Turkey, Iran and UN Sanctions

Jul 9, 2010

Update from AIJAC

July 9, 2010
Number 07/10 #03

This Update looks at Turkey’s regional policy, including its relations with Iran, especially in the wake of the recent UN and unilateral sanctions passed to deter Iran’s illegal nuclear activities. It also contains some new informed advice on how those sanctions can work.

First up is some analysis of how the shift in Turkish foreign policy looks from within Turkey, written by Suzy Hansen, a writer based in Istanbul. Hansen reports that Turkish PM Erdogan’s turn against Israel and dramatic response to the flotilla affair was no surprise to Turks. However, she argues that the grand political theory behind the shift in Turkish foreign policy, a theory which can be termed “neo-Ottomanism” comes not from Erdogan, but his foreign minister Ahmet Davutoglu. For her full explanation of the theory behind Turkey’s shift, and why it is popular among many Turks, CLICK HERE. Also, an interesting take on Washington’s policy options vis a vis Turkey comes from academic Stephen Sestanovich.

Next up, Iranian-Israeli analyst Meir Javedanfar argues that despite the changes in Turkey, the country is finding it has to put more distance between itself and Iran in the wake of the sanctions resolutions. Javedanfar points to a Turkish perception that Iran broke a promise to continue negotiations, plus its abandonment by other potential allies like Brazil, which, he argues, means that Turkey has found it has to move away from its close ties with Iran much sooner than expected. He also argues that despite their pretended nonchalance, the leaders of the Iranian regime are in fact deeply concerned about the new sanctions which have the potential to hurt them a great deal. For the rest of this interesting argument, CLICK HERE.

Finally, in the wake of President Obama’s signing of a tough new unilateral American sanctions bill against Iran last week, former US Ambassador the to EU Stuart Eizenstat looks at what is needed for the sanctions regime being put in place to be effective. What he urges in particular is close EU-US coordination of their efforts, particularly in the financial sector. He outlines a number of financial sanctions which he argues offer the best chance of preventing the unpalatable choice of launching military action or accepting a nuclear Iran. For the full article, CLICK HERE.

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Turkey’s imperial dreams

Suzy Hansen

The New Republic, June 26, 2010 | 12:00 am

Istanbul, Turkey—Late last month, when news broke that Israeli commandos had killed nine Turkish nationals onboard a Gaza-bound flotilla, no one here knew for sure exactly how Prime Minister Recep Tayyip Erdogan would respond. But Turks could be confident of one thing: Whatever Erdogan did, it was going to be dramatic. Tayyip, as Turks call him, is an emotive leader known for unleashing verbal tornadoes. In January 2009, at Davos, he had famously exploded at Israeli President Shimon Peres, hissing, “You know how to kill very well!” before storming off the dais. Now, confronting one of the biggest foreign policy crises of his seven years as Turkish prime minister, Erdogan was expected by his constituents to raise hell on the international stage. And that was precisely what he did—denouncing Israel as “a lying machine,” demanding that it “has to pay the bill for the blood that has been shed by the martyrs,” and gratuitously instructing Israelis in Hebrew, “Thou shalt not kill.” He then proceeded to cap this performance with a striking policy gesture: Last week, Turkey was one of just two Security Council members to vote against a new round of sanctions on Iran.

Erdogan’s response may not have surprised Turks, but, to the West, it was a cold shock. Isn’t Turkey one of America’s quietest, most dependable allies? Isn’t it the one Muslim country that doesn’t hate Israel? Where, exactly, does this newfound national swagger come from?

The most obvious answer is Erdogan, a populist former mayor of Istanbul who has made the Islamist-rooted Justice and Development Party (AKP) into the dominant force in Turkish politics. Not surprisingly, Erdogan is beloved by many religious Turks and reviled by the country’s secular elite, which views him as demagogic, crass, and embarrassing. (“Barbar!” a friend had exclaimed watching Erdogan at Davos, using the Turkish word for “barbarian.” She said this with a wink, knowing full well that, for centuries, Turks had been called just that.) Erdogan has chipped away at the influence of the country’s military, which had wielded enormous power over Turkish politics since the Ataturk era. While Turkey was known as a friend of Israel during recent decades, the relationship was arguably more of an alliance between two militaries than an alliance between two peoples. Lately, as Turkey has become more democratic and the military has retreated somewhat from politics, Erdogan has been able to bring Turkey’s foreign policy into sync with the views of its population. (A BBC World Service poll found that, as of last December, only 6 percent of Turks held “mainly positive” views of Israel’s influence, while 77 percent held “mainly negative” views.)

