An economic tussle between the US and Turkey has heightened over the past few months. Both countries are continuously imposing sanctions to paralyze each other economically. But why they are doing so? First of all, we have to keep in view the main reasons behind this tussle.
This tussle started after failed coup attempt by the Turkish Army on July 15, 2016 on which, a week after, Recep Tayyip Erdogan blamed US-based cleric Fethullah Gulen for failed bloody coup attempt to topple Erdogan’s government and behind this failed coup attempt for Marshall Law, Gulen network was of intention to remove Erdogan from the way and to promote his philosophy of moderate Islam. According to Gulen, Turkey was heading backward because of Erdogan’s conventional and orthodox policies. Erdogan then accused Gulen of conspiring to overthrow him from the government by building a network and officially declared the Gulen movement a terrorist organization in 2016. Erdogan and Gulen were once allies until Gullen opened a corruption probe into Erdogan’s inner circle in 2013. Turkey’s repetitive requests for Fethullah Gulen’s extradition from the US to face trial were rejected by the US saying they need a proper evidence of Gulen’s involvement first.
Fethullah Gulen is a Turkish Preacher, imam, and writer, currently living in self-imposed exile in the United States. He is the founder of Gulen movement known as Hizmet which is 3 to 6 million strong volunteer-based movement mostly focused on education, hard work, altruism, and modesty. This movement serves in Europe, the United States, Asia, and Africa.
This rift intensified more when Andrew Brunson, an American pastor, currently living in Turkey, arrested by the Turkish government in October 2016, has taken to the court to face trials over an allegation of alleged espionage on behalf of Kurdish insurgents and Gullen network and involvement in the failed coup attempt in 2016. He was under detention of Turkish government for 600 days, almost 2 years, is now released from jail due to health issues and placed under house arrest on July 25, 2018. The US secretary of state, Mike Pompeo, welcomed Andrew Brunson’s release from prison but said it is not far enough and demanded his complete release as they have not seen any credible evidence against Mr. Brunson but Turkish authorities neglected continuous demand for Brunson’s release by American policymakers.
Donald Trump rebuked Turkish authorities over their decision for not releasing their man in his tweet and said, “this is a total disgrace that Turkey will not release a respected American pastor, Andrew Brunson, from prison. He has been held hostage far too long. Erdogan should do something to free this wonderful Christian husband and father. He has done nothing wrong and his family needs him.” Turkish prosecutors are seeking a maximum prison sentence of 35 years for the pastor and the court has also imposed a travel ban on him.
The US’s Vice President, Mike Pence in response to this, threatened Turkey in his interview and said, “on behalf of the United States of America, release pastor Andrew Brunson now or be prepared to face the consequences.” Trump also said I thought Ankara and Washington had a deal that if Washington will help in the release of Turkish citizen in Israel on behalf of Ankara, they will fully release the pastor. Trump claimed, he urged the Israeli Prime Minister, Benjamin Netanyahu for the release of a Turkish citizen. However, Israel had even released Turkish citizen named Ebru Ozkan, on whom allegations are imposed that he was involved in abetting Hamas but Turkey instead, did not keep its words and moved the pastor to house arrest. Not fair. Not right.
In retaliation to Turkey’s betrayal, Trump administration levied sanctions on two Turkish ministers (Minister of Justice, Abdulhamit Gul and Minister of Interior, Suleyman Soylu) over propaganda on Andrew Brunson, and also banned their entry into the US and made their assets even frozen to suppress Turkish government on August 1, 2018. In addition to this, Trump further reacted in ire and said, we are cutting back on Turkey and announced a doubling of tariffs on Turkey on August 10, 2018. He said in his tweet, “I have just authorized a doubling of tariffs on steel and aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong dollar. Aluminum will now be 20% and steel 50%. Our relations with Turkey are not good at this time.” He did not care much about that Turkey is their NATO ally. Treasury secretary, Steven Mnuchin said, Turkey has “not proven to be a good friend” and we are ready to slap Turkey with more sanctions if President Recep Tayyip Erdogan refuses the quick release of an American pastor on August 16, 2018.
