Voices from UAE and Turkey

Egypt, and Israel cannot explore or construct without Turkish permission.

Mid-August saw the East Mediterranean tensions rise substantially with Turkish and Greek warships coming head to head two days after Turkey sent an energy exploration ship into Greek-claimed maritime territory. This latest wave of tension escalation brought with it increased possibility for multinational conflict as Greece received open support from Egypt and Israel while France dispatched warships into the contested waters. Tension escalations have been a long-running theme in this region, thus, recent developments do not present a significant shift in regional harmony. But, when Turkey’s Covid-heightened internal insecurity is considered, the reasons behind Turkey’s recent actions become clearer. The steady increase in Turkish foreign policy assertiveness over the past few years, much less the recent emboldened decisions, are not planned neo-Ottoman expansionist manoeuvres. Turkey’s actions are attempts to secure their territorial integrity, break their regional isolation, increase their economic independence and, crucially, distract a disquieted population in a period defined by a pandemic.The frequently cited term ‘neo-Ottomanism’ loads Erdogan’s foreign policies with imperialist and expansionist connotations it does not deserve. Pointing at popular rhetoric, it is tempting to agree but a deeper look into Turkey’s instability, especially those implemented since the Covid-19 crisis, tells a different story – one of defensive and responsive actions.

Voices from UAE and Turkey

written by Clarissa Fraschetti

Photo: Istanbul disinfected mosques to make them ready for reopening, Yasin Akgul/Xinhua, Global Times, 2020. The Covid-19 pandemic has changed life as we had known it, causing an unprecedented economic recession alongside socio-political changes. The Middle East is no different. These wide-ranging changes are exemplified by Turkey’s and the UAE’s respective responses to the crisis and how these have impacted their economies and the youthful generation. Living in countries with varied circumstances and political systems of governance, parts of this article were informed by citizens we spoke to, hoping to make sense of the recent upheavals. Such opinions will be fundamental in making sense of the governments’ domestic policies and choices. Following a fast rise in cases and deaths in March, Turkey began its struggle with Covid-19 by implementing novel partial lockdowns, encouraging remote working and remaining indoors where possible. Similar to cities across Europe, Turkish urban centres were described as ghost towns during the select lockdown days. Rural areas saw a slower response as these policies were not implemented as stringently and claims of Covid-19’s inexistence spread quickly. On the other hand, around the same time, the UAE quickly

