ANALYSIS
"NATO must wake up to Russia’s nuclear power deal with Turkey" by Gonul Tol, Financial Times
Akkuyu uses a build-own-operate (BOO) model unprecedented for the industry. Russia retains majority ownership but bears all the financial, operational and construction risks.
Moscow’s all-inclusive package covers construction, operation and personnel training, handling spent nuclear fuel and the ultimate decommissioning — all very appealing for a nuclear newcomer like Turkey. BOO contracts are expensive for Moscow, which is why Russia has only implemented it at Akkuyu and is reluctant to use it again. But President Vladimir Putin must have thought that the benefits of owning strategic infrastructure in a NATO country outweigh the financial risks. He’s probably right.
The BOO arrangement binds Turkey and Russia together for the next century, through an expected 60-year operating cycle and the subsequent decommissioning process.
Turkey’s opposition parties are against the project. To shield it, Erdoğan signed an intergovernmental agreement with Putin, making it constitutionally impossible for a post-Erdoğan government to contest it. That means Russia, known for using energy as a geopolitical weapon, will have direct control over strategic infrastructure in a NATO country for 100 years, no matter who is in power.
And that’s not all. Akkuyu NPP is close to Incirlik air base, home to NATO’s largest nuclear weapons storage facility and a hub for supporting alliance missions. The plant is also in close proximity to NATO’s ballistic missile defence radar facility at Kürecik. The BOO contract puts Russian personnel and assets near these NATO installations. Turkey may build another radar to protect the plant. Military analysts and defence officials fear that since Akkuyu NPP belongs to Russia, Moscow might demand to operate this radar and bring in troops to provide security.
"Turkey’s asset-price boom is good for some but terrible for most", The Economist
The rich are getting richer: the number of ultra-high net worth individuals (those with a value of $30m or more) in Turkey rose by 10% between 2022 and 2023. Yet ask the average Turk whether they feel they are getting wealthier, and the answer will almost certainly be no.
The figures are astonishing. According to a report from UBS, a bank, average wealth (financial and property assets minus debts) per Turkish adult increased by 158% in terms of the lira, Turkey’s currency, between 2022 and 2023—the highest rise by far of any country. Those who have had access to credit have often been able to get wealthier by taking out a loan at deeply negative real rates.
Well-off asset-holders may be watching their stash balloon. But for average people, the effect is less pleasant. Although whatever wealth they have is rising on paper, in the supermarkets their purchasing power has cratered.
“Those who can hedge get richer, and those who can’t get poorer,” says Murat Ucer, an economist and former adviser to Turkey’s economy minister. The new money is being splurged in the fashionable neighbourhoods of Istanbul and the celebrity-packed resorts of Bodrum.
"Turkey to host Iraq, Qatar, UAE officials for Development Road summit" by Amberin Zaman, Al-Monitor
Turkey will host a four-way summit with Iraq, Qatar and the United Arab Emirates on Aug. 29 to discuss an ambitious multi-billion-dollar project to connect the Iraqi port of Basra on the Persian Gulf to Turkey and beyond, Turkish Transport and Infrastructure Minister Abdulkadir Uraloglu said on Friday.
The estimated $20 billion project was formalized during Turkish President Recep Tayyip Erdogan’s official visit in April to Baghdad and will link the al-Faw port in Basra that is currently under construction to Turkey via a 1,275-kilometer (792-mile) rail and road network.
Nejat Tamzok, a Turkish academic, noted that the Development Road faces stiff competition from China’s Belt and Road Initiative, the US-supported India-Middle East-Europe Economic Corridor and Iran’s rival plans to develop its own ports for regional trade routes connecting Asia with the Middle East and Europe and is leery of any projects that would diminish its political and economic clout, as the Development Road likely would.
Analysts point out that Turkey and Iraq have signed multiple accords in the past that have rarely been fully honored. "Signing new deals that envisage carrying oil from Basra when even the existing Kirkuk-Yumurtalik oil pipeline between Turkey and Iraq remains sealed hardly inspires confidence", Arzu Yilmaz, an associate professor at the University of Kurdistan Hewler in Erbil, told Al-Monitor.
POLITICS
Main Opposition Leader Plans to Visit Palestine on September 1
Ozgur Ozel, leader of Turkey's main opposition Republican People's Party (CHP), announced that he may visit Palestine on September 1, coinciding with Turkey's World Peace Day celebrations.
Journalist Ismail Saymaz reported on August 20 that Ozel expressed his intention to visit Palestine as soon as he recovers from a foot injury sustained in a recent home accident.