In reciprocation to the US’s operations, Turkey took immediate steps by imposing heavy tariffs on products imported from the United States including cars, alcohol, and tobacco also on rice, nuts, cosmetics, paper, machines etc. Turkey placed 140% on alcohol, 120% on cars and 60% on tobacco and slaps sanctions on 2 US officials i.e., minister of Interior and Minister of Justice. Banned their entry into Turkey and had also frozen their assets. Turkey’s President Recep Tayyip Erdogan said in a press conference, “our nation will boycott U.S. electronic goods. We will stop bringing iPhone. He said, if they have their iPhone, we have South Korea’s Samsung as an alternative. In our own country, we have a Vestel.”
Supporters were strongly fascinated by Erdogan’s statement that “don’t forget, if they have their dollars, we have our people, our God. We are working hard. Look at what we were 16 years ago and look at us now.” As their deliberated trade tensions are at its peak, Turkish Lira shattered badly against the US’s mounting dollar and tumbled up to 5%. Investors started to pull out their money from banks. Such withdrawals have also hurt other currencies. Argentine peso and Indian rupee touched their weakest level against the US dollar. Turkey’s economy is suffering severely due to escalating sanctions by the US and is facing a currency crisis. Loss of $12 billion or more is expected to both countries amid their crumbling relations. According to the International Monetary Fund (IMF), it is also expected that these actions by the US can cause a loss of more than $500 billion to the whole world. It seemed like the only way for Turkey to get out of this crisis is by securing the help of IMF’s rescue bailout but Turkey’s Finance Minister Berat Albayrak said in a conference, there is no need to be panic, we will easily overcome this economic crisis and will emerge even stronger than before. He is taking its investors in confidence and also talks to France and Germany. Turkey is insistent that no matter what happens, they will not seek the help of IMF. President Recep Tayyip Erdogan and French President Emmanuelle Macron have agreed to improve bilateral relations as Turkey is passing through the dire strait. Turkey’s Finance Minister Berat Albayrak engaged with German Chancellor Angela Merkel and have agreed to meet in Berlin to take steps for further enhancement of economic cooperation.
Turkish Lira was up 4% against US dollar following the conference call and reassuring words from French President Macron and Germany’s Chancellor Merkel. Qatar pledged to invest $15 billion in Turkey’s financial sector which will also help to stabilize and bolster their economy. Pakistan, Iran, and Russia have also announced to help Turkey in their impassable time and deplored the US’s sanction on Turkey. Russian foreign minister calls US sanctions illegitimate. He further added that they are devising to end the US dollar’s dominance and envisaging to trade with Turkey and other countries as an alternative currency. Turkey’s president Erdogan also denied to stop trading with Iran after the cancellation of a nuclear deal between Iran and America and is likely thinking forward to purchase Russian Air Defense System if needed which America does not like.
On August 20, 2018, some assailants opened fire on the US Embassy in the capital Ankara. It has been suspected that this attack was carried out as a result of increased tensions between two NATO allies. Turkish Lira plunged further against the dollar after their spat with the United States on August 29, 2018. It has lost almost more than a quarter of its value. On the same day, Turkish media reported that Mohammad Ahmad, known as the spiritual son of Andrew Brunson, has been accused of being the link between the pastor and the Gulenist terror group. As on August 17, 2018, Turkish court in the province of Izmir, rejected an appeal to release Brunson, the lawyer of Brunson on August 30, 2018, has now decided that they would go to European Court of Human Rights.
The only way for both countries to reinstate their extremely disturbed relations is by reconciliation and consensus. Otherwise, the entire world would have to suffer from their delicate and shabby relationship.
Leftists make a comeback in Latin America
In Argentina and Uruguay, leftist candidates won the elections and Evo Morales could maintain his position as the president of Bolivia, but in Chile, people have protested against the U.S.-backed president.
The failure of the U.S.-backed candidate in the Argentinean election in recent days was a sign of the U.S. failure in Latin America. Leftist Alberto Fernandez, an opponent of U.S. interventionist policies, won about 48 percent of the vote in general election and was announced as the new president in the first round.
This is while countries such as Venezuela and Cuba have maintained their anti-U.S. sentiment. Although the U.S. has made an unceasing effort in the last two years to overthrow the current regime in Venezuela, it has not succeeded.
The New Left movement in Latin America, which was formed by the late Venezuelan president Hugo Chaves, has put Venezuela in many troubles but reduced U.S. influence in the region to the point that even experts suggested that Washington has lost its backyard.
