Hurriyet Daily News). The Turkish and Greek navies joined forces in a momentous NATO maritime exercise, Neptune Strike 23-2, conducted in the eastern Mediterranean.

July 21, 2023

  1. Turkiye Strongly Condemns Desecration of Quran in Sweden (Daily Sabah). The Turkish Foreign Ministry strongly condemns the “vile attack” against the Quran. Referring to a recent resolution by the U.N. Human Rights Council, the ministry said such acts amount to religious hate crimes. Additionally, Hakan Fidan engaged in discussions with several Arab counterparts to address the necessary reactions and collaborative actions against “the despicable attack on the Quran in Sweden.”  
  2.  Turkiye’s Central Bank Hikes Interest Rates to 17.5% (Al Monitor). Turkiye’s Central Bank has raised interest rates by 250 basis points to 17.5%, marking the second rate hike following the country’s economic management team’s commitment to tighter monetary policies. Although the increase was lower than expected, the Turkish lira declined to new lows.

July 24,2023 

 Turkiye and the Gulf Continue Transition From Antagonists to Allies

We continued to see a stunning turnaround in relations among Turkiye, the UAE, and Saudi Arabia. Just two years ago, Turkiye and the UAE were locked in proxy conflicts on multiple fronts, while Saudi Arabia considered Turkiye a significant opponent in the region. Now, the three countries are moving at full speed in the opposite direction.

First, Turkish-Saudi relations. During Erdogan’s second visit to Saudi Arabia on July 17, 2023, the two nations signed three significant memorandums of cooperation covering energy, direct investment, and media collaboration. An executive plan for cooperation was also established, encompassing capabilities, defense industries, research, development, and two contracts with Baykar Technology, particularly in the defense and aerospace industries, focusing on drones. At the end of the visit to Saudi, Officials from the Turkish Trade Ministry stated that exports to the Gulf reached $21 billion and noted that Saudi Arabia is one of the largest markets for Turkish contractors. In comparison, bilateral trade climbed to $6.5 billion.

Matters had already improved even before Erdogan visited Saudi Arabia, as sixteen Turkish and Saudi companies signed cooperation agreements amounting to $10 billion in direct investment, with a further $30 billion envisioned over an extended period. Senior Turkish officials had initially expected a total figure of at most $10 billion in direct investment, eventually reaching $25 billion to $30 billion from the Gulf countries in the long term.

Next, Turkish-Emirati relations. Erdogan followed his Riyadh trip by visiting the UAE, where he and Emirati leaders agreed to establish a high-level strategic council and sealed business agreements totaling $50 billion.

In sum, Erdogan returned to Ankara having reached partnership agreements worth a remarkable $60 billion with his former adversaries. More importantly, the three countries accomplished a regional realignment that will give both Turkiye and the Gulf states strategic depth, allowing them to focus on national security interests and threats that they’ve decided are more important. For Turkiye, that could mean more bandwidth to deal with the crisis in the Black Sea region and probably Syria. For the Saudis and Emiratis, that means more bandwidth to address their growing Iran problem–or perhaps their growing rivalry between themselves.

July 25, 2023

  1. Turkiye Unveils Groundbreaking Guided Naval Mine ‘UÇA (TRT Arabic). The idea of ​​​​the UÇA project is based on integrating a set of military technologies for guidance and targeting the winged smart guidance kit (KGK) to turn it into an intelligent offensive marine mine. Launching the UÇA system through warplanes or attack drones is possible, as its characteristics and advantages enable it to mine the entrances to the enemy’s headquarters and naval bases without the danger of approaching them.
  2.  Türkiye Joins the ‘Rome Process’ to Tackle Irregular Migration (Daily Sabah). Turkiye joined more than 20 nations and international organizations in the “Rome Process” during the International Conference on Development and Migration hosted by Italy…Turkish Foreign Minister Hakan Fidan emphasized the importance of regional cooperation and burden-sharing to tackle irregular migration, calling for the elimination of conflicts and economic problems at the source. The conference comes as four migrants attempting to cross into Europe were found dead inside a trailer truck in northwestern Turkiye

July 26, 2023

  1.  Turkiye Introduces 7 New Defense Products (Anadolu Agency). Roketsan is participating in IDEF ’23 with 30 products, seven of which were exhibited for the first time. The four-day event, one of the largest global defense fairs, which will run through Friday, is exhibiting a range of defense products, including land vehicles, weapons, simulators, radars, sonars, naval platform solutions, aviation systems, missiles, logistic vehicles, supply equipment, and security systems.
  2.  Ankara Focused on Revitalizing Foreign Policy and Taking a More Active Role in the Region (Al Sharq Al Awsat). Erdogan sought to host Abbas and Netanyahu this month but the Israeli prime minister announced that it was postponed, due to his recent surgery.  Turkish media said that Erdogan had a closed session… with Palestinian President Mahmoud Abbas. In other news, sources reported about an arrangements for a meeting in Türkiye between Abbas and Ismail Haniyeh, the leader of Hamas. The two sides are expected to discuss forming a national unity government. 
  3.  Iran Ready to Ship Radiopharmaceuticals to Turkiye (Tehran Times). Mohammad Eslami, head of Iran’s Atomic Energy Organization (AEOI), said on Monday that Iran is willing to export radiopharmaceuticals to Turkey. Eslami made the remarks in a meeting with Hicabi Kirlangic, the Turkish ambassador to Iran.

