Raisi visit to Turkey to focus on Gaza

According to Reuters, Iranian President Ebrahim Raisi will visit Ankara on January 04, 2024 to meet his Turkish counterpart Tayyip Erdogan for talks likely to focus on the situation in Gaza and Syria as well as bilateral ties.

A visit by Raisi in late November was postponed due to the conflicting schedules of the two regional powers. At the time, Turkey's foreign minister was in New York as part of a contact group of Muslim countries on Gaza.

Turkey, which supports a two-state solution to the decades-old Israeli-Palestinian conflict, has harshly criticized Israel for its attacks on Gaza, called for an immediate ceasefire, and said Israeli leaders should be tried in international courts for war crimes.

While it has ramped up its rhetoric against Israel since it launched its air and ground assault on Gaza in retaliation for Palestinian militant group Hamas' October 07 attack, Turkey has also maintained commercial ties with Israel, prompting criticism from some opposition parties and Iran.

Unlike its Western allies and some Arab nations, NATO member Turkey does not consider Hamas a terrorist group.

Its neighbor, Iran stands at the head of what it calls the Axis of Resistance, a loose coalition that includes Hamas as well as armed Shi'ite Muslim groups around the region that have militarily confronted Israel and its Western allies. It has voiced support for Hamas and warned of wider consequences if the fighting in Gaza continues.

Turkey and Iran have usually had complicated ties, standing at loggerheads on a host of issues, primarily the Syrian civil war. Ankara politically and militarily backs rebels looking to oust President Bashar al-Assad, while Tehran supports his government.

While several rounds of talks have been held between Syrian, Turkish, Iranian and Russian representatives to find a political solution to the war, Ankara has also moved to improve ties with Assad as part of a regional diplomatic push launched in 2020.

 

 

Erdogan terms Israeli assaults in Gaza massacre

Turkish President Tayyip Erdogan said on Wednesday that Israel's blockade and bombing of Gaza in retaliation for Palestinian militant group Hamas' attack was a disproportionate response amounting to a massacre.

With Ankara offering to mediate, Erdogan and his foreign minister held calls with regional powers, the United States and others. However, Israel's envoy to Ankara has said it is too early to discuss mediation.

Speaking to his ruling AK Party in parliament, Erdogan said even war had a morality but the flare-up since the weekend had very severely violated that.

"Preventing people meeting their most fundamental needs and bombing housing where civilians live - in short, conducting a conflict using every sort of shameful method - is not a war, it's a massacre," he said, referring to Israel cutting off electricity and water to Gaza and destroying infrastructure.

Turkey, which has backed Palestinians in the past and hosted members of Hamas, has been working to mend ties with Israel after years of animosity. Unlike the European Union and US, Ankara does not consider Hamas a terrorist organization.

While not openly blaming Israel, Turkey has said the fighting is due to years of injustices against Palestinians and that the only path to peace is the formation of a sovereign Palestinian state in a two-state solution.

On Wednesday, Erdogan criticised Israel's disproportionate attacks on Gaza as devoid of any ethical foundation, and called on the world not to blindly take one side. Leaving the underlying issue unresolved would lead to new, more violent conflicts, he warned.

"We call on countries in the Americas, Europe, and other regions to take up a position between the parties that is fair, just, and based on humanitarian balances. Everyone should refrain from acts that will wholly punish the Palestinian people, like blocking humanitarian aid," he said.

Colors promoting UN goals or LGBTQ rights

Turkish President Tayyip Erdogan said that he was uncomfortable with the use of LGBT colors at the United Nations, decorated with bright colors promoting the Sustainable Development Goals.

Erdogan said he would have liked to discuss it with UN Secretary General Antonio Guterres, Turkish media reported on Thursday. Turkish government - led by Erdogan and his Islamist-rooted AK Party - has toughened its stance on LGBTQ freedoms.

"One of the issues that bothers me the most ... is that when entering the United Nations General Assembly, you see the LGBT colors on steps and other places," Erdogan was quoted as saying by broadcaster Haberturk and others.

