Turkey May Become a New Playing Field for Russian Oligarchs
Russian oligarchs are looking for a new place. Turkey will quickly establish itself as a welcoming host. The Turkish Foreign Minister said on Saturday that he welcomed the entry of sanctioned Russian oligarchs into the country. As long as their business relationship is subject to international law, tourists and investors.
This happened after the President mentioned that a particular group of capital could stop its facilities in Turkey. This is a direct reference to the arrival of several Russian-owned luxury assets in Turkey, including the arrival of the last two yachts and a private jet owned by billionaire Roman Abramovich. These comments led to speculation that NATO member Turkey may be actively encouraging investment from blacklisted billionaires; It is trying to boost its economy.
According to reports, wealthy Russians are already actively seeking investment there. However, any promising gains could be far-sighted for a country that arranges a delicately balanced act between Russia and the West.
Experts estimate that attracting Russian money could hurt Turkey in the long run. It is worth noting that Turkey is trying to draw a sharp line in the ongoing war in Ukraine. Although strongly critical of Moscow’s unprovoked invasion, the country does not implement sanctions and opposes them.
Instead, Turkey took on the role of a neutral mediator in facilitating peace talks between Russia and Ukraine. On Tuesday, negotiations in Istanbul appear to have raised hopes of a breakthrough after Moscow agreed to reduce military strikes on Kyiv and Chernigov. The Iranian side offered to obtain neutral status in exchange for security guarantees.
Turkey’s position of nominal neutrality is largely understandable given its close economic and diplomatic ties with Russia, especially in terms of trade, energy, defense, and tourism. Western allies are not putting pressure on Turkey to join the sanctions. Consequently, they will not be punished for it either.
This makes the country a legitimate outpost for assets owned by sanctioned Russians. Indeed, the influx of foreign investment and expensive purchases could benefit the Turkish economy, which fell into crisis last September. The unorthodox reduction in interest rates further exacerbates spiral inflation. However, Western tolerance is likely to decline; If Turkey actively begins to demand sanctioned wealth.
Inflation in Turkey rose to a 54-year high of 54.4% last month, Against the background of the collapse of the lira and rising commodity prices. Complete data on the aftermath of the war didn’t publish. According to experts, Russia’s attack on Ukraine makes Turkey’s economic situation more dubious.
Inflationary pressures are higher, destabilizing the Turkish economy. The results of the sanctions will stop tourism from Russia and Ukraine, which accounted for about a third of the incoming tourism. This will affect Turkish investments in Russia and Ukraine. The fact is that Erdogan wants to maintain Turkey’s reputation as an independent mediator in the current conflict. The country is trying to win favor at home and abroad ahead of the 2023 elections.
Nevertheless, Turkey has the opportunity to strengthen its economy; Also enjoy the transfer of wealth from Russia without political and economic irritation. This includes attracting investment from 450 Western brands that have pulled out of Russia so far. Erdogan noted last week that Turkey’s doors are open to companies trying to relocate their businesses outside Russia.