For Turkey, Egypt Crisis Holds Risk And Promise

Joe Parkinson        The Wall Street Journal

Turkish officials are watching Egypt's political crisis with a mixture of anxiety and relish, worried that its economy may also be caught up in an investor backlash, but poised for more diplomatic influence as Turkey could become a replacement model for the region's crumbling autocracies.

The anti-regime protests in Tunisia, Egypt and Yemen draw attention to Turkey's success at wedding democratic freedoms with religion. It could emerge as the alternative model for countries that might soon have to choose between a democratic or Islamic administration.

This would deepen Turkey's growing sway in the Middle East. The process began with the election of the Islamist-leaning AK Party, led by Prime Minister Recep Tayyip Erdogan, in 2002, and accelerated as the party won a second election. It is expected to win a third this summer.

Turkey-Australia: More strategy, more depth

Kevin RUDD*      Today's Zaman

That Turkey and Australia are dealing with our strategic challenges in similar ways might be surprising at first glance. However, on closer investigation, it makes sense.

We both start from the premise that our national prosperity depends on regional and international stability. Australia and Turkey recognize that safeguarding this stability means building security between states -- developing trust, creating habits of cooperation and encouraging peaceful dispute resolution in our respective regions. As creative middle powers with global interests, Turkey and Australia both seek a rules based order at both the regional and global levels. Turkey has transformed its regional and global standing in recent years. Australia’s role has also taken on a new significance as the global centre of geo-strategic and geo-economic gravity shifts to the Asia-Pacific region.

Israel Shaken as Turbulence Rocks an Ally

Ethan BRONNER           The New York Times

The street revolt in Egypt has thrown the Israeli government and military into turmoil, with top officials closeted in round-the-clock strategy sessions aimed at rethinking their most significant regional relationship.

Israel’s military planning relies on peace with Egypt; nearly half the natural gas it uses is imported from Egypt; and the principle of trading conquered land for diplomatic ties began with its 1979 peace treaty with Egypt. Prime Minister Benjamin Netanyahu has met with President Hosni Mubarak of Egypt more than with any other foreign leader, except President Obama. If Mr. Mubarak were driven from power, the effect on Israel could be profound.

“For the United States, Egypt is the keystone of its Middle East policy,” a senior official said. “For Israel, it’s the whole arch.”

Turkey targets 20 nuclear reactors by 2030-official

 REUTERS

Turkey wants to build 20 nuclear reactors by 2030 to produce electricity and reduce its reliance on oil and gas imports, a senior Energy Ministry official said.

Turkey has agreed with Russian nuclear company Rosatom to build its first nuclear power station on the Mediterranean and is in talks with Japan's Toshiba and the Japanese government on building a second plant on the Black Sea.

"We want a minimum 20 reactors in operation by 2030. This may not be our formalised plan, but it is our target," Energy Ministry Undersecretary Metin Kilci told Reuters on Friday.

Turkey has said it wants nuclear to eventually account for most of its power production. Natural gas now fires more than half of Turkish electricity plants.

The government wants to complete talks and prepare an agreement with Toshiba and Japanese officials by the end of March, Kilci said. The Turkish side has yet to decide whether the state will take a stake in the project, he said.

Turkey summons firms to discuss Egypt, Tunisia

REUTERS


Turkey's foreign trade minister has summoned companies that do business with Egypt and Tunisia to discuss measures to limit the impact of political upheaval there, he said on Monday.


Fast-growing Turkey, which has annual trade volume of some $4 billion with the two countries, has set up crisis desks at its Foreign Trade Directorate to deal with the issue, State Minister Zafer Caglayan said in a statement.

Turkey warns EU becoming 'Christian club'

 
AFP


DAVOS, Switzerland — Turkey's deputy prime minister complained on Saturday that the European Union was becoming an inward-looking "Christian club", slamming a lack of progress in his country's bid to join.
Speaking on a panel at the World Economic Forum in Davos that included EU President Herman Van Rompuy, Ali Babacan said: "We always thought the EU is a big peace project... but then the enlargement process literally stalled.

"Open door policy is no longer there," he added.

"And one of the big themes about why Turkey cannot become a member of the European Union is because it is a Christian club. This is in our view very, very dangerous," he said.

Ankara began accession negotiations with the EU in 2005, but the process has stalled amid opposition from some member states, lack of reform in Turkey and a trade row over the divided island of Cyprus.

Syria Strongman: Time for 'Reform'

Jay SOLOMON & Bill SPINDLE   The Wall Street Journal

DAMASCUS—Syrian President Bashar al-Assad, who inherited a regime that has held power for four decades, said he will push for more political reforms in his country, in a sign of how Egypt's violent revolt is forcing leaders across the region to rethink their approaches.

In a rare interview, Mr. Assad told The Wall Street Journal that the protests in Egypt, Tunisia and Yemen are ushering in a "new era" in the Middle East, and that Arab rulers would need to do more to accommodate their people's rising political and economic aspirations.

"If you didn't see the need of reform before what happened in Egypt and Tunisia, it's too late to do any reform," Mr. Assad said in Damascus, as Egyptian protesters swarmed the streets of Cairo pressing for the resignation of longtime President Hosni Mubarak.

The Syrian strongman, who succeeded his father, has always kept a tight leash on his country and tolerated little protest. His regime has also maintained a close partnership with Iran and militant groups such as Hezbollah in Lebanon and Hamas in the Palestinian territories.

Robert Fisk: Egypt: Death throes of a dictatorship

Robert FISK             The Independent 

Our writer joins protesters atop a Cairo tank as the army shows signs of backing the people against Mubarak's regime

The Egyptian tanks, the delirious protesters sitting atop them, the flags, the 40,000 protesters weeping and crying and cheering in Freedom Square and praying around them, the Muslim Brotherhood official sitting amid the tank passengers. Should this be compared to the liberation of Bucharest? Climbing on to an American-made battle tank myself, I could only remember those wonderful films of the liberation of Paris. A few hundred metres away, Hosni Mubarak's black-uniformed security police were still firing at demonstrators near the interior ministry. It was a wild, historical victory celebration, Mubarak's own tanks freeing his capital from his own dictatorship.