CHP Plans New Strategy Against Government's Move on Municipal Debts
The Republican People’s Party (CHP) is preparing a response to the government's decision to collect municipalities' debts to the Social Security Institution (SGK), BBC Turkish reported.
During a meeting on August 20, chaired by CHP leader Ozgur Ozel, the focus of the meeting was on the government's recent notifications to municipalities about collecting SGK debts. Ozel accused the government of trying to "squeeze" CHP-run municipalities by cutting their resources.
The CHP plans to draft a bill to restructure these debts and implement measures to raise revenue. The party will also have its shadow ministers request meetings with Minister of Environment, Urbanization, and Climate Change Murat Kurum and Minister of Treasury and Finance Mehmet Simsek.
If these efforts do not yield results, some mayors suggested that Ozel might need to meet with President Recep Tayyip Erdogan due to upcoming collective labour agreements. They warned that without a resolution, they might be unable to pay staff salaries.
Bilal Bilici Joins CHP After Resigning from Good Party
Bilal Bilici, who recently resigned from the Good Party, joined the Republican People's Party (CHP). CHP leader Ozgur Ozel announced that Bilici, who was an Independent MP for Adana for a short time after leaving the Good Party, is now a member of the CHP. Bilici received his party badge from Ozel.
Bilici stated that he joined the CHP in response to Ozel's call for change and will continue his work within the party.
MHP Leader Bahceli Calls for Cuts in DEM Party Salaries and Treasury Aid
Nationalist Movement Party (MHP) Chairman Devlet Bahceli, in a written statement shared on social media on August 21, called for cutting the salaries of 57 People's Equality and Democracy (DEM) Party deputies and the party's Treasury aid.
Bahceli, who frequently links the 57 DEM Party deputies with the PKK terrorist organization, noted that they receive an annual salary of 116 million TL from the Treasury. He also noted that the Treasury aid DEM Party is set to receive in 2024 amounts to approximately 658 million TL.
The DEM Party quickly responded to Bahceli's remarks, accusing him of fueling hostility towards Kurds and harming social peace. The party claimed that MHP's real concern is not the love of the country but rather power, position, and personal gain.
ECONOMY
Turkey's Central Bank Keeps Interest Rates at 50% for Fifth Month
Turkey's central bank held its interest rates steady at 50% for the fifth consecutive month on August 20, as expected. The bank reiterated its vigilance against inflation risks while anticipating a faster pace of disinflation.
The central bank emphasized the importance of aligning inflation expectations and pricing with its own disinflation projections. It noted that indicators for the third quarter show a continued slowdown in domestic demand, reducing inflationary pressures.
While the latest interest rate decision by the Central Bank of the Republic of Turkey (TCMB) met expectations, foreign investors noted the hawkish tone in the bank's messages. Morgan Stanley described the move as a "hawkish surprise" and predicted that there would be no interest rate cuts in 2024.
Goldman Sachs, which initially predicted Turkey's first interest rate cut would occur in September, now suggests that a shift towards the dollar and rising inflationary pressures might delay the start of the rate cut cycle.
Isbank CEO Hakan Aran predicted the central bank would start easing monetary policy in November with a 250 basis-point rate cut, aligning with analysts' expectations. He expects the rate to drop to 45% by the end of this year and to 25% by the end of 2025.
Vice President and Finance Minister Simsek Deny Resignation Rumors
On August 21, Turkish media reported that Finance Minister Mehmet Şimşek attempted to resign two weeks ago but was persuaded by Vice President Cevdet Yilmaz to stay. Journalist Erol Mutercimler shared the claim on his YouTube channel, suggesting that Simsek's alleged resignation attempt stemmed from a dispute with the government over writing off billions of lira in tax liabilities and unpaid penalties for the wealthy. Mutercimler said Yilmaz intervened and barely convinced Simsek to remain in his position.
Vice President Yilmaz denied these claims, calling them "unsubstantiated" and "speculative." The anti-disinformation center of President Erdogan’s communications directorate also released a statement on X, dismissing the rumours of Simsek’s resignation and saying that the allegations were intended to create anxiety and undermine confidence in the markets.
Amid ongoing resignation rumours, Mehmet Simsek also posted on his X account on August 23, denying that he planned to resign. Simsek emphasized that the economic team was working together effectively and had started achieving their economic goals. He also noted that a significant and lasting decrease in inflation had begun and mentioned that they have always felt President Erdogan's "strong support" throughout this challenging process.
Card Payments in Turkey Surge by 89% in July
The Interbank Card Center (BKM) released its data for July, showing a significant increase in card payments. The total amount of payments made with credit cards, bank cards, and prepaid cards reached 1.421 trillion lira, an 89 percent increase compared to the same period last year.
