Turkiye-Armenia normalization: Analysts see cause for optimism but wary of history’s ‘trap’

Achieving the final objective “will not be easy, but the hardest parts have been overcome,” said an Armenian analyst as he delved into why he is “justifiably optimistic” about the historic bid by Turkiye and Armenia to normalize their long-strained ties.

Another analyst felt the process is on the precipice of a “real turning point,” but warned that Ankara and Yerevan must be vigilant to avoid walking into the same “trap” that derailed past attempts at reconciliation.

Turkiye and Armenia have ramped up efforts to bury the hatchet over long-standing differences that led to a diplomatic and border freeze between the neighbors.

Special envoys recently appointed by the two countries to spearhead the latest peace push held a first round of talks in Moscow on Jan. 14, where they agreed to continue negotiations without preconditions for “full normalization.”

“The reason I’m justifiably optimistic is because we see a rapid pace of diplomacy. That’s very unusual,” Richard Giragosian, a US-born Armenian who heads the Regional Studies Center (RSC) in Yerevan, said in an interview with Anadolu Agency in the Armenian capital.

For Giragosian, the recent normalization process is a “re-engagement of diplomacy.”

“In other words, this is very much round two, after the protocol process and football diplomacy back in 2008 and 2009,” he said, referring to the Zurich Protocols signed by Ankara and Yerevan in 2009.

The agreements were part of a move to “establish good neighborly relations and to develop bilateral cooperation,” but never received the stamp of approval from their respective legislatures.

“This time, however, we have much more advantage in the re-engagement. We see greater political will on both sides to pursue and succeed in normalizing relations,” he continued.

‘Red flags’

Vahram Ter-Matevosyan, an associate professor at the American University of Armenia, however, sees some “red flags” in the “methodology of rapprochement.”

“Turkiye and Armenia are getting into the same trap that they did in 2008 and 2009; that trap is clubbing together reconciliation and normalization,” he argued.

“It is important to go ahead with normalization first, reconciliation later,” he said, explaining that “normalization is between states, reconciliations between nations.”

Giragosian agreed that normalization is not reconciliation, but stressed that it is the “first step toward addressing any and all issues between our societies and our countries.”

“This time, unlike the protocols in 2009, Turkey and Armenia do not need a third party,” he said.

“A second key difference is the appointment of special envoys, which actually speeds up the process and removes any requirement of parliamentary ratification.”

Another critical change in circumstances is that “Azerbaijan is much more self-confident and much less opposed to normalization,” he added.

Talha Kose, associate professor of political science at Ibn Haldun University in Istanbul, viewed the new bid for normalization as “quite promising.”

“There are sincere and positive signals from both sides. There is a belief that this will be a win-win situation for both countries,” said Kose, co-author of the 2019 report, Armenia and Turkey: An Overview of Relations, published by the Turkiye-based Hrant Dink Foundation.

“Expectations are not high either. Parties will start from diplomatic normalization and recognition, and other issues related to historical reconciliation will be left to the future,” he continued.

Next steps

The normalization process received a major boost this week as flights between Turkiye and Armenia resumed after a two-year halt.

However, their land border – shuttered since 1993 when Armenia occupied Nagorno-Karabakh – remains closed.

In Ter-Matevosyan’s view, resuming flights “is not enough,” as the “real turning point in relations will be the reopening of the land border.”

He said there are many more important issues still to be addressed, particularly the factor of public perception in the two countries.

For Kose, the change in leadership in Armenia has bolstered the prospect of a successful normalization process.

“(Prime Minister Nikol) Pashinyan demonstrated bold leadership in taking the normalization attempt more seriously,” he said.

Giragosian echoed his views and built on them by pointing out that Pashinyan has a “fresh second mandate” after his re-election last year.

“First of all, most importantly, economics and trade are now recognized as real incentives (for normalization). This wasn’t the case in the past,” he continued.

“For Turkiye, normalization is also part of a broader strategy to repair and restore relations with the UAE, Israel, Egypt. This is a positive development … it is part of a bigger package of opening borders, establishing trade, transport, and ending embargoes.”

Source: Anadolu Agency

Uncertainties dominate global markets

The mixed course in global markets continues this week in the aftermath of a hawkish stance by central banks and strong macroeconomic data supporting monetary tightening.

The European Central Bank’s (ECB) hawkish stance surprisingly last week and the strong employment data announced in the US continue to have an impact on the markets.

Markets expect that the US Federal Reserve (Fed) will raise interest rates by 150 basis points in six meetings this year, and the ECB will increase the rate by 40 basis points during 2022.

While investors focused on the verbal guidance of monetary policy officials, ECB Governor Christine Lagarde’s statements on Monday can increase the volatility in asset prices.

While Fed officials’ negative comments last week related to an interest rate hike of 50 basis points increased uncertainties in markets, inflation figures in the US this week are expected to decrease uncertainties.

With these developments, it is observed that the risk appetite in global stock markets is low, while the ongoing increase trend in oil prices indicates that the cost pressures on the economy may continue.

The price of Brent oil per barrel is at $92.9 currently, the highest level since October 2014, started the eighth week of gains after seven weeks of an upward trend.

The US 10-year bond yield is currently stabilizing at 1.91% after rising to 1.94% on Friday due to the non-farm employment data, which surpassed expectations.