Yet, even as Erdogan has consolidated his political supremacy, he also faces two crucial upcoming tests. There are the 2011 elections, in which the AKP will face off against (among others) the Felicity Party, a more hard-line Islamist party aligned with the organization that sponsored the Gaza flotilla. Part of Erdogan’s response to the flotilla deaths can be understood as an attempt to triangulate against this threat from the right. More immediately, Turks will vote in September on a proposal to reform the constitution. The referendum is crucially important to the AKP, since it would allow the party to exercise more control over the judiciary. Erdogan needs to energize his base in advance of the vote. He seems to be betting that his post-flotilla theatrics will help.

But is Erdogan really the driving force behind Turkey’s shift—or merely a vessel for the ideas of a man who, unlike the flashy prime minister, doesn’t get a lot of press in the West? Ahmet Davutoglu, Turkey’s foreign minister, is the Kissinger to Erdogan’s Nixon: an academic with a grand theory of how his country ought to conduct itself on the world stage. And this theory-which is probably best described as neo-Ottoman—is upending nearly a century of Turkish foreign policy thinking.

Slight and bookish, his mouse-like face frequently frozen in a sly, smug smile, the 51-year-old Davutoglu was born in the pious Anatolian city of Konya, attended a German high school in Istanbul and Bogazici University (a prestigious public college where classes are taught in English), then went on to become a professor of international relations. While Turkish academics commonly seek extra training in Europe and America, Davutoglu spent years as an assistant professor at Malaysia’s International Islamic University. At home, he found himself part of a rising class of religious intellectuals—young, aspirational scholars who had come from conservative Islamic backgrounds but were swimming in Western ideas. And so, Davutoglu’s influences ranged from the realpolitik of Zbigniew Brzezinski to the Islamic political philosophy of the eleventh-century Seljuk vizier Nizam Ul Mulk.

After World War I, Turkey, its Middle Eastern empire destroyed, shifted away from the Arab world. It eventually latched on to the United States, which needed Turkey’s borders as a buffer against the Soviet Union. Turkey became the first Muslim country to recognize Israel in 1949, entered NATO in 1952, and generally followed America’s lead like a grateful lieutenant over the coming decades. But, as the cold war drew to a close, many Turkish intellectuals recognized that their country would need a new foreign policy; and Davutoglu was perhaps one of the first to articulate an overarching revision of the status quo. The doctrine—laid out in his nearly 600-page tome Strategic Depth, published in 2001—was called “zero problems with neighbors.” Turkey, he argued, needed to engage not only the West, but also the Middle East, Central Asia, Russia, and the Balkans.

At its inception, the AKP lacked a coherent foreign policy. Seeking to strike out independently from the army, it embraced Davutoglu’s ideas and encouraged him to enter politics, first as an ambassador and then, in 2009, as foreign minister. These days, both Erdogan and the country’s president, Abdullah Gul, do what he says on foreign affairs. They call Davutoglu “hocam,” which means “my teacher” or “my mentor.”

Admittedly, Davutoglu does not refer to his strategy as neo-Ottoman; that term has its roots in the diplomacy of a previous Turkish leader, Turgut Ozal, who, in the 1980s, also urged a re-engagement with the Arab world and beyond. And there is some debate among observers as to whether the foreign minister’s ideas are truly imperialist. What is beyond doubt, however, is that Davutoglu wants Turkey to enjoy significant influence in the Middle East—Ankara recently eased visa requirements with many countries in the region and, just days ago, initiated a free-trade zone with Syria, Lebanon, and Jordan—and that his worldview, as put into practice by the boisterous Erdogan, carries real appeal for many Turkish voters. The day after Erdogan’s 2009 confrontation with Peres, I heard shopkeepers on my street chanting, “Kasimpasa, Kasimpasa!” which refers to the tough, blue-collar neighborhood in Istanbul where Erdogan grew up. Elites and members of the military may wince at Erdogan’s style or wish for a return to a more pro-Western orientation. But the reality is that Turkey changed course a long time ago.

Suzy Hansen is a writer living in Instanbul.

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An emerging rupture in Iran-Turkey relations


Jerusalem Post, 07/08/2010 08:01

Erdogan has found himself reassessing the blossoming ties with the Islamic Republic much sooner than expected.