"How many LGBT are there in the world right now? However much right they have on these steps, those against LGBT have as much right as well," said Erdogan, who has frequently labeled members of the LGBTQ community as "deviants" and particularly toughened his rhetoric during his election campaign this year.

However, some UN diplomats suggested Erdogan might have confused the 17 different colors associated with the Sustainable Development Goals - and decorating parts of UN headquarters, including steps, for a summit that was held earlier this week - with the rainbow Pride colors associated with LGBTQ rights.

While Guterres has been a vocal supporter of LGBTQ rights and spoken out about discrimination, there are no rainbow Pride colors at UN headquarters promoting LGBTQ rights.

The 17 Sustainable Development Goals, adopted by world leaders in 2015 with a deadline of 2030, are a global "to do" list that includes wiping out hunger, extreme poverty, battling climate change and inequality, and promoting gender equality.

 

Turkish lira drops 7%

Turkish lira plunged 7% to a record low on Wednesday in its biggest daily selloff since a historic 2021 crash, a move traders said was a strong signal that Ankara was moving toward a freely traded currency, away from state controls.

The lira has come under increasing pressure since President Tayyip Erdogan was re-elected on May 28. It slipped to a record low of 23.17 against the US dollar at 1023 GMT on Wednesday, bringing its losses this year to more than 19%.

For much of this year, authorities have taken a hands-on role in foreign exchange markets, using up tens of billions of dollars of reserves to hold the lira steady. The bank's net foreign exchange reserves touched a record low of negative US$4.4 billion last month, after forex demand surged during the election process.

Four traders said the decline in the central bank's forex and gold reserves had stopped as of last week, and that they could enter an upward trend, along with signs of the change in forex policies.

"There are many regulations and changes that need to be made but the destination we are headed in is becoming clearer every day. We are going towards the lira's value being determined by market conditions," one trader said.

Erdogan announced his new cabinet at the weekend and named Mehmet Simsek, a former deputy prime minister who is well regarded by foreign investors, as finance minister. Simsek later said economic policy needed to return to rational ground.

Markets are also waiting for the appointment of a new central bank governor to replace Sahap Kavcioglu, who spearheaded rate cuts under Erdogan's unorthodox policies.

"We are seeing policy normalization play out," said Tim Ash at BlueBay Asset Management. "I think we are seeing the impact of Simsek pushing the Turkish central bank for rational policy."

Another trader said the lira was nearing expected levels with sharp intraday losses, adding these would continue for some time. The lira is getting closer every day to a level that will not need to be defended with reserves.

Some analysts expect the lira to weaken towards a range of 25-28 against the dollar.

Under pressure from Erdogan, a self-described enemy of interest rates, the central bank slashed its policy rate to 8.5% from 19% in 2021 to boost growth and investment. But it sparked a historic lira crisis in December of 2021 and sent inflation to a 24-year high above 85% last year.

The return of Simsek, who was finance minister and deputy prime minister in 2009-2018, signalled a move away from the unorthodox rate cuts despite high inflation that have sparked a more than 80% erosion in the lira's value in five years.

Erdogan is considering appointing Hafize Gaye Erkan, a senior finance executive in the United States, as central bank governor, Reuters reported on Monday. Erkan met with Simsek in Ankara on Monday.

Erkan would be the country's fifth central bank chief in four years, after Erdogan fired previous governors as part of frequent policy pivots.

Turkish authorities are now hoping foreign investors will return after a years-long exodus, but market watchers cautioned that Erdogan turned to conventional policies in the past only to change his mind shortly after.

Turkey's sovereign dollar-denominated bonds gave away early gains to trade slightly negative on the day. ,

The premium demanded by investors to hold the country's hard-currency bonds over safe-haven US Treasuries widened again to 472 bps after tightening nearly 200 bps in the second half of May, data from JPMorgan showed.

