ANALYSIS
"Turkey and Egypt Strengthen Bilateral Relations Amid Regional Crises" by Mustafa Enes Esen, The Institute for Diplomacy and Economy
On September 4, 2024, Egyptian President Abdel Fattah el-Sisi made an official visit to Turkey, signaling a deepening of relations between Egypt and Turkey. This rapprochement initially stemmed from Turkey’s urgent need to end its regional isolation.
Nonetheless, recent geopolitical developments have altered the dynamics. Cairo, facing growing threats in its immediate neighborhood, no longer stands as the party unmotivated in this rapprochement. The "ring of fire" surrounding Egypt—marked by the civil war in Sudan to the south, enduring conflict in Libya to the west, and ongoing war in Gaza to the east—has reinforced Cairo’s need for reliable regional allies. Therefore, Turkey’s potential role in regional stabilization has become more appealing to Egypt’s strategic interests.
Ankara’s interest in importing liquefied natural gas (LNG) from Egypt is part of a broader strategy to reduce its dependence on Russian energy. However, Egypt’s ability to meet Turkey’s LNG demands remains uncertain due to declining domestic gas production. In an effort to manage its domestic consumption and to increase gas exports, Egypt has been rationing electricity, raising concerns about the country’s long-term reliability as an energy supplier for Turkey.
Turkey and Egypt consider themselves islands of stability in a region where chaos reigns. Domestically, they face crippling issues, such as structural economic challenges, increased inequality, and deep social problems. This shared sense of insecurity will continue to drive Turkish-Egyptian relations, as both countries seek reliable partners to ensure stability and security in their “ring of fire.”
"Factionalization of Turkish Security Bureaucracy and Authoritarian Bargaining" by Hasim Tekines, The Institute for Diplomacy and Economy
Erdoğan’s tactics fuels factionalism within the bureaucracy, whether involving religious or secular groups, as part of a longstanding divide-and-conquer strategy. Using an authoritarian playbook, Erdogan controls the security bureaucracy by playing rival factions to each other. In line with that, it would not be surprising if Erdogan allocated some quota for nationalists or Kemalists to balance against religious groups. He also does not skip delicately trimming overgrown branches from every group. In this year’s appointments for the military, he kept Kemalist names at the forefront while surreptitiously discarding some other Kemalists.
Having said that, Erdogan’s upper hand does not mean his full indisputable control over the state. Today, different political factions seem to have the capacity to bargain with Erdogan. Indeed, between Erdogan and his partner Bahçeli, there has been a hard bargaining going on for some time. Also, secular Kemalists have some bargaining capacity with Erdogan. For sure, they do have neither intention nor capacity to challenge Erdogan’s power. Rather, this is a bargaining to cohabitate with Erdogan, and if succeeds, outlive Erdogan.
Young cadets’ oath and slogans might be spontaneous acts of courage. Yet, this incident has revealed once more the extent of factionalization within Turkey’s security bureaucracy. It may be good for Erdogan. As argued by Hakki Tas, populist leaders prioritize the bureaucracy’s loyalty to their own personalities by using ‘individual, communal, or ideological ties.’ Nevertheless, this causes politicization of army and institutional ‘decay’.
"Turkey’s economic growth slows to weakest level since Covid crisis" by Adam Samson, Financial Times
Turkey’s decelerating growth underscores how policymakers’ programme to cool runaway inflation is exerting an increasingly heavy toll on major sectors across the country’s $1tn economy.
“Second-quarter GDP showed a significant loss of momentum,” said Hakan Kara, a former Turkish central bank chief economist. “Leading indicators suggest that lagged impact of monetary and credit tightening will be more visible in the second half of the year, but they do not point to a hard landing either.”
There are now indications that high borrowing costs, combined with increases in petrol and VAT taxes and other fiscal tightening measures, are cascading across key industries. Manufacturing activity contracted for the fifth month in a row in August, an Istanbul Chamber of Industry survey released on Monday showed.
