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“Boris, you are mistaken …”. Some comments on trade between Russia and Turkey

Alexandr Svaranc, May 29 2023

Trade between Russia and Turkey

Turkey’s political future is a matter of great interest for the rest of the world. And its 2023 general election has been the subject of much comment in many countries, not least Russia. A key reason for the international interest in the elections is the question of Turkey’s foreign policy course under its new government: will it keep step with the West, headed by the USA, or will it follow a more independent course while retaining its partnerships with such major powers as Russia and China?

As for China – let’s leave that question for the Chinese themselves to consider. In Russia, attitudes to Turkey and future relations with that country are somewhat divided. Specifically, the Russian government sees Turkey, if not as a strategic partner, then at least as an important one – a country focused on strengthening international relations and developing international relations in various directions, including political, cultural and economical cooperation, as well as cooperation in relation to energy, transport, national security and military and technical matters. The Russian President Vladimir Putin has maintained a good friendship with the current Turkish President, Recep Tayyip Erdoğan.

On the other hand, in Russia there is also a certain opposition to a “close embrace” with Turkey, given the two countries’ geopolitical rivalry and at times conflict over several centuries, Turkey’s continued membership of the anti-Russian NATO military alliance, as well as Turkish nationalists’ and even the Turkish government’s support for the Great Turan project – a revanchist policy aimed at increasing Turkey’s influence in the post-Soviet Turkic nations. Russia’s Turkey-sceptics argue that, in the best-case scenario, any apparent rapprochement between Moscow and Ankara is a purely temporary or even seasonal phenomenon and that in the near future this tendency is likely to change. In the worst-case scenario, opponents of a partnership between Russia and Turkey are suspicious of Russia’s diplomatic efforts in this area as they fear a new wave of Islamism and separatism within the Russian Federation, as well as new betrayals by Turkic nations in the former Soviet space.

Some of them see the current relations as a “holiday romance” overly dependent on the subjective factor of good personal relations between two heads of state (i.e. Putin and Erdoğan), while others see this tendency as the result of lobbying by liberal pro-business figures in Russia’s investment and government sectors, while yet others (including Aleksandr Dugin) see it as an ideological and geopolitical initiative aimed at bringing Moscow and Ankara together in a Eurasian union led by Moscow and Ankara.

Naturally, Russia is interested in developing constructive and mutually beneficial relations with all its neighbors, including Turkey. Moscow is well aware of Turkey’s special geographical position at the crossroads of Europe and Asia, and, finally Russia is interested in having a good relationship with Turkey that owes nothing to US dictates. But Russia is also mindful of its long history of dealings with Turkey and has not forgotten the many wars and conflicts between the two nations, and it is well aware that Turkey, both as a member of NATO and as a potential sponsor of neo-Ottoman and pan-Turkic ideologies, may be a source of new external and internal threats.

Be that as it may, today Russia is in favor of peace and friendship with Turkey, has a positive view of President Erdoğan’s flexible approach to the crisis in Russian-Ukrainian relations, welcomes Ankara’s refusal to sign up wholeheartedly to the West’s anti-Russian sanctions, and is keen to develop economic ties and trade between the two countries.

In Azerbaijan there is a proverb: “if you say no evil, no good will come”. In the present case, if Turkey changes its course towards Russia, choosing confrontation rather than partnership and instead turning towards NATO and the EU, then at the end of the day the Turks themselves will be the losers. Russia has several options for cutting off Turkey’s infrastructure connections in the southern and eastern areas of the post-Soviet space, and could easily critically weaken its economy and cause it other problems. But Russia has no intention of following such a course, and regards Turkey as a friend and partner. That, at least, is the situation as of May 2023.

A number of Russian experts and opposition figures (some of whom have been labeled as foreign agents) have attempted to criticize Russia’s diplomatic policy in relation to Turkey by presenting a false picture of the economic cooperation between Russia and Turkey. For example, Boris Kagarlitsky, Professor at the Moscow Higher School for Social and Economic Sciences, and listed as a foreign agent, believes that the balance of trade between Russia and Turkey is not in Russia’s favor, as Russia provides Turkey primarily with raw materials, while Turkey, with its advanced economy, exports mainly finished manufactured goods to Russia.

Unfortunately, the economic reform process in Russia has not yet advanced beyond the “transit corridor” stage, and Russia has not yet fully reformed its industry, its high technology manufacturing sector is in its infancy and it is not yet able to fully do without importing manufactured goods. However, the growth of Turkey’s manufacturing sector and its technical modernization were achieved largely through cooperation with Europe and the USA, while Russia has had to rely on its own resources and develop its own technologies. And anyway, it should be pointed out that as far as trade between Russia and Turkey is concerned, Turkey can hardly claim to be the winner.

Turkey mainly supplies Russia with agricultural produce (fruit and vegetables, with a high chemical fertilizer content), food products (sweets, dried fruits etc), light industrial goods (textiles, clothes, shoes and carpets), and to a slightly lesser extent household appliances and chemicals (soap, cleaning products etc.), and since the 1990s it has provided construction services and tourism services.

This list is very interesting, of course, and it reveals a lot about Turkey’s development. But nevertheless, it can hardly be said that Russia would suffer serious shortages if it was deprived of any given category of Turkish goods. After all, these products and services are not crucial for Russia’s critical infrastructure. However, in view of the crisis in relations between Russia and Ukraine, the ongoing special military operation, and the sanctions imposed by the West, Turkey has become a significant transit route for the Russian economy. Given the current circumstance, Russia is well aware that Turkey may become a kind of “link with the outside world” (that is, with Europe, the Middle East and North Africa). The last of these regions is of particular importance.

