Though the economic backlash may not be felt for months, will Turkey’s shooting down of a Russian plane eventually destabilize the global economy?
By: Ringo Bones
Unlike what happened back in August 2, 1990 when the then Iraqi strongman Saddam Hussein forcibly annexed Kuwait and made it an Iraqi province, it seems that that the global economy had become immune from the knock-on effects of recent geopolitical shenanigans and military adventurisms. Even though the global market price for crude oil peaked for a few hours following the shooting down of a Russian jet after accidentally straying into Turkish airspace after running bombing sorties in Syria in support for the Assad regime, it seems that recent military adventurisms – i.e. Russia’s “invasion” of a separatist region in Georgia back in 2008 and the recent “military intervention” of Donetsk region of the Ukraine and Crimea last year - only resulted in a “localized” economic destabilization, and largely due to EU sanctions for Russia’s failure to adhere to accepted international laws and conventions.
Even though Russian President Vladimir Putin’s action via bombing sorties over Syria aimed on Daesh / Islamic State is largely in response to the downing of the Metrojet Flight 9268 back in October 31, 2015 which Daesh claims responsibility, Putin’s loyalty to the despotic Assad regime only complicates matters on the international efforts to destroy Daesh’s ability to launch more terror attacks. But when a Turkish F-16 plane shot down what looks like a MiG 23 Flogger back in November 27, 2015 as it strays into Turkish airspace initiated this ongoing tension between Turkish PM Recep Tayyip Erdoğan and the Kremlin complicates matters further still. But will the current Russo-Turkish conflict result in a widespread economic destabilization unseen since the 1990’s Operation Desert Shield?
4.5 million Russian tourists visited Turkey in 2014 and form the bulk of Turkey’s tourism revenue and Turkey is currently the biggest consumer of Russian natural gas thanks to ongoing EU sanctions. A senior advisor of Russian President Vladimir Putin even said a few days ago that every Turkish tomato bought by Russians means money for rockets to shoot down our pilots. In total, 33 billion US dollars worth of trade from Russia and most of their energy will be affected. But will the Russian crackdown on the Turkish economy eventually hurt its own economy?
During the last few days, Russian Prime Minister Dmitry Medvedev already drafted economic sanctions against Turkey that will take effect in January 1, 2016. A leading Russian travel agency already cancelled tours to Turkey a few days ago. Visa free travel by Turkish citizens to Russia will be suspended starting next year and the Turkish-Russian 20 billion nuclear power plant project and the Turkmenistan gas pipeline project will likely be cancelled.