The New Leftist governments emerged in Latin America in the late 20th century. Leftist leaders have distanced from some of traditional principles, but maintained the fight against American hegemony, just like their predecessors. Latin America, with rich sources of oil, gas, and uranium, as well as great opportunity for investment, has been of particular importance from a geopolitical, geostrategic and geo-economic perspective. The U.S. has put control over Latin America on its agenda since 1823 when then president James Monroe offered his plan known as the “Monroe Doctrine”.
The Monroe Doctrine emphasized that as long as the U.S. had not achieved real power and growth, it cannot be considered as an active element and main actor in world politics, thus it should obtain necessary economic growth in Western Hemisphere. The doctrine also stated that South America and Caribbean are areas with high security priority whose fate is tied to the U.S. fate, and the U.S. must have a strong influence in the region to provide its own growth and development.
In the late 20th and early present century, Latin America has witnessed new developments, including the New Left movement. The New Left in Latin America was founded and developed as leaders such as Chavez in Venezuela, Luiz Inacio Lula da Silva in Brazil, Evo Morales in Bolivia, Rafael Correa in Ecuador, and Daniel Ortega in Nicaragua came to power.
Opportunities and threats
The U.S. is concerned about the presence of its rivals, especially Russia and China, in Latin America and the cooperation of these two countries with leftist states in the region. To counter China and Russia’s influence, the U.S. has launched various plans to undermine leftist governments through economic crises and put its allied right-wing figures into power.
Washington’s comprehensive effort to topple the Maduro administration in Venezuela is an example. On the other hand, China and Russia’s approach to Latin America and the tendency of New Left countries to ally with Beijing and Moscow can be a major deterrent to the implementation of the U.S. plan in the region.
This is while the Trump administration is trying to redefine U.S. role and position in Latin America. From Trump’s point of view, the wrong policies of previous governments and developments have caused the U.S. to lose its control over Latin America and the Caribbean, and instead increased the influence of U.S. rivals, including China, in the region.
In an interview with Foreign Policy, following his recent visit to Colombia, Air Force Chief of Staff General David Goldfein said that the Trump administration is making a push to strengthen alliances across Latin America as part of an effort to counter rising Chinese and Russian influence in the United States’ backyard.
Goldfein said Colombia and other Latin American countries risked being locked out of U.S. and allied operations if they stopped buying military hardware from the United States and turned to other markets instead.
China has invested heavily in the region to reach Latin America’s oil reserves. Beijing has now become the largest trading partner of some Latin American countries, including Brazil, Chile, Cuba and Uruguay.
Russia also continues to sell billions of dollars in arms to Latin American countries. Unlike China, which seeks to use Latin American natural resources for its economic growth, Russia’s interests in this region are more strategic.
From our partner Tehran Times
Democrats take a gamble on Trump’s impeachment
Despite all ups and downs, Democrats finally brought impeachment inquiry into President Donald Trump to the House of Representatives, a move which made Trump’s prediction come true.
The House of Representatives passed a resolution on Thursday to launch an impeachment inquiry into Trump, thereby making formal investigations against him possible. The resolution was approved by a vote of 232 to 196.
Accordingly, the House of Intelligence Committee carries out the investigations into the impeachment and reports its findings to the Judiciary Committee that comments on the process of impeachment.
Trump has said that the House will get enough votes to impeach him, but he is certain that the Senate will acquit him of charges.
Investigations into Trump’s impeachment began on September 24 following the official order of Speaker of U.S. House of Representatives Nancy Pelosi.
The order came after reports about Trump’s telephone call with Ukrainian president for investigation into his possible rival Joe Biden.
During the conversation Trump asked his Ukrainian counterpart Volodymyr Zelensky for a “favor”. He pressured Zelensky to investigate Joe Biden, his possible Democratic rival for the 2020 presidential election, and his son Hunter Biden who was on the board of a Ukrainian oil and gas factory. At the time, Trump had suspended $400 million military aid to Ukraine as a quid pro quo.
Why Nancy Pelosi risks?
It should be noted that some Democrats have called for Trump’s impeachment since his first months of his presidency. The impeachment inquiry was popular among Democratic voters, with a recent poll showing that %73 of them favoring the impeachment.