Economic officials privately concede that the recent progress on inflation has been the relatively easy part of the process because of last year’s high baseline in prices. The months ahead are likely to be more painful as businesses and consumers contend with high interest rates and slowing growth, a strong contrast to recent years when easy-money policies juiced up the economy.
“Domestic demand needs to weaken further and so policy will need to be kept tight for longer,” said William Jackson at Capital Economics in London. “Fiscal policy needs to do a lot of the work from here on, but monetary policy is also likely to remain restrictive.”
POLITICS
Istanbul Mayor Responds to Rumors of Prison Sentence and Political Ban
Istanbul Metropolitan Municipality Mayor Ekrem Imamoglu addressed rumors on a TV program about his 2 years, 7 months, and 15 days prison sentence possibly being upheld, possibly leading to a 5-year political ban.
Imamoglu warned that if the Court of Appeals confirms the local court's decision, the ruling party might lose power before the Supreme Court's final decision. He said, “If you impose a penalty, go ahead. This nation will rise up. Those who interfere with the judiciary against the will of this nation will not see the outcome of the Supreme Court decision.”
Justice Minister Yilmaz Tunc criticized Imamoglu’s comments, saying, “It is inappropriate for anyone to make threatening remarks about an ongoing case. No one can point a finger at or threaten the judiciary.”
Turkey Investigates Newly Graduated Officers for Chanting Slogan
Turkey’s Ministry of Defense opened an investigation into a group of newly graduated military officers who chanted a slogan referencing Mustafa Kemal Ataturk, the country’s secular founder, after their graduation ceremony.
The lieutenants, who graduated from the Turkish Military Academy on August 30, were filmed chanting, “We are Mustafa Kemal’s soldiers,” while waving swords after the ceremony.
On September 5, the Ministry of Defense confirmed the investigation and warned that any personnel found to have violated military rules would face disciplinary action.
On September 7, President Erdogan announced that the lieutenants involved in the "sword oath" during the Military Academy graduation would be dismissed from the army.
Erdogan criticized the participants, stating, "We will not allow our army to be weakened again. Investigations are ongoing, and those responsible will be purged, no matter who they are.” He added that steps are being taken to address how the incident occurred.
Presidential Communications Directorate Triples Workforce, Increases Budget Twelvefold
The Directorate of Communications, accused by the opposition of 'managing public perception in favor of the government,' has significantly expanded its workforce and expenditures since its establishment in 2018, the daily Birgun reported.
The directorate's budget, which stood at TL 344 million ($10.1 million) in 2019, has soared to TL 4.1 billion ($120 million) for 2024. In the first six months of this year alone, it spent TL 2.8 billion ($82.4 million).
Starting with 584 employees in 2018, the directorate now employs over 1,600 people as of September 2024. It has also received TL 145 million ($4.2 million) to expand its facilities after outgrowing its current 25-story headquarters due to the growing number of staff.
Another Good Party MP Resigns
Another lawmaker from the nationalist opposition Good Party has resigned. Kayseri MP Dursun Atas resigned on September 6, stating that “this decision to resign is unavoidable to best fulfill the responsibility given to me by our nation.” With Atas’s resignation, the Good Party’s seats in parliament have dropped to 31.
Former AKP Lawmaker Calls on Erdogan to Step Down Amid Declining Support Base
Metin Kulunk, a former lawmaker from Turkey’s ruling Justice and Development Party (AKP) and once a close ally of President Recep Tayyip Erdogan, called on Erdogan to consider stepping down while still at the peak of his political power. Kulunk warned that the president's support is steadily diminishing.
“Since March 31, Erdogan's base has been eroding,” Kulunk said. “He should leave on a high note.”
He suggested that Erdogan’s legacy would be better preserved if he chose to step down voluntarily rather than risk further loss of support. “People no longer say, ‘Our president is good, but those around him are bad,’” Kulunk added. “Unfortunately, the trust in our president from three or four years ago is declining.”
