AKP policies encouraging U.S. sanctions during economic vulnerability - U.S. scholars

Turkey’s adversarial stance towards the United States and Europe could lead to sanctions that tip the country’s current economic problems into a full-blown crisis, according to a memo published on Monday by the Washington D.C.-based think tank Foundation for Defense of Democracies.

Turkey is already suffering the effects of economic mismanagement by the ruling Justice and Development Party (AKP), which has become dominated by a narrow and paranoid clique, senior vice president Jonathan Schanzer, senior fellow Aykan Erdemir, and researcher Merve Tahiroğlu said in the memo.

This has coincided with consolidation of vast powers under President Recep Tayyip Erdoğan under the new executive presidential system last year, and the consequent loss of independence for vital institutions including the central bank, they said.

“Turkey is experiencing one of the worst economic downturns in its history,” with inflation over 20 percent combining with a serious slide in the lira, high unemployment and the start of a recession in the last quarter of 2018 to raise the prospect of slumpflation this year.

This could be exacerbated if the AKP continues to pursue policies that inflame tensions with its western allies or ramps up its authoritarian tendencies at home, the scholars said.

The United States is already on alert about Ankara’s tendency to cooperate with countries it has placed sanctions on.

Last year an executive at Turkish state-run Halkbank was found guilty of participating in a scheme to move Iranian money through the bank, contravening sanctions. Evidence revealed during the trial pointed to the involvement of Turkish ministers, and according to testimony from a key, Erdoğan himself had greenlighted the scheme.

While Halkbank is still awaiting a potentially crippling fine, eyes have turned to Venezuelan President Nicolas Maduro, whose administration has survived large-scale protests and an opposition claim to the presidency thanks partly to strong support from Ankara.

While the United States has placed sanctions on Maduro’s government and backed opposition leader Juan Guaido’s challenge, Ankara has increased trade with the Latin American country and is potentially breaking sanctions already by playing a key part in Venezuela’s gold trade.

Erdoğan had already been facing the prospect of a strong response from the United States since signing the deal to buy S-400 missile defence systems from Russia in December 2017.

With the Turkish president appearing determined to go through with the deal, Turkish officials and institutions could face sanctions according to “Section 231 of the Countering America’s Adversaries Through Sanctions Act mandates sanctions against individuals or entities that engage in significant transactions with the Russian defense or intelligence sectors”.

Other avenues that could lead to retaliatory measures by the United States include the imprisonment of U.S. citizens and employees on terror charges, and support for proscribed organisations, including the Palestinian Islamist organisation Hamas, the scholars said.

Declining religious freedoms in Turkey could also trigger sanctions under the International Religious Freedom Act, the scholars said.

As a result of these disagreements, it would be unwise for Ankara to rely on its importance to Washington as a military ally to shield it from a U.S. response, they said.