"Even without political interference, the process of getting Turkey onto a sustainable path is going to be turbulent, and likely involves substantial devaluation and higher yields," said Paul McNamara, director of emerging market debt at asset manager GAM.

"We think fair value for the lira is probably 15% or so lower, but containing a devaluation without substantial external support is going to be a desperately difficult task," he said before Wednesday's decline.

"Orthodoxy would involve (above all) allowing the lira to find a sustainable level without intervention and abandoning the de facto capital controls currently in place."

 

Turkey: Erdogan rival accuses Russia of deep fake campaign

Kemal Kilicdaroglu, the main election rival of Turkish President Tayyip Erdogan, issued a warning to Russia, accusing it of responsibility for the release of fake material on social media ahead of Sunday's ballot.

Kilicdaroglu, who has a slight lead over long-time leader Erdogan according to opinion polls, did not specify to which material he referred.

A third presidential candidate, Muharrem Ince, withdrew from the race on Thursday citing a faked character assassination carried out online. He gave few details.

Kilicdaroglu accused Turkey's Russian friends of responsibility for the release in this country yesterday of montages, plots, deep fake content...

"If you want to continue our friendship after May 15, withdraw your hand from the Turkish state. We are still in favour of cooperation and friendship," he said on Twitter on Thursday evening in both Turkish and Russian.

There was no immediate comment from Russian officials.

Moscow and Ankara have close ties and Russia is Turkey's largest supplier of energy. President Vladimir Putin and Erdogan hold frequent talks on issues ranging from energy to the wars in Ukraine and Syria.

In the tense campaign ahead of the May 14 presidential and parliamentary votes, political figures from both the Erdogan and Kilicdaroglu camps have complained about online accusations, including the posting of videos and photographs.

 

Are Russia and Iran friends or foes?

A budding courtship between Russia and Iran is an unwelcome development for the West in general and the United States in particular.

Russian President Vladimir Putin used a rare foreign trip on Tuesday to hold talks in Tehran with Supreme Leader Ayatollah Ali Khamenei and President Ebrahim Raisi, as well as Turkish President Tayyip Erdogan.

The fact that Russia and Iran are competing energy producers is likely to place limits on any deeper partnership.

Here's a look at some of the key questions that their developing relationship poses.

CAN IRAN HELP RUSSIA IN THE UKRAINE WAR?

US officials have said Iran is preparing to help supply Russia with several hundred unmanned aerial vehicles (UAVs), or drones, including some that are capable of firing weapons, but neither country has confirmed it. Russian presidential aide Yuri Ushakov was quoted by RIA news agency as saying Putin had not discussed the issue with Iran's leaders.

"Russia deepening an alliance with Iran to kill Ukrainians is something that the whole world should look at and see as a profound threat," US National Security adviser Jake Sullivan said last week.

Ukraine has used Turkish-supplied Bayraktar drones to lethal effect in targeting Russian units and destroying huge quantities of tanks and other armored vehicles. Jack Watling, a war expert at the RUSI think-tank in London, said Iranian drones would be useful to Russia for both reconnaissance and as loitering munitions that can bide their time in locating and engaging suitable targets.

"Beyond supplying UAVs Iran can also help Russia evade sanctions and potentially collaborate on the manufacture of weapons systems that are less dependent upon supply chains through Western countries," he said.

WHAT CAN RUSSIA LEARN FROM IRAN ON SANCTIONS?

Iran has many years of experience of defending itself against Western sanctions over its disputed nuclear program. "The Russians see Iran as being highly experienced at, and a potentially valuable partner, in evading Western sanctions," said Watling.

Russia, meanwhile, has been hit with waves of sanctions against banks, businesses and individuals over the war in Ukraine. Both countries therefore lack access to Western technology and capital, said Janis Kluge of the SWP think-tank in Berlin.

"There might be some lessons that Russia can learn from Iran... In exchange, Russia could offer military goods and possibly raw materials or grain," he said. Russia is already a major supplier of wheat to Tehran.

