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Author: Arielle Romm

  • Turkey’s Strategy in the Russia-Ukraine Conflict

    Turkey’s Strategy in the Russia-Ukraine Conflict

    Turkey shares complicated relationships and maritime borders with both Russia and Ukraine, and it has taken a dual approach to maintain distance from either neighbor. Turkey’s status as a NATO member and an economic partner with both Russia and Ukraine puts it in a unique position to serve as a place of negotiation and a communicator to the West. As Turkey balances its NATO responsibilities and strategic considerations, Ankara has worked to avoid alienating either side as it attempts to secure its own international and domestic position as a regional decision-maker.

    Early Stages of the Conflict

    In late March of 2022, Turkey served as the host of the first of three-way talks between Foreign Minister Dmytro Kuleba of Ukraine and Foreign Minister Sergei Lavrov of Russia, along with Turkish Foreign Minister Mevlut Cavusoglu. During these talks in the town of Antalya in southern Turkey, Cavusoglu described Turkey’s role as more of a “facilitator” than a “host”. As part of the talks, Turkey brought up critical issues to the conflict, including free access to humanitarian corridors and the violence occurring in the city of Mariupol. Although no agreement was reached, Turkey has strengthened its position as a diplomatic actor in dealing with a developing conflict with two of its major economic partners. On a more personal level, President Vladimir Putin himself was reported to have called Turkish President Recep Tayyip Erdogan to outline his demands throughout the negotiations process. Finding himself in a difficult position, Erdogan has sought to optimize Turkey’s ability to pivot strategically while maintaining a distance from the current conflict. 

    Initially, Turkey’s position on the current conflict favored the Ukrainian cause. Erdogan criticized the West’s response as weak and joined NATO in condemning Russia by voting for the UN General Assembly resolution condemning the invasion of Ukraine. This isn’t the first time that Turkey has publicly denounced Russia’s actions in the region—Ankara criticized Russia’s 2014 annexation of Crimea and has been outspoken in support of Ukraine’s claim over Crimea and for Crimean Tatars, a Turkic ethnic group that has been persecuted under Russian control. Additionally, Turkey has joined Ukrainian diplomatic initiatives such as the August 2021 Crimea Platform summit.

    Naval Response

    Ankara changed its rhetoric after the beginning of the conflict. Erdogan and other Turkish figures in the government and media have called the invasion “unacceptable,” Ukrainian President Volodymyr Zelenskyy “courageous,” and the Ukrainians “helpless civilians.” However, when Ankara began describing the conflict as a “war” rather than repeating the Russian term “special operation,” it was able to invoke the articles of the 1936 Montreux Convention, at Zelenskyy’s request. Invoking the Articles of the Montreux Convention allowed Turkey to close the Bosphorus Strait to warships and thus block warring states from accessing the Black Sea (Figure 1). This has effectively limited Russia’s ability to move ships from other fleets into the region. Before the invasion of Ukraine, 16 Russian warships sailed through the strait to conduct military exercises in the Black Sea and now are engaged in the conflict. Due to the closing of the Bosphorus Strait, two of Russia’s Slava-class cruisers, the RTS Marshal Ustinov and the RFS Varyag were unable to move into the Black Sea from other operating areas. This move has earned Ankara praise from NATO and EU allies.

    Figure 1 

    Military and Economic Response

    Turkey has also sent aid to Ukraine in the form of weapons. Turkey sent a number of Bayraktar TB2 armed drones to Ukraine. These weapons have been deployed in Libya, Syria, and Nagorno-Karabakh and have been extremely effective in other conflicts. Although Ukrainian officials have repeatedly underlined this contribution and its success, possibly to publicly pressure Turkey to take a more active pro-Ukrainian stance, Ankara has stopped short of claiming the transaction as a form of military aid. Rather, Turkey’s Foreign Minister Sedat Onal has publicly emphasized that the transfer of Bayraktar TB2 drones was instead an agreement made between the Ukrainian government and a private Turkish company. This attempt to distance the Turkish government from any overt lethal aid to the Ukrainian cause underlines the strategic considerations leading Turkey to avoid alienating Russia. 

