Economic and Defense Ties Between Turkey and Israel in Crisis

In the wake of the flotilla crisis between Israel and Turkey, attention is shifting to the question of what this development might mean for their bilateral relationship. Angered by the Israeli army’s treatment of Turkish citizens seeking to break Israel’s blockage of Gaza, which resulted in nine deaths and various injuries, the Turkish public has expressed deep outrage. While demonstrations throughout the country called for punitive retaliatory actions, the Deputy Prime Minister, Bulent Arinc, set the limits of Turkey’s response. “No one should expect us to declare war against Israel,” said Arinc (Anadolu Ajansi, May 31).

Granted, Turkish leaders unanimously used harsh language, accusing Israel of state terrorism and vowing that they would hold Tel Aviv accountable for its actions. However, representatives of opposition parties and many NGO’s found the government’s response insufficient, demanding concrete measures rather than “political rhetoric” (www.ntvmsnbc.com, May 31).

Amidst these discussions, the Turkish parliament held an extraordinary session to adopt a declaration condemning Israel. The debates in parliament reflect the depth of feeling in the country against Israel, which exerts pressure on the government. Reportedly, the governing Justice and Development Party (AKP) expressed reservations over a clause in the draft declaration that stated: “Parliament expects the Turkish government to reconsider economic and military ties with Israel and take the necessary effective measures.” Only after the AKP bowed to growing pressure from opposition parties could parliament adopt the declaration (www.haberturk.com, June 2).

Overall, the Turkish government has stressed that it would prefer to explore instruments provided by international law and diplomacy to force Israel to compensate victims for its actions. So far, Israel has proven reluctant to accept an independent international inquiry into the flotilla incident and it is unclear if it will agree to pay reparations for the material and human losses suffered by Turkish citizens. Inevitably, Turkish-Israeli relations might come down to coercive instruments short of force. Therefore, it is necessary to ponder the following questions: what instruments can Turkey bring to bear on Israel, and how effective will they be in terms of achieving Turkey’s stated objective of punishing Israel? What price will Turkey pay if it continues on this confrontational path?

The economic and military relationship might suffer from the nationalist urge to punish Israel. As regards economic ties, the public has called for boycotting Israeli products. However, experts point out that even if the crisis results in the limitation of the bilateral trade volume, it will not have a major impact either on Turkey or Israel. In 2009, Turkey’s imports from Israel were $1.1 billion, while Turkish exports to Israel were $1.5 billion. Since this trade volume accounts for only 1 percent of Turkey’s foreign trade, its economy will not suffer from any escalation of the crisis. Experts further note that despite similar calls to limit economic activity with Israel following the Gaza crisis in January 2009, Turkish-Israeli trade continued unabated. Nonetheless, analysts observed that since the 2009 crisis, Turkish businessmen doing business in Israel have faced bureaucratic obstacles and those problems are likely to accelerate (Referans, June 2). Turkish Finance Minister, Mehmet Simsek, also expressed similar opinions, arguing that given the limited trade volume, economic measures against Israel will not undermine Turkey’s economic recovery efforts (Anadolu Ajansi, June 3). Nonetheless, major Turkish firms scheduled to invest in Israel announced that they might freeze their investment or downgrade their operations to support the government’s policies (Milliyet, June 1).

Since severing Turkish-Israeli economic ties will hurt neither Israel nor Turkey to a considerable extent, Ankara is evaluating energy cooperation. Although Energy Minister, Taner Yildiz, said it was too early to talk about sanctions in the energy sector early on in the crisis (Star, June 2), he later supported nationalist arguments, saying “we are not considering any projects with Israel, until things return to normal” (www.haberturk.com, June 3). Yildiz emphasized that major energy and infrastructure projects with Israel will be suspended. He was obviously referring to the plans for the construction of multiple pipelines to transport oil, gas and water from Turkey to Israel, commonly termed Med-stream. These are, however, multinational projects that also involve other countries including Russia, Azerbaijan and India (EDM, November 25, 2008; August 7, 2009), and it remains to be seen how they will react to Turkey’s plans to politicize these projects.

Escalation of tensions may have considerable repercussions in military affairs. Israel has been a major supplier to the Turkish army, especially in sophisticated weapons systems. Moreover, Israel has, in the past, undertaken various multi-billion-dollar contracts to modernize Turkey’s aging military hardware. Turkish Defense Minister, Vecdi Gonul, highlighted that although no new large-scale projects with Israeli defense companies were being considered, the ongoing programs, worth hundreds of millions of dollars, would continue (Hurriyet Daily News, June 3). Attending a TV show, a representative from the AKP argued that all agreements with Israel, including defense cooperation, would be cancelled (www.ntvmsnbc.com, June 6). It is, however, too early to tell if Turkey will indeed take this route.

Even if military cooperation continues, relations will fall short of earlier levels, which had led observers to describe Turkish-Israeli ties as a “strategic partnership.” The new era might harm both sides to a significant degree. Previously, in addition to reaping the gains of lucrative Turkish defense contracts, Israel had also benefited from military-defense cooperation with Turkey in strategic terms. Various agreements signed in the 1990’s enabled Israel to conduct joint military exercises and develop defense cooperation with Turkey, which expanded its strategic depth vis-à-vis Syria and Iran. Following the 2009 crisis, Turkey limited Israeli access to its airspace, and have now announced cancellation of further exercises with Israel. Overall, Israel might suffer from the loss of such a valuable “ally,” not to mention its possible alienation in the Middle East due to the deterioration of diplomatic relations with Turkey. Ankara, also might have to pay a price, as Israel is reportedly reluctant to transfer to Turkey advanced strategic weapons systems which are considered essential for the country’s security needs, especially those required in the fight against the Kurdistan Workers Party (PKK).