In the pantomime world of Mubarak himself – and of Barack Obama and Hillary Clinton in Washington – the man who still claims to be president of Egypt swore in the most preposterous choice of vice-president in an attempt to soften the fury of the protesters – Omar Suleiman, Egypt's chief negotiator with Israel and his senior intelligence officer, a 75-year-old with years of visits to Tel Aviv and Jerusalem and four heart attacks to his credit. How this elderly apparatchik might be expected to deal with the anger and joy of liberation of 80 million Egyptians is beyond imagination. When I told the demonstrators on the tank around me the news of Suleiman's appointment, they burst into laughter. 

Geopolitical Unrest and World Oil Markets

James HAMILTON    Econbrowser

Change is on the way in the Arab world, with Egypt the latest focal point. Here I review recent events and their implications for world oil markets.

I begin with a timeline, if not to connect the dots, at least to collect the dots in a single list. 

• Sudan, Jan 9-15: Country holds a referendum whose apparent outcome will be a split of South Sudan into its own a separate country.
• Lebanon, Jan 12: Key cabinet ministers resign in protest against impending indictments from a U.N.-backed investigation into the 2005 assassination of former prime minister Rafiq al-Hariri, toppling the governing coalition. U.S. Secretary of State Hillary Clinton offered this assessment:
We view what happened today as a transparent effort by those forces inside Lebanon, as well as interests outside Lebanon, to subvert justice and undermine Lebanon's stability and progress.
• Tunisia, Jan 14: President Ben Ali flees the country in response to widespread protests.
• Iraq, Jan 17-27: Over 200 people killed in a spate of recent bombings, a sharp and tragic increase from the recent norm.
• Egypt, Jan 29: Cairo appears to be near anarchy as a result of an uprising against President Mubarak.
• Yemen, Jan 29: Demonstrations and rallies have resulted in clashes with police, with unclear implications at this point for the stability of the regime.

An optimist might see the common thread in many of these developments to be the realization across parts of the Arab world of the power of popular will to overthrow dictators, the first step toward democracy and a better life for the people. A pessimist might see in at least some of these situations deliberately orchestrated chaos for purposes of seizing power by a new group of would-be ruthless leaders. A realist might acknowledge the possibility of both factors in play at once, and worry that ideologically motivated uprisings have often turned out to be usurped by groups with their own highly anti-democratic agenda. In the event that some of the transitions of power prove to be more chaotic than peaceful, let me comment on their potential to disrupt world oil markets.

Turkey and EU

Arab News

Why can’t a member of the NATO and OECD be in European Union?

WHATEVER happened to Turkey’s European dream? It’s nearly six years since Ankara began accession negotiations with the EU. Yet the mirage of joining the European club remains just that — a mirage.  No wonder the Turks are getting increasingly frustrated.  Speaking at the World Economic Forum in Davos over the weekend, Deputy Premier Ali Babacan complained that the EU was increasingly becoming an “inward-looking Christian club.”

So what’s hampering Turkey’s EU aspirations? Ankara began its membership negotiations with Brussels in 2005.  And before that the Turks spent years going through numerous stages of reforms and tense transitions to make themselves acceptable and suitable to the privileged club that is the EU.

In its quest for the “holy grail of Europe” Turkey not only had to scrap numerous laws and traditions that Brussels might have frowned upon, it even amended its constitution.  It reached out to all its estranged neighbors and former enemies.  Indeed, the proud Turks who not long ago ruled large parts of the world, including many European lands, were forced to bend over backward to address the demands and concerns of the grouping for that prized ticket to Shangri la. 

Obama will be remembered as the President who lost Egypt, Turkey, Lebanon...

Aluf Benn  Haaretz

The street revolts in Tunisia and Egypt show that the United States can do very little to save its friends from the wrath of their citizens.


immy Carter will go down in American history as "the president who lost Iran," which during his term went from being a major strategic ally of the United States to being the revolutionary Islamic Republic. Barack Obama will be remembered as the president who "lost" Turkey, Lebanon and Egypt, and during whose tenure America's alliances in the Middle East crumbled.

The superficial circumstances are similar. In both cases, a United States in financial crisis and after failed wars loses global influence under a leftist president whose good intentions are interpreted abroad as expressions of weakness. The results are reflected in the fall of regimes that were dependent on their relationship with Washington for survival, or in a change in their orientation, as with Ankara.

America's general weakness clearly affects its friends. But unlike Carter, who preached human rights even when it hurt allies, Obama sat on the fence and exercised caution. He neither embraced despised leaders nor evangelized for political freedom, for fear of undermining stability.

Davos panel sees huge Iranian response to attack

 AP

DAVOS, Switzerland — A diverse panel of decision-makers and experts from the United States, Europe and the Middle East found common ground on just one thing when it comes to dealing with the Iranian nuclear program Friday: A military strike could well spark a devastating counterattack.

In the debate at the World Economic Forum, former top U.S. diplomat Richard Haass said there were no good options should diplomacy fail, but stood apart from the others in advocating force as a viable option. He sparred repeatedly with Saudi Arabia's Prince Turki al-Faisal, who urged the United States to instead pressure Israel to quit its own reported nuclear weapons as a way of coaxing Iran to drop its suspected weapons program as well.

Haass replied that there was no time for this because of the speed of Iran's program — and rejected the assertion by Turkish Deputy Prime Minister Ali Babacan that the program might be civilian, as Tehran has repeatedly claimed.

Without Egypt, Israel will be left with no friends in Mideast

Aluf Benn   Haaretz

Without Egypt's Mubarak and with relations with Turkey in shambles, Israel will be forced to court new potential allies.