    Turkey’s commitment to Ukraine’s territorial integrity has avoided outright alienating Russia. Erdogan’s response to the current invasion has stopped short of other measures pursued by other NATO members. Ankara has continuously declined to join sanctions on Russia, calling them “useless,” and it has refused to close its airspace to Russian aircraft. Through this, Turkey has become a “haven,” becoming the base of Russia’s connection to the rest of Eurasia. Some oligarchs and citizens have fled there as the effects of Western economic sanctions take hold of the Russian economy, leading to fears that it will undermine the effectiveness of the measures. However, this strategy is risky for Turkey. If the United States and the West decide to ramp up secondary sanctions, Turkish banks and businesses could be greatly affected. 

    Russian-Turkish Security Relationship

    Turkey’s strategic hedging of its actions during the current crisis has much to do with its complex security and economic relationships with Russia. Russia and Turkey are historical competitors in multiple security areas and have fought on opposite sides of multiple regional conflicts, such as Syria, Libya, and Nagorno-Karabakh. Geography and politics play a major part in Turkey’s decisions. As both a NATO member and a close neighbor to Russia and Ukraine, with economic ties to both countries, Turkey risks becoming deeply involved in a conflict with both security and economic partners.

    There has been an increasing security relationship between Ankara and Moscow in the past few years. Despite their opposing stances in regional conflicts, Turkey has increasingly viewed Russia as a “counterweight” to the West’s powers and pressures in the international sphere and seeks a deepened relationship with Russia to diversify its security strategy. In regional conflicts such as Syria, the countries cooperate. For example, they arranged a 2020 ceasefire agreement, and mutually brokered a security corridor and joint patrols. Criticism over the human rights abuses and the rule of law in Turkey has increased from the West, leading Erdogan to turn to alternative allies. Putin hasn’t questioned any of Erdogan’s domestic human rights crackdowns, and he extended his support during the 2016 failed coup in Turkey. A shared goal of legitimating their role in the regional order outside of Western-led institutions has provided a platform on which the two nations have begun to cooperate.

    Turkey’s pivot towards Russian partnership is exemplified in the highly controversial 2019 purchase of S-400 missiles from Russia, which led to a downturn in relations with the United States. The U.S.’s response included a sanctions package against Turkey’s defense industry, Turkey’s removal from the F-35 Joint Strike Fighter program, and the resulting cancellation of a large transaction of U.S. F-35 fighter jets. This is indicative of a larger Turkish policy trend of reducing dependence on NATO and the West, looking to alternative allies. Turkey’s pivot to ​​Russian weapons platforms has led to concerns about its future unity with NATO.

    Domestic Considerations

    Aside from its international strategic considerations, Ankara’s domestic economic considerations are a central determinant in the ongoing conflict. Both Russia and Ukraine are key economic partners to Turkey. Turkey, whose energy needs are import-dependent, especially depends on Russia: Russian natural gas made up 45% of Turkey’s gas purchases last year. Rosatom, a Russian conglomerate, began building a nuclear plant at Akkuyu in southern Turkey. Ankara has a very profitable free trade agreement with Ukraine, which it does not want to lose. As the largest foreign investor in Ukraine, Turkey’s security and defense sectors are tied up with Ukraine’s as well. For example, a new drone manufacturing factory has been planned to co-produce the long-range tactical Bayraktar TB2 system with Ukraine, further promoting the Turkish drone brand and expanding it to other markets. Turkey is also a major importer of sunflower oil and wheat, and in 2021 it imported 64.6 percent of its wheat from Russia and 13.4 percent from Ukraine—78% of a critical import overall. Turkey’s exports to Russia have been measured at 4.5 billion dollars in 2020, and to Ukraine at 2.24 billion dollars, figures that are expected to be disrupted as the crisis continues. Additionally, Ukrainians and Russians make up 23% of Turkey’s tourism sector revenue, a large share of an industry that represents about  4% of Turkey’s overall GDP. 

    Hit hard already by the ripple effects of Western sanctions, Turkey also knows well what a cooling economic relationship with Moscow would look like. In 2015, when Turkey shot down a Russian fighter jet on the Turkish-Syrian border area, the subsequent sanctions and downturn in relations proved devastating to the Turkish economy. The impacts of tensions with Russia caused double-digit inflation, high unemployment, and a rising current account deficit. Russia cracked down on tourism to Turkey, imposed import restrictions on Turkish goods, and even suspended the building of Turkey’s first nuclear power plant. The ten-month sanctions eventually ended when Erdogan personally apologized for the downing of the Russian bomber. This example of Russia’s status as a close economic partner to Turkey may explain Ankara’s hesitation to join harsher sanction measures.