With some Russian banks cut off from the SWIFT international payments system, Moscow is developing an alternative in which Iranian banks could be included, Kluge said.

More broadly, Iran is part of a wider group of countries - also including China, India, Latin America and Arab and African nations - with which Russia is forging stronger ties in a bid to prove its claim that it can thrive under sanctions and that these will only rebound on the West.

HOW CAN RUSSIA AND IRAN COOPERATE ON ENERGY?

This is potentially a sensitive question, both countries are oil and gas producers, and competition between them has intensified since the start of the Ukraine war as Russia has switched more of its oil exports to China and India at knock-down prices.

"On the economic dimension, the war has significantly worsened their relationship. Moscow is eating Tehran’s lunch in commodity markets and has even fewer resources to throw at projects in Iran," said Henry Rome, deputy head of research at Eurasia Group.

Coinciding with Putin's visit, however, the National Iranian Oil Company and Russia's Gazprom signed a memorandum of understanding worth around US$40 billion under which Gazprom will help NIOC develop two gas fields and six oil fields, as well as taking part in liquefied natural gas (LNG) projects and construction of gas export pipelines.

WILL ANYTHING CHANGE IN THE IRAN NUCLEAR TALKS?

The Ukraine war has changed Moscow’s approach towards talks on reviving the 2015 Iranian nuclear deal, known as the JCPOA.

Eleven months of talks to restore the deal, which lifted sanctions on Iran in return for curbs on its nuclear program, had reached their final stages in March. But they were thrown into disarray over a last-minute Russian demand for written guarantees from Washington that Western sanctions targeting Moscow over its invasion of Ukraine would not affect its trade with Iran.

Although Russia quickly retreated under Iranian pressure, diplomatic momentum for an agreement was lost. The talks have stalled since then over various remaining issues.

Whether the deal can get back on track will be one measure of the impact of the rapprochement between Putin and Iran's leaders.

"Russia’s interference in the JCPOA talks was a significant reversal of the traditional Russian approach and probably further fanned suspicions in Tehran about Moscow’s reliability and trustworthiness," said Rome of Eurasia Group.

Putin’s Most Difficult Demands

According to The Epoch Times, Russian President, Vladimir Putin has laid out several demands for Ukraine including two ‘most difficult issues’ during a phone call with Turkish President, Tayyip Erdogan.

The demands can be divided into two parts; Turkish presidential spokesperson Ibrahim Kalin told several media outlets. 

The first four articles appear to be possible common ground for both sides.

“Basically, there are six topics:

The first is Ukraine’s neutrality, that is, its withdrawal from NATO membership.

Second, disarmament and mutual security guarantees in the context of the Austrian model.

Third, is the process that the Russian side refers to as ‘de-Nazification.’

Fourth, removing obstacles to the widespread use of Russian in Ukraine,

Some progress has been made in the above four topics. However, it’s too early to say there is potentially a full agreement that could be reached because there are two other “most difficult issues.”

Putin put forward two territory-related demands.

Putin would require Ukraine to recognize Russia’s annexation of Crimea, and admit the independence of the Donbas, a disputed region in southeastern Ukraine.

Putin recognized the independence of Donetsk People’s Republic and Luhansk People’s Republic, two separatist territories in the Donbas, days before he ordered a full invasion of Ukraine.

Putin reportedly told Erdogan he would hold talks with Ukrainian President Volodymyr Zelensky personally about the territory-related issues if the two sides reached common ground on the first four areas.

The Epoch Times reached out to the Ukrainian government and the Russian government for comments.

Zelensky has been asking Putin to talk with him directly after the war broke out. He proposed again on Saturday that the disputes between Russia and Ukraine be solved through meaningful talks.

“Negotiations on peace, on security for us, for Ukraine—meaningful, fair, and without delay—are the only chance for Russia to reduce the damage from its own mistakes,” he said in a statement.

He also warned that the war would cause huge losses to Russia if the two sides don’t reach a timely end to the war.

“Otherwise, Russia’s losses will be so huge that several generations will not be enough to rebound,” he said.