ECONOMY
Turkey Revises Economic Targets for 2025-2027
Vice President Cevdet Yilmaz announced revised economic targets for 2025-2027 on September 5, adjusting both growth and inflation forecasts.
The inflation target for 2024 has been raised to 41.5 percent, up from the previously forecasted 33 percent. Inflation estimates for 2025 and 2026 were also increased, now projected at 17.5 percent and 9.7 percent, respectively.
The government lowered its economic growth forecast, with the 2024 target reduced to 3.5 percent from the earlier 4 percent estimate. Growth is expected to reach 4 percent in 2025, 4.5 percent in 2026, and 5 percent by 2027. The government also revised its current account deficit target, aiming for 1.7% of GDP by 2024. Unemployment is expected to remain at 9.6% in 2025 before improving in 2027.
Turkish Exports to Palestine Soar Amid Halt in Direct Trade with Israel
Turkish businesses have continued exporting to Israel through Palestinian Authority customs after Turkey halted direct trade with Israel in May over the Gaza conflict, according to data released this week.
The Turkish Exporters' Assembly (TIM) reported a 423 percent increase in exports to Palestine in the first eight months of 2024, rising from $77 million last year to $403 million this year. In August, Turkish exports to Palestine also saw a significant surge of 1,156 percent, growing from $10 million in August 2023 to $127 million this year. Certain goods showed remarkable growth. Steel exports to Palestine increased by 8,722 percent from $430,000 to $37.9 million in the first eight months of the year. Steel exports soared by 125,437 percent in August alone, jumping from $17,400 to $21.8 million.
In August, chemical exports rose 3,388 percent, reaching $16 million, while mining products saw a 62,174 percent increase, hitting $6.2 million. Similar sharp rises were recorded in exports of iron, fruits, vegetables, and air conditioning units.
Fitch Upgrades Turkey’s Credit Rating to 'BB-'
Fitch upgraded Turkey's long-term foreign-currency rating to "BB-" from "B+" on September 6, citing improvements in fiscal policies and stronger external reserves.
The agency noted that tighter monetary policies, planned budget cuts, and wage adjustments are expected to reduce inflation and current account deficits, boosting foreign currency reserves.
However, Fitch warned of the risk of policy reversals, pointing to Turkey's recent history, the strong political belief in low interest rates, and potential resistance from various groups.
Turkey's Trade Deficit Shrinks as Exports Rise and Imports Fall in August
Trade Minister Omer Bolat announced Turkey's foreign trade figures for August on September 2. In August 2024, compared to the same month last year, exports rose by 2.4% to $22.06 billion, while imports fell by 10.8% to $26.99 billion. The total foreign trade volume dropped by 5.4% to $49.05 billion, and the foreign trade deficit decreased significantly, down 43.4% year-on-year to $4.9 billion. Additionally, the export-to-import ratio improved by 10.5 points, reaching 81.7%.
For the January-August 2024 period, compared to the same period last year, exports increased by 3.9% to $170.8 billion, while imports dropped by 8.7% to $225.67 billion. As a result, the foreign trade volume fell by 3.7% to $396.47 billion. The trade deficit for the first eight months of 2024 decreased by 33.6%, totaling $54.9 billion.
Botas and Shell Sign 10-Year LNG Deal
On September 2, Turkey’s state energy company Botas and British oil giant Shell signed a 10-year LNG agreement, Turkish Energy Minister Alparslan Bayraktar announced.
The deal includes the annual delivery of 40 LNG cargoes, totaling about 4 billion cubic meters, starting from 2027.
At the signing ceremony, Bayraktar highlighted that this agreement enhances Turkey's potential to become a key natural gas hub and reinforces its role in ensuring Europe's energy security.
Turkey's Annual Inflation Drops to 51.97% in August
Turkey's annual inflation fell more than expected to 51.97% in August, continuing its sharp decline due to base effects and a drop in food prices, according to official data released on September 3.
