--- title: "Turkey Epitomizes the West’s Russia Sanctions Dilemma" type: "post" post_id: "4059" slug: "turkey-epitomizes-the-wests-russia-sanctions-dilemma" canonical: "https://pennyforyourthoughts2.ca/2023/04/01/turkey-epitomizes-the-wests-russia-sanctions-dilemma/" markdown_url: "https://pennyforyourthoughts2.ca/2023/04/01/turkey-epitomizes-the-wests-russia-sanctions-dilemma.md" json_url: "https://pennyforyourthoughts2.ca/2023/04/01/turkey-epitomizes-the-wests-russia-sanctions-dilemma.json" txt_url: "https://pennyforyourthoughts2.ca/2023/04/01/turkey-epitomizes-the-wests-russia-sanctions-dilemma.txt" published: "2023-04-01T23:00:33+00:00" modified: "2023-04-01T23:00:33+00:00" author: "penny2" categories: - "Uncategorized" tags: - "NATO" - "perception management" - "Russia" - "state sponsored terrorism" - "Turkey" - "US" site_name: "PFYT2" publisher: "" language: "en-US" generator: "easyPress Markdown" generator_version: "1.0.6" --- > Sanctions and other trade restrictions are very difficult to enforce alone, even for a country as large as the U.**S. A certain amount of badgering of friends and allies—`along with veiled threats and inducements—comes with the territory.`** > > **And not so veiled threats too!** > > > **But the case of Turkey is particularly confounding.** Turkey is a NATO ally, has supplied Ukraine with drones that made a crucial difference early in the war and helped broker the pact with Russia that keeps Ukrainian grain flowing to the world. **But it has also emerged as a key transit point for semiconductors and other potentially dual-use electrical equipment into Russia, a destination for Russian tourists and for Russian airlines flying U. S-made airplanes to transit. Turkey is also a key buyer of Russian energy**—all while holding up Sweden and Finland’s accession to the military alliance. > > > It is also a country in deep economic crisis, recovering from a devastating earthquake. Its trade with Russia has become an important economic lifeline. > > > **All of this makes any serious effort to pressure the country into taking a stronger stance against Russia highly fraught**. **That probably means many high-tech goods and other key equipment will continue to flow through it into Russia*****. A new administration after May’s election might change that calculus,*** but probably only **if the West and its allies are willing to step in with massive financial assistance to offset the advantages of the country’s special relationship with Russia.** > > **I’ve previously covered the fact that the US is aiding and abetting the opposition in Turkey. As well has being solidly behind the coup.** > > > **The cornerstone of that relationship, unsurprisingly, is energy.** In large part due to the Erdogan administration’s insistence on a highly unconventional monetary policy, Turkish inflation was already sitting at 36% in December 2021. The run-up in oil prices and trade disruptions at the beginning of the war then supercharged it: The Turkish lira dropped sharply again, and inflation spiked as high as 85%. > As bad as that already is**, the situation would probably have been significantly worse without the subsidy from Russian oil imported at a hefty discount to the global benchmark of Brent crude: around $20 a barrel for much of 2022. In 2021, 28% of Turkey’s import bill for mineral fuels and oils, a trade category which includes crude oil, came from Russia, according to United Nations data. In 2022, 43% did—and nearly 60% of the net increase in spending went to Russia. Meanwhile transport, electricity and fuel directly account for close to a quarter of Turkey’s consumer-price basket.** > The impact of rising exports to Russia was less dramatic, **but still important in the context of a trade deficit that blew out from around $4 billion a month in mid-2021 to roughly twice that by the last quarter of 2022**, and a run on the currency that forced Ankara to guarantee many lira-denominated deposits against currency depreciation. Turkey’s overall exports managed to rise 13% last year despite the inflationary blowout, according to figures from data provider CEIC, but exports ex-Russia only rose 11%. Exports to Russia itself rose 62%. > **With oil prices down in early 2023, Turkish inflation is down marginally too:** It was 55% in February. But the country now faces rapidly slowing growth—3.5% year on year in the fourth quarter, down from 9.6% a year earlier—and the costly aftermath of a major earthquake. > To be sure, the Erdogan administration’s highly unconventional monetary policy—cutting rates in the midst of rising inflation—and other missteps bear much responsibility for Turkey’s economic troubles. **But the nation’s emergence as a vital trading partner for an increasingly isolated Russia also highlights one of the harsh realities of broad-based sanctions: Tough enforcement always entails significant political and economic costs, and sometimes in places already suffering substantial natural or man-made misfortune.** **Expect lots of teeth gnashing and hand wringing about the upcoming election in Turkey from the 5 eyes media.**