    The conflict, as well as Western-imposed sanctions, has already compounded Turkey’s ongoing economic crisis. Since sanctions were introduced, Turkey’s economy has taken a turn for the worse, including surging inflation at a 20-year high of 54%. The tourism industry has taken a hard hit from the loss of Ukrainian and Russian visitors, losing Turkey billions in revenue. As supply chain disruptions affect imports and exports, grains, oil, and gas prices have skyrocketed. With national elections coming in 2023, worries about civic dissatisfaction due to economic losses have been at the forefront of Erdogan’s mind.

    Ankara’s position as a mediator in the talks has so far seemed to work more than any other measure. The only signs of diplomatic progress have emerged from the three-way discussions, as Russia said it would significantly scale back its military activity around Kyiv and northern Ukraine, a confidence-building “de-escalation” step. Whether this step will be carried out, however, is unclear. In this way, Ankara has worked to solidify itself as a key independent international intermediary to both the West and Russia while avoiding endangering either of its critical partnerships.

  • Ukraine Crisis and U.S. Sanctions Part 2

    Ukraine Crisis and U.S. Sanctions Part 2

    Russian Central Bank

    In coordination with European allies, the United States has also targeted investment in Russian funds. It has prohibited any U.S. individual or entity from engaging with the Central Bank of the Russian Federation and frozen any assets of the Bank held in the United States or by Americans elsewhere. On a larger scale, the G-7 countries announced that Russia will be restricted from accessing its reserve holdings in G-7 jurisdictions, freezing about half of Russia’s foreign reserves. 

    The measures the United States has taken against the Central Bank are most significant in the imposition of limits on employing international reserves, which otherwise would be used to bolster the Russian economy in the face of U.S. sanctions. Moscow’s financial defense system against international economic sanctions has been referred to as a “fortress Russia” economy. Moscow’s efforts to sanction-proof the Russian economy have included amassing $630 billion dollars in foreign currency reserves. The foreign currency reserves were built up by over 75% since 2015, intended to enable Russians to exchange rubles for foreign currencies in the case of foreign sanctions. Despite a concerted attempt to shift towards the Chinese yuan, 45% of those assets were held in Western currencies. Preventing Moscow from selling foreign currency reserves to stabilize the ruble curtails its ability to protect its domestic economy from international economic sanctions.

    Nord Stream 2

    A significant development in the sanctions against Russia is within the energy and gas sector: Germany’s agreement to halt certification of the Nord Stream 2 pipeline, worth $11 billion. After Russia recognized two breakaway regions in Ukraine, the United States terminated a previous waiver that exempted Nord Stream 2 AG, the parent company of the natural gas pipeline project, and its CEO from sanctions under U.S. law. Nord Stream 2 AG is a company under Gazprom, a Russian state-owned gas company. Despite pressure from the United States to reduce energy reliance on Russian suppliers, Berlin has resisted discontinuing the Nord Stream 2 project. Russia produces about 10% of the world’s oil, and concerns have arisen over the dependence of Europe on Russian gas. Europe’s significant economic interdependence on Russia’s gas companies has made this sector difficult to sanction as concerns emerge about rising gas prices. However, sanctions stopped short of the Nord Stream 1 pipeline, which is operational and has transferred gas to Germany since 2011. 

    SWIFT Sanctions

    The most recent sanctions blocking Russian banks from the global financial network SWIFT have the potential to cripple the Russian economy. Just days before Russia invaded Ukraine, disconnection from the SWIFT financial system was not included as a potential sanction, and the move seemed unlikely. A measure restricting banks from SWIFT has only been used once before against the Iranian government in 2012. SWIFT, or “Society for Worldwide Interbank Financial Telecommunication” is the world’s primary international payment network and is central to participation in the global financial system. Restricting banks from using SWIFT blocks international trade flow and undermines transfers and messaging across borders. Cutting Russia off from SWIFT was floated as a potential economic sanction in the aftermath of the 2014 annexation of Crimea, but it was ultimately not implemented because these sanctions could hurt the economies of the U.S. and its allies by stymying Russian participation in the global financial system. However, a day after the invasion, a joint statement by the U.S., European Commission, France, Germany, Italy, U.K., and Canada announced that certain Russian banks would be subject to a disconnection from SWIFT, marking an approach that would allow further expansion of SWIFT sanctions and protect against outsized economic harm in the rest of Europe. This measure marks a distinct escalation in sanctions against Russia.

