Erdogan’s Moscow Visit Produces Mixed Results

On March 15, Turkish Prime Minister, Recep Tayyip Erdogan, accompanied by a large delegation of businessmen and cabinet members, travelled to Moscow. Though on balance it produced mixed results, the visit constitutes yet another major step in the flourishing Turkish-Russian ties, characterized as a multi-dimensional strategic partnership. Both during his meetings with the Russian President Dmitry Medvedev and Prime Minister Vladimir Putin and other bilateral gatherings he attended, Erdogan underscored the multi-dimensional character of the relationship and the determination to further deepen it (Anadolu Ajansi, March 15).

On March 15, Erdogan attended the Turkish-Russian Business Forum in Moscow, organized jointly by leading Turkish business associations. Addressing around one thousand businessmen from both nations, Erdogan reiterated earlier objectives set by his government to boost the bilateral trade volume, in order that it reaches $100 billion in the coming years (EDM, January 25).

Despite the announcement of such ambitious objectives, however, Turkish-Russian trade volume stood at around $27 billion last year, down from $38 billion in 2008, reflecting the impact of the global financial crisis. Most of this trade is accounted for by Turkey’s energy imports from Russia, creating a trade deficit in Russia’s advantage. To address this deficit, Turkey has requested that Russia implement some measures to bolster the import of Turkish goods. Thus far, there has been no major progress in this area.

Traditionally, the construction projects Turkish contractors undertook in Russia have partly compensated for the trade deficit. Through such investments, Turkish businesses have recorded valuable profits, and many Turkish engineers and workers have found employment opportunities in the Russian construction market. However, in recent years Turkish developers have faced difficulties in securing new projects in Russia. This was due partly to the contraction of the construction industry as a result of the global financial crisis and to the growing competition from other countries. As Russia launches new highway projects and prepares for a fresh round of infrastructure investments in preparation for the 2013 Summer Universiade Games in Kazan and 2014 Winter Olympic Games in Sochi, Turkish contractors hope to benefit. Erdogan raised this issue with his Russian counterparts, and reportedly the Russian authorities also expressed their desire to see greater Turkish participation in the upcoming construction boom. It remains to be seen if the Russians will really offer privileged treatment to Turkish constructors in the months to come, or if such words are only sweeteners to please the Turkish side.

However, both parties agreed to finalize the ongoing preparations for visa free travel. Starting from mid-April 2011, citizens from the two countries will be able to visit the other country visa free for 30 days. This development is expected to accelerate not only mutual visits but also the bilateral trade volume. Turkey has been placing great value on this agreement, as the government uses many of the recently initiated visa liberalization deals as an indicator of success for its new foreign policy doctrine of integration with its neighbors.

Another area where the parties demonstrated commitment to further the bilateral relationship was cooperation in nuclear energy. Turkey had awarded the contract for the construction and operation of its first nuclear power plant to Russia. Joining the worldwide wave of going nuclear, Turkey has been planning to build up to three nuclear plants in the coming decades. In the wake of the recent catastrophes in Japan which resulted in damage to its nuclear reactors, however, nuclear safety issues appeared on the agenda, forcing many countries to reconsider their plans for opening new nuclear power plants. In Turkey, the groups that had objected to nuclear power plants reignited this debate, calling for the suspension of the projected plants, especially given the fact that Turkey is situated on geological fault-lines. Before his departure for Russia, Erdogan ruled out any cancellation of the nuclear contract, adding that no project was risk-free (Anadolu Ajansi, March 15). During his meetings in Moscow, Erdogan reassured his Russian counterparts about his commitment to see this project through and announced that construction would start as early as May. Yet, it seems Turkey asked Russia to improve the safety precautions for the project. While currently the plant was expected to withstand magnitude 8 earthquakes, it might have raise it to an even higher magnitude.

However, limited progress was made on other energy projects. Turkey has been asking for price reductions for the natural gas it imports from Russia and the easing of “take-or-pay” clauses, especially in view of its declining energy consumption due to the financial crisis. Despite Ankara’s insistence and ongoing negotiations for some time, the Russian side has not accommodated Turkish concerns on this issue and in the planned Samsun-Ceyhan bypass oil pipeline. Reports indicate that there was no concrete progress on the remaining disagreements in energy projects, and Moscow deferred the issue for further discussion of the technical details. Responding to a question on this topic during the joint press briefing with Erdogan, President Medvedev said they would evaluate Turkey’s demands within the framework of existing agreements. Turkish media even speculated that when he failed to receive any concessions from Medvedev, Erdogan’s delegation raised this issue again during the meeting with Putin (www.turkrus.com, March 16). In contrast, the Russian side complained about Ankara’s delays in authorizing the construction of part of South Stream in Turkey’s exclusive economic zone in the Black Sea, which in their view obstructs the further progress of the project (Cihan, March 16).

On March 16, in a ministerial meeting attended by both sides the two countries held their High Level Strategic Cooperation Council (HLSCC) meeting. This is a new framework for bilateral cooperation, which Turkey established with various neighboring states in recent years. Following the initiation of a HLSCC with Syria and Iraq, Turkey moved on to sign similar agreements with Jordan, Greece and Russia and has recently taken a step towards forming one with Azerbaijan. Under this framework, both sides form committees to discuss ways to improve cooperation in various areas, and the leaders hold biannual summits to set the broader direction of bilateral partnership. Although Turkey publicizes such summits as indicators of strategic cooperation with its neighbors, the failure to bridge the remaining differences with Russia show that there are significant diverging interests which might set serious barriers to further cooperation.