When Turkey’s president Recep Tayyip Erdoğan went to Moscow last week to join Russian president Vladimir Putin for the inauguration of the newly rebuilt Moscow Cathedral Mosque, not much progress with respect to bilateral ties was expected from the talks between these two leaders. After all, relations had soured in recent months over a number of issues such as Putin’s calling of the 1915 Armenian massacres genocide and the situation of Crimean Turks after Russia’s annexation of the peninsula. Moreover, the two governments have totally divergent opinions on the future of Syria, and things do not seem rosy on the economic field either as negotiations on a pipeline project to carry Russian gas to Turkey have stalled again.
The biggest difference between Turkey and Russia is on Syria. For Ankara, the Assad regime is the main culprit of all evil in the country and entire Middle East, and if there is going to be a solution to the crisis, Assad has to go. Russia, on the other hand, considers the Assad regime as the sole legitimate government of Syria and calls for a political solution prioritizing the regime’s survival. Recently, Russia decided to increase military build-up in support for Assad’s forces, a move called by the Turkish Prime Minister Ahmet Davutoğlu to be “very dangerous.”
The difference between Ankara and Moscow positions with regard to Assad’s fate seems unbridgeable, that is, until Erdoğan met Putin in Moscow. The two sides have decided to form a tripartite group, which also includes the United States, to work together for a solution to the Syrian issue under the auspices of the United Nations; and there will be regular communication between the foreign ministers of the two countries as well. More interestingly, Erdoğan has announced, in stark contrast with his strict no-Assad attitude and to the surprise of many, that the Syrian president “could actually take part in the transition process to find a solution.”
Only a few days before Erdoğan’s visit to Moscow, Turkish Foreign Minister Feridun Sinirlioğlu was in Sochi to meet his Russian counterpart Sergei Lavrov, and both sides agreed on what they do not agree. “We have different approaches to the issue, but the objective is the same: stability in Syria” said the two ministers then. Do Erdoğan’s remarks hint at a search for common ground between divergent approaches, for the sake of reaching the shared objective?
The wildly divergent priorities of external powers such as Turkey, Russia and the United States have been so far an important factor hindering constructive collective action and leading to the deepening of the crisis in Syria. If these actors can compromise sufficiently to minimize their differences, find a common ground, and act through the legitimacy of the United Nations, there can be hope for Syria. But when it comes to the recent signs of Syrian rapprochement between Ankara and Moscow, it is not only the Syrians’ plight or the pressing refugee crisis that bring the two sides closer. There are economic considerations at the bilateral level as well.
Until recently, Turkey and Russia have managed to keep economic relations insulated from fluctuations in the political arena, and this was precisely what Lavrov meant when he said in Sochi “our relations are going strong without being subject to any form of political conjuncture.”
This may not go on forever. Differences on what to call the Armenian massacres or how to deal with the situation of the Crimean Turks are perhaps not destructive enough to hurt the economic relations between the two sides; but the Syrian issue is. For Turkey it is a serious domestic problem, not only because of the two million refugees calling Turkey home now, but also due to its instabilizing effects on the domestic security situation as the government’s struggle against armed Kurdish separatist organization is escalating tragically. Russia’s military backing of Assad is likely to change the balances on the ground, and under current circumstances, this change is highly likely to upset the Turks. The stakes are high, so are the risks and threats; and increasing tension between Turkey and Russia on Syria has the potential to hurt the economic ties between the two countries. But nobody, neither Turkey nor Russia, has to gain from this, as both economies are suffering from certain problems and weaknesses, and they both depend on each other to sustain their economic path.
And it is not only about gas. For sure, hydrocarbons are the main trading item between Turkey and Russia, and there is profound interdependence in this realm, as for Turkey Russia remains the main source of the gas it consumes and transports to third countries for a fee; and for Russia, Turkey is a crucial customer especially given its lack of access to European markets due to political reasons. However, the economic ties between Turkey and Russia go far beyond the hydrocarbons. For one, there is the construction business. Construction services are a major item in Turkey’s global portfolio; and in the list of 250 largest international contractors, Turkey comes second after China with 43 companies in the list (China has 65 firms, and United States, in the third place, has 32 firms). According to a report by Turkish Contractors Union, Russia is Turkey’s largest market in this field, with 19.6 percent of projects completed overseas being located in this country. The same report shows that Turks have so far completed 1,921 construction projects of various scales in Russia with a total value of $61.2 billion. And here we are not talking only about the prestige buildings in Moscow as Turkish companies’ work extends all the way to housing in Siberia and infrastructure projects in Kamchatka. Construction tenders are politically sensitive processes and increasing political rift between Turkey and Russia can jeopardize the construction business to the dismay of not only Turkish providers but also the Russian customers.
Market access in non-hydrocarbons is another important item in Turkish-Russian economic relations. Suffering from a chronic current account deficit, Turkey aims to enhance its export capabilities, and Russia is a large and geographically close market. After the Russian government decided to embargo imports from the European Union in several good categories, Turks decided that they could fill in the void and benefit from European’s absence in the Russian markets. Efforts in this respect are still ongoing and things are not running smoothly due to differences in standards and customs practices. Rising political tension can only complicate the tension and in the long run, this would mean not only disappointment for Turkish exporters but also rising consumer prices for Russians.
Finally, there is tourism. According to data released by Turkish Ministry of Culture and Tourism, a total of 4.48 million Russian citizens entered Turkey during 2014, with an overwhelming majority of them being tourists. Despite economic crisis, Russia is Turkey’s second largest tourism market after Germany. Increasing tension in Syria can cause a decline in tourism numbers.
It is too early to tell whether the recent Erdoğan-Putin meeting will start a process of genuine and productive Turkish-Russian rapprochement on the Syrian issue, but the signals are strong and unprecedented. Expect Ankara and Moscow to overcome their differences, at least to a certain extent, because it is not only Syria’s future that is at stake, but also the sustainability of the economic relations between two countries that are significantly dependent on each other.
Dr. Altay Atlı is a lecturer at the Asian Studies program of Boğaziçi University in Istanbul and a non-resident research fellow at the Center for Global Studies of Shanghai University.
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