Analysis - Turkey's tough foreign policy talk may backfire

ANKARA Tue Sep 20, 2011 6:22pm BST

Turkey's Prime Minister Recep Tayyip Erdogan gestures during a news conference at the Rixos Hotel in Tripoli September 16, 2011. REUTERS/Ismail Zitouny

Turkey's Prime Minister Recep Tayyip Erdogan gestures during a news conference at the Rixos Hotel in Tripoli September 16, 2011.

Credit: Reuters/Ismail Zitouny

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ANKARA (Reuters) - Turkey's threats to send warships to gas fields in the eastern Mediterranean mark a new projection of Ankara's growing power in the region, challenging Cyprus's drilling plans and casting a shadow over Israel's preparations to exploit huge deposits.

But Prime Minister Tayyip Erdogan's tough tactics risk isolating Ankara in the region, fanning tensions with the United States, its ally, and hurting its bid to join the European Union.

Raising the stakes in a dispute over drilling rights around the divided island of Cyprus, Turkey said it could provide naval escorts for survey vessels poised to explore for oil and gas off northern Cyprus, in response to the Greek Cypriot south's "provocative" decision to start drilling.

And Erdogan has said Turkish aircraft, frigates and torpedo boats will watch over the eastern Mediterranean, where the Cypriot and Israeli governments have signed an exclusive economic zone agreement to explore natural resources.

Such threats might be designed to unsettle investors in the area, but Ankara may have misjudged their impact.

"Erdogan's aim is to deter foreign investors in the contested eastern Mediterranean, but Turkey is isolated on this issue," said Fadi Hakura, from the London-based Chatham House think tank.

"It is clear that the U.S. and the EU will come firmly behind Cyprus, despite Turkey's muscular approach."

Split in a Turkish invasion in 1974 triggered by a brief Greek-inspired coup, Cyprus is represented in the European Union by the internationally recognised Greek Cypriot government.

Turkey, the only country to recognise the breakaway state of northern Cyprus, has said any reserves belong to both communities and cannot be exploited unilaterally by the Greek Cypriots.

Texas-based based Noble holds the exploration concession for a block off southeast Cyprus that lies close to a gas field in Israeli waters -- thought to be the world's largest find of the last decade.

BETWEEN EAST AND WEST

Turkey, an EU candidate country that straddles East and West, has been steadily trying to increase its influence in the Middle East and in Central Asia, powered by its booming economy.

Erdogan received enthusiastic receptions during an "Arab Spring" tour last week that included Egypt, Tunis and Libya.

After long maintaining close ties with Syria, he has spoken out ever more strongly against President Bashar al-Assad's armed repression of a popular uprising, taking a clear line that the region's Arab states have struggled to articulate.

Meanwhile, ties between NATO member Turkey and Israel have nosedived since a bloody Israeli raid on a Turkish ship bound for Gaza last year, and Turkey has threatened to send naval vessels to escort future aid convoys trying to break Israel's blockade of Gaza.

Turkey's stance has won kudos among Arabs and Muslims. But Daniel Korski, from the London-based European Council on Foreign Relations, said it might alienate EU states who already have reservations about admitting a largely Muslim country.

Ankara started EU accession talks in 2005 but they have flagged, largely because of the stalemate over northern Cyprus.

"Some Europeans are now beginning to worry about the point of strategic dialogue with a country that is moving beyond the pale of normal behaviour. It is going to be incredibly difficult," Korski said.

Sinan Ulgen, from the Istanbul-based Centre for Economics and Foreign Policy Studies, said Turkey has until recently used its "soft power" to advance its interests, but was now growing in confidence and assertiveness:

"Turkey is sending the message to the international community that it has to deal with Turkey and take Turkey into consideration," Ulgen said.

CYPRUS-ISRAEL AGREEMENT

Last year Cyprus and Israel signed an agreement establishing their maritime borders and the respective rights to explore natural resources within them.

Ankara rejects any such delimitation, threatening itself to declare a 200 nautical mile exclusive economic zone with northern Cyprus, which would reach far into the waters carved up by Cyprus and Israel, and to drill for gas there itself.

Guil Bashan, an energy analyst at Tel Aviv-based IBI investment house, said the dispute would add to investors' concerns, but that it would not have a major impact on Israeli drilling projects.

"The tensions, the concerns do add a new dimension of risk to investors, but I don't think it's significant. In Israel, these things get a lot of attention politically, but have a small impact on the economy and on stocks," Bashan said.

He said much of the financing for new projects had already been secured, but if the geopolitical situation worsened and investors saw higher risk, "they may want a higher risk premium."

The United States, dismayed at the deterioration of ties between its two key regional allies, has urged restraint and reconciliation.

Ulgen said Turkey may be calculating that Washington cannot afford to imperil its relations with Turkey at such a crucial moment for the Middle East, especially since Ankara agreed last week to host a NATO radar system.

"The vision in Ankara is that Turkey is such a core country in the Middle East and in North Africa, and with such a regional influence, that at the end of the day not even a country like the United States has the luxury to push Turkey," Ulgen said.

U.S. President Barack Obama was due to meet Erdogan in New York later on Tuesday. Turkish officials said they would discuss Turkey's neighbours Syria and Iran as well as wider issues.

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