Ankara, Moscow consistently expand trade ties

Russian-Turkish trade and economic relations have been steadily developing in recent decades, and the growing mutual interest of the business elites of the two countries has helped to overcome political crises in the shortest possible time, such as after the events of November 2015, during the peak of the Syrian crisis. Moreover, mutually beneficial business cooperation outweighed all the attempts of Armenian lobbyists and their Western curators to play on the political contradictions of Ankara and Moscow, pushing the two countries together. Well, today, in the conditions of tough anti-Russian sanctions, transport, trade, and investment ties with Türkiye are considered by the Russian Federation as a key vector of development for the long term.

The war in Ukraine played the role of a trigger that brought down the decades-old geopolitical picture of the world and changed the traditional transport, logistics and trade chains on the Eurasian continent. Increased sanctions pressure on Russia, including the closure of air, sea and land borders by European countries, forces Russian cargo carriers to look for alternative routes, and exporters to find new markets for energy, as well as chemical, metallurgical, agricultural and other products. In this regard, the Russian economy does not have many alternative directions left: along with India and especially with China, through Far Eastern ports and borderland hubs, the Russian Federation continues to trade with several other Southeast Asian countries, exporting mainly hydrocarbons and other raw materials and purchasing consumer goods, as well as equipment and high-tech IT components, mainly using "grey" import schemes.

In turn, Türkiye, the only NATO country that has not joined the anti-Russian sanctions, has become a key vector for Russian trade and transit in the Middle East region. It should be clarified here that, politically, Ankara consistently supports Ukraine's territorial integrity and sovereignty within the borders of this Eastern European country recognised by the UN. Ankara also provides humanitarian assistance to Kyiv, supporting its neighbour in the region through various initiatives, such as the agreement on the grain corridor concluded in late July, etc.

At the same time, acting extremely pragmatically, Türkiye is in no hurry to curtail business ties with Russia, especially since, given the rapidly changing realities, the ability to get along with all global vectors of power only strengthens Ankara's position. Moreover, in the circumstances of the destruction of the unipolar world order and the collapse of the globalist concept of a single market, geographical diversification of exports is extremely necessary for Türkiye itself.

In particular, over the past few years, the Russian-Turkish trade turnover has consistently been at the level of $20 billion, and only twice approached peak values - $23.3 billion in 2015 and $26 billion in 2021, and last year the volume of mutual trade increased by 57 per cent at once. However, in 2022, trade indicators may exceed these indicators by two or more times. Thus, according to Russian Deputy Minister for Economic Development Vladimir Ilyichev's forecasts, the Russian-Turkish trade turnover could reach $60 billion by late 2022, based on current year results, and given the high annual dynamics, and possibly large volumes. "The data for the first nine months of this year show that the trade turnover with Türkiye has already reached $47 billion. This growth was mainly due to the supply of Russian energy resources, but there was an increase in trade in non-primary goods - by 19 per cent, to $10.5 billion. In general, it is expected that by the end of this year, the growth of trade turnover will be achieved by more than two times compared to last year's indicators," Ilyichev noted.

A similar opinion is shared by the head of the Russian-Turkish Business Council, Naki Karaaslan, who believes that by the end of 2022, Russia and Türkiye can reach $60 billion if the central banks of the two countries manage to prevent losses caused by the exchange rate difference.

Alexei Egarmin, director of the Russian-Turkish Business Council (RTDS), is even more optimistic, believing that, taking into account the changing conjuncture, the total volume of Russian-Turkish trade in the near future will approach the landmark mark of $100 billion – the target formulated by the Turkish and Russian leaders back in 2018. The increased value of Turkish exports is evidenced by the fact that the volume of exports to Russia in September, Türkiye has pressed Germany, finishing third after China and Belarus.