employed travel bans and stricter lockdown measures Agenda through growth in its health, education, infrathat only allowed leave for essential needs. Whilst gov- structure and competitive economic sectors. Still, with ernments, for example, in Britain and the US have been an oil-based economy and a migrant-based labour heavily criticised by their citizens for their slow or lack- force, their economy is heavily dependent on the flows ing responses to the pandemic and the subsequent of international trade and migration. Therefore, they consequences, Turkey and the UAE received more posi- are particularly vulnerable to the economic impacts of tive initial public feedback. the pandemic. Yet, the UAE is expected to fare relatively better than other countries in the area. It is predicted Turkey, for instance, saw a slight increase in public trust by the IMF to see a contraction in real GDP in 2020 by in the government during the first months of the crisis. -3.5% while Saudi Arabia is expected to see a fall by Depicted in both polls and the Turkish university stu- -6.8% and Bahrain by -3.6%. dents interviewed (both of which study in the UK), the If the UAE attempts to tackle the current econompopularity of the governing party, the AKP, and the Pres- ic crisis similarly to how it handled the 2008 financial ident, Recep Tayyip Erdogan, increased. Crucially, the crisis, the two economically dominant Emirates, Abu Turkish government was initially very effective in trans- Dhabi and Dubai, are the most at risk. Abu Dhabi facforming public perceptions on not only the government es pressure from falling oil demand and prices but is itself but the nature of the looming crisis. The pandemic in a better position to withstand Covid-19’s economic shifted from being simply a public health concern into impact with its large sovereign wealth fund estimated a national threat that endangered at $800 billion. Dubai, however, still the strength and survival of the holding significant sovereign and country. This legitimised the au- “There’s a looming state-owned enterprises debt from thoritative policies and garnered public support for the implement- debt repayment the 2008 crisis, has one of the highest debt-to-GDP ratios in the world. ed policies. Meanwhile, Erdogan’s crisis” job approval rate remained over Dubai’s potentially worsening eco50% in polls between the Corona- nomic conditions, with the delayed virus outbreak and August. These EXPO 2020, mounting debts and are figures he has struggled to achieve over the past struggling housing market, is likely to impact the UAE year. However, according to the Turkish students, this as a whole, meaning Abu Dhabi may intervene to prosituation has since altered and this is largely to do with tect the economic stability of the country. Meanwhile, the public’s economic dissatisfaction. slow recovery from the pandemic lasting a decade or Domestic socio-political change following the Covid-19 more will impact global tourism and oil industries more crisis within the UAE, on the other hand, is less likely than currently projected. The UAE, already diversifying, than in Turkey. Although interviewees working in the may need to consider further changing the structure UAE did comment on the stringent rule-abiding, vir- of its economy to consistently diversify and encourage tual working and the mixed receptions these policies import substitution industrialisation. received, they also questioned whether these public Similarly, the Turkish economy is also facing mounting responses would have any long-term impacts on gov- economic issues and the Turkish students touched on ernment policies. the general dissatisfaction this was causing. The iniThe UAE is a wealthier, non-democratic state with a rel- tial public trust over the government’s actions took a atively stable governing system and is composed of a heavy hit when the value of the lira dropped in August comparatively younger and expat-heavy population. after remaining stable at 6.85 to the dollar for most of Therefore, the economic impacts of Covid-19 are more June and July. likely to have greater sway on the government’s poli- Like the UAE, the blow Covid-19 dealt to the tourism cies and decisions. sector, which accounts for 10% of the country’s GDP, Like other countries, the UAE cannot yet fully assess the piled further misery onto an already unstable econohuman and economic impacts of the pandemic. The my. Alongside the public health measures placed to UAE holds one of the most economically diversified of avoid the virus seriously impacting the global econothe oil-based economies and, before the Covid-19 out- my, Turkey, not unlike the UAE, is facing a long-running break, was making progress in meeting its Vision 2021 debt crisis. Although the country’s sovereign debt is

relatively low, especially compared to that of the UAE’s, its increasing debt is concealed within its banks which are borrowing in dollars and euros to lend out in lira. Meanwhile, Turkish economic policy has for years centred on pushing interest rates lower to encourage more lending. It did in part work but has left a dangerous debt crisis in its wake. Turkey had successfully managed to bolster its currency over the summer through selling dollars to buy lira on the open market; this was a temporary fix, however. Now, with low-interest rates and depreciating currency, there’s a looming debt repayment crisis.

Following the contraction in trade and tourism with the pandemic-induced crisis, Turkey cannot continue as it has. Allowing the lira to fall further will likely lead to banks struggling to pay their dollar debts and the economy sinking into a prolonged recession. However, with debt so wide-spread and economic activity so reliant on it, hiking interest prices could also potentially push Turkey into a deeper recession. With the Covid-19 slump exacerbating Turkey’s looming debt issue, the support President Erdogan saw in June has fizzled away and his job approval has fallen from 50.6% to 47.9% between June and August. But, Turkey is claiming the recent natural gas found in the Black Sea is hinting to more being discovered soon. If so, this would not only aid their economic woes as the impacts of Covid-19 are increasingly felt over the coming months, but, potentially, Turkey could be toying with the geopolitical energy trade in the MENA region.

Months into the pandemic, the UAE and Turkey have chosen different paths to follow in tackling the crisis and the young people spoken to have reflected this. With the government now facing increasing criticism, Turkey will need to rethink its economic policies as well as its policies to tackle Covid-19. Improvements in both public opinions on the government and the economy are not impossible but will require the country to act in a quick and targeted manner as it had at the start of the pandemic. Meanwhile, in the UAE, those living there may have seen no obvious internal political change, but the government’s response to the economic impacts of the crisis could significantly alter their internal economic structure. Amid all the uncertainty, one thing seems clear: both states are heading towards significant political and economic change which will invariably alter both the countries and the region in the long-term.

Photo: Dubai, Yasin Akgul/Xinhua, Global Times, 2020.