Erdoğan's Pragmatist Political Economy and the Course of Relations with Israel

Erdogan's Forced Return to Pragmatist Politics

The biggest problem for President Erdoğan in the near term is his failure in managing the economy. He realizes that if he cannot overcome this situation, it will be difficult for him to win the 2023 presidential elections. Therefore, the Turkish government is putting the desire to get out of the economic crisis above all else. Although it is not possible to talk about an electoral economy that is being directly implemented at the moment, considering the measures such as increasing the minimum wage by 70%, raising wages in the public sector, lowering the interest rate from 14% to 13%, keeping the foreign exchange under control with a state guarantee and other similar measures, we can conclude that in the current high inflation environment, the aim is to go to the elections without stagflation and without stopping the wheels of the economy. 

It seems quite difficult for Erdoğan to recover the economy with only domestic measures. Therefore, foreign currency inflows from abroad are important. For this, Gulf and Western capital will be needed. The transfer of money from Russia, whose relations with the West have deteriorated and is subject to sanctions, seems to be very limited. Sino-US tensions over Taiwan also limit Turkey's financial options with this country. However, in the long run, Turkey is not shy about taking steps towards becoming a part of Eurasian politics, and its economic-political expansions can be realized with the eastern world. 

In the short term, however, Russia and the Eastern world are far from offering a solution for Turkey. In the recent period, it is widely believed that it is in Turkey's strategic interests to establish good political, military and economic relations with Israel, Egypt, Syria, the United Arab Emirates, Saudi Arabia and even Greece. In this context, Erdogan has made a successful return to pragmatist policy initiatives, recognizing the need for the Turkish government to warm relations with its regional rivals.

Turkey-Israel Relations

Since 1948, Turkey has tried to maintain good relations with Israel, which declared its independence in 1948, and even during the Arab-Israeli Wars, Turkey kept its distance from both sides. On the other hand, the widespread view of the Turkish people that they have a political responsibility towards the former Ottoman territories may cause the majority of Turkish politicians to take a cold stance towards Israel and sometimes react emotionally, especially against Israel's violent policies against the Palestinian people. Therefore, the judgment that "the Palestinian issue has been the factor that has most affected Turkish-Israeli relations at the political level" remains valid to a large extent today. 

In 1993, the "Declaration of Principles" signed by a joint Rabin-Arafat effort brought about a process that raised hopes for peace between Israel and Palestine. Turkey-Israel relations were also affected by this positive atmosphere and contacts between the two countries increased. In this environment, 

On March 14, 1996, economic relations between the two countries began to develop with the Turkey-Israel Free Trade Agreement. The Defense Industry Cooperation Agreement signed in the same year made it possible to implement training and modernization projects (54 F-4 and 48 F-5 fighter jets and 170 M-60 Tanks). 

The Deterioration of Turkey-Israel Relations with the Hamas Government in Palestine

The relations between the two countries, which had been on a very good course with the visit of then Prime Minister Erdogan to Israel in 2005, suddenly began to deteriorate with the developments in Palestine in 2006. The visit of Khaled Mashal, the leader of Hamas, which won the Palestinian elections, to Turkey on February 16, 2006 caused a crisis in relations with Israel. In the same period, Israeli attacks targeting Palestinian and Lebanese territories disturbed the conservative Erdoğan government and the masses it represents.

From this point on, Turkey-Israel relations started to lose momentum and entered a period of conflict. A number of incidents that contributed to the loss of mutual trust also played a role in delaying the 'normalization' of relations.

Let us briefly mention these incidents:

- The New York-based ADL (Anti Defamation League), an international Jewish non-governmental organization, made a claim that there was an "Armenian Genocide" (August 21, 2007), 

- Israeli Air Force strikes on Syria's Al-Qubar nuclear facility (September 5, 2007) and the use of Turkish territory in the attack,

- Starting from May 21, 2008, despite Turkey's mediation role between Syria and Israel, Israel launched Operation Cast Lead in Gaza (December 27, 2008), killing 1,315 Palestinians,

- The "One Minute" incident between Erdogan and Peres at the Davos Summit (January 29, 2009) (Erdogan's popularity in the Arab world increased),

- Genocide Claims by the Israeli Land Forces Commander and the Foreign Ministry (February 2009),

- Israeli Deputy Foreign Minister Danny Ayolon's high chair scandal against Turkish Ambassador to Tel Aviv Oğuz Çelikkol (January 11, 2010),

- The Israeli attack on the Mavi Marmara ship carrying humanitarian aid to Gaza (May 31, 2010) and the killing of nine Turkish citizens,

- A ban on the use of Turkish airspace by Israeli military aircraft (July 2010) and an end to mutual military training between the two countries,

- The leak of the UN Mavi Marmara Commission Report (September 2, 2011) and Turkey's withdrawal of its ambassador and the downgrading of diplomatic relations to the level of second secretary,

- In 2013, with the intervention of the US, the Israeli side admitted that it was 'wrong' in the Mavi Marmara attack, and relations began to soften again,

- Israel's launch of Operation Protective Edge in Gaza (July 7, 2014), which lasted 50 days, and Turkey's reaction to it,

- The closure of Al-Aqsa Mosque to Muslims (December 2014),

- The signing of the final memorandum of understanding on the Mavi Marmara incident (26 June 2016), Israel's agreement to "pay $20 million in compensation to the families of those who lost their lives in the Mavi Marmara raid, to end the total embargo on Palestine, to allow humanitarian aid ships to bring aid, and to allow TOKI to build housing projects in Gaza", and mutual steps towards normalization of relations.

