By Eric Vandenbroeck and co-workers

Russia  And Turkey Today

Russia and Turkey’s complex relationship sometimes baffles outside observers. Turkey and Russia are fierce competitors in many respects: Moscow and Ankara back opposing camps in Libya, Syria, and Nagorno-Karabakh, and Turkey is a member of NATO – the alliance Russia views as both adversary and threat. Nevertheless, this has not prevented collaboration between the two powers, who share profound economic and cultural ties and have made concerted efforts to deepen diplomatic relations, often to the frustration of Turkey’s Western allies.

But 2022 has been a year of unprecedented trade growth between the two countries – the only NATO member yet to participate in anti-Russia sanctions. The government in Ankara has made it a point to keep a constant dialogue with Moscow on various issues. But that doesn’t change the fact that Russia and Turkey are natural competitors with strict limits to the level of cooperation they can engage in. Still, a long-term partnership, however, constrained, is acceptable to both so long as everyone, including European countries, benefits from the relationship.

                                                       

A Lot Of Sense

Russia’s interests have long intersected with Turkey’s. This presents as many opportunities for conflict as it does for cooperation. Turkey and Russia see each other as neighbors along the Black Sea, and both are interested in maintaining good relations while keeping a certain distance. Tensions arise, of course, in places like the Caucasus, which both see as their backyard.

Today, their interests butt against each other in several areas. Take Central Asia. The region boasts predominantly Muslim but ethnically Turkic populations, and Ankara has engaged in several projects to shore up its ethnic linkages. Moscow believes Ankara is doing so in its traditional buffer zone and sphere of influence. In the Middle East, they are on opposite sides of the Syrian war. In the Caucasus, Turkey actively supports Azerbaijan in the Nagorno-Karabakh conflict, even as Russia balances between Azerbaijan and Armenia. In Ukraine, Turkish President Recep Tayyip Erdogan entered into a strategic military and political alliance with Kyiv at the outset of the war, sending drones and helping to build out the Ukrainian navy.

Despite all their differences, they have benefited from improved trade relations this year. They recorded growth in key areas such as engineering products, civil electronics, and food products. In August, Moscow and Ankara signed a roadmap for economic cooperation to increase trade to $100 billion annually. The fact that the Russian ruble is legally accepted in Turkey has facilitated this newfound partnership. In September, Russian authorities announced that Turkey would start paying for 25 percent of Russian gas supplies in rubles. On Oct. 12, Russian President Vladimir Putin proposed the creation of a gas hub in Turkey, which could offset Russian losses through the Nord Stream pipeline and to which the Turkish government has been very receptive.

And though this may seem like a contradictory turn of events, it makes sense for both. Bilateral relations between Russia and Turkey are built primarily on the pursuit of economic imperatives. Both economies have structural problems generally, and both were in particularly bad shape earlier this year, thanks to the COVID-19 pandemic, supply chain disruptions, and so on. Sanctions made Russia’s problems only direr.

Moscow needs to constantly export energy resources to ensure the inflow of funds and replenish the budget. It also needs to maintain access to imports to ensure the influx of consumer goods and products on which Russia remains import-dependent. This has been particularly tricky without access to the SWIFT payment system. For its part, the Turkish economy is in crisis – on the eve of elections, no less. The Turkish lira continues to weaken, with inflation getting worse. The central bank systematically reduces key interest rates, lowering the cost of loans to increase business activity but strengthening exporters' position vis-a-vis the lira. Turkey's economic model is based on production, which is also stimulated by cheap credit – and on exports to avoid overproduction and recession and ensure the inflow of foreign currency. In this model, Turkey needs to have a permanent trading partner, and Russia, which is struggling to produce industrial products on its own – things that Turkey can produce – is a natural partner. Importantly, Turkey depends on Russian energy resources, so it would have a hard time saying no to Russian trade proposals even if it wanted to.

Third parties benefit from Turkish-Russian cooperation, too, largely because Turkey’s location makes it an ideal transit hub. The European Union, for example, was an important trade partner for Russia, but much of its trade has dried up because of sanctions. Under these conditions, Turkey becomes a waypoint for the transit of goods to Russia and a re-exporter of goods like Russian gas. Hence, Turkish imports from Italy, Germany, France, and the U.S. have increased.

Still, there’s no reason to believe this will be a lasting marriage. Put, there are major geopolitical obstacles that stand in the way. Russia has always been active in the Black Sea, and its activities will always be seen by Turkey, to some degree or another, as an encroachment. Ankara believes Russian behavior – be it the war in Ukraine, the incursion into the breakaway Georgian territory of Abkhazia, or the annexation of Crimea – can tip the balance of regional power in Russia's favor, and thus wants to try to counter Moscow when it believes its interests are under threat. Russia sees Turkish forays in the Caucasus and Central Asia similarly. None of this is prohibitive for cooperation, of course. Still, both sides understand that they are working within a set of geopolitical parameters rather than acting on opportunities with limitless potential.

There are also practical considerations that hamper relations. Because of logistics, infrastructure, and supply and demand, there is only so much trade they can do with each other. Turkish transportation is carried out by sea, and the war in Ukraine has stymied transportation via the Black Sea. Turkey is actively working on new ways to deliver goods, but traffic, chokepoints, and other regional conflicts have complicated its efforts. (Turkey was particularly interested in the Zangezur corridor, which connects Azerbaijan to the city of Nakhchivan, but Armenia slowed the project down by demanding that roads and communications networks be built following Armenian law.) This is to say nothing of the recently increased transportation costs and problems obtaining insurance and fuel.

Nagorno Karabakh and Zangezur Corridor

For these reasons, Turkey and Russia are neither allies nor strategic partners, for geopolitical tension will always be embedded in their relationship. But economic realities and the need for domestic stability periodically trump whatever rivalries they have, leading to spasms of cooperation based on specific projects. Turkey plays an essential role as Russia becomes more geographically and economically isolated. Because their relationship indirectly benefits the West, the West is fine with letting them come to terms. As long as there is interest in these relations, Turkey and Russia will see further growth in cooperation.

 

 

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