The fading power of Egyptian President Hosni Mubarak's government leaves Israel in a state of strategic distress. Without Mubarak, Israel is left with almost no friends in the Middle East; last year, Israel saw its alliance with Turkey collapse. 

From now on, it will be hard for Israel to trust an Egyptian government torn apart by internal strife. Israel's increasing isolation in the region, coupled with a weakening United States, will force the government to court new potential allies.

Israel's foreign policy has depended on regional alliances which have provided the country with strategic depth since the 1950s. The country's first partner was France, which at the time ruled over northern Africa and provided Israel with advanced weaponry and nuclear capabilities.

After Israel's war against Egypt in 1956, David Ben-Gurion attempted to establish alliances with non-Arab countries in the region, including Iran, Turkey and Ethiopia. The Shah of Iran became a significant ally of Israel, supplying the country with oil and money from weapons purchases. The countries' militaries and intelligence agencies worked on joint operations against Egyptian President Gamal Abdel Nasser's rule, which was seen as the main threat against Israel and pro-Western Arab governments.

Azeri leader says feels no Russian pressure over Nabucco

REUTERS

Azerbaijan's leader said on Friday he is under no pressure from Russia to shun the Nabucco gas pipeline, the European Union's attempt to reduce its reliance on Russian supplies.

Addressing a panel on European energy security at the World Economic Forum in Davos, President Ilham Aliyev said he was giving equal priority to the Nabucco pipeline -- which pumps Caspian Sea gas to Europe via Georgia and Turkey -- as to other projects involving his Caucasian country's neighbors. EU diplomats have said Moscow and its gas monopoly Gazprom have spared no effort to try to undermine the Nabucco project, notably by forging ahead with a $25 billion alternative pipeline plan known as South Stream to deliver gas to southern Europe through a pipeline on the Black Sea bed. Nabucco, which has faced delays over supply talks, aims to transport up to 31 billion cubic meters (bcm) of gas a year from the Caspian region and Middle East to Europe via Turkey and the Balkans.

Ukraine hits Russia gas plans, inks Azeri deal

 REUTERS

Yanukovich says Russian new gas pipeline too expensive and Russia not hearing Ukraine's proposals, signs gas and oil deals with Azerbaijan in Davos

Ukraine's president clinched energy pacts with Azerbaijan on Friday and attacked Russia for plans to bypass his country in supplying gas to Europe, reviving market fears of regular spats between Moscow and Kiev.

Markets were relieved when Viktor Yanukovich, perceived as friendlier to the Kremlin than his predecessor, Viktor Yushchenko, was elected Ukraine's president last year.

That followed five years of disputes between the ex-Soviet neighbours, marked by mid-winter cuts in Russian gas supplies to Europe that represent a quarter of the continent's total needs.

But Yanukovich has played a much less pro-Moscow role than expected since taking office, saying the European Union was an equally or even more important partner than Russia.

The propagation of neo-Orientalism

 

Soumaya Ghannoushi*     Al Jazeera

 

The media continually builds an association of Islam with war,instability and repression, creating a false stereotype.

 

It is hard to imagine amidst the omnipresence of discourse currently on Islam that a mere three decades ago, Islam had been a marginal concern situated on the periphery of western consciousness.

If ever encountered in press reports during the cold war, it would most likely have been in the figure of the "mujahideen" confronting the Empire of Evil in Afghanistan. Islam appeared as a benign ally of the forces of freedom camped in New York and London.

What finally brought it to the heart of Euro-American preoccupations were the events that occured on 9/11.
Islam became a local and globalised issue at once, transmitted in countless daily images across the globe.
Since then, rarely does a day go by without hearing, reading, or watching reports of a terrifying Muslim-related event. The presence of Muslim minorities within western capitals has further complicated things, aggravating the intricate interplay of the local and the global.

Fears of a perpetual Muslim danger overlapped with deep-seated fears of immigrants, aliens, and strangers.

Italy-Russia Energy Partnership Deeper Than Berlusconi

 
Gre Caramenico*            World Politics Review

In December, Italy's bilateral trade agreements with Russia drew media scrutiny. First, a Wikileaks cable release indicated anxiety on the part of various U.S. diplomats over Italian Prime Minister Silvio Berlusconi's close friendship with Russia's leaders, particularly Russian President Vladimir Putin. Then Italy's largest energy company, Eni, renewed its extensive 2006 contract with Russia's Gazprom, including plans to jointly build the South Stream pipeline across the Black Sea, as well as cooperation in drilling, transportation and personnel training.

Critics in Italy and abroad believe the energy partnership between the two nations results as much from Berlusconi's personal politics as from economic exigencies, and suspect it may weaken if the scandal-ridden prime minister leaves office. But this view ignores the extensive history of energy and trade cooperation between Russia and Italy, as well as Italy's political ambitions in Southeastern Europe. It may be the case that, if Berlusconi's People of Freedom party loses power, Italy may stop trying to broker deals between Russia and the European Union. But Berlusconi's alleged Russophilia was not the cause of the Italian energy industry's close partnerships with companies like Gazprom and Itera, a conglomerate with Russian gas holdings, and is unlikely to alter their future collaboration.

Exxon and Rosneft to Develop Black Sea Oil Field

 AP

Exxon Mobil signed a deal with the Russian oil giant Rosneft on Thursday to develop oil and gas resources in the Black Sea, a new lift for Russia’s lucrative energy sector despite concerns about the challenges of investing there.

The chief executive of Exxon Mobil, Rex W. Tillerson, announced the deal with the chairman of Rosneft, Igor Sechin, who is also Russia’s deputy prime minister.

They did not immediately disclose the potential value of the deal, but said it could lead to crude oil sales to Rosneft’s Tuapsinsky refinery and other Black Sea markets.

The agreement gives Exxon access to Russian resources and Russia access to Exxon’s technology. They will explore an 4,300-square-mile area of deep water in Russia’s sector of the Black Sea.

