After Ankara issued on the eve of New Year a permit for the installation of the South Stream in its waters, having removed the last obstacle to the project and actually given up the Nabucco project (the competitive version), the Russian-Turkish economic relations have entered a new phase. This opinion is shared by many experts.
Meanwhile, also until this landmark decision, the bilateral trade in recent years has grown at an unprecedented pace. If in 2010 it was $25 billion, last year it has already closed to the mark of $40 billion. And during the last visit in March of 2011 of Turkish Prime Minister Recep Tayyip Erdogan and talks in the Kremlin, President Dmitry Medvedev has declared the intention to increase the trade to $100 billion a year, stating that the Russian-Turkish cooperation has reached a level of strategic partnership. For comparison: with our largest partner – China, in the past year, we sold almost $80 billion’s worth.
In all appearance, both sides are determined on fulfilling the task. The visa relaxation largely contributes to this. Not so long ago visas to stay in the country within one month were canceled. Now this period is planned to be extended from two to three months. Such a move will undoubtedly lead to a further increase in the flow of Russian tourists to Turkey - and in the past year they were already 3.5 million. There is another effect: in a short time the number of Turkish companies investing in Russian projects has been seriously increased.
According to Turkish Charge D’Affaires in Russia Ceren Yazgan, who spoke last December in Moscow at the Russian-Turkish business forum, by the end of 2011 the Turkish investment in Russia totaled $7 billion, and Russian one in Turkey - $4 billion.
Chairman of the Russian-Turkish Business Council A.M. Palankoev notes that geography of Turkish investments in the Russian Federation covers a growing number of regions. Turkish businesses are actively working, according to him, in Moscow, St. Petersburg, Nizhny Novgorod, in Tatarstan, Bashkortostan, and North Caucasus. In addition, companies with Turkish capital successfully occupy a niche in a variety of industries - electronics, household chemicals, construction materials, textiles, glass, and food production. In addition, they also operate in the services sector - trade, tourism, finance.
It is known that the Turks are one of the best builders in the world, and it is only natural that they are often invited to participate in Russian projects. Now in our country - from Vladivostok to Kaliningrad - about 150 Turkish construction companies are employed. For two decades they have constructed more than 800 building objects. Among them, for example, are big ones such as the Moscow City complex buildings, a Sheremetyevo airport new terminal, four thermal power plants in Moscow and Surgut. It is expected that Turkish experts will also build a steel plant in Rostov region, farming machinery production enterprises in the Kuban, a carpet factory in Rostov-on-Don, and a bottles and jars factory - in Novosibirsk and Krasnodar.
They expressed a desire to participate in the construction of Olympic facilities in Sochi. By the way, the Turkish prime minister himself played the role of lobbyist. At a press conference in
Moscow following the results of the last year’s visit, Recep Tayyip Erdogan said: “The Olympic Games in Sochi in 2014 are in store for us. This is a very important event, and you know that Turkish construction companies have leading positions in the global market for these services and in general rank at the third place by their performance indexes after the U.S. and Chinese companies. I am sure that Turkey by means of it will be able to make a worthy contribution to the success of the Olympic Winter Games 2014 in Sochi.”
Well, during a recent trip to Moscow, Turkish Foreign Minister Ahmet Davutoğlu discussed with his Russian counterpart, Sergey Lavrov, the establishment of a joint investment bank. It will enable to solve the problems of lack of funds for bilateral and multilateral cooperative projects. The investment bank will also support the use of local currency between two countries and thus promote their economic ties.
As for the participation of Russian business in the Turkish economy, its share is much more modest. And all because there is little we can offer our partners besides energy projects. They are impressive though. Consider the Akkuyu nuclear power plant, for example, which will be built on the southern coast of Turkey by the Russian Atomstroyexport Company, and will cover 10% of the country’s demand for electricity. Russia is financing the project having invested $20 billion. This is our most solid foreign investment. We can also recall the Lukoil deal in buying Akpet, Turkey’s large network operator of filling stations who possessed about 700 petrol stations. Also, now this Russian largest private oil and gas company has eight terminals with storage capacity of more than 200 thousand tons of oil.
Today, the share of energy carriers in Russia’s exports to this country is 70%. Turkey ranks second in our natural gas purchase amount after Germany. It is delivered by the so-called “western route” - Trans-Balkan pipeline - through Ukraine, Romania and Bulgaria, as well as by the Blue Stream pipeline across the Black Sea.
There is, however, another steel plant in Iskanderune, which is constructed by Russian specialists, and also some serious process plans such as the take-over by the Alfa Group of the Turkish Turkcell mobile operator worth $3.3 billion, but, unfortunately, they can be counted on fingers.
As rightly pointed out by Vice-President of the Russian Chamber of Commerce Georgiy Petrov, despite the fact that last year the economic relations between our two countries reached pre-crisis levels, their commodity composition has remained the same and requires diversification. So the future of Russian-Turkish economic cooperation depends not so much on the ability of our companies to fill the oil and gas pipelines with raw hydrocarbons, as on Russia’s ability in a very short period of time to rebuild its economy in an innovative manner, so as not to be a “raw province” of Turkey, but become its equal partner. However, it fully applies to our trade with all other countries, both in the East and the West.
