Russian-Turkish ties are set for Catholic marriage: Businessman
ST. PETERSBURG- Hürriyet Daily News
Russia is the best market in which Turkey shows the best of its real potential, says Erman Ilacak talking to Daily News during the St. Petersburg International Economic Forum, which included a panel discussion on TurkeyTurkey and Russia might not see eye to eye on some global issues, but the two are a match made in heaven in terms of their joint desire to expand their strategic and economic partnership into third countries, according to businessman Erman Ilıcak.
“Relations are going toward an [unbreakable] Catholic marriage. They are heading toward a strategic point of no return and this is to the advantage of Turkey,” Ilıcak, the chairman of the board of Renaissance Construction, the biggest foreign construction company active in Russia, told the Daily News in an interview this week.
Q: How did the economic crisis in Europe and political crisis in the Middle East affect relations with Russia?
A: It affected it in a positive sense. Turkey and Russia came to understand a little bit better how much they need each other. Both started to look at the other with a different eye and see different opportunities in the other. At the end of 500 years of relations, we are only now starting to truly know each other. Europe is our biggest export market but we now understand how fast Russia is growing and have increased our focus on it.
Russia has also understood the need to grow in Turkey without wasting time in Europe or the Balkans. That’s why there has been investment in the nuclear field and Sberbank’s purchase of Denizbank. Last year, there was an investment worth more than 1 billion dollars in the steel industry. This shows mutual confidence. Turkey has proved that whoever wants to grow has to be present in Turkey.
Q: You say Russia is one of the best countries in which we express ourselves.
A: There are 59,000 Turks living in Russia, and there are six big Turkish banks. We have Turkish industrialists, contractors, as well as retail firms. We have professional executives. Russia is the best market in which Turkey shows the best of its real potential.
Q: What is the most important obstacle standing in the way of a more rapid development of bilateral economic ties?
A: There is no obstacle. There is serious positive discrimination. An American or a German waits in line to get a visa whereas we enter Russia without a visa. Maybe we can move to a trade union or customs union one day. This is something I absolutely want as an individual.
Q: But Turkey’s customs union with Europe is an obstacle to such a union. In addition, you are known to appreciate the importance of relations with the EU.
A: I believe this can be somehow accomplished. If indeed it can be accomplished, Turkey’s exports will be multiplied. If we want to strengthen our hand with the EU, we need to develop our relations with Russia. I think we can negotiate this with the EU.
Q: Are disagreements in the political arena, like the presence of NATO radars on Turkish soil or the Syrian crisis, affecting economic ties with Russia?
A: Our relations are independent of those factors; they are independent of politics. Turkey has a stance with its neighbors, and Russia respects that stance. We might have different views on certain issues, but we have such a strategic relationship with Russia that this is not harmed by these [differences of views].
Q: Are you talking about a strategic economic relationship?
A: [I’m talking about] a strategic relationship in the economic and political sense. There is a relationship on a global platform above all the issues you mentioned.
Q: Can you elaborate?
A: Both Russia and Turkey want to grow in new markets like Africa. We have become aware now that we can work with Russians in third countries. Central Asia in the 1990s, for instance, was a place of rivalry. In the 2000s, friendship replaced this rivalry. Wherever we go, we are doing separate things. What Turks and Russians are doing is not competitive but complementary. In new markets like the Middle East and Central Asia, Turks and Russians can come up with deeper strategies.
Q: So despite divergences of views, you still believe there is room for cooperation.
A: At the end of the day, the economy makes its presence felt. We have now learned to work together. In Libya, Russians were doing a project connecting the railways, but all the manpower for the project came from Turkey. They did the engineering, and we did it on the ground. We will see more of these examples in the very near future. Russian investments in Turkey, like the purchase of [Denizbank], came in the midst of the issues you mentioned. We have come to the point of investing in each other; now we will carry this to third countries. Russians have a very specific way of doing business. There are not many in Russia who speak English. As it itself has been a huge market, it did not feel the need to [look at] other markets until now. We Turks came to Russia in the 1980s and learned Russian and learned how to work with Russians. Now we are at the level of doing business in third countries with Russians. This is know-how very specific to Turks; there is no other country that has expended such effort to figure out the Russians.
Q: Do you believe that cooperation will increase despite all the instability in the Middle East?
