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TUSIAD Turkey Letter: 25 March 2013

THIS WEEK:
FOREIGN & DOMESTIC POLICY
•  Obama ends Israel visit by brokering end to dispute with Turkey
•  Jailed leader of the Kurds offers a truce with Turkey
•  Turkey rejects Syria accusation for possible chemical attack
•  Iraq official fears split as Kurdish-Turkey oil trade grows
•  Turkey main staging point for illicit goods: Europol report
ECONOMY / ENERGY
•  Turkey’s central bank reverts to old playbook 

FOREIGN & DOMESTIC POLICY

Obama ends Israel visit by brokering end to dispute with Turkey

Prodded by President Obama, Israel and Turkey agreed Friday to end a three-year rift caused by a deadly Israeli commando raid on a Turkish ship bound for Gaza, a rapprochement urgently sought by the United States to help contain spillover from the worsening fighting in Syria. During an airport meeting with Obama at the end of his two-day visit to Israel, Prime Minister Benjamin Netanyahu phoned Turkish Prime Minister Recep Tayyip Erdoğan, Israeli and U.S. officials said.

Netanyahu apologized for the deaths of nine activists aboard the Turkish ship and promised to reach an agreement on compensation to their families, according to a statement from his spokesman. The Israeli and Turkish leaders agreed to restore normal relations, including the return of ambassadors and the cancellation of Turkish legal proceedings against four former senior Israeli army commanders accused of involvement in the raid, Israeli officials said. Netanyahu also agreed to ease restrictions on Gaza.

“The United States deeply values our close partnerships with both Turkey and Israel, and we attach great importance to the restoration of positive relations between them in order to advance regional peace and security,” Obama said in a statement. “I am hopeful that today’s exchange between the two leaders will enable them to engage in deeper cooperation on this and a range of other challenges and opportunities,” the president added.

Concern that Syria’s stockpile of chemical weapons could reach militant groups bordering Israel and Turkey was the motivation for restoring relations with Ankara after a three-year rift, Israel’s prime minister said Saturday. Netanyahu wrote on his Facebook page that Israel and Turkey, which border Syria, need to communicate with each other over the Syrian crisis. “The fact that the crisis in Syria intensifies from moment to moment was the main consideration in my view,” he said.

Erdoğan suggested on Sunday that “normalization” of ties with Israel would take time, hinting that Turkey wanted to ensure the victims of a flotilla raid were compensated and Israel remained committed to the easing of restrictions of goods to Gaza before relations are restored between the two nations.  “We have said: ‘an apology will be made, compensation will be paid and the blockade on Palestine will be lifted. There will be no normalization without these,” he said. “Normalization will happen the moment there is an implementation. But if there is no implementation, then I am sorry.”
~~~
Washington Post, 22 March 2013, Obama ends Israel visit by brokering end to dispute with Turkey
Foreign Policy, 22 March 2013, Inside Bibi’s apology to Turkey
Wall Street Journal, 22 March 2013, Israeli apology resets alliance with Turkey
Reuters, 22 March 2013, Obama brokers Israel-Turkey rapprochement
Washington Post, 23 March 2013, Fear over Syrian weapons motivated apology to Turkey, Netanyahu says

Jailed leader of the Kurds offers a truce with Turkey

The jailed leader of the Kurdistan Workers’ Party (PKK) Abdullah Öcalan on Thursday called for a cease-fire and ordered all his fighters off Turkish soil, in a landmark moment for a newly energized effort to end three decades of armed conflict with the Turkish government.

Since its start late last year, the peace effort has transfixed a Turkish public traumatized by a long and bloody conflict that has claimed nearly 40,000 lives and fractured society along ethnic lines. While there have been previous periods of cease-fire between Turkey and PKK, never before has there been so much support at the highest levels of both the Turkish and Kurdish leadership.

“We reached the point where weapons should go silent and ideas speak,” Öcalan wrote in a letter read out to crowds gathered in the Diyarbakır. “A new era starts when politics, instead of guns, comes to the forefront.”

The deal is far from done, however. Notably, while Öcalan called for militants to retreat to bases in the mountains of northern Iraq, he did not order them to disarm. And a long process of constitutional reform and negotiations over Kurdish prisoners lies ahead.

The Turkish government had come under bomb and missile attack the night before in what a deputy prime minister said could have

been an attempt to wreck the peace process before the announcement. Early on Wednesday, a small bomb exploded near state offices on the Asian side of Istanbul, damaging windows but resulting in no casualties, while police defused separate explosives in front of a cultural center in the city. Hours earlier, unidentified assailants attacked the Justice Ministry and offices of the ruling AK Party with homemade bombs and a shoulder-fired missile in the capital Ankara. One person was slightly wounded in the ministry attack. The outlawed Revolutionary People’s Liberation Party-Front, or DHKP-C, claimed responsibility.
~~~
Huffington Post, 20 March 2013, Turkey bombings: DHKP-C, Marxist group, claims attacks on ruling party headquarters, Justice Ministry
Reuters, 20 March 2013, Turkey targeted in bomb attacks before expected rebel ceasefire
The Guardian, 20 March 2013, Kurdish leader Abdullah Ocalan declares ceasefire with Turkey
Al Jazeera, 21 March 2013, Timeline: PKK conflict with Turkey
New York Times, 21 March 2013, Jailed leader of the Kurds offers a truce with Turkey
Reuters, 23 March 2013, Kurdish rebels declare formal ceasefire with Turkey