Turkish Prime Minister Recep Tayyip Erdogan has suddenly found himself reassessing his government’s burgeoning ties with the Islamic Republic of Iran – and sooner than expected.

One of the reasons Turkey agreed to Iran’s demands and voted against new UN sanctions was because the Iranian government promised it would continue to negotiate with the West. However, it did not take long for Supreme Leader Ali Khamenei to break his promise.

Soon after the UN resolution was passed, he declared, through President Mahmoud Ahmadinejad, that all negotiations will be suspended for two months.

This has clearly angered the Turks, who may not be able to stand by Teheran for very much longer. And why should they? The US government is already breathing down Erdogan’s neck, and word is that the meeting between the two sides at last month’s G20 summit in Canada was tense. US President Barack Obama arrived late to the meeting, and there were no joint press statements or photographs taken together.

This, in addition to other reports that the US canceled its participation at a recent regional security conference in Turkey a mere 12 hours before it started.

The Turkish government knew well in advance that its decision to back Iran in the UN would raise the ire of the Americans.

However, it hoped that the merits of the relationship with Teheran would compensate for that and make such a policy worthwhile. Reality is proving otherwise. The Brazilians soon realized after sanctions passed that it wasn’t worth their while to defend Iran’s nuclear cause. The Turks, based on Washington’s reaction and the fact that Teheran broke its promise of negotiations, could very well reach the same conclusion – and sooner than many expected.

This does not mean that Turkey is going to break relations with Teheran, nor does it mean that it will distance itself from Iran altogether. What it does mean is that Erdogan and his AKP party will reduce their support for Iran’s cause in the UN. They will stop acting like Khamenei’s lawyer and defender in the West, because that’s what Khamenei wanted from them all along, and he was prepared to pay handsomely for it with a cheap gas deal and lucrative contracts for Turkish companies.

NOW THAT new sanctions are going to be imposed by the UN, as well as the US and the EU, the Iranian government is going to find it harder to buy political support at the UN.

One major reason will be the decline in value of Iranian incentives. There are few countries which would now prefer to side with Iran against the West. This means it will be more difficult for Khamenei to find heavy weight countries from the Nonaligned Movement to back its stance. Even Venezuela’s Hugo Chavez is not as vociferous as he once was; snubbed by Iran’s ties with Brazil, he did not attend the recent nuclear summit in Teheran.

This is just one impact of sanctions.

There are also domestic implications.

Some countries, including Israel, have dismissed the latest round of sanctions.

The Iranian government has not.

Ahmadinejad has already started a domestic PR campaign to calm nerves.

In a recent interview he tried to downplay their impact by saying that the US and Iran do not have any economic relations, therefore the latest round won’t have any impact on Iran’s economy.

This is, of course, wrong. Although direct trade between both countries is not very much, the new round of sanctions is nevertheless going to hit the economy hard. First and foremost, it is going to become more difficult for American companies who were using the United Arab Emirates to resell their products to Iran. This is partly due to the UAE’s commitment to abide by the new sanctions.

There is also the oil sector. The Iranian oil industry needs close to $140 billion of investment over the next 10 years to maintain its current production capacity. The new round of sanctions will complicate the Iranian oil industry’s abilities to attract the investment it needs to keep functioning. It will also make it far more expensive and difficult to buy equipment for this all important sector. This is a serious threat, one which in the long term could threaten the oil industry with a possible meltdown.

Nuclear armed or not, these are dangers which Iran’s leaders can only ignore at their own peril.

The writer is an Iranian-Israeli Middle East analyst and coauthor of The Nuclear Sphinx of Teheran: Mahmoud Ahmadinejad and the State of Iran. This article originally appeared on www.realclearworld.com

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Iran Sanctions: Where We Go From Here

A coordinated strategy by the U.S. and the European Union will determine success or failure


Wall Street Journal, July 1, 2010

The overwhelming international support for the new U.N. Security Council sanctions against Iran represents one of the most tangible successes of the Obama administration’s foreign policy. While not mandatory, these new sanctions call upon states to prevent any financial service—including insurance and reinsurance, freezing any assets, and prohibiting new banking relationships—that contributes to Iran’s nuclear proliferation program.

The question now is whether the European Union and the United States can use the legal umbrella of U.N. sanctions to create a coordinated sanctions strategy to put the squeeze on Iran.

Following the U.N. vote on June 9, the Obama administration broadened its sanctions regime to target a state-owned bank and a score of state-owned petroleum, petrochemical and insurance companies. And yesterday, the president signed into law new congressional sanctions banning international firms that aid Iranian banks sanctioned by the U.N. from conducting business in this country.

