The Turks and the Russians: Business as usual

The Turks and the Russians: Business as usual

Russian President Vladimir Putin, accompanied by a large delegation including 10 ministers, visited Turkey on Dec. 1 to attend the fifth session of the High-Level Cooperation Council (HLCC), an inter-governmental mechanism designed to oversee the cooperation between the two countries and eliminating bureaucratic barriers to enhance it. The timing of the visit was crucial for Russia, as it came at a time when Putin has been isolated in the international arena. Not only that, he is not welcome in the West; he was openly snubbed by the leaders of the G-20 countries in their annual summit in Brisbane, Australia, on Nov. 15-16. Russia, too, faces sanctions for the EU and the U.S. due to its meddling in Ukraine. Thus, Putin’s visit to Turkey was important to demonstrate to the larger world that he is still welcome in parts of the globe.

During the meetings, Turkish and Russian officials discussed various issues mainly related to bilateral trade and economic cooperation. Although the two countries signed 11 agreements to bolster economic cooperation and Turkish President Recep Tayyip Erdoğan and his Russian counterpart Putin reiterated their ultimate goal of increasing the bilateral trade volume to $100 billion, the deadline for reaching it was extended to 2023, a very distant target.

According to the Turkish Statistical Institute (TUIK) figures, Russia is Turkey’s second largest trading partner, after Germany, with $32 billion in 2013. However, it heavily favors Russia, as Turkey has become the second biggest buyer of Russian gas. Although it is argued that economic sectors other than direct trade, such as construction and tourism, where Russians are the second in the number of tourists arriving Turkey, should be added to the account, the fact that Russian company Rosatom will soon build Turkey’s first nuclear power plant in Akkuyu shows that the imbalance in figures will continue however way we look at them.

The Turkish government’s approval of the environmental impact report (ÇED) for the Akkuyu plant a day before Putin’s arrival signaled Turkey’s intention to move along with the cooperation, despite disagreements over various issues. Although Putin, for his part, announced a 6 percent discount on natural gas price, it was short of Turkish expectations and negotiations will likely continue as world oil prices continue to decline. Nevertheless, the two countries signed an agreement for an additional 3 billion cubic meters natural gas to Turkey from Jan. 1 onward.

Although Putin dropped the much expected bombshell of announcing the inability to build the South Stream Pipeline to Europe via the Black Sea and Bulgaria, instead announcing a new project linking through Turkey; it is still too early to see whether this is just another bargaining chip against the West or a firm offer to Turkey. So far as the sanctions are concerned, the depreciation of the ruble against the dollar and the sharp fall in oil and gas prices have hit the Russian economy considerably. Estimates for Russia’s losses due to sanctions and low energy prices have already reached $140 billion.

While nobody is sure how long Russia could tolerate the pressure, Turkey’s preference to continue with deepening economic relations with Russia will in time attract attention in the West. Indeed, the new NATO Secretary General Jens Stoltenberg has stated his expectations from Turkey to join the sanctions against Russia on the same day of Putin’s visit.

Adding this to the disagreements over several regional issues, such as the civil war in Syria, the Russian annexation of Crimea, Nagorno-Karabakh and Cyprus, it is not certain how long Turkey could continue to ignore the Western pressure and prioritize bilateral economic relations above all. Realpolitik will catch on eventually.