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TURKISH CENTER for ASIA PACIFIC STUDIES
In late June 2016, less than a year since the escalation of the Russia–Turkey conflict, Ankara and Moscow embarked upon a course towards rapprochement. Over the past two months, the leaders of Russia and Turkey have held three meetings, with the latest taking place on October 10, 2016. The results of the Istanbul meeting boil down to the following points: the restoration of Russia’s trade and economic cooperation with Turkey is not going quite as fast as Turkey had hoped; energy remains the basis for relations between the two countries; and, given the interests of both countries, the Syrian crisis will contribute to furthering the dialogue and shaping a positive agenda.
In global politics, great attention is paid when relations between states escalate or normalize, particularly when we are talking about states that could, under favourable circumstances, “shake up” both regional and extra-region forces. Conversely, under negative circumstances, they could, in a blink of an eye, break off agreements that took many years to be elaborated and put the situation on the brink of a most unpredictable scenario.
In late June 2016, less than a year since the escalation of the Russia–Turkey conflict and the events of November 24, 2015, Ankara and Moscow embarked upon a course towards rapprochement. Over the past two months, the leaders of Russia and Turkey have held three meetings, with the latest taking place on October 10, 2016. It is possible that the heads of state will hold several more rounds of negotiations rounds before the end of 2016, touching on the most problematic aspects of the bilateral dialogue, including renewing the work of the High-level Cooperation Council, which comprises the majority of the relevant ministries of both states. Therefore, we can speak about the desire to restore mutually beneficial bilateral relations and, in the future, to restore political trust between the leadership of Russia and Turkey.
President Putin’s latest visit to Istanbul is of great significance for the future of Russia–Turkey relations, as it shapes the grounds for developing a new, post-November 24, 2015, agenda. The following aspects of the visit appear to be of the greatest importance: restoring trade and economic ties in tourism; developing the energy dialogue in the context of Turkey's regional potential; achieving progress in issues relating to the settlement of the protracted Syrian crisis.
Lifting the Economic Sanctions, or one Good Apple in the Bunch
Even though Russia has long been saying that economic sanctions are not an effective tool for applying pressure on a state and are ineffective in terms of resolving a crisis in international relations, after November 24, 2015, Moscow took precisely that path and imposed restrictions on Ankara. The sanctions affected virtually all areas of bilateral cooperation, and both parties suffered significant economic losses.
The process of normalizing relations involved, first of all, lifting a series of sanctions and returning to the pre-crisis level of cooperation – even exceeding it. But this did not happen. It appears that, in the nearest future, the sanctions will not be lifted to the degree that Ankara had expected. Moreover, Moscow took the interests of Russia’s domestic producers into account and partially lifted the sanctions only after the agricultural season in Russia was over. Therefore, by the middle of autumn, restrictions had been lifted on so-called “citrus” and “stone fruits,” which in monetary terms account for less than a half of the overall food turnover.
Before the crisis, Turkey exported about $1.3 billion worth of foods to Russia; various kinds of tomatoes accounted for a quarter of this figure, and tomatoes, like some meats, vegetables and fruits, are still on the sanctions list. A partial lifting of restrictions is definitely a step forward, yet, quantitatively speaking, the volume of food sanctions lifted accounts for about $400–500 million, as opposed to the pre-crisis indicator of $1.3 billion.
One should note that the crisis in Russia–EU relations demonstrated the ability of business to adapt to the given situation and look for ways around the existing restrictions. Thus, the well-known “Belarusian seafood” phenomenon emerged, when the goods produced in a particular state were imported into Russia via third countries. Obviously, as a major supplier of food products, Turkey needs to somehow sell its goods. And when direct sales are impossible, the goods move into the “shadow.” This creates additional difficulties both for supervisory bodies and business communities of Russia and Turkey. Lifting the food sanctions as fast as possible is in the best interests of both Turkey and Russia; the latter was forced, within the shortest time possible, to look for new suppliers of foods traditionally purchased from Turkey.
Second, Russia has quotas on foreign trucks entering the country. Before the crisis, Russia issued 8,000 permits to Turkish trucks annually. This did not satisfy the needs of Turkish producers, and Ankara attempted to raise the quota several times over, to 40,000. However, after the events of November 24, the quota was reduced to 2,000. It is easy to suppose that the statement made by the heads of state to move to a new, pre-crisis level of economic cooperation in the nearest future does not rest on solid foundations. Technically speaking, it is impossible to increase trade in food, textile and other industries without lifting the truck quota restrictions imposed by Russia.
Third, the crisis in Russia–Turkey relations has affected sales of Turkish goods to Central Asian states. If, before November 24, 2015, the most efficient shipping route from Turkey to Central Asia went through Russia, then after the crisis, Turkish shippers realized it had become virtually impossible to drive their trucks through Russia. A large number of new customs procedures appeared, interfering with the smooth delivery of cargo consignments. Ankara was forced to look for longer, economically inefficient routes, including those via the South Caucasus and Iran, increasing delivery times and making the goods more expensive.
