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

Germany Celebrates 25 Years of Unity

October 3 is a public holiday, marking the day in 1990 when East Germany and West Germany reunited More

Analysts: Russia's Syria Strikes Shake Regional Powers

If Moscow bolsters Assad, Saudi Arabia, other Gulf countries may feel obliged to step in More

Video Innovative Nano-Tech Water Filter Prevents Disease

It can absorb contaminants like copper, bacteria, viruses and pesticides, says Askwar Hilonga, who has been successfully trying out his product in Arusha More

This forum has been closed.
Comment Sorting
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.
Russia’s Syria Involvement Raising Concerns in Europei
Luis Ramirez
October 02, 2015 4:45 PM
European nations are joining the United States in demanding that Russia stop targeting opposition groups other than the Islamic State militants as Russian warplanes continue to conduct raids in Syria. The demand came in a statement from Britain, France, Germany, Qatar, Saudi Arabia, Turkey and the United States Friday. VOA Europe correspondent Luis Ramirez reports.

Video Russia’s Syria Involvement Raising Concerns in Europe

European nations are joining the United States in demanding that Russia stop targeting opposition groups other than the Islamic State militants as Russian warplanes continue to conduct raids in Syria. The demand came in a statement from Britain, France, Germany, Qatar, Saudi Arabia, Turkey and the United States Friday. VOA Europe correspondent Luis Ramirez reports.

Video First Self-Driving Truck Debuts on European Highways

The first automated semi-trailer truck started its maiden voyage Friday, Oct. 2, on a European highway. The Daimler truck called 'Actros' is the first potentially mass-produced truck whose driver will be required only to monitor the situation, similar to the role of an airline captain while the plane is in autopilot mode. VOA’s George Putic reports.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Migrant Influx Costs Europe, But Economy Could Benefit

The influx of hundreds of thousands of refugees and migrants is testing Europe’s ability to respond – especially in the poorer Balkan states. But some analysts argue that Europe will benefit by welcoming the huge numbers of young people – many of them well educated and willing to work. Henry Ridgwell reports from London.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

Video New Fabric Helps Fight Dust-Related Allergies

Many people around the world suffer from dust-related allergies, caused mainly by tiny mites that live in bed linen. Polish scientists report they have successfully tested a fabric that is impenetrable to the microscopic creatures. VOA’s George Putic has more.

Video Burkina Faso's Economy Deeply Affected by Political Turmoil

Political turmoil in Burkina Faso over the past year has taken a toll on the economy. The transitional government is reporting nearly $70 million in losses in the ten days that followed a short-lived coup by members of the presidential guard earlier this month. The crisis shut businesses and workers went on strike. With elections on the horizon, Emilie Iob reports on what a return to political stability can do for the country's economic recovery.

Video Fleeing Violence, Some Syrians Find Refuge in Irbil

As Syrians continue to flee their country’s unrest to seek new lives in safer places, VOA Persian Service reporter Shepol Abbassi visited Irbil, where a number Syrians have taken refuge. During the religious holidy of Eid al-Adha, the city largely shut down, as temperatures soared. Amy Katz narrates his report.

Video Nigeria’s Wecyclers Work for Reusable Future in Lagos

The streets and lagoons of Africa's largest city - Lagos, Nigeria - are often clogged with trash, almost none of which gets recycled. One company is trying to change that. Chris Stein reports for VOA from Lagos.

Video Sketch Artist Helps Catch Criminals, Gives a Face to Deceased

Police often face the problem of trying to find a crime suspect based on general descriptions that could fit hundreds of people in the vicinity of the crime. In these cases, an artist can use information from witnesses to sketch a likeness that police can show the public via newspapers and television. But, as VOA’s Greg Flakus reports from Houston, such sketches can also help bring back faces of the dead.

Video Thailand Set to Build China-like Internet Firewall

Thai authorities are planning to tighten control over the Internet, creating a single international access point so they can better monitor content. VOA Correspondent Steve Herman reports from Bangkok on what is being called Thailand’s own "Great Firewall."

Video Croatian Town’s War History Evokes Empathy for Migrants

As thousands of Afghanistan, Iraqi and Syrian migrants pass through Croatia, locals are reminded of their own experiences with war and refugees in the 1990s. VOA's Daniel Schearf reports from the town of Vukovar, where wartime scars still are visible today.

Video Long Drought Affecting California’s Sequoias

California is suffering under a historic four-year drought and scientists say even the state's famed sequoia trees are feeling the pain. The National Park Service has started detailed research to see how it can help the oldest living things on earth survive. VOA’s George Putic reports.

VOA Blogs