Qatar defies US and sides with Turkey with $15bn investment pledge amid Lira crisis

Turkish President Erdogan meets with Emir of Qatar Sheikh Tamim in Ankara. (Presidential Palace/Handout)
Updated 16 August 2018

Qatar defies US and sides with Turkey with $15bn investment pledge amid Lira crisis

  • Emir's support for Erdogan comes amid trade, diplomatic spat with US
  • The Turkish currency has lost nearly 40 percent against the dollar this year

JEDDAH: Qatar defied US President Donald Trump on Wednesday and promised to plough $15 billion into Turkish financial markets and banks, amid a collapse in the value of the lira and a looming trade war between Turkey and the United States.

The bail-out followed talks in Ankara between the emir of Qatar, Sheikh Tamim bin Hamad Al-Thani, and Turkey’s President Recep Tayyip Erdogan. 

The lira has lost nearly 40 percent of its value against the dollar this year, driven by worries over Erdogan’s growing influence on the economy and his refusal to raise interest rates despite high inflation.

Last week the US doubled tariffs on aluminium and steel imports from Turkey, during a dispute over Turkey’s detention of an American pastor on security charges that the US views as baseless.

In response, Erdogan launched a boycott of US electrical products and sharply raised tariffs on other US imports.

Turkey and Qatar have become close economic and political partners. Doha has $20 billion worth of investments in Turkey, and Ankara is one of the top exporters to the emirate. Sheikh Tamim was the first foreign leader to call Erdogan after the aborted coup in Turkey in 2016, and Turkey — along with Iran — is one of the few countries to support Qatar against the boycott by the Saudi-led Anti-Terror Quartet over Doha’s financing of terrorism. 

Although Qatar has now pledged $15 billion it has not actually paid anything, and it may not be enough to solve Turkey’s economic problems.

Analysts also said the political cost of the investment remained to be seen, given that Qatar is also a US ally and dependent on Washington for both military and political protection.

“This is what happens when you choose to run with the hare and hunt with the hounds,” Dr. Hamdan Al-Shehri, a Saudi political analyst and international relations scholar, told Arab News. “The Americans have their base at Al-Udeid in Qatar so naturally they will expect Qatar to toe their line.

“Qatar has gravitated toward Turkey because of the Muslim Brotherhood link and the Iranian connection so now it finds itself in an unenviable situation. If they side with Turkey, they run the risk of antagonizing US President Donald Trump. If they back the American position on Turkey tariff penalties, then they lose Turkey.”

Al-Shehri said Ankara appeared to have blackmailed Qatar into supporting it. “They said they came to Qatar’s support during Doha’s row with its Arab neighbors, and now it was Qatar’s turn to pay back the favor.”


Turkey’s rulers plot law changes to block breakaway parties’ power grab

Updated 28 May 2020

Turkey’s rulers plot law changes to block breakaway parties’ power grab

  • President Recep Tayyip Erdogan’s AKP is working on a plan to stop parliamentary deputies from transferring to other parties

ANKARA: Turkey’s ruling Justice and Development Party (AKP) is looking at ways to change electoral laws in order to block challenges to power from two new breakaway political parties.

President Recep Tayyip Erdogan’s AKP and its nationalist coalition partner the MHP are working on a plan to stop parliamentary deputies from transferring to other parties — a move that has fueled rumors of an imminent snap election in the country.

Under Turkish election rules, political parties must settle their organization procedures in at least half of the nation’s cities and hold their first convention six months ahead of an election date.

Any political party with 20 lawmakers in Turkey’s parliament is entitled to take part in elections and be eligible for financial aid from the treasury for the electoral process.

The leader of the main opposition Republican People’s Party (CHP), Kemal Kilicdaroglu, has hinted at the possibility of transferring some CHP lawmakers to the newly founded parties to secure their participation in elections.

Turkey’s ex-premier, Ahmet Davutoglu, and the country’s former economy czar, Ali Babacan, both longtime allies of Erdogan, recently left the AKP to establish their own opposition groups, and have come under pressure from the AKP and MHP to leave their parties out of the race.

Babacan has been critical of Erdogan’s move away from a parliamentary system of governance in Turkey to one providing the president with wide-ranging powers without any strong checks and balances.

“The AKP is abolishing what it built with its own hands. The reputation and the economy of the country is in ruins. The number of competent people has declined in the ruling party. Decisions are being taken without consultations and inside a family,” Babacan said in a recent interview.

He also claimed that AKP officials were competing against each other for personal financial gain.

Babacan, a founding member of the AKP, was highly respected among foreign investors during his time running the economy. He resigned from the party last year over “deep differences” to set up his DEVA grouping on March 9 with a diverse team of former AKP officials and liberal figures.

Berk Esen, a political analyst from Ankara’s Bilkent University, believes Babacan’s recent statements have angered Erdogan.

“As a technocrat, Babacan gains respect from secular circles as well as the international community, which Erdogan clearly lacks. Despite being in office for 13 years, Babacan has not been tainted by corruption allegations and is known as the chief architect of Turkey’s rapid economic growth during the AKP’s first two terms,” he told Arab News.

“The legislation that the AKP-MHP coalition is working on may prevent deputy transfer only in case early elections are scheduled for the fall. Otherwise, the newly established parties will most likely build their organizations across the country and become viable for elections by summer, if not the spring of 2021.”

If Davutoglu and Babacan were successful in capturing disillusioned voters, they could prevent the ruling coalition getting the 51 percent of votes needed to secure a parliamentary majority.