This year’s BRICS Summit was a big show. No question. The main event was provided by Turkish President cum Dictator Recep Tayyip Erdogan.
Erdogan wants to a a “T” to the acronym, making them the BRICTS.
Erdogan also made it very clear Turkey’s shift away from the West will proceed faster if the bullying and marginalization continue. For months now, Turkey has struggled with a crashing Lira and sovereign bond market.
The poster child for the unfolding sovereign debt crisis.
The Trump Administration knows that Turkey is slipping from its grasp. Do you ever wonder why certain countries’ currencies get trashed when others with worse balance sheets or balance of trade don’t?
You should. Because asking that simple question will lead you to asking “Why X? Why Now?”
And in Turkey’s case it is for many reasons:
Turkey was key in assisting Iran resist pre-JCPOA sanctions by laundering Iranian oil sales in physical gold through Turkish banks.
Turkey is highly dependent on foreign energy imports and is one of Iran’s largest customers.
To alleviate this foreign-energy dependence Turkey, through Russia, are building nuclear power plants and the Turkish Stream pipeline.
Turkey refuses to comply with Trump’s edict to not buy Iranian oil in November.
Turkey is buying S-400 missile defense systems from Russia
The U.S. blocked the sale of F-35s to Turkey as a retaliatory measure. Given the F-35’s cost/benefit ratio, I’d say Turkey wins on that front as well.
Turkey’s occupation of Northern Syria was a blocking move to keep the U.S. from moving West to Afrin and uniting the Kurdish cantons.
I could go on, you get the point.
BRICTS of Trade
In the bigger picture, Turkey is still most important because of its geography. It’s really the only reason anyone puts up with Erdogan’s shiftiness in the first place.
But, Erdogan’s pushing for admittance into the BRICS is about far more than symbolism. it’s about access to development capital through their parallel institutions to the ones controlled by the U.S. — The IMF, The World Bank, Asian Development Bank, Ex-Im banks, etc.
To assist Turkey in its fight to stand firm on U.S. hybrid war tactics, accession into the BRICS gives them access to more sources of Chinese capital. China and Russia were, to no one’s surprise, receptive to the idea.
As I pointed out in an earlier post, China and Russia account for nearly 20% of Turkish imports, with Iran and India making up another 6.4%, larger than the U.S.’s contribution.
Turkish Imports by Country...