Of this total, 1.201 trillion lira was paid using credit cards, which saw a 94 percent increase in payments compared to July of the previous year.
Company Closures and Liquidations Rise in July 2024
The Union of Chambers and Commodity Exchanges of Turkey (TOBB) released the latest "Established and Closed Company Statistics" on August 23.
According to the data, in July 2024, the number of newly established companies rose by 4.2% to 9,713, while the number of closed companies surged by 39.8% to 2,889, and the number of liquidated companies increased by 10.6% to 2,902 compared to the same month last year.
However, during the first seven months of the year, the number of newly established companies dropped by 14.5% to 62,389 compared to the same period last year, while the number of closed companies rose by 28.3% to 14,828, and liquidations increased by 3.8% to 15,077.
According to the updated weekly data from the Banking Regulation and Supervision Agency (BDDK), as of August 16, banks' commercial and other loans under follow-up reached 165.4 billion lira, up from 146.6 billion lira at the end of 2023 and 134.9 billion lira in the same week last year.
Turkish Farmers Protest Rising Costs and Falling Crop Prices
Farmers across Turkey are protesting due to soaring production costs and stagnant or falling crop prices. With rising fuel, fertilizer, and pesticide expenses, many farmers find that the prices they receive for their produce are insufficient to cover their costs, pushing them towards financial ruin.
The Turkish Statistical Institute (TurkStat) reports that agricultural input prices increased by 47.56% in June compared to the previous year. Meanwhile, prices for key crops like sunflower, corn, wheat, barley, and various fruits and vegetables have remained the same or dropped, with tomatoes falling below last year's levels.
Farmers struggling to pass on these increased costs are absorbing the financial burden themselves. Despite significant crop investments, they receive offers far below production costs, leading many to distribute their harvest locally to avoid further losses.
Ministry to Lease Unused Agricultural Lands to Boost Production
The Ministry of Agriculture and Forestry will lease agricultural lands owned by individuals or legal entities that have not been cultivated for two consecutive years as long as the land is used for agricultural production and its characteristics remain unchanged. The new regulation was published in the Official Gazette on August 22.
A Land Leasing Commission will be set up to determine the rental value of the agricultural lands and manage the leasing process. Priority for leasing will be given to residents of the area where the land is located, as well as to civil society organizations and professional chambers.
Agriculture writer Ali Ekber Yildirim commented on the decision in a video on his YouTube channel, saying, "On one hand, there are producers who cannot sell their products and do not plan to plant in the next period. On the other hand, you are leasing uncultivated lands and encouraging production. This move is contradictory because you first need to support producers, ensure they sell their products, and help them continue farming."
7 Million Tourists Visit Turkey in July
According to Turkey's Tourism Ministry, 7 million tourists visited Turkey last month, a 2.6 percent increase compared to July last year, with 7,333,812 visitors in total.
From January to July, nearly 29 million tourists traveled to Turkey, marking an 8.27 percent increase compared to the same period in 2023.
HUMAN RIGHTS
Erdogan Transfers Shares of Companies Linked to Gulen Movement to Wealth Fund
Turkish President Erdogan signed a decree transferring the treasury's shares in 12 companies, seized due to their alleged ties to the Gulen movement, to the Turkey Wealth Fund (TVF).
A presidential decree published in the Official Gazette on August 20 announced the transfer of shares in major companies such as Koza Altin, Koza Anadolu Metal, and Ipek Dogal Enerji, all listed on the Borsa Istanbul stock exchange.
These companies are part of Koza-Ipek Holding, a conglomerate that was among the first targeted in the government’s crackdown on the Gulen movement.
FOREIGN POLICY
Ankara can’t advise Iran to be patient, all countries in the region share responsibility to act on Israel: Turkish Ambassador to Iran
In an interview with Iranian media, the Turkish Ambassador to Tehran, Hicabi Kirlangic, highlighted the importance of Iran's role in Turkey's efforts to normalize relations with Syria.
The Turkish envoy also addressed Israel’s assassination of Hamas political Chief Ismail Haniyeh, who was killed on July 31 in a Tehran residence, saying it is reasonable for Iran to respond to the assassination.
"I think it is reasonable for Iran to react. Any other country would show the same reaction. In some situations where countries lack power, they may not respond, but Iran is a large and powerful country with significant backing.”
Highlighting the gravity of the situation, the ambassador stated, "Ismail Haniyeh was subjected to such a brutal attack and became a martyr while in Iran for the presidential inauguration, which is a grave incident, and that such an event occurred in the capital of Iran worsens the situation."