A: I believe all this turbulence will pass by and that the region will embark on a period of serious growth. I don’t know how much time this will take, but it will end and [the region’s rapid growth] will positively affect Turkey. And Russia would like to have a say; it has always been a major player in the region. Turkey is the country with whom Russia will work the most easily in the Middle East.
Q: But don’t you think Russia seems to be standing against the tide by supporting the existing regimes?
A: Russia has deep ties of friendship with these countries. There are a lot of relations from people to people. Russian policy will be whatever is good for the people of these countries.
Q: The regime changes in the region seem to have become irreversible.
A: Whatever is needed will be done there, and I am sure Russians will have a positive role.
Q: Can a wave akin to Arab Spring extend to some Russian regions or Central Asia?
A: I don’t think so; there are differences with the Middle East, be it the lifestyle or the problems they experience.
Q: There have been concerns that with the Arab Spring, Turkey might lose its strong position in the region, especially in economic terms.
A: I also initially thought that, especially this time last year. But the government, and particularly the prime minister and the economy minister, have worked so seriously that we have not lost our position.
Q: What makes you say that? Is it the Libya experience, where you had serious investments?
A: Yes, we have restarted our work in Libya by sending our engineers and workers there, and Libya has said it will remain loyal to its commitments. This was made possible thanks to all this shuttle diplomacy. Our position was seriously in limbo, but following serious efforts, there are developments in our favor. Actually, it is not that easy to lose our position there: Libya is not an easy country to work in and get a result. If there is such a thing as an art of doing business in Libya, we are at the peak of that art; we have 40 years of experience in that country. We have all passed from the “Libya school,” living there and working there, myself included.
We have accumulated 40 years of know-how in different strategic and historic places, and this is know-how that is much needed by Europe. Today, if a Japanese person wants to enter to the region, he or she needs to work with Turks. That will also be to the benefit of Russians, since we know how to work in these regions much better than anyone else.
Q: Given that some believe the region will remain in chaos for a long time, what makes you so optimistic?
A: Afghanistan is currently the most chaotic place on earth, but Turkish contractors are the most successful contractors in that country. Turks have developed an expertise in working chaotic environments. Crisis means opportunity for us. When the economy is fine, you can’t separate the good from bad; everybody seems do be doing well, but the real differences emerge in these types of chaotic situations. We also make sacrifices. Renaissance Construction is the biggest foreign construction company in Russia because we never left the country despite the economic crises in 1998 or 2008. The Turkish nation grew, acquiring immunity to the crisis. With the Turkish government’s stance, coupled with the economic stance of Turkish firms, there will be opportunities in the region when the crisis ends and our European competitors will be coming only after us. This is because our European partners are rather tiny despite their big names.
Q: You are talking about a strategic partnership with Russia but isn’t there a need to balance relations? The trade deficit is in Russia’s favor and Turkey is too dependent on Russian energy sources.
A: It is up to us: If we have the right criteria, we can expand our business in Russia. If there is discrimination toward Turks, it is a positive discrimination. But the era of buying oil in exchange for selling soap is over. It’s important to have good relations at the top, but the area of favors from state to state is over. If it wants, Turkey can buy its oil and gas from other countries as well. It would not be to the advantage of Turkey, but Russian energy can be replaced. There are open market rules between the two countries. Both sides negotiate fiercely when they are closing a deal. Political relations are good, there are two leaders at the top that understand each other well. Relations are going toward an [unbreakable] Catholic marriage. They are heading toward a strategic point of no return and this is to the advantage of Turkey.
Who is Erman Ilıcak?
Erman Ilıcak is the founder and chairman of Rönesans Holding, as well as the vice president of the Turkish Industry & Business Association (TÜSİAD) and the chairman of the Turkish-Russian Business Council of the Foreign Economic Relations Board of Turkey (DEIK).
A graduate of Middle East Technical University’s (ODTÜ) Civil Engineering Department, Ilıcak established Renaissance Construction in 1994 in St. Petersburg.
Rönesans Construction has grown, placing 61st on the Engineering News Records’ (ENR) list of Top 225 International Contractors with $2 billion in revenue and employing 16,000 workers worldwide.
Renaissance Development, which was established in 2000, has grown to become the largest private real estate development company in the Turkish market. Rönesans Energy, which was established in 2007, also has ambitious growth plans with $2 billion in scheduled investments.