Fourth, one of the most significant aspects of developing bilateral economic cooperation and conducting mutually profitable business between the two countries was Turkish companies (mostly construction and industrial enterprises) employing Turkish citizens in Russia. There were more than 2,000 of these companies before the crisis. Today, given the latest decision of the Russian government, the number of Turkish companies with the right to employ Turkish citizens totals 68. There is a restriction on issuing work permits to Turkish citizens, including top managers who, before the crisis, headed major companies with large capital. Visa restrictions were also introduced by Russia as part of its sanctions package. The issue of lifting the restrictions imposed on members of the business communities, not to mention general labourers and tourists, has not been discussed.
Finally, we have the restrictions imposed on charter flights from Russia to Turkey. But this is not a simple issue either. The number of flights has dropped significantly from the pre-crisis levels and, consequently, the traditionally large tourist flow from Russia to Turkey will not be resumed in the nearest future. This creates additional hurdles for Turkish businesses, as well as for Russian tourists who, it appears, did not take the suggestion of the Chairman of the Council of the Federation Committee on the House Rules and Parliamentary Performance Management, Vadim Tyulpanov, to vacation in Turkmenistan instead of Turkey and Egypt seriously.
Turkish Stream Given the Green Light
Despite the obviously destabilized system of international relations and the fact that the situation may change overnight, Russia needs time to study the political and economic risks.
The very idea of constructing the Turkish Stream pipeline caused quite a stir at the time it was announced. The project was put on hold when Russia–Turkey relations began to deteriorate rapidly. The surprisingly rapid pace of bilateral relations thawing was equally surprising, and the question of implementing a joint gas project was yet again raised.
The original idea in 2014 was to build four pipelines with a total capacity of 63 billion cubic metres of gas, each line with a capacity of 15.75 billion cubic metres. But, for various political and economic reasons, as well as the possible construction of Nord Stream 2 by Russia, the number of pipelines was soon cut to two. The gas transported along the first pipeline would go directly to the Turkish consumers. It should be understood that in this case, the existing Trans-Balkan gas pipeline (running via Russia, Ukraine, Romania, Bulgaria and Turkey) will become irrelevant for Ankara, since Turkey receives 14 billion cubic meters of gas via the Trans-Balkan gas pipeline. Furthermore, Turkish Stream’s first line would transport gas previously transported to Turkey via the Trans-Balkan gas pipeline. Thus, Ankara can receive gas directly from Russia, bypassing transit countries and thus minimizing political risks and gaining a clear economic advantage by decreasing transit expenses.
The second line entails the possibility of transporting Russian gas via Turkey to European markets, that is, primarily to Greece and Southern Italy.
It is important to note that delivering Russian gas to European markets is of key importance to Moscow. The pipeline running via Turkey allows Russia to minimize risks linked to gas transit via Ukraine, solidify its positions, and exert certain influence on the European energy market. Besides, mutually profitable cooperation with Turkey allows Moscow to circumvent the European Union’s Third Energy Package. At the same time, it is clear that, in implementing Turkish Stream, Moscow obtains additional leverage on the regional balance of energy powers by creating a project which, in the medium term, may become an alternative to the Trans-Anatolian Natural Gas Pipeline (TANAP) pipeline. In the long term, Russia may count on gaining partial control over the Mediterranean energy market, including Syria. Thus, Moscow carries out a pre-emptive strike intended to afford Russia the possibility of blocking off a part of the European market for other gas exporters. As Vladimir Putin said in his Valdai speech in 2015, “If a fight is inevitable, be the first to strike.”
When considering the possibilities of implementing the project, Moscow takes the timeframe into account as well. It is no coincidence that the start of construction on Turkish Stream is scheduled for 2018. However, despite the obviously destabilized system of international relations and the fact that the situation may change overnight, Russia needs time to study the political and economic risks. For example, the European Union’s stance on Turkish Stream, Moscow’s confidence in the domestic political stability of Turkey and, of course, the developments in Ukraine (since the gas agreement with Ukraine expires in 2019) are of crucial importance.
A common “engine” promoting the political rapprochement between Moscow and Ankara, and that is the deterioration of relations with the West and the increasing “anti-American” sentiments.
It is also important to understand that, despite the Kremlin’s rhetoric, Moscow is not interested in granting Turkey the status of a regional energy hub. An energy hub is the final and most important link in the chain of the so-called “energy status hierarchy.” Such a status implies the creation of a large energy market and the possibility of concluding spot deals and short-term gas contracts. It also implies immediate participation in gas pricing, the construction of subsurface gas reservoirs and granting the hub state the right to re-export gas. These conditions are not part of the Turkish Stream agenda, which means that Russia still views Turkey as a corridor country or a transit state. Regarding the possibility of offering Turkey a discount on Russian gas, the question has been broached, and a 10–15 per cent discount has been discussed, yet the agreement signed on October 10, 2016 did not mention a discount. It is apparent, however, that the countries will have to return to that question shortly.