Despite joint efforts by both sides in the following years, the level of ambassadorial appointments has not yet been reached. 

During the periods of deteriorating relations, Israel increased its direct contacts with Egypt and Greece, and the possibility of cooperation with countries in the region, including the Greek Cypriot Administration of Southern Cyprus, in the transportation of Eastern Mediterranean gas to Europe and the introduction of new routes (EastMed) were on the agenda, but the desired progress could not be realized. The biggest factor in this was the exclusion of Turkey in the transportation of Mediterranean gas, but the inability to put other routes into operation due to political and economic costs. 

Turkey Takes Decisive Steps to Restore Diplomatic Relations

Meanwhile, Turkey took steps to normalize its relations with the countries in the region in its foreign policy in 2021. The aim was to re-establish relations with Egypt, Greece, the United Arab Emirates (UAE), Saudi Arabia and Israel. Thus, the Erdoğan government sought to repair the deteriorated relations with the countries of the Middle East, to increase Turkey's influence and reputation in the eyes of the countries of the region, and to overcome the bottlenecks it was facing in the field of foreign policy and economy. 

Erdogan is aware that without foreign support, and especially without the inflow of hot money, the Turkish economy will find it difficult to turn the wheels of the Turkish economy with domestic measures. Attracting Gulf capital to Turkey was seen as important in this respect. Previously, after the open support for Qatar, disagreements with other capital-rich Gulf states had reached a head. In November 2021, UAE ruler Mohammed bin Zayed visited Ankara after years of frosty relations with Turkey. As a result of this visit, it was announced that a ten billion dollar United Arab Emirates investment fund would be established in Turkey to invest in Turkish infrastructure companies and the energy sector. Cooperation in the defense industry was increased. 

On the Saudi Arabia side, Erdoğan took a pragmatic step and visited Riyadh, leaving behind the tensions between the two countries over the murder of journalist Jamal Khashoggi, a critic of the Saudi regime, in Istanbul. Erdoğan's visit wiped the slate clean and there was talk in Turkey that the Saudis would also open their purse strings after his visit and that huge investment funds would be heading to Turkey.

In the same period, relations between Israel and Turkey also warmed up. On November 18, 2021, in a telephone conversation between the Turkish and Israeli Presidents, it was mutually confirmed that Turkey-Israel relations are important for the security and stability of the Middle East, it was mutually agreed that the development of Palestinian-Israeli relations and the resumption of the peace process is a priority, and it was noted that the continuation of contact and dialogue between the two countries is in the common interest of both countries. Following this contact at the highest level, the visit of the President of Israel to Turkey gave a new impetus to the relations. On March 9, 2022, President Yitzhak Herzog paid an official visit to Turkey. He was followed in June by Foreign Minister Yair Lapid, who also visited Turkey before assuming the Prime Minister's office, and yesterday a renewal of relations was announced. Erdogan suddenly disliked Israel and the change of power was not a weight for warming. The Turkish President understands Israel's weight and position in the region and is therefore trying to reduce friction and above all to open more economic channels.

Despite high political tensions between Israel and Turkey, the volume of foreign trade has continued to grow. Meanwhile, Israeli tourism to Turkey has rebounded after difficult years, and Turkish resorts in the Mediterranean are "back to speaking Hebrew". Potential Iranian operations against Israeli citizens in Turkish territory were thwarted by the close cooperation of Turkish and Israeli security and intelligence services, which served as a reminder of the close security relationship between the two countries.

In addition to foreign trade and security, the two countries are also expected to strengthen their economic relations in the fields of infrastructure and energy. The need for Turkish-Israeli cooperation in the transportation of Israeli gas to Europe has become urgent in the face of the gas shortage that European countries are experiencing due to the Russian-Ukrainian War and the inflationary effect of rising prices.  Although Israel stands out due to its position in the EASTMED alliance of gas countries, its relations with Egypt and Europe, and the possibility of selling gas to EU countries that want gas other than Russian gas, it has not yet been successful in delivering the gas. Therefore, in the near term, the possibility of transporting Israeli gas to Europe via Turkey may be on the agenda of the two countries.

On Syria, the two countries also have policies in the context of common interests. Recent developments and political and economic interests have brought the two countries to the point where it would be better for them to put behind them the unfortunate events that led to serious tensions between them. The way has been paved for the re-establishment of strategic cooperation between the two countries.  

Recently, it was announced that Israel and Turkey have decided to reassign ambassadors and consuls-general. Thus, the two countries have demonstrated their willingness to take a strong step towards strengthening their positions in the region and increasing their bilateral relations.

Turkey's decisions to raise the level of diplomatic relations with Israel and reopen embassies are welcome. However, it does not seem possible for the time being to expect bilateral relations to rise to the level of the 1990s.