Monthly, consumer price inflation (CPI) was 2.47% in August, influenced by a rise in gas prices but falling short of market expectations, the Turkish Statistical Institute reported.
Annual inflation was primarily driven by a 121% increase in education prices and a 101% rise in housing costs. However, this was balanced by a 45% increase in food and non-alcoholic drink prices.
The domestic producer price index also rose 1.68% month-on-month in August, with an annual increase of 35.75%.
According to the Inflation Research Group (ENAG), an independent group of academics and economists, inflation rose by 3.47 percent in August, with a 12-month increase of 90.35 percent.
Economy Slowed In Latest Quarter
Turkish economic growth lost pace in the second quarter, a sign that restrictive monetary policy is cooling overheated activity that caused inflation to surge.
April-June gross domestic product was up 2.5% from a year earlier, the country’s statistics agency reported on September 2, its weakest performance since the Covid-19 pandemic and short of the 3.4% economists expected. GDP was up just 0.1% from the previous quarter. Imports slowed sharply over the quarter, suggesting domestic demand is beginning to cool.
Consumer price inflation, which had soared to debilitating levels in recent years, has begun to ease. The central bank has still kept a strict tone around interest rates.
HUMAN RIGHTS
34 Detained Across Turkey for Alleged Links to Gulen Movement
Turkish police detained 34 people in 19 provinces for alleged ties to the Gulen movement, Interior Minister Ali Yerlikaya announced on X on September 5.
The arrests were part of raids carried out in several provinces, including Ankara, Istanbul, and Izmir.
Turkey to Require Licenses for YouTubers Producing News Content
In a move seen by many as an attempt to control independent media and public discourse in Turkey, YouTubers who produce news programs or conduct street interviews will now need a license from the Radio and Television Supreme Council (RTUK), Turkey’s broadcasting authority.
RTUK Chairman Ebubekir Sahin announced the new regulation during a TV program, stating it would affect a wide range of independent creators sharing news and public opinion on the platform.
"New digital platforms must also comply with Turkish laws. Those broadcasting news on YouTube are required to obtain a license from RTUK, which will be issued for a nominal fee and will be valid for 10 years," Sahin said.
FOREIGN POLICY
Turkey Requests to Join BRICS, Aims to Expand Global Influence
Turkey has officially requested to join the BRICS group of emerging-market nations, aiming to enhance its global influence and build new relationships beyond its traditional Western allies, Bloomberg reported, citing sources familiar with the matter.
According to these sources, President Recep Tayyip Erdogan’s administration believes the geopolitical focus is shifting away from developed economies.
Russian President Vladimir Putin's foreign policy advisor, Yuri Ushakov, told reporters that Turkey has applied for full membership and that they would consider the application.
The potential expansion of BRICS would be possibly discussed during a summit in Kazan, Russia, from October 22-24. Ushakov also announced that Turkey has been invited to the BRICS summit in Kazan and confirmed that President Erdogan has accepted the invitation.
On September 3, Omer Celik, spokesperson for Turkey’s ruling party, stated that Turkey has not yet taken concrete steps toward joining the BRICS group of emerging economies. However, he noted that "a process is underway." Celik added, "If there is a concrete development—such as a decision or evaluation by BRICS on membership—we will inform you."
Erdogan Calls for Islamic Alliance Against Israel's 'Expansionism'
Turkish President Erdogan called on Islamic countries to unite against what he described as "the growing threat of expansionism" from Israel. His statement came on September 7, a day after Israeli troops killed a Turkish-American woman who was protesting settlement expansion in the Israeli-occupied West Bank.
Speaking at an event near Istanbul, Erdogan said, "The only way to stop Israeli arrogance, banditry, and state terrorism is through an alliance of Islamic countries."
In response, Israeli Foreign Minister Israel Katz condemned Erdogan's comments, calling them "a dangerous lie and incitement." Katz also accused Erdogan of working with Iran for years to destabilize the region's moderate Arab governments.