In addition to the issues of renewing gas cooperation, questions about the construction of the Akkuyu Nuclear Power Plant are also raised; along with Turkish Stream, this issue was one of the principal engines of bilateral relations. After relations had begun to normalize, Ankara considered it a strategic project. In its turn, due to reasons of economic expediency, Moscow intends to sell up to 49 per cent of its stake in the construction of the nuclear power plant to Turkish companies.
At the same time, it is clear that the mutual dependence of states could significantly mitigate possible crisis situations. Up until November 24, 2015, both Turkey and Russia had spoken a lot about this approach, but there was no evident justification for it. Undoubtedly, significant constraints, primarily of an economic nature, could not have prevented the crisis that occurred in Russia–Turkey relations. However, it is also clear that the energy aspect played a key role in making it possible to start the process of normalization.
The Syrian Challenge
The Syrian crisis continues to be a challenge for Turkey–Russia relations. From the very outset, the regional agenda has been at the forefront for both parties throughout the crisis. And this remains the case now, when relations are being normalized. It is apparent that, in order to make progress in resolving regional issues, it is necessary to start looking for answers in the conflict’s hotbed, that is, in Syria.
On the one hand, after November 24, 2015, Ankara was virtually isolated from developments in the region and was not able to carry out the policies it had planned. On the other hand, the normalization process could not but influence Turkey’s subsequent decisions and changes in its strategy. Thus, over the last few months, Ankara has adjusted its foreign policy in regard to Damascus, softening its stance on the issue of Bashar al-Assad’s resignation. At the same time, Turkey was able to “play the Kurdish card,” not within its own borders, but in another state – namely, Syria. It is obvious that without Moscow’s approval, Operation Euphrates Shield would have been impossible. It is important to understand that one of the operation’s goals was fighting the Islamic State terrorist group, but Ankara also considers it important to prevent the formation of a unified “Kurdish corridor” under the cover of the PYD (the Democratic Union Party) and the YPG (the military wing of the Democratic Union Party, or the People’s Protection Units), which Turkey’s leadership views as a branch of the Kurdistan Workers’ Party (PKK) terrorist group. Russia, however, does not consider the PKK and the PYD/YPG to be terrorist groups. It is also important to understand that the alignment of Russia and Turkey’s positions on the need to prevent a Kurdish corridor from emerging does not mean that these positions are identical. On the contrary, they are divergent and largely pursue different strategic interests, but both Ankara and Moscow, each in its own way, is interested in preventing this eventuality.
At the same time, against the background of rapidly growing tensions in Russia–U.S. relations and the collapse of the agreements with the United States, Russia needs to ensure support from the principal regional actors before a new President is installed in the White House and before Washington proposes a new concept on Syria. Moreover, the United States is now actively discussing the supply of heavy weaponry to the opposition, including Man-portable air-defence systems (MANPADS) and antitank weapons systems, which could pose a direct threat to the Russian presence in the region. Washington is also debating the idea of bombing the key bases of the Syrian regime, launching missiles from the Mediterranean. It is possible that Russia’s actions in Syria will lead to new sanctions being imposed on the country. Given all this, it would be an advantage for Moscow to have Turkey as a partner. This is confirmed by the fact that during the October 10 negotiations in Istanbul, the two heads of state also discussed the issue of separating moderate opposition from terrorist groups, as well as issues related to the situation in Aleppo. It is also highly probable that Russia will not impede Operation Euphrates Shield, in exchange for the Russian Air Force being given freedom of action in Aleppo.
It is clear that full-scale cooperation on Syrian crisis is still far off. There are several strategic issues to be resolved by both parties. Yet the new situation in the region forces both Turkey and Russia to interact and find points of contact on the most sensitive issues. At the same time, there is a common “engine” promoting the political rapprochement between Moscow and Ankara, and that is the deterioration of relations with the West and the increasing “anti-American” sentiments. Thus, the old adage “the enemy of my enemy is my friend” rings true. However, it is necessary to understand that if bilateral relations are based on this principle, sooner or later they will spring a leak, and a conflict of an even larger scale will follow. Thus, restarting a dialogue and dividing relations into compartments is the foundation for the stable development of bilateral cooperation.
The results of the Istanbul meeting boil down to the following points: the restoration of Russia’s trade and economic cooperation with Turkey is not going quite as fast as Turkey had hoped; energy remains the basis for relations between the two countries; and, given the interests of both countries, the Syrian crisis will contribute to furthering the dialogue and shaping a positive agenda.
‘Less than a Year Since…’ Does the Normalization of Russia–Turkey Relations Really Work?”,
14 October 2016, RIAC (Russian International Affairs Council)