Erdogan's $20bn canal to nowhere

In April 2011, Turkish leader Recep Tayyip Erdogan laid out his vision for a nearly 50-kilometre canal linking the Marmara and Black seas parallel to the Bosphorus Strait, some 20km to the east. A decade later, after countless stops and starts, Turkish officials expect to break ground next month on the $20 billion project, which Mr Erdogan himself describes as “crazy”.

A growing chorus of critics might agree. Leading the charge is Istanbul Mayor Ekrem Imamoglu, widely seen as Mr Erdogan’s main challenger in the next presidential vote, set for 2023. He views the project as a betrayal, arguing that locals need jobs and health and financial security a great deal more than a pricey new waterway. Nearly three of every four Istanbul residents concurs, according to a 2019 survey.

Istanbul represents one-fifth of Turkey's population and more than one-third of its gross domestic product. But the Turkish economy has been stagnant since a mid-2018 currency crisis, with a steadily declining lira, massive foreign debt and persistently high inflation and unemployment. The pandemic has made matters worse, driving more than 1.5 million Turks into poverty. And a few days ago, Turkey entered its harshest lockdown yet amid record-high Covid-19 deaths.

Mr Erdogan has vowed to go ahead with the canal, arguing that it will attract much-needed foreign investment and spark economic activity. Top Turkish officials and wealthy foreigners have reportedly snapped up land along the planned route, leading to a sharp increase in real estate prices.

The government estimates the canal will generate $5bn in annual transit fees and curb traffic on the Bosphorus, which sees about three times as many ships as the Suez or Panama canal. Many critics denounce the proposal out of environmental concerns, citing predictions that the canal will destroy great swathes of farmland and the coastal habitats of many species and imperil marine ecosystems from the Black Sea to the Mediterranean.

Yet due to congestion, sharp turns, narrow stretches and bottom currents, accidents on the Istanbul strait are not uncommon. In 1999, a Russian tanker split in two near the mouth of the Bosphorus, spilling 1,500 tonnes of oil that contaminated nearby beaches for two years. Last month's lodged container ship in the Suez Canal, which halted traffic for nearly a week and cost Egypt millions of dollars, seems a decent advertisement for Canal Istanbul.

The 1936 Montreux Convention ensures free passage for civilian vessels through the Turkish Straits (the Bosphorus and the Dardanelles), while giving Turkey considerable control over the passage of naval vessels of non-Black Sea states. Top Justice and Development Party (AKP) officials have asserted that the new canal would enable Turkey to void the convention and establish new regulations. But this is highly unlikely, particularly as Russian President Vladimir Putin has made clear to Mr Erdogan that Montreux is a red line.

Assuming Montreux remains in effect, leading Bosphorus analyst Yoruk Isik estimates that during normal economic times shipping vessels wait an average of 20 hours to transit the strait. If true, shipping firms would have some incentive to pay for speedier, safer no-wait transit through the new canal, which will be nearly straight and potentially easier to navigate.

Mr Erdogan might also be driven by ego. Blessed with rolling hills and glistening waterways, Istanbul has for nearly three millennia provided leaders looking to cement their legacy with an ideal natural canvas. Byzas and Constantine lent the city their names. Justinian gave the world Hagia Sophia. Theodosius left his still-standing walls.

Then came the Ottomans’ lofty mosques and pencil-thin minarets, mostly designed by Mimar Sinan, the favoured architect of Suleyman the Magnificent, the 16th-century sultan. Mr Erdogan has already copied this style, building Turkey’s largest mosque overlooking the Bosphorus from Istanbul’s Asian side. But these are mere ornaments pinned on a well-aged beauty.

A second Bosphorus that transforms the city centre into an island would be an unprecedented makeover – one that proved too much even for Mr Erdogan’s greatest predecessors. Sultan Suleyman, who ruled the empire at its peak and led it to the gates of Vienna, first floated the concept of a man-made Black Sea-Marmara waterway five centuries ago. Mimar Sinan was even said to have begun devising a route plan before the effort was abandoned.

Succeeding sultans similarly mulled the idea before finding other projects to keep them busy. The concept has also been resurrected a few times in the Republican era, including as recently as 1991 when the head of an Istanbul commission argued it would reduce maritime traffic, cutting pollution and environmental risk.

Bringing this project to fruition after so many others failed would be the capstone on the Turkish President’s rise from the rough streets of Kasimpasa to unsurpassed greatness. “Istanbul will become a city with two seas passing through it,” Mr Erdogan proclaimed in 2011.

It is fitting that this may be his defining project. After taking power in 2003, Mr Erdogan took control of the public housing agency, TOKI. Over the next decade, construction in Turkey leapt five-fold as building became an economic driver and electoral tool. “TOKI builds many kinds of projects to win voters,” economist Mustafa Sonmez told me in 2013. “Sometimes a mosque, a stadium, sometimes military compounds and malls – whatever’s needed.”

Mr Erdogan launched one mega-project after another: a third bridge across the Bosphorus, the world’s largest airport, a railway tunnel beneath the Bosphorus, a billion-dollar port complex, a mosque looming over Taksim Square. His construction-focused agenda is one of his most successful political schemes, and one of his most despised.

The building boom was backed by his base and the AKP inner circle, many of whom reportedly profited from no-bid contracts running into the billions of dollars. It also inspired the largest wave of opposition to Mr Erdogan. In mid-2013, millions of Turks joined weeks of nationwide demonstrations that initially began to protest the razing of Gezi Park in central Istanbul.

A decade later, one wonders if Turkey’s leader should have paid more mind. He always argued that the new airport, bridge and canal were key to his vision of boosting Turkey’s prestige and raising GDP to $2 trillion by 2023. The centennial of the republic is now just two years away, but the Turkish economy is more than 60 per cent short of that target.

Meanwhile, the projects that have been completed look like boondoggles. Istanbul Airport opened in April 2019. Less than a year later, and weeks before the pandemic cratered the travel industry, China’s ICBC bank was in talks to refinance $6.2bn of its loans.

The third Bosphorus bridge and adjoining Marmara Motorway opened in 2016 and soon under-performed to the extent that the Italian-Turkish consortium overseeing them walked away. Now Turkey is preparing to make a Chinese consortium the majority owner of the bridge and motorway, according to ANKA Review columnist Aygen Aytac.

Beijing is suddenly all over Mr Erdogan’s prestige projects. China’s two largest port operators are the majority owners of Istanbul’s Kumport, which is conveniently located on the north-western rim of the Marmara Sea, near the southern end of the planned canal. Top Chinese tech firm ZTE owns 48 per cent of Turkey’s top telecoms firm, which oversees communications at Istanbul Airport, close to the planned canal’s northern end.

Last week, six Turkish banks, including the country’s three largest private banks, said they were unlikely to invest in the canal due to environmental concerns. This followed news that Chinese banks are considering a multi-billion-dollar investment in the planned canal, which would be incorporated into Beijing’s expansive Belt and Road Initiative.

Due to economic troubles and waning AKP support, the likeliest outcome for Canal Istanbul may be the bridge-to-nowhere scenario, under which construction would begin but then pause indefinitely if Mr Erdogan is voted out. But even if the canal does come to fruition, it may come to be seen not as Mr Erdogan’s crowning glory, but as an early sign of China’s conquest of the great Ottoman capital.

David Lepeska is a Turkish and Eastern Mediterranean affairs columnist for The National