From Bullets to Megabytes

 Richard A. FALKENRATH      The New York Times

STUXNET, the computer worm that last year disrupted many of the gas centrifuges central to Iran’s nuclear program, is a powerful weapon in the new age of global information warfare. A sophisticated half-megabyte of computer code apparently accomplished what a half-decade of United Nations Security Council resolutions could not.

This new form of warfare has several implications that are only now becoming apparent, and that will define the shape of what will likely become the next global arms race — albeit one measured in computer code rather than firepower.

For one thing, the Stuxnet attack highlights the ambiguous boundaries of sovereignty in cyberspace. Promoting national security in the information age will, from time to time, cause unpredictable offense to the rights and interests of innocent people, companies and countries.

Stuxnet attacked the Iranian nuclear program, but it did so by maliciously manipulating commercial software products sold globally by major Western companies. Whoever launched the assault also infected thousands of computers in several countries, including Australia, Britain, Indonesia and the United States.

European pipelines in final push

Chris BRYANT          The Financial Times

At times the European Gas Conference in Vienna felt more like a television dating gameshow than a humdrum industry get-together.


It is make-or-break-time for Europe’s ambition to open up the so-called “Southern Corridor” – the bid to access alternative gas supplies in the Caspian region (which holds one quarter of the world’s reserves)  and thereby break the continent’s dependency on Russian gas.

Rival bids
Companies developing Azerbaijan’s Shah Deniz II gas field are due to finalise their allocation plans in the coming weeks.

With the clock ticking, the backers of rival European pipelines who convened this week in the Austrian capital were therefore keen to show themselves in the most flattering light.

The best-known of these projects is of course Nabucco – a 3900km, €7.9bn gas link that, in theory, could start bringing gas from the Caspian all the way to Vienna in 2015.


But smaller rival projects TAP (Trans-Adriatic pipeline – 10bcm-20bcm/yr), ITGI (Interconnector Turkey, Greece, Italy – 8bcm-12bcm/yr) are also in the running.

Turkey's growing ties with Arab world

Amberin Zaman*       BBC News

On 10 January, before an audience of eminent Islamic scholars in Kuwait City, Turkish Prime Minister Recep Tayyip Erdogan was awarded the "Outstanding Personality in the Muslim World" prize. 

Drawing on his training as a Muslim cleric, Mr Erdogan elicited cries of "Allahu Akbar" (God is Great) as he launched into a passionate tirade against Israel and its treatment of the Palestinians in his acceptance speech.


The moment perfectly captured Turkey's growing popularity in the Arab world under Mr Erdogan's mildly Islamist Justice and Development (AK) party government that shot to power in 2002.

And it will have undoubtedly provided fresh fodder for those who argue that - under AK - Turkey is hurtling out of the West's orbit and going a decidedly Islamic green.

'Zero problems'
 
Yet for all Mr Erdogan's fiery talk about Muslim solidarity, the main purpose of his three-day visit to Kuwait and Qatar by his own admission was to create new markets for Turkey.

Some 358 Turkish businessmen eager to cash in on Kuwait's $140bn (£88bn) five-year infrastructure spending budget travelled to Kuwait with the prime minister. 

"Sure there are political dimensions, but the primary aspect is economic," Mr Erdogan told journalists on the flight home.

Turkish Foreign Policy under the AKP: The Rift with Washington

The Washington Institute

The United States has grown increasingly concerned about its relationship with Turkey under the Justice and Development Party (AKP). From rejecting expanded sanctions against Iran to downgrading bilateral ties with Israel, the AKP seems bent on radically transforming its longstanding partnership with the West on key regional issues. And since summer 2010, signs have emerged that the policy rift between Washington and Ankara may be permanent.

This Policy Note, edited by senior fellow Soner Cagaptay, offers several compelling explanations for, and responses to, the shift in Turkish foreign policy. Featuring contributions from Svante Cornell, Ian Lesser, and Omer Taspinar, the report discusses how the shift is rooted in Islamism, Gaullism, nonaligned foreign policy, and hubris. By understanding these proclivities and treating the AKP accordingly, the United States and its allies will be better equipped to navigate the complex relationship between Turkey and the West.

Download full article:
http://www.washingtoninstitute.org/pubPDFs/PolicyNote03.pdf

Turkey and the EU: An Alternative Approach

Heather Grabbe and Sinan Ülgen    ECFR


The deadline for opening a new chapter in Turkey's negotiations for EU membership has just passed, and the prospects for opening more than one more subject this year are slim.

Regrettably, progress has slowed to a crawl, with more than half of the chapters blocked by the EU because of objections by Cyprus and France. The effect is to sap Turkey's motivation to work on reforms to meet EU standards in those chapters that still could be opened. Since no result is in sight from the long-running negotiations about the reunification of Cyprus, the only way out appears to be a deal in which Turkey, which still has troops in northern Cyprus, would allow Cypriot-flagged vessels to start using Turkish ports.

The political atmosphere is turning sour. To improve it, the EU and Turkey should establish a strategic dialogue to complement the accession process. There is already a good basis: Catherine Ashton, the EU's foreign policy chief, and Ahmet Davutoglu, Turkey's foreign minister, already talk in an atmosphere of trust about sensitive issues in Afghanistan, Pakistan, Iraq, Iran, the Middle East, and the Balkans. This dialogue should now be widened to include the EU foreign ministers and deepened through regular exchanges.

Yıldız sees bright horizons for energy cooperation with Venezuela

Today's Zaman

Energy and Natural Resources Minister Taner Yıldız has expressed high hopes for oil exploration opportunities in South America’s top oil exporter, Venezuela, as he underlined that Turkey could not remain indifferent to a country that recently claimed to have overtaken Saudi Arabia in possessing the world’s largest oil reserves.
 
“Venezuela has offered Turkey two oil fields in return for construction projects from the Housing Development Administration of Turkey [TOKİ]. Venezuela needs 2 million houses and Turkey can build these houses via TOKİ subcontracting the houses step by step,” Yıldız said on Monday.