Turkey rejects Syria accusation for possible chemical attack

Turkish Prime Minister Recep Tayyip Erdoğan rejected an accusation from Syria on Tuesday that Turkey bore responsibility for a possible chemical attack in the northern province of Aleppo. “Turkey has never been in a situation in which it used chemical weapons. There are no chemical weapons in our inventory,” Erdoğan told reporters.

Syrian Information Minister Omran al-Zoabi said earlier that Turkey and Qatar, which have supported rebels fighting President Bashar al-Assad, bore “legal, moral and political responsibility” for the attack, state television reported.
~~~
Reuters, 19 March 2013, Turkey rejects Syria accusation for possible chemical attack

Iraq official fears split as Kurdish-Turkey oil trade grows

Rising oil trade between Iraqi Kurdistan and Turkey threatens to split Iraq in two, a senior Iraqi official said, as the autonomous region ignores Baghdad’s threats of tough action against what it terms illegal exports. “If oil from Kurdistan goes through Turkey directly, that will be like dividing Iraq. This is our big concern,” Iraq’s Deputy National Security Adviser Safa al-Sheikh Hussein said on the sidelines of an Iraq conference.
~~~
Reuters, 19 March 2013, Iraq official fears split as Kurdish-Turkey oil trade grows

Turkey main staging point for illicit goods: Europol report

Turkey is the main staging point for illicit goods and irregular migrants travelling to the EU from parts of Asia, a new report by Europol, European Union’s law enforcement agency, said March 19. The agency warned that Turkey’s borders with the EU remain vulnerable despite intense law enforcement focus.
~~~
Hurriyet Daily News, 21 March 2013, Turkey main staging point for illicit goods: Europol report

ECONOMY / ENERGY

Turkey’s central bank reverts to old playbook

Turkish bank lending growth has surged to a one-year high of 24% as of March 15 from 16.5% in the beginning of the year, according to central bank data. This helps drive a pickup in Turkey’s economic growth from growth of 3% last year, a significant slowdown after two years of rapid expansion averaging 9%. Data showed that the healthy rise in consumer credit so far this year is helping boost loan growth, despite official efforts to skew the expansion toward more stable commercial lending.

As growth in Turkey’s $800 billion economy accelerates, central bank governor Erdem Başçı is trying to keep interest rates low while raising reserve requirements to prevent excessive consumer lending, a policy he tried in 2010-2011.
~~~
Wall Street Journal, 25 March2013, Turkey’s central bank reverts to old playbook 

 

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