If we look at the trends in trade between Russia and Turkey in the period of 2015-2022, we can see that it has increased in volume almost every year. There were just two exceptions: 2016 and 2020. In 2016 trade fell from $23.33 billion to $15.84 million as a result of a deterioration in relations between the two countries after Turkey shot down a Russian Su-24 bomber over Syria in November 2015.  And in 2020 trade fell from $26.03 billion to $20.84 billion as a result of the COVID-19 pandemic.   In all the other years there was a year-on-year increase of at least $1 billion.

The highest ever figure was in 2022, when trade between Russia and Turkey reached the level of $80 billion.  That increase was the result of the West’s sanctions against Russia, which forced Russia to shift the focus of its foreign trade links from the West to the East. For Russia Turkey became a global crossroads and trading hub, and a route for the indirect import of goods from countries with which Moscow no longer had trading links because of the sanctions. As a result, Turkey became Russia’s second most important foreign trade partner after China. And while in previous years the balance in trade between Russia and Turkey was consistently in Russia’s favor, with Russia’s exports more than four times greater than Turkey’s, last year it shifted in favor of Turkish exports. But those exports were not primarily Turkish-made goods – the increase was due to the reexport of goods from other countries (with Turkey acting as a transit corridor) and the rise in gas prices.

Nevertheless, the trade balance between Russia and Turkey demonstrates that Russia exports more essential products to Turkey than vice versa. These goods include Russian gas and oil, nickel, copper and grain. There are two gas pipelines, Blue Stream and Turkish Stream, one of which also has a transit branch taking Russian gas to Europe, as well as Turkey’s first nuclear power station, the Akkuyu plant in Mersin Province, on the Mediterranean coast, constructed with the help of more than $21 billion in financing provided by Russia, and which will provide 10% of Turkey’s energy needs, and another nuclear power plant planned at Sinop, on the Black Sea coat (for which Russia is likely to provide $20 billion in financing, and which will also provide 10% of Turkey’s energy needs). There is also military and technical cooperation (including the supply of a high-technology S-400 Typhoon rocket system and the planned supply of the latest Russian Su-30 and Su-57 fighter jets, as well as the supply of military and transport helicopters). And a gas hub has also been agreed – this huge infrastructure project which will allow gas from the Nord Stream-1 and 2 pipelines, which were sabotaged by Western special forces, to be redirected to Turkey. The Turks will be able to purchase the gas at a reduced price and take part in energy auctions for the sale of Russian gas on foreign markets.

Turkey’s energy sector is thus highly dependent on Russia, and without gas or electricity its production capacity would be seriously reduced. The Akkuyu nuclear power plant has been described by experts from the IAEA as one of the best, most advanced in terms of its technology, and safest in the world. Russian arms retain their dominant position both in global arms markets and, more importantly, on the battlefield. So, one could ask, which country supplies its partner with more important goods and services – Russia, or Turkey?

In the author’s view, the answer is clear: Russians can do without Turkish tomatoes, consumer goods and construction services (especially since there have, tragically, been defects in Turkish construction, for example following this year’s earthquake in the South-East of Turkey, and, also, back in 2004, following the collapse of the roof of the Transvaal Park water park in Moscow, built by a Turkish company). Russia can also do without Turkish tourism, of which Turkey is the main benefactor, to the tune of billions of dollars, (especially since Russia, with its many different ecosystems and great geographical diversity has a huge amount to offer tourists and can easily compete with Turkey). But Turkey would definitely be the main loser if it was deprived of Russian gas, Russian preferential pricing, Russian nuclear power plants and Russian missile systems.

What is more, following the fall of the USSR, Turkey, in partnership with the US and UK, started to open up the post-Soviet space (including by exporting oil from Azerbaijan through Turkey to Europe, thus bypassing Russia), and Russia refrained from taking any radical steps to prevent Turkey from using this route – just as it is doing now in Central Asia. Russia showed restraint in 1999, when at its Istanbul summit the OSCE approved the route for the export of oil and gas from Azerbaijan, and in 2008, when Georgia attacked South Ossetia, and in 2020, during the second Nagorno-Karabakh war. As a result, with the tacit consent of Russia Turkey receives oil, gas and uranium via the Caspian Sea and benefits from new transit routes running through Turkey to global markets. Not to mention economic growth.

So, in the present case the author would beg to differ with the view of Professor and foreign agent Boris Kagarlitsky, and tell him: “Boris, you are mistaken …”. He is also mistaken in accusing Russia of working only with the government, and ignoring the opposition, both in Turkey and in other countries. It is not Russia that elects the government in Turkey or any other country, but that country’s citizens. But Russia is obliged to respect their choice and develop a systematic policy.

Certain experts, like fortune tellers reading tea leaves, have attempted to predict the winner of the current Turkish elections – the “pro-Russian” Erdoğan and the “pro-American” Kılıçdaroğlu. Firstly, Erdoğan is not a “pro-Russian” politician, and his only loyalty is to Turkey. Secondly, of course in the 20 years that he has been in power there have been ups and downs in the relationship between Turkey and Russia. In these years the two countries have stabilized their relations, established fruitful partnerships in areas where they have shared interests, and productive dialog where their interests diverge. We have built up more wide-ranging economic and political relations which represent the future interests of both countries and their citizens. Thirdly, irrespective of whether Erdoğan stays in power or whether he is replaced by another leader, Turkey will need to retain productive, level-headed and responsible relations with Russia.

As we have seen, Moscow and Ankara reestablished good international relations after Turkey shot down a Russian Su-24, following which they announced an ambitious goal of increasing trade between the two countries to $100 billion. And the Russian and Turkish leaders are steadily moving towards their target.

Aleksandr SVARANTS, PhD in political science, professor, exclusively for the online journal “New Eastern Outlook.

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