Accompanied by delegations from both TOKİ and the Turkish Red Crescent Society (Kızılay), Yıldız was in Caracas last week, marking the first ministerial level visit from Turkey to the country in the past nine years.

While in Caracas, Yıldız had talks with Venezuelan President Hugo Chavez, in addition to Foreign Minister Nicolas Maduro Moros. Moros paid a visit to Ankara in November when he first disclosed his country’s interest in bilateral energy cooperation, which would also involve TOKİ. “During our meeting, Mr. Chavez clearly showed that he is knowledgeable about Turkey’s growth and rising role in the global arena.

Greece and Israel discuss cooperation on natural gas

  
The Jerusalem Post

Greek Investment Minister says his country may become a "transportation hub and services center" for gas found in Leviathan field.

Greece has begun talks with Israel about transporting natural gas to Europe, Greek Investment Minister Harris Pamboukis told Reuters on Monday

"The Israelis have found big quantities of offshore gas in the Mediterranean," Pamboukis explained. "We are trying to see how Greece could be seen as a transportation hub and a services center, since it is on a natural road to the Balkans and Europe."

Pamboukis emphasized that these are only exploratory talks, initiated after natural gas was discovered in the Leviathan field, Reuters reported.

He added that he had been appointed the Greek coordinator for relations with Israel.

Exploratory drilling by the companies investing in Leviathan - Delek Energy, Razio, Isramco and Noble Energy - began in early January. Leviathan is the largest natural gas find in Israel's history, with an estimated 16 trillion cubic meters of gas.

Relations between Israel and Greece warmed in the past year, with Prime Minister Binyamin Netanyahu paying the first visit to the country by an Israeli prime minister in August, a month after his Greek counterpart George Papandreou came to Israel.

Source:

http://www.jpost.com/NationalNews/Article.aspx?ID=205019&R=R1&utm_source=twitterfeed&utm_medium=twitter

Turkey alternatives: A flawed renewables law

The Economist Intelligence Unit 

Turkey's new renewable energy law aims to boost renewable energy use and the domestic sector, but critics say it has a number of flaws.

Turkey's new renewable energy law - details of which were published on January 10 has replaced a flat rate tariff of between 5 euro cents and 5.5 euro cents with a range of tariffs tailored to the expected requirements for the development of different types of renewable energy (see table 1 at bottom).

As had been widely expected, the new tariffs were far lower than those included in a previous draft of the law sent to parliament in late 2009 (see table 1) and blocked by the Turkish treasury for fear that they would have an inflationary effect on retail power prices.

Drill ship set sail for Turkish Black Sea

Agencies

The Deepwater Champion, a drill ship contracted by U.S.-based energy giant Exxon Mobil, set sail on Sunday to explore oil in the Black Sea.

Mehmet Uysal, director of the Turkish Petroleum Corporation, or TPAO, said Deepwater Champion was constructed in dockyards in South Korea and was expected to be in Bandırma in the western province of Balıkesir in the first half of March.

“They are planning to start exploring deepwater prospects off the shores of Kastamonu province by the end of March or beginning of April,” Uysal said.

Turkey Rejects Israeli Panel's Support of Aid-Ship Raid

Charles LEVINSON  The Wall Street Journal

JERUSALEM—An Israeli raid against a Gaza-bound Turkish aid ship in May that killed nine passengers was legal under international law, an Israeli commission of inquiry said in a report released Sunday.

The commission, headed by retired Supreme Court judge Yaakov Turkel, ruled that Israel's continuing land, sea and air blockade of the Gaza Strip also complies with international law because Israel is effectively in a state of war with the territory's rulers, who are from the Palestinian Hamas movement.

Turkey's Prime Minister Recep Tayyip Erdogan denounced the findings. "In my judgment there is no value or credibility to this report," he told reporters in Ankara, according to Anadolu Ajansi, Turkey's state news agency. Israeli human-rights groups also rejected the report's findings that the continuing blockade of Gaza is legal due to military necessity.

The actions by Israeli soldiers' were "lawful and in conformity with international law," the commission said in the report summary. "When examining the operation as a whole it seems that the soldiers did not overreact."

The commission will publish the second part of its findings in coming months, focusing on Israel's methods for investigating itself and government decision making in the runup to the botched raid.

Azerbaijan-Turkey Military Pact Signals Impatience with Minsk Talks -- Analysts

Shahin Abbasov*      EuraisaNet

Unlike its neighbors, Azerbaijan has long shied away from close partnerships with either the North Atlantic Treaty Organization or the Russia-dominated Collective Security Organization. A recent military compact with Turkey, however, suggests that Baku may be preparing to change that strategic game plan.

The Agreement on Strategic Partnership and Mutual Support, ratified by Azerbaijan’s parliament on December 21, pledges that both Turkey and Azerbaijan will support each other “using all possibilities” in the case of a military attack or “aggression” against either of the countries. Plans to upgrade hardware for joint military operations, cooperation in “military-technical” areas, joint military exercises and training sessions are also specified, but details are not provided.

The agreement would last for 10 years and would be renewed by default for another decade if neither side expresses a wish to end it. The Turkish parliament is expected to vote on ratifying the deal by the end of January, Trend news agency reported.

Such cooperation, at first glance, does not come as a surprise. Ever since Azerbaijan’s independence in 1991, Turkey, a member of NATO, has been Baku’s main military ally, helping to rebuild the Azerbaijani army after the disastrous 1988-1994 war with Armenia over breakaway Nagorno Karabakh, and maintaining close ties with its military defense complex.

Turkey Presses Role as Mideast Referee

 MARC CHAMPION in Istanbul and FARNAZ FASSIHI in Beirut  

The Wall Street Journal

Turkey's involvement in attempts to resolve two of the Middle East's toughest diplomatic disputes this week has underscored its emergence as a key player in the region, after decades spent on the sidelines.