Putin ordered a full-scale invasion of Ukraine on February 24, after the efforts to deter war failed.

The United Nations said that, as of March 19, they had recorded 847 deaths and 1,399 injuries of civilians in Ukraine because of Russia’s military action against Ukraine, mostly caused by shelling and airstrikes.

However, the U.N. believes that the actual figures are considerably higher.

Over 3.3 million people have fled Ukraine since the war began, United Nations data show.

 

Istanbul Canal: Commencement of a crazy project

On 6^th May 2021, I had posted a blog titled Istanbul Canal: Benefits and pitfalls reporting Turkey’s intention to start work this year on Istanbul Canal project, an artificial canal connecting the Black Sea to the Sea of Marmara. 

Today, I was astonished to read a Bloomberg report, Turkish President Recep Tayyip Erdogan saying the construction of a multi-billion dollar canal, an alternative to Istanbul’s Bosporus strait, will begin by end June.

Erdogan’s announcement came a decade after he first revealed his “crazy project” and at a time when his support has hit an all-time low. The 45-kilometer (28-mile) Canal Istanbul would cost around US$15 billion and link the Black Sea with the Sea of Marmara.

The government says it is meant to ease shipping traffic and the risk of accidents in the Bosporus, which bisects Turkey’s biggest city.

Erdogan is betting that the building of the canal and the rise of new cities along its route will create thousands of jobs and wealth that will dramatically boost the country’s economic growth and reverse the slide of his popularity ahead of the 2023 presidential elections. Discontent has grown over the Erdogan government’s handling of the economy and over allegations of corruption from a mafia boss, which he’s dismissed.

During the president’s 18-year rule, Turkey has poured tens of billions of dollars into giant infrastructure projects, including the new Istanbul airport, a new bridge over the Bosporus and massive city hospitals.

The planned waterway is projected to create a new city of half a million, with several bridges connecting the two sides. Shares of Turkey’s state-run property developer Emlak Konut and cement-maker Akcansa Cimento, a partnership between HeidelbergCement and Sabanci Holding, climbed as much as 6.4% and 7.6%, respectively on Monday.

“We will lay the foundations of the Canal Istanbul at the end of June,” Erdogan said at the opening ceremony of a TV signal tower on the anniversary of the capture of Istanbul by Ottoman Turks in 1453 on Saturday, a day after inaugurating a giant mosque in Istanbul’s central Taksim square. “We will build two cities on the right and left of the Canal Istanbul. With these two cities,” Istanbul’s beauty and strategic importance will increase, he said.

In order to mitigate the impact of the pandemic on the economy, his government is struggling to open up the economy and revive the tourism industry by ramping up vaccinations. The goal is to narrow the current-account deficit and alleviate sufferings of businesses that have complained about insufficient government support and families that are withering under soaring inflation.

Erdogan has dismissed concerns of his political rivals that the project would hit taxpayers, the environment and undercut a 20th-century agreement meant to ensure stability and security in the Black Sea. Erdogan has said Turkey won’t exit the 1936 Montreux Convention but said warships will be able to use the canal.

Istanbul’s Mayor Ekrem Imamoglu, who’s seen as a potential future challenger to Erdogan, is firmly opposed to the project, saying it would “annihilate” water resources for Istanbul’s 16 million residents, ruin the province’s nature beyond repair and make it unlivable. Turkish prosecutors on Friday demanded imprisonment of Imamoglu, whose victory in 2019 ended more than a quarter-century of control over Istanbul by Erdogan’s party and its predecessors, on charges of allegedly insulting the country’s election watchdog.

“The people of Istanbul elected Imamoglu on March 31 to prevent the destruction of the green, the city from being buried in cement, the people from being treated loutishly and finally block the formation of that freak system called the Canal Istanbul,” Meral Aksener, head of the opposition Iyi Party which backed Imamoglu’s candidacy, said at a competing ceremony marking the capture of Istanbul on Saturday.