On Friday, the S&P 500 index gained 0.52% and the Nasdaq index gained 1.58% in the New York stock market, while the Dow Jones index fell 0.06% In the US, index futures contracts are mixed on the first trading day of the new week.

The tension between Russia and Ukraine continues to affect asset prices.

While analysts focused on the decisions to come out of the meeting between US President Joe Biden and German Chancellor Olaf Scholz, the US National Security Advisor Jake Sullivan asserted that Russia could invade Ukraine at any moment.

With the selling pressure in the bond markets after the hawkish monetary policy in Europe, Germany’s 10-year bond yield rose to 0.21%.

The euro/dollar parity, on the other hand, started the new week with a downward trend after five consecutive days of an upward trend and is currently at 1.1440.

On Friday, the DAX index in Germany fell by 1.75%, the FTSE 100 index in the UK by 0.17%, the CAC 40 index in France by 0.77% and the FTSE MIB 30 index in Italy by 1.79%. European indices are positive in futures on Monday.

While the Chinese markets, which were closed last week due to the New Year holiday in Asia, were reopened, expectations that China will be more sensitive for the regulation steps support the risk appetite.

According to the macroeconomic data released in the region, the service sector Purchasing Managers Index (PMI) in China decreased to 51.4 and the composite PMI to 50.1.

Leading indicators index in Japan exceeded expectations and reached 104.3.

Asian indices closed last week with mixed figures, on Monday, and all major indices except Shanghai are in the negative territory.

On Friday, Turkiye’s BIST 100 index lost 0.72% and closed the day at 1,943.81 points.

The USD/TRY exchange rate closed the last week at 13.5625 and it is around 13.56 currently.

Source: Anadolu Agency

Germany’s 2022 inflation forecast raised to 4% amid high energy prices

Germany’s inflation forecast for this year is raised to 4% amid high energy prices, a Munich-based research institution said on Monday.

The previous inflation forecast for 2022 made last December was 3.3%.

“Companies are passing the increased cost of energy and of procuring intermediate products and merchandise on to their customers. Those increases will filter down to consumer prices,” Timo Wollmershauser, head of forecasts at the Ifo Institute for Economic Research, said in a statement.

German companies’ price expectations for the next three months rose to a new high of 46 points in January, according to a recent survey by Ifo Institute.

The index stood at 44.7 points in December and at 45 points in November.

It came highest in wholesale at 60.3 points, followed by retail with 57.7 points and manufacturing at 55.6 points.

In the service sector, the index reached a new high of 41.9 points, and it came at 41.5 points in construction, the Ifo Institute said.

Annual consumer prices in Germany increased by 3.1% in 2021 compared to the year before.

Source: Anadolu Agency

10 killed after Cyclone Batsirai batters Madagascar

At least 10 people are confirmed dead in Madagascar after Tropical Cyclone Batsirai slammed its eastern coastline overnight, the country’s disaster management agency said Sunday.

Some died after their homes collapsed in the town of Ambalavao, about 460 kilometers (286 miles) south of the capital Antananarivo.

The initial death toll reported was six.

The National Bureau of Risk and Disaster Management said 47,888 people were displaced by the storm, which brought heavy rains and winds.

According to the agency, water levels along the cyclone’s path were expected to peak between Sunday and Monday and flood warnings were issued for the Mananjary and Fiherenana rivers.

Following initial reports, up to 250,000 people are affected, the agency said.

The most affected area was the southeastern city of Mananjary, where strong winds and rain destroyed homes and damaged infrastructure, including schools and hospitals.

Cyclone Batsirai made landfall near Mananjary, around 530 kilometers (329 miles) from Antananarivo, around 8 p.m. local time on Saturday, the agency said.

Gusts reached speeds of 235 kilometers per hour (146 miles per hour) with high waves battering coastal areas, according to the country’s meteorological agency.

The cyclone weakened as it moved inland, with winds scaling back to around 110km/h (68 mph).

“Strong winds and heavy rains destroyed the city…until 3 a.m. local time,” one resident told local media. “The night was long. It was the worst nightmare of my life.”

The cyclone was expected to move westwards towards the sea in the Mozambique Channel on Sunday and is forecast to head south, bypassing mainland Africa.

It was the second major storm in a week after Tropical Storm Ana struck the Indian Ocean island last month, killing 55 people and displacing more than 110,000 others.

Last month, nearly 80 people were killed following tropical storms in the three southern African countries of Madagascar, Mozambique and Malawi.

According to experts, extreme weather events such as cyclones could become more regular, attributable to climate change.

The World Food Program (WFP) director for Madagascar, Pasqualina Di Sirio, told reporters ahead of the storm that she anticipated “a major crisis.”

Source: Anadolu Agency

Israeli premier, US president discuss ‘regional challenges’

Israeli Prime Minister Naftali Bennett spoke to US President Joe Biden over phone and discussed a range of issues including regional challenges, his office said in a statement on Sunday.

Bennett congratulated Biden on the operation to eliminate Daesh/ISIS leader Abu Ibrahim al-Hashimi al-Qurayshi in northern Syria, saying that “the world is now a safer place thanks to the courageous operation of the US forces.”

The two leaders also talked about the “growing Iranian aggression,” “steps to block the Iranian nuclear program,” and the current situation between Russia and Ukraine.

Bennett thanked Biden for his “steadfast support of Israel” and invited him and his wife to visit Israel.

Source: Anadolu Agency