On Friday, diplomats from the major world powers began talks in Istanbul on Iran's nuclear program aimed at unblocking a years-long stalemate over whether Tehran should suspend production of nuclear fuel, a process that can be used to make nuclear weapons as well as civilian-grade fuel.

Their host, Turkey's Foreign Minister Ahmet Davutoglu, had arrived for bilateral talks with some of the players Thursday on a 4 a.m. flight, after spending 48 hours in round-the-clock negotiations to prevent a potential conflict in Lebanon.

Mr. Davutoglu's deep involvement in helping to mediate the Lebanon crisis, and the choice of Istanbul to host the Iran talks, show how Turkey has emerged as a significant player in the Middle East—perhaps the only country in the region able to speak easily to Sunnis and Shiites, Hezbollah and Washington alike, diplomats and analysts say.

That is a dramatic change for Turkey, which had long isolated itself from the Arab world, the fruit of a booming economy in search of a stable neighborhood.

Yet this week's events also underscored the limits of Turkish influence. Mr. Davutoglu didn't get a seat at the table as the U.S., U.K., Russia, China, France, Germany and Iran launched into talks Friday. His role as host rather than participant, as well as the uncertain outlook for success in Lebanon, show the limits of Turkish influence in a region littered with the debris of failed mediation efforts, analysts say.

Iran talks in Turkey focus on confidence-building

AP

Diplomats say six-power talks with Iran are focusing on reviving a nuclear deal that would see Tehran ship some of its enriched uranium out of the country in exchange for reactor fuel.

They say that agreement would build confidence in the larger framework of trying to get Iran to discuss concerns about its enrichment program, which can make both fuel and missile warhead material. The diplomats asked for anonymity in exchange for discussing the closed meeting.

The talks entered their second day Saturday. Iran is under four sets of U.N. Security Council sanctions for refusing to freeze enrichment and other activities that could be used to make weapons. It insists it has no such plans.

“We will not allow any talks linked to the freezing or suspending of Iran’s enrichment activities to be discussed at the meeting in Istanbul,” Massoud Zohrevand, a senior official in the Iranian delegation, was quoted as saying on the first day of the talks Friday.

EU and Turkey avoid last ditch Cypriot talks

Andrew Duff          The Financial Times


The European Union and Turkey are about to make a huge mistake. Next week, in Geneva, probably the last meeting of Greek and Turkish Cypriot leaders will take place, aimed at reconciling their many differences. There will be no breakthrough. Guilty by dissociation, neither the EU nor Turkey will be in Geneva. Greek Cypriot elections in May and Turkish elections in June are unlikely to improve prospects for a settlement. With the end of hopes for a deal on Cyprus goes Turkey’s prospects of joining the EU.

Turkey’s formal accession process, begun amid much wrangling in 2005, stalled in 2010. Few EU governments are enthusiastic about Turkish membership, and those that are, like the British, are suspected by their partners of wanting to expand the size of the Union only in order to weaken it.

IEA doubles global gas reserves estimates

Roger Harrabin       BBC News


The world may have twice as much natural gas than previously thought, according to the rich nations' think tank the International Energy Agency (IEA).

The world may have 250 years of gas usage at current levels thanks to "unconventional gas" from shale and coal beds, Anne-Sophie Corbeau, senior gas expert at the IEA told BBC News.

Estimates may even be revised upwards.

Studies are underway into newly-recoverable sources, Ms Corbeau said.

But she stressed that the totals were highly uncertain, and depended on price, technology and the accessibility of supplies.

"The gas story is huge," she told BBC News.

"A few years ago the United States was ready to import gas. In 2009 it had become the world's biggest gas producer. This is phenomenal, unbelievable."

Defiant Iran says uranium enrichment not up for debate at Istanbul talks

AFP

A defiant Iran said Friday its uranium enrichment drive was not up for debate as it met with world powers in Istanbul for fresh talks aimed at easing concerns that it is secretly developing atomic weapons.

"We will absolutely not allow the talks to go into the issue of our basic rights like the issue of suspending enrichment," Abolfazl Zohrevand, an aide to Iran's chief nuclear negotiator Said Jalili, told reporters.

He spoke after an Iranian delegation led by Jalili met with counterparts from the so-called P5+1 group of world powers, led by EU foreign policy chief Catherine Ashton, for two days of talks in Istanbul over Tehran's controversial nuclear program.

Zohrevand insisted that the meeting, held behind closed doors at a seafront Ottoman palace, had kicked off in a "positive" atmosphere.

"We will focus on cooperation. ... The talks have been positive because both sides have come to take positive steps," he said, without elaborating.

A Gas Fields Row in the Mediterranean?

Robbie SABEL*                 The Jerusalem Post 

The Tamar and Leviathan gas fields belong to Israel. But what happens when more are discovered where maritime boundaries have not been agreed upon?

Under the eastern Mediterranean Sea lies what may be some of the world’s biggest natural gas fields. Two of them, Tamar and Leviathan, have already been licensed by Israel to Israeli and foreign investors. The potential economic bonanza raises the question of which countries are entitled to a share in the windfall and how it will be apportioned among them.

International law stipulates that every state is entitled to exploit the natural resources of the seabed, including oil and gas, up to 200 nautical miles from its coast. Where the distance between two neighboring states is less than 400 nautical miles, the two must agree on a median line.

The distance between Cyprus and Israel is approximately 260 nautical miles, so an as-yet unpublished agreement was signed by the two countries delimiting a median line. This line allows each state to exploit the natural resources of the seabed up to a distance of approximately 130 miles from its coast. The Tamar and Leviathan fields are well within Israel’s part of this 260-mile zone.

Turkey has raised vociferous objection to the Israel-Cyprus agreement, based on the country’s interest in ensuring that the Turkish republic of Northern Cyprus also benefit from the gas income, even though the region is adjacent to the coast of the southern (Greek-speaking) Republic of Cyprus.