Now the key test moves to the EU. It must put aside its traditional commercial relations with Iran and take firm action to prevent Tehran from going nuclear.

The goal of sanctions against Iran is to make the cost of continuing its nuclear program higher than the benefits. Shutting down the financial sources the regime uses to support its nuclear program is the most effective way to change its behavior. Iran is not North Korea: It is a significant economy that depends heavily on funding from its energy sector to sustain its nuclear program.

Iran skillfully exploits the differences in various countries’ sanctions regimes to finance its nuclear activities. Thus it is crucial that the EU and U.S. harmonize the disparities between their sanctions regimes, and then push their allies to adopt the same policies.

As a first step, the EU should place all Iranian state-owned banks on its sanctions list. Past U.N. resolutions only sanctioned one Iranian state-owned bank, Bank Sepah in 2007, for its role financing Iran’s nuclear program. The new U.N. sanctions add only one subsidiary of another Iranian bank. The U.S. has gone further, adding all other major state-owned banks—a total of 16—including Bank Mellat, Future Bank, the Export Development Bank and Bank Saderat. Since the U.N. vote, the U.S. also added Post Bank, barring it from the U.S. dollar market.

The EU is an entirely different story. In 2008 it barred any European companies from doing any business with Bank Melli, but took no similar action on any other Iranian bank. But the U.N. never explicitly designated Bank Melli at all, only calling for “vigilance” on financial ties to the bank. This lack of transatlantic symmetry is unacceptable, and only rewards Tehran.

The EU should sanction all Iranian state-owned banks and their subsidiaries, preventing any transactions with them in the eurozone market. All are involved in supporting illicit trade in arms, and all finance front companies for the nuclear weapons program. To leave any off the sanctions list only invites Iran to shift transactions to those not on the list. All pollute the integrity of the global financial system.

Second, the EU should make its sanctions systemic. America’s sanctions regime covers all transactions by Iranian state-owned banks—not only those directly related to nuclear activities. The U.S. bars dollar-transactions involving Iran if they are cleared through the United States. Right now, the EU has no similar policy. It should.

The EU should prohibit any euro-denominated transactions involving Iran from being cleared through the European banks. Once the U.S. ban was put into place, Iranian banks and front companies changed many of their nuclear-related transactions from dollars to euros. Thus, only by this prohibition can the EU protect its own banks from unknowingly participating in nuclear proliferation financing.

Third, the EU and U.S. should agree to ban all insurance companies under their jurisdiction from providing insurance or re-insurance to any ships carrying refined petroleum to Iran, which imports 40% of its needs, and prohibit any new investment in Iran’s oil and gas industry.

As a fourth step, the EU should work together with the U.S. in multilateral forums outside of the U.N. to broaden the number of countries undertaking serious financial sanctions. With EU-U.S. cooperation, Japan will be more likely to take the same type of action for yen-denominated transactions. If it did, Iran would be deprived of financing its nuclear activities in any of the three major international currencies. The EU and U.S. should jointly work through the 34-nation Financial Action Task Force, which has already played an effective role in limiting money laundering, to enhance its work on Iranian nuclear financing.

Lastly, it’s time to shine a harsh light on the Central Bank of Iran. The new U.N. resolution stresses the need for nations to exercise “vigilance” over the activities of the bank, but the EU and U.S. should go further.

Except in times of war, central banks have been sacrosanct because of the potential disruption to the global financial system. But Iran’s central bank has forfeited its special status. It functions like no other central bank. It is not only Iran’s monetary arm, but it conceals financial transfers, assists Iranian banks and companies in navigating around existing sanctions, and helps finance front companies to acquire nuclear technology and parts. The EU and U.S. should jointly warn the Central Bank that if it does not cease its illicit activities, it too could become a sanctions target. In the meantime, the new U.N. panel tasked with monitoring sanctions should be asked to report on the bank’s role in subverting past U.N. resolutions.

Whether or not sanctions are effective depends in large part on the EU’s will to take these steps. Harmonized transatlantic sanctions led by the U.S. and EU with the support of their allies offers the last, best chance of avoiding two unpalatable alternatives: Bombing Iran’s nuclear infrastructure, or conceding that Iran will become a nuclear weapons state.

Mr. Eizenstat was ambassador to the EU in the Clinton administration and played a major role fashioning international sanctions policy.

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