Coronavirus Could Offer Avenue to Ease US-Turkey Tensions

An unanticipated side effect of the coronavirus pandemic has been the upending of traditional regional dynamics in favor of new, ad hoc coalitions to contain the effects of the virus. One particularly salient example is Washington’s relationship with Ankara, characterized by both chronic and deep strains in the Erdogan era. 
 
TURKEY SEEKS DETENTE WITH WASHINGTON 
 
Earlier this year, Turkish officials expressed optimism that Turkey would weather the coronavirus pandemic with only minimal damage to its population and economy. Just over a month ago, Turkish ministers remainedin denial that the virus had even entered Turkey. But over the next several weeks, the virus spread rapidly to over 80,000, the highest of any Middle Eastern country after Iran.
 
In this new, starker environment, President Erdogan has extended an olive branch to his critics in Washington, announcinga new understanding with U.S. President Donald Trump to work together to counter the threat posed by the coronavirus outbreak. The heart of this new entente, it has emerged, is Ankara’s attempt to secure economic aid in exchange for dropping plans to immediately activate a Russian air defense system that had been a sticking point between the two governments.
 
The pandemic has arrived at a particularly difficult time for Erdogan. Turkey has only recently emerged from recession, and several of its economic indicators are fragile. The Turkish currency has fallen14 percent against the dollar over the past year, and many of Turkey’s financial institutions are heavily overleveraged. Ankara appears unprepared for the inevitable economic slowdown. As a consequence of the weakened economy, Ankara was unable to provide more than a relatively modest $15 billionstimulus plan on March 18 — a plan that, even on a per capita basis, is dwarfedby the stimulus packages recently unveiled in the U.S., Germany, and Brazil.
 
A STICKING POINT DEFERRED
 
In his bid for closer ties with the U.S., Erdogan has had one major concession to offer: deferring the activation of the Russian S-400 air defense system. According to a senior Turkish official who spoke on condition of anonymity, “There is no going back on the decision to activate the S-400s [but] due to COVID-19 ... the plan for them to be ready in April will be delayed.” The delay in operationalizing the Russian system could drag on for several months, or indefinitely, the official said, adding that Turkey had in any case to overcome numerous technical difficulties.
 
NATO and the U.S. have long maintained steadfast opposition to Turkey’s acquisition of the Russian air defense system, even raising the specter of sanctions on Turkey if Ankara should move forward over American objections. Both sides had been on a trajectory toward an inexorable confrontation in April, when President Erdogan had announced that the S-400 would be activated.
 
Other sources have confirmed that economic calculations are decisive in Ankara’s thinking. As Sinan Ulgen, a former Turkish diplomat, who heads the Istanbul-based Centre for Economics and Foreign Policy Studies think tank, put it, “The economic shock is such that Turkey may indeed down the line seek some kind of external financing.” Ulgen went on to add, “If and when that time comes there will be more pressure on the Turkish government to permanently sideline the S-400s.”
 
In recent days, Turkish officials acknowledgedthat Ankara has reached out to contacts within the American administration to explore the possibility of setting up a swap line from the U.S. Federal Reserve as well as other funding options to mitigate the economic fallout from the coronavirus outbreak. President Erdogan is reportedly keen to secure funding from the U.S. central bank if that would enable him to avoid pursuing a loan from the IMF, given the ostensibly negative domestic perceptions of working with the Fund.