Erdogan Seeks More Help From Trump Than He May Be Ready to Give

Onur Ant and Selcan Hacaoglu
Erdogan Seeks More Help From Trump Than He May Be Ready to Give

(Bloomberg) -- Recep Tayyip Erdogan may be expecting more from Donald Trump than he’s ready to deliver as the Turkish president tries to defuse his biggest diplomatic spat yet and prevent the economy from unraveling.

Erdogan dispatched top aides, including his son-in-law and now finance minister, to persuade U.S. officials this week that Turkey shouldn’t be a target for American sanctions over its planned purchase of an air defense system from Russia. The goal was also to calm U.S. investors concerned about the Middle East’s largest economy and the prospect of more political turmoil.

The Trump-Erdogan channel has been used by both leaders to iron out frequent differences over policy toward Syria, views on trade and NATO. The problem now facing Erdogan is that regardless of Trump’s affinity for him -- he once said the Turkish leader gets “very high marks” –- it may be a dead end.

“Turkey has very few friends left in Washington,” said Gonul Tol, director of the Center for Turkish Studies at the Middle East Institute in Washington. Trump can’t “deliver despite the promises he made to the Turks because there are other players in Washington who refuse to tolerate Erdogan’s increasingly aggressive policies,” she said.

Turkey looks progressively isolated as Erdogan struggles to contain a series of events that threaten to undermine the country more than at any time since taking power in 2003.

Economic Slump

The economy entered its first recession in a decade following a currency crash last year, and the International Monetary Fund predicts it will contract by more than 2 percent in 2019. Erdogan’s position as leader is intact, but his governing AK Party unexpectedly lost control of Turkey’s largest cities in local elections on March 31.

On Tuesday, AKP officially demanded a rerun of the mayoral election in Istanbul, claiming its narrow loss was down to fraud. After a partial recount, the main opposition party said its candidate won. It’s unclear when Turkey’s election board will make a ruling.

“It is a mix of hubris, poor understanding and unwillingness to recognize that problems are mounting,” said Wolfango Piccoli, co-president of Teneo Intelligence in London.

Erdogan’s most pressing problem is that the U.S. is threatening to cut off Turkey from buying and helping to produce Lockheed Martin Corp.’s F-35 fighter if he goes through with plans to buy the S-400 air defense system from Russia.

One option would be to abandon the S-400 deal -- which was finalized as Turkey made up with Russia following a row that erupted after Turkey shot down a Russian jet over Syria -- but Erdogan vowed not to go back on his promise to President Vladimir Putin.

Sanctions

Indeed, a back-door solution to the missile row would bolster the Turkish economy. It entered its first recession last year after a currency crash that was touched off by another round of American sanctions over the continued detention of the American pastor Andrew Brunson in Turkey.

Trump has taken Erdogan’s side before, only to back off. After a talk with Erdogan in December, Trump announced he’d be pulling all U.S. forces out of Syria as the Turkish president urged. Eventually, Trump acquiesced to pleas from his advisers and European allies and agreed to keep about 400 troops.

“Erdogan is clearly hoping that Trump will intervene to prevent the dispute over Turkey’s procurement of the Russian S-400 missile defense system from triggering sanctions,” said Anthony Skinner, Middle East and North Africa director at Verisk Maplecroft in the U.K. “We have seen Turkish-U.S. relations on the precipice before only for some last-minute concession to save the day, but things could get increasingly ugly if Turkey completes the purchase.”

On his visit to the U.S., Finance Minister Berat Albayrak said Turkey took its case for buying the Russian air-defense system directly to Trump. He told reporters on Monday there was “quite positive feedback.” The White House didn’t immediately respond to inquiries about such a meeting.

The Pentagon confirmed that Acting Defense Secretary Patrick Shanahan met with Turkish Defense Minister Hulusi Akar on Tuesday, saying in a statement only that they “met as strategic partners” and discussed “interests, rather than positions.”

Damage Limitation

Albayrak also tried to bolster confidence in the economy, saying it’s probably emerged from its first recession in a decade. “We’ve come out of a difficult period with a minimum amount of damage,” he said.

The lira lost nearly a third of its value against the dollar last year, setting the stage for what could be the worst contraction since 2001. The slowdown in activity, coupled with the highest inflation rate and worst jobless figures in about 15 years, debased Erdogan’s support in cities, resulting in an unexpected loss of major cities in March 31 municipal elections.

Among those that fell was Istanbul, where Erdogan made his political career in the 1990s. The AKP has refused to concede, submitting an “extraordinary objection” and raising the specter of another vote.

Then there’s the prospect of U.S. action resulting in another run on the currency and a wave of bankruptcies that could cripple the economy, weighing on Erdogan’s popularity.

Getting Trump to go light on sanctions when Turkey receives the Russian air-defense systems is now the obvious policy path Turkish officials are following, but the U.S. president and the State Department have limited say over their scope.

Their final shape must be approved by Congress -- a message that was delivered to Erdogan as recently as January when Senator Lindsey Graham visited the Turkish leader to warn him that Congress was unlikely to give Turkey a pass over the S-400 purchase.

(Adds completion of vote recount in sixth paragraph.)

--With assistance from Firat Kozok, Kerim Karakaya, Asli Kandemir and Margaret Talev.

To contact the reporters on this story: Onur Ant in Istanbul at oant@bloomberg.net;Selcan Hacaoglu in Ankara at shacaoglu@bloomberg.net

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Rodney Jefferson, Larry Liebert

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