July 27, 2023

  1. China’s Newly Appointed FM: Ready to Enhance Mutual Cooperation with Turkiye (Daily Sabah). Yi noted that Beijing was ready to enhance mutual strategic trust and deepen cooperation with Türkiye, as he called on the two sides to utilize bilateral cooperation. On the issue of stepping up efforts to align China’s Belt and Road Initiative and Türkiye’s Middle Corridor Initiative, Erdoğan conveyed his desire for more vital collaboration between the two countries.

July 28, 2023

  1. Defense Industry Exports Expected to Reach $500 Million by the End of 2023 (Anadolu Agency). The four-day International Defense Industry Fair in Istanbul garnered substantial interest from foreign delegations. The chairman of Turkish drone maker Baykar stated that the country now possesses a wide range of ammunition families, air defense tools, and combat systems. Turkish missile producer Roketsan’s CEO, Murat Ikinci, announced that Roketsan anticipates reaching $500 million in exports by the end of 2023.
  2. Renewable Energy Aims to Dominate Electricity Generation by 2024 (Daily Sabah). The share of renewables in global electricity generation stood at 22% in 2014 and is now projected to reach over 33% in 2024, indicating a 50% growth during this period. According to the IEA’s forecast, the global energy investment is expected to be approximately $2.8 trillion this year. Over $1.7 trillion will be allocated to clean energy, encompassing renewable power, nuclear, grids, storage, low-emission fuels, efficiency improvements, and electrification.

July 31,2023 

Executive Summary:

In this week’s analysis, we explore two significant and unpredictable trends in the region’s two most powerful states. In Turkiye, President Erdogan continues to make unexpected U-turns in his foreign and economic policies, driven by the urgent need to revive Turkiye’s struggling economy. Meanwhile, Israel grapples with escalating internal divisions as well as security threats within and beyond its borders.

Erdogan Changes Key Policies to Gain Allies, Attract Foreign Investors, and Balance the Great Powers

Since his reelection in May, President Erdogan has made rapid, mercurial changes in Turkiye’s foreign and fiscal policy. He has sought to mend ties with the West, transformed Gulf rivals into allies, and reversed his previous public finance policies.

Earlier this month, President Erdogan surprised his NATO allies when he dropped his opposition to Sweden’s request to join the military alliance and sufficed to cooperation guarantees from the United States on the F-16 fighter jet sale, NATO, and the EU concerning a new economic mechanism with Turkiye.

Another dramatic shift occurred when the Turkish president’s visit to former adversaries in the Gulf secured $60 billion in partnership agreements last week.

President Erdogan’s goal of attracting global investment and creating jobs through a global financial management approach became evident when he appointed as finance minister Mehmet Simsek, a liberal economist. Simsek accepted the position only after being granted a non-interference guarantee and receiving Erdogan’s endorsement for a gradual interest rate increase over 18 months. In two months in office, Simsek has begun to manage the lira’s depreciation and tax hikes, while the US-educated economist Hafize Gaye Erkan, the first Turkish woman appointed central bank governor, worked on doubling Turkiye’s interest rates. To remove any bureaucratic resistance to Simsek and Erkan’s new approach, Erdogan appointed three new deputy governors to Turkiye’s central bank. The Central Bank announced a significant 900 basis points increase in the primary interest rate and projected a 58 percent inflation rate by the end of 2023.

While making these changes, Erdogan has maintained a “one foot in each camp” strategy to reassure global investments and manage great-power rivalry. China has been a case in point. During the new Chinese Foreign Minister’s first high-level visit to a NATO country, which took place less than three weeks after NATO accused Beijing of undermining international order in space, cyber, and maritime domains, the Turkish president conveyed to Wang Yi that he had cautioned other countries against sidelining partners in the Asia-Pacific region. President Erdogan repeatedly told his Chinese guest that Turkiye is willing to deepen cooperation with China in trade and energy and boost bilateral relations to a new level.

Indicative of his balancing act, however, Erdogan has simultaneously reached out to China’s regional rival South Korea. On the 28th of July, Turkiye’s foreign minister Fidan hosted South Korea’s foreign minister Park Jin in Ankara to sign a road map agreement for a “dynamic-Turkiye-Korea partnership.” The trade volume between the two countries is expected to jump from $10 billion last year to $15 billion. Turkiye faces an overall trade deficit of $8.85 billion, surging by 44 percent as of April 2023.

Erdogan is not finished with his significant post-election policy changes. This week he is likely to turn his attention to significant changes in the Turkish military when he presides over the Supreme Military Council to decide appointments and promotions within the Armed forces.

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