News / Europe

Ukraine Crisis Impacts Turkey's Economy

FILE - Liquefied natural gas  (LNG) import terminal in Marmara Ereglisi, near Tekirdag, western Turkey.
FILE - Liquefied natural gas (LNG) import terminal in Marmara Ereglisi, near Tekirdag, western Turkey.
Dorian Jones
With the crisis continuing to deepen in Ukraine, concern is growing in neighboring Turkey about the economic fallout, but Ankara also sees opportunities.

Rising tensions between Ukraine and Russia are putting regional neighbor Turkey in an increasingly difficult position, having close political and economic ties with its Western allies and Moscow.

A visiting scholar of the Brussels based Carnegie Europe Institute, Sinan Ulgen, said there are significant risks to Turkey.

"The political economic risks are increasing, because the more the West hardens its position against Russia, the more it talks about introducing sanctions, the more difficult it will be for Turkey to keep a balanced act with Russia and the West," said Ulgen.

Even though Ankara criticized Moscow’s annexation of Crimea, it has not followed its Western allies and imposed economic sanctions on Russia, which is Turkey’s sixth-largest export market.

In a move seen as a goodwill gesture by Ankara to Moscow, the Turkish national air carrier Turkish Airlines announced the resumption of flights to Crimea. While observers say Ankara has tried to stay on the sidelines, Finans Bank chief economist Inan Demir warns that Turkey will not be able to escape the financial fallout from the crisis.

"If we see the tensions escalating further, then perhaps investors will take another look, and that will not be in the emerging markets' favor either. Even though there is some scope for capital outflows from Russia finding their way to Turkey, I think the broader emerging markets' sentiment will be weaker and that will have an indirect effect on Turkey as well," said Demir.

With Russia providing half of Turkey’s natural gas needs, much of which comes from a pipeline running through Ukraine, analysts warn the Turkish economy is vulnerable to disruption.

Energy also represents the potential for powerful leverage by Moscow against Ankara, like the rest of Europe, according to political consultant Atilla Yesilada of Istanbul-based Global Source Partners.

But Yesilada also says the Ukraine crisis could eventually be to Ankara’s advantage.

"One way to effectively discipline Russia is to create an alternative to Gazprom’s monopoly on most of European natural gas services, and that could be to accelerate building the Iraqi-Kurdish gas pipeline to Turkey, and then eventually to persuade Ankara help keep peace with Cyprus and to reconcile with Israel, so undersea pipelines can be built to Turkey," said Yesilada.

Cyprus and Israel have recently discovered large natural gas reserves and analysts say that could help Europe diversify its gas supply and lessen dependence on Russia. But aware of Europe’s talk of diversification, Gazprom is seeking to shore up its relations with Turkey, its second-largest customer after Germany.

This week Gazprom deputy head, Alexander Medvedev, held talks with Turkish energy minister Taner Yildiz to expand cooperation between the countries.

While the deepening crisis in Ukraine poses economic risks to Turkey in the short-term, analysts predict ultimately the crisis could be a catalyst leading to Ankara’s achieving a key strategic goal of establishing itself as a regional energy hub.

You May Like

Photogallery Oxfam: Ebola Could Be 'Disaster of Our Generation'

Meanwhile, Fidel Castro, the former leader of Cuba, says the Caribbean island nation will 'gladly cooperate' with the US in the fight against Ebola in West Africa More

Multimedia Kobani Fighting Sends 400,000 Refugees to Turkey

Refugees receive help from Turkish authorities and individuals, but say much more is needed More

India’s Ruling Nationalist Party Makes Gains in Regional Elections

Bharatiya Janata Party’s huge margin over its rivals puts it on course to form governments in the northern Haryana and western Maharashtra states More

This forum has been closed.
Comment Sorting
Comments
     
by: Thomas Reimel from: Montgomery County, pa
May 17, 2014 6:22 PM
Turkey's reliance on Russian natural gas has put the balkan nation in a very precarious position; let that be a lesson to other NATO members not to become reliant on Russian resources.


by: NN
April 25, 2014 12:25 PM
Turkey's NATO member... they'll have to fight Russia if Putin goes farther West. With this fact in mind, how prudent is for Turkey to keep relying on Russia?..

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Exclusive: American Joins Kurds' Anti-IS Fighti
X
Zana Omer
October 18, 2014 6:37 PM
The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.
Video

Video Syrian Defector Leaks Shocking Photos of Torture Victims

Shocking photographs purporting to show Syrian torture victims are on display at the U.S. Holocaust Memorial Museum in Washington. The museum says the graphic images are among thousands of photographs recently smuggled out of Syria by a military policeman-turned-defector. As VOA reporter Julie Taboh reports, the museum says the photos provide further evidence of atrocities committed by the government of Syrian President Bashar al-Assad against its own people.
Video

Video Drought-Stricken California Considers Upgrading Water System

A three-year drought in California is causing a water shortage that is being felt on farms and cities throughout the state. As VOA's Mike O’Sullivan reports, water experts, consumers and farmers say California needs to make changes to cope with an uncertain future.
Video

Video TechShop Puts High-tech Dreams Within Reach

Square, a business app and card reader, makes it possible to do credit card transactions through cell phones. But what made Square possible? VOA’s Adrianna Zhang and Enming Liu have the answer.
Video

Video Church for Atheists Goes Global

Atheists, by definition, do not believe in God. So they should have no need of a church. But two years ago, a pair of British stand-up comedians decided to create one. Sanderson Jones and Pippa Evans told the BBC they envisioned “something like church but without God". Their “Sunday Assembly” movement has grown from a single congregation in London to dozens of churches around the world. Reporter Mike Osborne visited with the members of a Sunday Assembly that now meets regularly in Nashville.
Video

Video Robot Locates Unexploded Underwater Mines

Many educators believe that hands-on experience is the best way to learn. Proving that the method works is a project developed by a group of students at the Stevens Institute of Technology, in Hoboken, New Jersey. They rose up to a challenge posted by the U.S. Department of Defense and successfully designed and built an underwater robot for locating submerged unexploded ordnance. VOA’s George Putic reports.
Video

Video Liberia's JFK Hospital Reopens After Temporary Ebola Exposure

JFK Hospital is Liberia’s largest and one of its oldest medical facilities. The hospital had to close temporarily following the deaths of two leading doctors from Ebola. It is now getting back on its feet, with the maternity ward being the first section to reopen. Benno Muchler has more for VOA News from Monrovia.
Video

Video Hong Kong Protests Expose Generation Gap

Most of the tens of thousands of protesters in Hong Kong are students seeking democracy. Idealistic youths say while the older generation worries about the present, they are fighting for the territory's future. VOA's Daniel Schearf reports from Hong Kong.
Video

Video Liberians Living in US Struggle From Afar as Ebola Ravages Homeland

More than 8,000 Liberians live in New York City, more than in any other city outside of Liberia itself. As VOA’s Bernard Shusman reports, with the Ebola virus ravaging their homeland, there is no peace of mind for these New Yorkers.
Video

Video Kurds See War-Ravaged Kobani As Political, Emotional Heartland

Intense fighting is continuing between Islamic State militants -- also known as ISIS or ISIL -- and Kurdish forces around the Syrian town of Kobani, on the Turkish border. The U.S. said it carried out at least nine airstrikes against Islamic State positions Friday. Meanwhile the U.N. has warned that hundreds of civilians would be massacred if the town falls to the militants. Henry Ridgwell looks at the strategic significance of the city.

All About America

AppleAndroid