Page 5 - TURKRptMar22

1.0 Executive summary
The Ukraine war is an undeniable factor at the moment. Prior to February 24, when the Putin regime launched its full-blown invasion of Ukraine, the expectation was for a limited invasion in the Donbas region, where there was already conflict with proxies of Russia.
However, since February 24, we have entered into a new chapter in history. Currently, in response to the war, the West has regrouped and is waging a full-blown campaign to destroy the Russian economy.
Given the extent of sanctions already imposed on Moscow, the only possible escalations from here are an absolute ban on Russian gas and oil exports or an absolute ban on Russia’s access to the global SWIFT payments system used by banks.
So far, Russia’s energy imports and Russian access to the SWIFT system have only been partially hit. The most sensational move by Western powers was the blocking of the Russian central bank’s international assets and the cutting of its access to the global financial system. That means Russia’s international reserves are mostly useless as things stand.
There is a real war pitching one sovereign state against another and Turkey cannot escape the heat. For instance, Black Sea trade has simply stopped.
On the short-term horizon, Turkey has enough sunflower oil stocks for around one month while 15-16 vessels loaded with oil are currently stranded at ports in Ukraine and Russia, according to Turkey’s oil industrialists association. It outlined the concerns on March 2 in a written letter sent to the trade ministry.
On March 2, Turkey’s grain board TMO held its previously announced tender to import 435,000 tonnes of wheat. Due to booming prices, the authority could buy only 295,000 tonnes at an average price of $435 per tonne, still 25% higher than the average price obtained in the previous tender held on January 18.
On March 3, Turkish President Recep Tayyip Erdogan stated in a decree that Turkey would not demand the usual required certificates and documents for agricultural imports from Ukraine and for the transit trade of Ukrainian agricultural products.
There are those in the Erdogan regime who have benefited from the Syrian War via shadow and illegal trading. The Turkish economy also enjoyed the dropping crumbs of the “trade” activities in question in the initial years of the war.
It is too early to form conclusions as to what the direct impacts on the Turkish economy of the Ukraine conflict will be, although indirect effects seen in booming commodity prices are currently undeniable.
At the moment, Russians are still permitted to fly to Turkey, while most countries have closed their airspace to Russian civilian flights. How such issues will evolve by the beginning of the tourism season in April, whether many Russians will have the wherewithal and spirit to go on an overseas holiday and whether Turkey will remain a safe destination are questions to be answered further down the road.
When it comes to the political implications of the Ukraine - Russia showdown, the main envisaged scenario still suggests that Erdogan will not be smashed between the US, once more seen as “the West”, and the Putin regime.
5 TURKEY Country Report March 2022 www.intellinews.com