But Republicans are strongly opposed to impeachment, and the country generally relies on Republicans. That is why Nancy Pelosi and other leading Democrats were first reluctant to officially begin an impeachment. Their calculations have so far revealed that impeachment against Trump will not have much effect on the opinion of Republicans and his supporters, a situation which will make it more difficult to remove him from the 2020 election.
Trump has described the impeachment as “fake”. Pelosi said that Trump has affirmed that he had asked the Ukrainian president to take actions in favor of his political position, claiming the measures of Trump’s administration were undermining U.S. national security.
“The release of the notes of the call by the White House confirms that the president engaged in behavior that undermines the integrity of our elections, the dignity of the office he holds and our national security,” Pelosi said in a statement.
House Intelligence Committee Chairman Adam Schiff also said that the president should prioritize national interests rather than his personal interests. Schiff added that they will study whether Trump has exploited military aid to Ukraine to meet his demands.
Consequences of Trump’s impeachment
Experts argue that Trump’s impeachment and lack of a decisive leader will make the U.S. more vulnerable to other countries’ plots. As Robert W. Merry recently said in The National Interest magazine, “When the president is weakened at home, then America is weakened abroad.”
However, Washington’s friends and enemies consider U.S. foreign policy insignificant due to political infighting at home. Instead, the great power players are seeking to limit the influence of the country rather than cooperating with it.
The recent accusations against Trump can be easily stated as a national security issue, which needs to be reformed immediately. Theoretically, military aid will be provided only if U.S. officials become convinced that they can achieve main security objectives of Washington. Therefore refusing to provide aid because of political reasons is a serious wrongdoing, showing that the personal interests of the president is superior to U.S. national interests.
Will the impeachment inquiry get the necessary vote?
Now that the House has launched an impeachment inquiry into the president, the Senate will play an important role in the process. In this case, the Senate will act as a court that decides on Trump’s dismissal or survival.
To oust Trump, the votes of 67 members of the Senate is needed, which would be two-thirds of their population. Currently, there are 53 Republicans and 47 Democrats in the Senate. Therefore, Democrats need the support of 20 Republican senators.
Since the Republicans have not supported Trump’s impeachment, it is highly unlikely that Trump’s impeachment leads to his dismissal.
Impact of the impeachment on the 2020 presidential election
The impact of Trump’s impeachment on the presidential election depends on his defense and the credibility of accusations against him. Democrats are well aware that accusing Trump of corruption and incompetence will not affect American voters. Democrats probably knew that those allegations were not strong enough to undermine Trump, but on the contrary they would undermine their positions.
By stating an issue related to U.S. national security, Democrats took the risk of impeachment. To make the impeachment strategy successful, Democrats should prove that the president has endangered U.S. national security and he may do the same in future. This claim can go beyond party politics and put unbearable pressure on Trump, Republicans and uncertain voters.
From our partner Tehran Times
Russian Involvement in Venezuela is Troublesome for Western Hemisphere
The U.S. Energy Information Administration (EIA) “projects that natural gas consumption in Asia will continue to outpace supply.” With the future growth of natural gas consumption concentrated in Asia the EIA “expects ‘non-OECD Asia’ to consumer 120 billion cubic feet per day (Bcf/d) by 2050, outpacing regional production by 50 Bcf/d.” China’s natural gas consumption will “triple between 2018-2050.” Most long-term natural gas infrastructure, global liquid natural gas (LNG) terminal(s) import and export, and demand projections are based on Asian growth.
Late October reporting in Russian media confirmed Russian energy conglomerate, Rosneft had plans to consolidate Venezuela’s National Oil Company PDVSA (Petroleos de Venezuela) under Rosneft’s corporate structure in exchange for debt relief. This counters U.S., Canadian and Mexican oil and natural gas firms from satisfying natural gas demand from non-OECD Asia. Additionally, it allows Moscow to use Rosneft acquiring Venezuelan natural gas as a geopolitical, soft power coercion tool by acquiring some of the largest recoverable oil and natural gas reserves in the world.