    Consequences

    Isolating Russia economically in this way may put pressure on Moscow to temper or halt its actions in Ukraine and Eastern Europe. As the situation in Russia and Ukraine continues to develop, additional sanction measures may be introduced by the United States and the EU as a deterrent and political punishment for Russia’s violations of the Minsk Protocol and international law regarding Ukraine’s sovereignty, especially the 1994 Budapest Memorandum, signed by the U.S., U.K., and Russia. Under that agreement, the United States provided assurances that it would not only respect Ukraine’s conditions to denuclearize but respond if Russia were to violate its security. By providing military assistance and imposing sanctions on Russia, it fulfills those assurances. 

    The economic consequences of the sanctions have already begun to take effect on Russia’s domestic economy. The Kremlin’s “fortress economy” has been put to the test: after sanctions were introduced there was a run on central banks as Russians attempted to withdraw foreign currencies. The Russian rouble collapsed against the dollar, depreciating to record lows—losing more than 40% of its value, settling at less than a U.S. penny. This depreciation has accelerated inflation in Russia; the central bank has more than doubled interest rates (to 20%), introduced capital controls, and blocked interest payments to foreign investors. 

    Image 1 

    While sanctions on Russian financial institutions and industries imposed by governments have damaged the Russian economy in the immediate aftermath of the conflict, economic consequences are emerging from the private sector as well. Disruptions in the supply chain and the volatility and depreciation of the ruble have created an unattractive and risky business environment. As the Russian economy begins to face the repercussions of a swift Western response, it has become increasingly difficult for private companies to operate there. Those who stay risk violating sanctions, reputational damage, and logistical complications. American credit rating agency Fitch downgraded its evaluation of the Russian economy from ‘B’ to ‘C’, indicating that a sovereign debt default is “imminent.” Many Western investors and companies have pulled out of Russia or announced their intentions to do so, severing sometimes decades-long business ties. This includes multinational corporations such as Paypal, ExxonMobil, BP, Visa, Mastercard, IBM, Amazon Web Services, Goldman Sachs, Apple, and Disney. In addition to the loss of consumer goods trade, many of these entities have significant financial and industrial clout. The loss of international business has more long-term implications than sanctions imposed by Western governments; private trepidation to operate in Russia could last far longer after sanctions have been lifted.

    However, it is unclear whether sanctions and their economic ramifications will be effective in swaying Moscow’s decision-making regarding Ukraine. Just as the economic impact of sanctions in the past has been debatable in altering Russia’s behavior, it is difficult to evaluate how much of an effect the 2022 sanctions will have. As of this moment, the fighting continues to escalate, as does the intensity and urgency of the international response to the conflict. Whether the economic damage will influence the Kremlin to back away from military action is yet to be seen.

  • Arielle Romm

    Arielle Romm

    Arielle Romm is an undergraduate student studying Comparative Political Science with  minors in Global Studies and Arabic at the University of California- Los Angeles. Arielle is  passionate about international relations and has a special interest in international conflict,  security, and intelligence, as well as the dynamics of intra-societal political violence. She has  previously worked as a researcher for the UC Coalition for Reproductive Justice to advance  policy efforts towards equitable healthcare access statewide. Her research experience has  encompassed topics such as American strategy in the South China Sea, the Violence  Against Women Act, and the constitutional merits of religious exemptions. Through these  experiences, she has gained a deep appreciation for the equitable distribution of unbiased  information. In her free time, Arielle loves to learn new languages, bake, and listen to  podcasts.

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  • Ukraine Crisis and U.S. Sanctions Part 1

    Ukraine Crisis and U.S. Sanctions Part 1

    Introduction

    Economic sanctions refer to a policy of withdrawing customary trade and financial relations in response to a diplomatic or foreign policy challenge. Governments may choose to enact comprehensive sanctions on an entire country, or direct sanctions on institutions, groups, and individuals in order to impact a government’s actions or decisions. In the case of its foreign policy with Russia, the United States has used targeted economic sanctions to deter and alter Moscow’s aggressive military actions in Ukraine. 

    Russia’s annexation of the Crimean Peninsula in 2014 sparked initial sanction measures imposed on Russian individuals, entities, and financial institutions by the U.S. and E.U. The recent recognition of the Donetsk and Luhansk breakaway regions as independent and the subsequent Russian invasion of Ukraine have also been met with a harsh international response, most notably in the form of economic sanctions. These policies are intended to deter Russia from further military escalation against Ukraine and to publicly indict violations of international law. However, the new sanctions introduced in 2022 have the potential to be far more economically damaging and isolating for Russia than any previous measure.