Along with the dynamic growth of trade relations, the two countries are implementing numerous projects in other directions. For example, under the sanctions regime, the main flow of Russian holidaymakers this year went to the resorts of Türkiye, where about 2.2 million Russians visited in January-July 2022, which is 41.46 per cent more compared to the same period in 2021. Cooperation between the two countries in the energy sector is very effective: the construction of the Akkuyu NPP in the Turkish province of Mersin is intensifying, it is also planned to expand supplies via the Turkish Stream and Blue Stream gas pipelines, in connection with which Ankara is studying Moscow's proposal regarding the formation of a gas hub in Türkiye. "As a result of our negotiations with Russia, we will ensure the distribution of natural gas through the Turkish Stream to Europe and other regions," Turkish President Recep Tayyip Erdogan said recently during a speech to members of the ruling Justice and Development Party in Ankara.

In general, an important factor contributing to the dynamic growth of trade and economic ties between the two countries is the re-export through the Turkish market of a number of industrial goods to the Russian Federation: in recent months, about 730 companies with Russian capital have been opened in Türkiye carrying out intermediary activities. At the same time, high business activity is due to efforts to gradually transfer financial transactions to national currencies: not so long ago, Ankara began to purchase Russian gas for roubles. Settlements in roubles and liras mitigate the factor of Russian banks' disconnection from the SWIFT international settlement system. In turn, Turkish hotels connect Russian payment systems that allow accepting Russian Mir cards and Visa and Mastercard issued by Russian banks.

However, the strengthening of economic cooperation between Ankara and Moscow causes the EU and the United States to be wary, and the latter warns Turkish banks and businesses about the possibility of applying secondary sanctions. Moreover, various Armenian lobbying groups are particularly active in anti-Turkish propaganda, and NGOs and "activists" in the media are trying in every possible way to create a negative image of Türkiye helping the aggressor Russia.

The delegation of the American government, which arrived in Türkiye in late October, informed the Turkish business community about the inadmissibility of cooperation with companies with 75 per cent Russian capital and with Russian oligarchs, as well as the acceptance of Russian payment instruments by Turkish banks, bypassing sanctions.

In this difficult situation, Ankara is quite flexible in responding to external pressure, trying to maintain a balance of interests, and not compromising the basic interests of the country. So, in mid-September, five Turkish banks suspended the service of Mir cards, but at a government meeting on September 26, Turkish President Recep Tayyip Erdogan instructed relevant ministries to work out other alternatives to using the Mir payment system in the country. Even more consistently, Ankara defends its right to trade in national currencies. So, the other day, the Motherland Party's [Vatan Partisi] economic policy department head, Hakan Topkurulu, told Aydınlılk that gas trade is conducted in Türkiye's and Russia's national currencies without using the world reserve currency - the dollar in recalculations, it is absolutely legal and the United States cannot interfere in these processes. "Russian-Turkish financial ties are completely legitimate, and Türkiye will not behave in a way that would lead to violations of the rules of the international financial system," Turkish Treasury and Finance Minister Nureddin Nebati recently told the Financial Times. Adding that everything comes to Türkiye legally, the minister stated that anti-Turkish forces in the world deliberately raise questions about the illegality of financial ties with the Russian Federation, but these efforts are futile.

Even more futile are the actions of Armenia and its Western sponsors to disrupt the Turkish and Azerbaijani efforts to expand transport cooperation along the "Middle Corridor", including attempts to prevent the creation of the Zangazur corridor. According to Alexander Karavaev, a Russian expert and researcher at the Institute of Economics of the Russian Academy of Sciences, due to the increased sanctions pressure, Russia is consistently expanding cooperation with Türkiye, and in this regard, the formation of a set of initiatives for the development of the North-South transport corridor, as well as the creation of the logistics infrastructure of the Zangazur corridor in Azerbaijan and other countries is an extreme priority for Moscow South Caucasus. Today, this region is gaining special significance both from the point of view of trade partnership and as a kind of transit bridge for Russian-Turkish trade.