NEW YORK, NY (KWR) October 6, 2011 - Over the last few years there has been an important change in the structure of international relations in the eastern Mediterranean as Turkey has increasingly asserted itself in regional affairs. This assertion has come in a number of ways - a disinclination to be involved in the last U.S. war against Saddam's Iraq in 2003, a building of diplomatic bridges to Iran supported by growing economic links, a deterioration in relations with Israel with which it shared a close military relationship), and a steady distancing from the European Union. Most recently Ankara announced it was ready to send warships to escort research vessels that would explore for oil and gas off the coast of Northern Cyprus, while warning Cyprus and the Greek-dominated south to stop its drilling and exploration. At the same time, Prime Minister Recep Tayyip Erdogan was heavily courted in Washington, D.C. over the IMF/World Bank meetings and had a 90 minute tete-a-tete with U.S. President Barack Obama.

Turkey has long been a bedrock member of NATO, an erstwhile U.S. ally during the Cold War, and a moderate voice in the Muslim world. That has become more questionable, in part due to the financial/economic crisis in the advanced economies, most notably the U.S. and Europe. The upheaval caused by the sub-prime crisis in the U.S., the corresponding weakening of economic power as well as imperial overextension has lead Ankara to reassess Washington's power and the value of this alignment. At the same time Europe's dragging its feet over Turkish European Union membership and the current sovereign debt crisis roiling the Eurozone have made deepening that relationship less attractive. Indeed, neo-Ottomanism appears to have quietly entered in through the back door of Turkish foreign policy.

What is neo-Ottomanism? Neo-Ottomanism is not the simple re-imposition of Turkish influence on its neighborhood, though there is an element of that. Rather it embraces a willingness to come to terms with Turkey's Muslim and Ottoman heritage at home and abroad, which means less militant secularism in Turkey and "soft" Turkish influence in the former Ottoman Empire. Moreover, neo-Ottomanism looks to foreign policy with a sense of self-confidence, based on the view of Ankara being a pivotal state and a regional superpower supported by a strong economy. Consequently, Turkey should play an active role in the part of the world in which it is the center.

Since coming into office in 2002, the Justice and Development Party (AKP) and Prime Minister Recep Tayyip Erdogan have more aggressively pressed a neo-Ottoman agenda. This has come in the form of improved relations with Tehran and a reaching out to post-Mubarak Egypt and post-Qaddafi Libya. At the same time it has seen a hardening of relations with Israel, especially following the Turkish flotilla's attempt to break Israel's blockade of Gaza in May 2010 which led to several deaths. Relations have only deteriorated since that incident, with Turkey threatening to send more flotillas, accompanied by the Turkish navy. Prime Minister Erdogan insisted his country will be assuming a more aggressive stance throughout the eastern Mediterranean. This tough profile has also been leveled against Greek Cyprus, which is seeking to explore for oil to its south.

Cyprus is an island divided since 1974 between the Greek Cypriot south, which is an EU member, and Northern Cyprus, the home of the Turkish Cypriots. Cyprus, working with Israel, is actively searching for oil, through U.S.-based Noble Engineering. In September 2011, the U.S. firm began exploratory drilling south of Cyprus. This resulted in what many have called "saber rattling" by Turkey, which came out and stated that Cyprus could not drill for oil and gas on the continental shelf that it delineated with Israel in a 2010 agreement. Adding to this, Turkish Energy Minister Taner Yildiz characterized the Cypriot exploration project as "a political provocation aimed at consolidating the Greek Cypriot administration's status." He also stated that Ankara would make its own deal with the TRNG (Turkish Republic of Northern Cyprus) to delineate the continental shelf north of the island if Noble were to continue its drilling plans.

Where does this leave power relations in the eastern Mediterranean? Turkey has asserted its geo-political significance vis-à-vis Cyprus and Israel, has been active in building new relationships in Libya and Egypt, and improving ties with regional bad boy, Iran. This is pushing Greece, long a pro-Palestinian player, closer to Israel as well as Cyprus. But the shift in power relationships is not a simple black and white issue. Despite more trade and investment between Turkey and Iran, Ankara recently announced it would install a radar system designed by the U.S. as part of a NATO shield against a possible missile attack by Iran on Europe. Turkey also joined the United States and the EU in condemning the Syrian government's violent repression of demonstrators. And both the EU and the U.S. remain important trade partners and sources of foreign direct investment.

Although the idea of neo-Ottomanism has strong appeal within the AKP government and elements of it are clearly at work, there is also a pragmatic dimension to Turkish foreign policy. The Erdogan administration's play to the Palestinians has an appeal to most Turks. The AKP has to pay attention to public opinion as it functions in an elective political system. In the same light, the AKP has to appear to look out for the interests of the Turkish community in northern Cyprus. As for Syria, Ankara is not at all pleased with the political instability on its southern border. Iran represents a larger, more strategic worry - it will soon become a nuclear power and more difficult to manage. Moreover, the new Cold War between Iran, as the leader of the Shiite world, and Saudi Arabia, head of the Sunnis, provides a challenging foreign policylandscape for Ankara, that it cannot control.

Even with Israel there is an important degree of pragmatism. Despite the verbal sparring between the two countries and ending of what had been close military relations, bilateral trade remains strong. In the year to August Turkey bought 3% of Israel's exports to the tune of $1.3bn, up 40% y/y. Turkish exports to Israel for the first seven months of the year were worth $1.46bn, up 20% y/y.

The neo-Ottomans have arrived. As the West grappled with its self-inflicted economic crisis, a power vacuum developed in the eastern Mediterranean. As nature abhors a vacuum, Turkey was and continues to be willing and able to fill the space. This is not an easy or smooth process, but Turkey has a long history as a key player in the Middle East. Unlike the governments prior to the AKP, which favored a more conservative and cautious approach to engaging the Islamic world and the West, the neo-Ottomans find the more assertive foreign policy approach a return to grandeur and confidence. As in any such change, the neo-Ottoman foreign policy is unsettling for its neighborhood, adding to uncertainty. Considering the fear and loathing in global markets, the neo-Ottomans hopefully play a pragmatic game, knowing that saber-rattling is not necessarily likely to add a calming influence.