Turkey-Russia economic ties

Turkey-Russia relations at stake
It could appear economic ties between Turkey and Russia went down nearly as fast as this plane. After repeated warnings, Turkey shot out of the skies a Russian warplane that violated its airspace. Russia describes the incident as an “act of aggression”, but Turkish President, Recep Tayyip Erdogan says it was not a hostile act towards Moscow. However, Russia ignored this and in retaliation, cut economic ties. President Vladimir Putin approved a raft of economic sanctions against Turkey. And Russian foreign minister Sergei Lavrov announced travel restrictions. Exports from Turkey to Russia which have been banned include meat and fruit. It’s a move which will damage the economy of both countries.

Trade between Turkey & Russia
Russia is one Turkey’s largest trading partners so a win-win relationship between both countries could well turn to ‘lose-lose’. The President-elect of the International Association for Energy Economics, Professor Gurkan Kumbaroglu says Russian sanctions will cause both countries to suffer. Turkey buys most of its energy producing raw materials from Russia and nearly 4 and a half million Russians visited Turkey last year… Turkish food supplies became more important to Russia after it banned imports from the West in retaliation to sanctions imposed on it following Moscow’s annexation of Crimea. Just a few months ago, Erdogan and Putin agreed to triple bilateral trade to 100 billion dollars in the next eight years… And both countries are expected to build a new pipeline project to carry gas into Europe… Turkey has also commissioned Russia to build its first nuclear power plant. It’s a standard tactic for Russia to use its energy supplies as a political weapon during disputes. But so far energy gas and oil supplies to remain unaffected, although there’s uncertainty over both future energy supplies and the two major joint projects. And Professor Kumbaroglu believes Russia will not take the step of cutting supplies because it has too much to lose.

What’s next for Turkey & Russia?
Russia’s economy is already suffering due to Western sanctions. And, a sharp decline in oil prices has been damaging its economy, because oil makes up nearly 60 percent of Russia’s total exports. Its economy is expected to shrink 3.8 percent this year alone. Analysts believe Russia just can’t afford to lose one of its top export destinations: Turkey. But for Turkey, the situation is different. The President of Turkey’s Foreign Economic Relations, Omer Cihad Vardan says it will not be seriously affected by Russian sanctions, because trade’s been falling due to Russia’s slowdown. And the falling ruble is also putting pressure on Russian people who don’t want any more political tension. Only time will tell whether political and economic ties between Turkey and Russia will improve. But Vladimir Putin seems far removed from a return to how things were before his country’s plane was downed. In his annual state of the nation speech, Putin said the sanctions would not only be about tomatoes and chickens.

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