Venezuelan government sources, Rosneft and the Kremlin all denythe potential for a takeover of PDVSA energy assets to satisfy Russian bank loan requirements to the Madero regime. Russian energy experts have visited PDVSA to analyze the possibility of merging with Rosneft. The Russian energy giant buying out Venezuela’s best source of hard currency and domestic economic driver illustrate the “hard-hitting impact of U.S. sanctions.” The Venezuela regime-based economy predicated on oil and natural gas production is on the verge of collapsing.
Rosneft’s offer is the best way outside of western help for Venezuela to mitigate damaging sanctions, and “debt relief for a country that owes over $156 billion to external parties – and Venezuela’s debt is 740% higher than the value of its exports.” This is four times more than what is typical in emerging markets and economies according to The World Bank.
U.S. Special Envoy for Venezuela Elliot Abrams has pointed to Rosneft having joint projects with PDVSA where it took leading minority stakes, and how these ventures do not “breach” U.S. sanctions. This is positive news for average Venezuelan citizens suffering under economic malaise. Caracas’ debt to Moscow seemingly is being forgiven under the auspices of U.S. blessing. However, the Trump administration has been clear in its maximum pressure “sanctions policy towards Venezuela” that mirrors the sanctions-strategy towards Tehran. Retaliation from the U.S. could be the future of Washington-Moscow-Caracas tri-lateral relations if Rosneft tries to liquidate PDVSA assets, and release thousands of employees to skirt U.S.-led western sanctions.
The Maduro regime will also need to navigate the “$20-$60 billion in debt owed” to China. Will the Chinese have a stake in PDVSA? If so, how does that play into the current U.S.-China trade negotiations? What these geopolitical decisions points towards is a Rosneft-PDVSA merge bringing up more questions than answers.
It makes sense for Russia to be the power broker in Venezuela. This is similar to how Russia is the safe diplomatic choice in the Middle, post-Syrian civil war. According to Foreign Affairs, Russia is now “the Indispensible Nation in the Middle East.” Military troops and hardware were used to save the Assad regime, and now in Venezuela it will be oil, natural gas and petrochemicals that gives Russia a solid foothold in the western hemisphere. PDVSA is one of the “world’s most prolific oil companies” with the largest extractable oil and gas reserves in the world – estimated at 300 billion barrels and PDVSA’s estimated worth is “approximately $186 billion.”
Putting this energy portfolio under Kremlin influence gives Rosneft and other energy firms aligned with Moscow solid footing to control price and supply for global oil and petrochemical markets. The Maduro government wants to stay with previous joint venture contracts between PDVSA and Rosneft, and if the merger takes place, wants to “hand control over to Rosneft without having to go through privatization.” Financial questions arise from this arrangement; who is responsible for terms of debt, how is China able to value the deal, and would equity be defined as a public, private or some form of public-private entity? These are some of the larger issues that would need to be resolved.
Maduro can possibly work around these issues when he took over Venezuela’s Supreme Tribunal of Justice. This allows Maduro to ignore the democratically elected Legislature, the opposition-controlled National Assembly, and its leader, Juan Guaido. Mr. Guaido claims he is the legitimate leader of Venezuela, but likely Rosneft with Moscow’s backing will only negotiate with the Maduro government. The Supreme Tribunal of Justice can overrule the Assembly to assist the merger towards completion. Debt repayment is important to the Maduro regime, and return to financial health.
Citgo, a U.S. based company that is a valued asset for PDVSA is another area of concern for the proposed merger in tandem with U.S. sanctions.
American officials have implemented a freeze on all Venezuelan assets based in the U.S. Washington implemented an executive order coinciding with sanctions protecting “bondholders and other parties” mulling asset sales and seizures for unpaid debts. The international desire among government and financial officials is this move by the Americans facilitate diplomatic solutions over asset seizure. The downside is it strengthens Maduro over the elected Venezuelan legislature and Assembly leader Guaido.
Debt holders who own Citgo then have to negotiate with Venezuela and Rosneft. This will be tough for bondholders to receive repayment, or will it, as this could mean tougher going for international credit markets to lend money for future Rosneft/PDVSA projects. A Moscow-Caracas alliance is something Washington could believe will increase geopolitical tension between all three countries. Debt relief for Caracas, and control over the world’s largest oil reserves are likely to be the final push for Rosneft to acquire PDVSA over escalating tensions between Moscow and Washington with Caracas stuck in the middle.
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