Turkey’s Rules

James TRAUB              The New York Times


In the fall of 2009, relations between Serbia and Bosnia — never easy since the savage civil war of the 1990s — were slipping toward outright hostility. Western mediation efforts had failed. Ahmet Davutoglu, the foreign minister of Turkey, offered to step in. It was a complicated role for Turkey, not least because Bosnia is, like Turkey, a predominantly Muslim country and Serbia is an Orthodox Christian nation with which Turkey had long been at odds. But Davutoglu had shaped Turkey’s ambitious foreign policy according to a principle he called “zero problems toward neighbors.” Neither Serbia nor Bosnia actually shares a border with Turkey. Davutoglu, however, defined his neighborhood expansively, as the vast space of former Ottoman dominion. “In six months,” Davutoglu told me in one of a series of conversations this past fall, “I visited Belgrade five times, Sarajevo maybe seven times.” He helped negotiate names of acceptable diplomats and the language of a Serbian apology for the atrocities in Srebrenica. Bosnia agreed, finally, to name an ambassador to Serbia. To seal the deal, as Davutoglu tells the tale, he met late one night at the Sarajevo airport with the Bosnian leader Haris Silajdzic. The Bosnian smoked furiously. Davutoglu, a pious Muslim, doesn’t smoke — but he made an exception: “I smoked; he smoked.” Silajdzic accepted the Serbian apology. Crisis averted. Davutoglu calls this diplomatic style “smoking like a Bosnian.”

Turkey's boom brings dilemmas new and old

Laurence Knight        BBC News

With the sun shining on its economy, many may ask whether Turkey can get along just fine outside Europe

Turkey can rightly feel chuffed at its quick bounce-back.

Having suffered in the global financial crisis like everyone else - output briefly shrank a painful 15% in early 2009 - the country's economy is now comfortably outstripping its pre-recession highs.

It is a familiar story across the developing world: China, Brazil and others have returned their zippy trajectory, while the US and Europe remain stuck in first gear.

But look a little closer, and you will find that Turkey's recession woes have merely given way to a new set of boom-time anxieties.

Indeed, the recovery poses tricky conundrums for both economists and diplomats.

A good crisis

"Turkey was fortunate to have their crisis some years early," says economist Martin Blum at Austrian investors Ithuba Capital.

Turkey's currency was trashed by markets in 2001, exposing serious weaknesses in its banks, many of which folded.

By the time the global financial crisis came around in 2008, Turkey had already finished the diet of belt-tightening and bad debt workouts that the West has only just embarked on.

Turkey hosts Iran nuclear talks

Al Jazeera and agencies


Little hope of breakthrough as six world powers and Iran meet in Istanbul to discuss Tehran's nuclear programme.



Iran and six world powers have begun talks in Turkey on Tehran's controversial nuclear programme, but diplomats say hopes of a breakthrough are slim.

"No one is expecting any big breakthrough, but Iran needs to show that it is interested in engaging in a wider process," said one diplomat as the opening session began on Friday.

"There are fundamental issues Iran needs to address and those are pretty clear, but no one's expecting any great shift."

The five permanent members of the UN Security Council - Britain, China, France, Russia and the US - plus Germany (collectively known as the P5+1 group) have said they believe Iran's uranium enrichment process is a cover for developing nuclear weapons.

Turkey: policy surprise for investors

Can you be a hawk and a dove at the same time? If you are a central bank overseeing a booming economy, soaring domestic lending, a gaping current account deficit, and a volatile currency popular with the carry trade crowd, you probably need to be. That explains why the normally cautious Turkish central bank has become a font of radicalism. Its continuing experiment in a two-pronged monetary policy – loosening and tightening at the same time, using different measures – could have valuable lessons for other booming emerging markets.

For the second month in succession, the central bank took investors by surprise on Thursday, cutting interest rates while raising banks’ reserve requirements. The aim is to weaken the lira to reduce the carry trade, curb an explosion in domestic credit (so the economy won’t overheat), and rein in the deficit, which is around 6 per cent of gross domestic product. The policy is working: the lira is at a six-month low against the US dollar and speculative inflows have slowed.

read full article:
http://www.ft.com/cms/s/33e62368-24a4-11e0-8c0e-00144feab49a,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F3%2F33e62368-24a4-11e0-8c0e-00144feab49a.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Feurope

Qatar and Turkey end Lebanon talks

Al Jazeera and agencies

Qatar and Turkey suspend mediation efforts in Lebanon after Saudi opts out and warns of worse times ahead.

Foreign ministers from Turkey and Qatar have suspended efforts to mediate Lebanon's political crisis after two days of intensive talks with rival parties that failed to clinch a breakthrough.

Their departure from Lebanon on Thursday comes one day after Saudi Arabia also decided to pull out as a mediator from the talks.

Ahmet Davutoglu, the Turkish foreign minister, and his Qatari counterpart, Sheikh Hamad bin Jassem bin Jaber al-Thani, said in a statement released overnight that they were leaving Lebanon after a working draft to break the impasse between Saad Hariri, Lebanon's caretaker prime minister, and Hezbollah was met with "reservations".

Turkey, Venezuela come closer to reaching expected oil deal

Energy and Natural Resources Minister Taner Yıldız on Tuesday said that his ministry would like to take part in Venezuela’s oil production.   Yıldız arrived in the Latin American country’s capital Caracas on Tuesday to meet with Venezuelan Foreign Minister Nicolas Maduro Moros. He said Turkey is willing to support the South American country’s oil production. According to the Venezuelan Foreign Ministry, the country plans to discuss providing oil to Turkey in exchange for funding for housing and other infrastructure projects needed after devastating floods hit the country in December of last year. “This visit will let us discuss energy projects with a focus on Venezuela exchanging oil for funding for housing and infrastructure projects, areas where Turkey has made important achievements,” the Foreign Ministry said in a statement.

Iranian natural gas to be transported to Syria via Turkey

Damascus

The Iranian natural gas will be transported to Syria via Turkey.