Egyptian President Sisi Visits Turkey for the First Time in 12 Years to Repair Ties
Egyptian President Abdel Fattah al-Sisi visited Turkey on September 4 for the first time in 12 years as both countries work to restore relations that broke down in 2013 after Sisi, then Egypt’s army chief, ousted the Muslim Brotherhood's Mohamed Mursi.
After their talks, Erdogan expressed Turkey’s desire to strengthen ties with Egypt in areas such as natural gas and nuclear energy. Ministers from both nations signed 18 agreements on cooperation in sectors including energy, defense, tourism, health, agriculture, finance, culture, education, and transport.
At a joint press conference, Erdogan said the goal is to increase annual trade between the two countries by $5 billion, reaching $15 billion in the next five years. He also noted that both nations share a "common stance" on the Palestinian issue, while Sisi called for a ceasefire in Gaza and an end to violence in the West Bank.
Sisi mentioned that they also discussed the situation in Libya, where Turkey and Egypt have historically backed opposing factions, and Somalia, agreeing on the importance of maintaining the country's unity and territorial integrity.
Turkey Launches Air Strikes and Drone Attack in Northern Iraq
On September 2, Turkey launched air strikes in northern Iraq, targeting and destroying 20 sites associated with the outlawed Kurdistan Workers' Party (PKK), according to the Turkish Defence Ministry. The strikes, aimed at PKK bases in Asos, Gara, Hakurk, Metina, Qandil, and Zap, resulted in the deaths of many militants.
A Turkish drone strike also killed three people in northern Iraq on September 4, according to Iraqi Kurdish security sources and a local official. The attack targeted a vehicle, resulting in the deaths of the three passengers near Sulaimaniya. The identities of the victims have not been immediately revealed.
Eurasianist Youth Group Attacks U.S. Marines in Turkey
A Eurasianist Turkish youth group attacked two U.S. Marines in western Turkey on September 2. The Izmir governor's office reported that members of the Turkey Youth Union (TGB), a youth wing of the nationalist Vatan Party, physically assaulted the Marines, who were dressed in civilian clothes, in the Konak district.
Fifteen people were detained in connection with the incident, which involved putting a sack over the head of an American soldier on duty on a U.S. warship docked at the Port of Izmir. Ten of those detained were arrested, and the others were released under judicial control.
Turkey Arrests Kosovan National Suspected of Managing Mossad’s Financial Network
On September 3, Turkey’s intelligence agency, MIT, announced the arrest of Liridon Rexhepi, a Kosovan national who is accused of managing the financial network for Israel's Mossad in Turkey. Rexhepi was detained in Istanbul on August 30, suspected of transferring funds to Mossad agents operating in the country.
MIT stated that Rexhepi had been under surveillance since his arrival in Turkey on August 25. He is alleged to have facilitated financial transfers from Eastern European countries, mainly Kosovo, to Mossad agents in Turkey. The funds, according to MIT, were reportedly used for intelligence operations in Syria, psychological operations against Palestinians, and drone-related activities.
Turkish Drone Strike Kills Three in Northern Iraq
A Turkish drone strike killed three people in northern Iraq on September 4, according to Iraqi Kurdish security sources and a local official.
The attack targeted a vehicle, resulting in the deaths of the three passengers near Sulaimaniya province. The identities of the victims have not been immediately revealed.
Turkey's Spy Chief Visits Libya Amid Political Deadlock
Turkey's spy chief, Ibrahim Kalin, visited Libya to discuss the ongoing political crisis that has halted oil exports. On September 6, a Turkish security source revealed that the day before, Kalin, head of Turkey's National Intelligence Agency (MIT), met with Prime Minister Abdulhamid al-Dbeibah and other officials.
Kalin expressed Ankara's hope for resolving Libya's conflicts through national agreement and emphasized Turkey's commitment to Libya's unity and stability.
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