    In December of 2021, as Russian forces continued to amass on the Ukrainian border, the United States warned of new measures if Russia invaded Ukraine. Prior to and in the immediate aftermath of Russia’s military aggression in Ukraine, the U.S. and its European allies implemented sweeping economic sanctions on multiple sectors of the Russian economy as well as Russian individuals. In response to Russia’s claims of de facto control over Ukraine, an initial round was announced from February 21-23 to deter further action. After Moscow launched an armed invasion on February 24, another round of sanctions was introduced. The most recent, and arguably the most damaging, sanctions were introduced from February 26-28 as active fighting continued. 

    Although sanctions are extensively used in American foreign policy, their actual impact on Russia has been widely debated. Sanctions generally fall into two categories: those that seek to encourage a change in Russian state behavior and those that seek to impose costs without necessarily having a specific policy goal. The success of these sanctions is measured by their ability to influence another state to change its behavior in accordance with U.S. foreign policy goals. As Russia gathered troops at its Ukrainian border in the lead-up to the invasion, sanctions were introduced as economic deterrents to further aggressive military action. A best-case scenario may have been to avoid war altogether. As armed conflict is underway, however, it seems that this objective was either impractical or not well addressed by threats of sanctions. Sanctions now are focused on economic isolation to encourage disengagement or ceasefire in the region.

    The 2022 sanctions have been more expansive than previous rounds and focus on five areas: financial institutions, export controls, personal sanctions against individuals, investment prohibitions, and energy and gas. Three of these expanded measures—preventing Russia’s central banks from using foreign currency reserves, termination of certification for the Nord Stream 2 pipeline, and blocking Russian banks from the SWIFT system—are significant escalations from past rounds and may be the most impactful in changing Russia’s behavior.

    Financial Institutions

    Financial institutions and banks were targeted the most heavily during this round of sanctions, measures which the U.S. Treasury called “unprecedented.” The most critical of Russia’s financial institutions were targeted, including its largest, Sberbank. Sberbank holds about a third of all Russian bank assets, is Russia’s biggest lender, and is majority-owned by the Government of the Russian Federation (GoR). These sanctions require all U.S. institutions to close Sberbank accounts and reject future transactions with Sberbank or its subsidiaries. Under these new measures, Sberbank is also barred from purchasing and making transactions with U.S. dollars. The European branch of Sberbank now faces failure in Europe in the fallout from the U.S. and E.U. sanctions. 

    Additional financial institutions—such as VTB Bank, Otkritie, Novikom, and Sovcom—were identified in new sanction measures. These institutions have been identified as systemically important to the Russian financial system; these sanctions aim to undermine the Russian financial sector and export economy from participating in the global market and using the U.S. dollar. Significantly, the full blocking sanctions on VTB Bank, which holds 20% of Russian banking assets, freeze assets from being accessed by the GoR and mark a measure on one of the largest institutions the U.S. Treasury has ever targeted. About 80% of the $46 billion daily transactions conducted by Russian financial institutions are conducted in U.S. dollars. By barring Sberbank and VTB from processing payments through the United States’ financial system, the foreign exchange transactions normally conducted by these institutions will be greatly disrupted. 

    Export Controls

    Export control sanctions target the enactment of a Foreign Direct Product Rule focused towards strategic export controls on Russia’s technological and industrial industries, a “novel” policy that has previously been used to “hobble” foreign corporation Huawei. Blocking the sale of high-tech exports to Russian entities undermines military and industrial production by subverting their ability to acquire critical defense and intelligence technology. The new measures ban the import and export of arms and the sale of dual-use goods and technology to Russian military end-users, including technology such as computers, sensors, and lasers. 

    The U.S. has also banned imports of Russian oil, liquefied natural gas, and coal, a step that marks a long-term effort to weaken Russia’s lucrative oil industry. This move diverges from European sanctions on Russia and stops billions of profits from reaching the Russian energy sector. Export controls have also been applied to oil and gas extraction equipment.

    Personal Sanctions

    Additionally, Russian politicians and oligarchs connected to Moscow were sanctioned personally,  including President Vladimir Putin, foreign minister Sergei Lavrov, 351 members of the Russian parliament, financial actors such as the head of Promsvyazbank, and senior executives at state-affiliated banks. Personal sanctions include freezing foreign-held assets and travel bans. While personal sanctions are not the most effective on a global scale, undermining Russian elites’ power and credibility could have lasting effects on the country’s domestic politics.