Syria and Iran have recently signed a memorandum of understanding on transportation of oil from Iran to Syria following talks between Syrian Oil Minister Sufiyan Alaw and Iranian Petroleum Minister Masud Mir-Kazemi.
Within the scope of the cooperation, Iranian natural gas will be carried to the Syrian city of Aleppo via a pipeline passing through the Turkish territory. 

Historical Oil Shocks

James D. Hamilton          Department of Economics University of California, San Diego


ABSTRACT

This chapter surveys the history of the oil industry with a particular focus on the events associated with significant changes in the price of oil. Although oil was used much differently and was substantially less important economically in the nineteenth century than it is today, there are interesting parallels between events in that era and more recent developments. Key post-World-War-II oil shocks reviewed include the Suez Crisis of 1956-57, the OPEC oil embargo of 1973-1974, the Iranian revolution of 1978-1979, the Iran-Iraq War initiated in 1980, the first Persian Gulf War in 1990-91, and the oil price spike of 2007-2008. Other more minor disturbances are also discussed, as are the economic downturns that followed each of the major postwar oil shocks.


Download full essay:
http://dss.ucsd.edu/~jhamilto/oil_history.pdf

The Turkish Rating Wars: Episode II

Emre DELİVELİ       Hurriyet Daily News & Economic Review

As the venerable Yoda would say, begun again the rating wars have.

Recent research by Ozan Acar, prepared during his stint as a guest researcher at the Brookings Institution, discusses why Turkey is still rated below investment grade by the credit rating agencies, or CRAs, and whether an upgrade is on the cards.

The standard argument is that markets, as gauged by Turkey’s credit default swap, or CDS, spreads, have already been priced in an upgrade and that the CRAs, whose ineptitude was proven during the European sovereign-debt crises, are simply trailing behind.

Irrespective of problems with the CDS’ which I outlined during the first rating wars, a simple graph of CDS spreads against ratings shows the fragility of this argument: while there is a negative relationship between the two, there are many countries bundled at the 100-150 basis-points range, with some sitting below and others sitting above investment grade. 

Azerbaijan Signs up Officially to EU’s Southern Gas Corridor

 
Vladimir SOCOR            Eurasia Daily Monitor 
Volume: 8 Issue: 13

On January 13 in Baku, Azerbaijan’s President Ilham Aliyev and European Commission President Jose Manuel Barroso signed a declaration on developing the Southern Gas Corridor to Europe. On January 14-15 in Ashgabat, Barroso and EU Energy Commissioner Guenther Oettinger conferred with President Gurbanguly Berdimuhamedov on Turkmen gas delivery to Europe via the Southern Corridor.

The unprecedented Barroso-Oettinger joint visit to both countries is a likely prologue to investment decisions for Phase Two of production at the Shah Deniz gas field in Azerbaijan, and for construction of the Nabucco pipeline within the Southern Corridor to Europe.

Latin America's China Challange

Kevin P. Gallagher   Triple Crisis



China Petrochemical Corporation bought Occidental Petroleum’s Argentina operations, capping close to $15 US billion of Chinese foreign investment in Latin America for 2010.  In addition to this new source of foreign investment, China has become a new export market for Latin America.  Well over $100 billion of Latin American products, chiefly iron and copper ores, soya, and crude oil, will reach China this year as well.

China’s unprecedented and impressive growth has been a great boon to Latin America in the short-term.  It is up to Latin American nations to translate these short-term gains into longer-run economic development.


Not only has China become a new source of export and investment demand for Latin American commodities, China’s demand has boosted the price of key commodities as well.  That means that indirectly through China then, Latin Americans enjoy a higher price for their key commodities across the globe.  In the aftermath of the crisis, Latin America is set to grow at a pace more than five percent in 2011, according to the IMF.

In order for Latin American nations to leverage its new economic relationship with China for long run benefit, Latin Americans will have to use newfound gains to enable macroeconomic stability, economic diversification, and environmental protection.

France's Sarkozy to visit Turkey on Feb 25

Sarkozy is expected to debate Turkey's EU membership bid, regional issues, the initiatives of France--holding the rotating presidency of the G-20, and its priorities during his stay in Turkey.

 The French president will pay a formal visit to Turkey on February 25.

Nicolas Sarkozy is expected to debate Turkey's European Union (EU) membership bid, regional issues, the initiatives of France--holding the rotating presidency of the G-20, and its priorities during his stay in Turkey.

Turkey's Prime Minister Recep Tayyip Erdogan had invited Sarkozy to Turkey during his formal visit to Paris, France last year, and the French president accepted that invitation.

The main obstacle before further improvement of Turkish-French relations is Paris' objection to Turkey's EU membership bid.

Lebanon Shows Shift of Influence in Mideast (Turkey: The New Indispensable Nation)*

* "Turkey: The New Indispensable Nation" (Bloger's note.)

 Anthony SHADID         The New York Times

In Lebanon’s worst crisis in years, whose resolution may determine whether Hezbollah controls a government allied with the United States, American diplomacy has become the butt of jokes here. Once a decisive player here, Saudi Arabia has all but given up. In their stead is Turkey, which has sought to mediate a crisis that, given events on Tuesday in Beirut’s streets, threatens to turn violent before it is resolved.

The confrontation here is the latest sign of a shifting map of the Middle East, where longtime stalwarts like Saudi Arabia and Egypt have further receded in influence, and emerging powers like Turkey, Iran and even the tiny Persian Gulf state of Qatar have decisively emerged in just a matter of a few years. It is yet another episode in which the United States has watched — seemingly helplessly — as events in places like Tunisia, Lebanon and even Iraq unfold unexpectedly and beyond its ability to control.

The jockeying might be a glimpse of a post-American Middle East, where the United States’ allies and foes, brought together in the interests of stability, plot foreign policies that intersect in initiatives the United States must grudgingly accept.

“There is a sense that the regional players have gone up as the United States has gone down in terms of its presence, its viability, its role,” said a high-ranking Lebanese official allied with the American-backed side in the crisis, which erupted last week.