He continued, "In this regard, we cannot tell Iran to be patient and not respond harshly. Iran seems determined in this matter, but we cannot predict how they will respond. Time will reveal this; it may be a response they do not expect. Whether it will be a military response, we do not know either. But the greatest response is that it should be answered in such a way that they retreat and come to their knees, which is not solely Iran's responsibility; all countries in the region share that responsibility. It is unreasonable to just wait for Iran to act."
Assad: No Tangible Results from Efforts to Improve Relations with Turkey
Syrian President Bashar al-Assad announced on August 25 that efforts to improve relations with Turkey have not produced any significant results.
"The initiatives have not led to any meaningful outcomes, despite the seriousness and genuine efforts of mediators," Assad said in a speech to the Syrian parliament, referring to attempts by Russia, Iran, and Iraq to reconcile the two countries.
"The solution is openness," Assad added. "Restoring a relationship first requires addressing the causes that led to its breakdown."
Abu al-Zendeen Crossing Reopens Amid Controversy
The Abu al-Zendeen crossing between opposition-held al-Bab and regime-controlled Aleppo reopened on August 18, following significant pressure from Turkey and support from the opposition Interim Government and its Ministry of Defense.
On August 15, three days before the reopening, Turkish security officials met with SNA leaders in Hawar Kilis, emphasizing that the crossing's reopening was purely for commercial and humanitarian reasons, aiming to increase Syrian access to trade, goods, and funds. Turkish officials denied any link between the crossing's reopening and Turkey's interest in diplomatic normalization with Damascus. They also assured that all funds generated would go to the opposition Interim Government and its Ministry of Defense, with the SNA overseeing the crossing's regulation.
The push to reopen the crossing earlier this year was driven by Turkey's desire to combat criminal activities and encourage legitimate trade across opposition and regime areas. Although it initially reopened on June 26, riots and clashes forced it to close shortly afterwards.
Fidan and Blinken Discuss Ceasefire Efforts Between Israel and Hamas
On August 21, Turkish Foreign Minister Hakan Fidan and U.S. Secretary of State Antony Blinken held a phone call to discuss ongoing efforts to secure a ceasefire between Israel and Hamas. Oncu Keceli, Turkey's foreign ministry spokesperson, said the call was requested by the U.S. and also covered other regional developments.
Egyptian President to Visit Turkey for the First Time on September 4
Egyptian President Abdel Fattah el-Sisi will make his first official visit to Turkey as president on September 4, Haber Turk online newspaper reported. President Erdoğan will welcome him with an official ceremony at the presidential palace in Ankara.
The ongoing Israeli attacks on Gaza will be a key topic of discussion, with both leaders expected to focus on efforts to secure a ceasefire. Additionally, Erdoğan and el-Sisi will discuss strengthening bilateral relations and trade. During the visit, the Turkey-Egypt Strategic Cooperation Council, established in 2010 to enhance political, economic, and commercial ties, will also convene.
Turkish Foreign Minister to Attend EU Meeting in Brussels
Turkish Foreign Minister Hakan Fidan will attend a European Union ministers' meeting in Brussels next week, the Foreign Ministry Spokesperson announced on August 22.
Spokesperson Oncu Keceli said that Fidan was invited to the August 29 meeting. Keceli emphasized that the EU's positive approach shouldn't be limited to such meetings, adding that Turkey expects "concrete steps" on its EU accession, visa liberalization for Turkish citizens, modernizing the customs union, and deepening dialogue on economic, political, transportation, and energy issues.
Turkish and Russian Troops Resume Joint Patrols in Northeast Syria
Turkish and Russian troops have resumed joint ground patrols in northeast Syria after halting operations last year for security reasons, Turkey's defense ministry announced on August 23.
The patrol, which took place on August 22, involved four vehicles and 24 personnel and was conducted in the "Operation Peace Spring" zone.
The defense ministry stated that these joint patrols would continue to help establish stability in the region, secure Turkey's borders, and demonstrate Turkish-Russian cooperation in the fight against terrorism.
US Imposes Sanctions on Over 400 Entities and Individuals for Supporting Russia
On August 23, the United States imposed sanctions on over 400 entities and individuals for supporting Russia’s military actions in Ukraine, including companies from China and Turkey, the State Department announced.
The Department of State sanctioned over 190 individuals and entities, while the Department of the Treasury targeted nearly 200 individuals and entities.
The Treasury Department focused on transnational networks involved in procuring materials for Russia, including companies that ship machine tools and microelectronics.
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