Russian-Turkish Relations In Crisis

The downing of the Russian Su-24M bomber on November 24, 2015 led to a shift in relations between Moscow and Ankara.

Abstract

The downing of the Russian Su-24M bomber on November 24, 2015 led to a shift in relations between Moscow and Ankara. Formerly, Presidents Vladimir Putin and R. Tayyip Erdoğan had agreed to disagree on Syria and focused on the two countries’ thriving business links. In the spring of 2014, Turkey had refused to join the Western sanctions regime imposed on Russia over the annexation of Crimea and the war in Eastern Ukraine. It was eager to boost its exports to Russia and upgrade energy ties at a time when Gazprom was coming under fire from the European Commission.1 But that has all changed. Turbulence in the Middle East has pushed relations to their lowest point since the end of the Cold War, if not before. However, just as it was off the mark to believe Russia and Turkey were allies before the Su-24M incident, one should not jump to the conclusion they are now sworn enemies. Their relations are more complex than that.

The Russian-Turkish War of Words

The rhetorical clash between Putin and Erdoğan over the Su-24 incident should not have surprised anyone familiar with the two strongmen. Lamenting “the stab in the back by terrorist accomplices”, the Russian president accused his former friend of taking a cut from the self-styled Islamic State’s (IS) illicit oil exports, and portrayed him as a U.S. stooge in less than diplomatic terms: “Someone in the Turkish leadership tried to lick the Americans in a particular place, I don’t know whether the Americans needed that.” Turkey has effectively replaced the decadent West as Russia’s favourite bogeyman. At a time when Putin is reaching out to Western leaders to unite in a common front against extremism, he has redirected his ire at a new, more convenient target.

Turkey’s response has been more muted. According to Erdoğan and Prime Minister Ahmet Davutoğlu, Turkey was not seeking confrontation, but would nonetheless defend its airspace. Later on, however, Erdoğan lashed out at Putin, dismissing his IS allegations as slanderous and calling for him to step down. “What are you doing in Syria? You’re essentially an occupier”, he rebuked the Kremlin’s master.2 Turkey’s pro-government media readily joined in. A criminal complaint was filed against Putin at the Ankara Public Prosecutor’s Office for defaming the Turkish leader.

Such rhetorical outbursts have poisoned relations. Economic ties have taken a hit and fears of more armed clashes, whether direct or by proxy, have spread. On January 29, 2016, Turkey flagged up further cases of airspace violations, which were also confirmed by NATO and the U.S. State Department. However, for all the bad blood between Moscow and Ankara, it would be difficult to undo or altogether freeze the extensive ties that connect the two countries.

The Economic Fallout from the Crisis

Russia’s leadership took a conscious decision to inflict economic punishment on Turkey.

The Russian-Turkish High-Level Council, which brings together the two governments, is unlikely to meet anytime soon, after its regular sessions were called off in December 2015.3 As of January 1, 2016, Turkish citizens can no longer travel visa-free to Russia. Charter flights have been cancelled and agents forbidden to sell holidays in Turkey, a hugely popular destination with Russian tourists. Turkish firms have been denied access to public contracts, notably in the construction sector, which comes second only to tourism services in terms of Turkish exports to Russia. Businesspeople and students have been expelled or forced to comply with more restrictive residency rules. Russian nationals are also prohibited from taking pilot courses in Turkey. Rossel’khoznadzor, Russia’s ubiquitous food safety agency, has barred a good deal of Turkish agricultural imports, from tomatoes and apricots to poultry and salt, making life difficult for entire farming regions off the country’s Mediterranean coast.4 Deputy Prime Minister Mehmet Şimşek estimates the potential loss at USD 9bn, or 0.3 to 0.4% of Turkish GDP.5 In the meantime, Turkey is considering anti-dumping duties on Russian rolled steel – but, significantly, not the implementation of the EU sanctions.6

What will be the impact on the gas trade, the backbone of the two countries’ economic relationship? The cancellation of the Turkish Stream project by the Russian government has been the most visible sign of a shift.7 However, Moscow’s decision to pull the plug on the ambitious pipeline has to be taken with a grain of salt.8 Originally, the plan was unveiled in December 2014 by Putin himself, much to the surprise of both Turkey and the Gazprom management. Turkish Stream did not make much progress thereafter. Moscow and Ankara are locked in a protracted dispute over pricing. In late October 2015, BOTAŞ, the Turkish state-owned natural gas utility, announced  that it was taking Gazprom to international arbitration. Russia had already backtracked on its original commitment, scaling down the pipeline’s annual capacity from 63 to 32 billion cubic metres (bcm). Turkish decision-makers were taken aback when Russian Energy Minister Aleksandr Novak signed a memorandum of understanding with Panagiotis Lafazanis, his Greek counterpart, in June 2015 to extend Turkish Stream into a trading terminal in Greece, across the border from Turkey.

The doomsday scenario stipulating that Russia will use its famed “energy weapon” has therefore been proven wrong.  Turkey, which currently supplies around 60% of its needs with Russian gas, continues to be a major customer of Gazprom. In the winter months when demand is at its peak, shipments of gas to Turkey have proceeded largely uninterrupted.9 It is easy to understand why. Gazprom has every incentive to continue selling to Turkey, its second largest market after Germany. Turkey takes about one fifth of Russian deliveries to Europe and, unlike the EU, demand is growing robustly thanks to factors such as demography, industrial growth and the expanding gasification of households. That will remain the case at least until 2030.

However, the crisis has pushed Turkey to double down on its efforts to diversify its gas supplies. The opening of Iran, already the second largest source of energy for Turkey, provides opportunities, as does Iraqi Kurdistan and perhaps the Eastern Mediterranean, should Cyprus reunification talks end in success. In 2019, 6bcm of Caspian gas will start flowing through the Transanatolian Pipeline (TANAP). If the price is right, larger imports of Liquefied Natural Gas (LNG) from Qatar and Algeria will also put pressure on Gazprom in the Turkish market. Davutoğlu’s trip to Baku and Erdoğan’s visit to Qatar at the close of 2015 were a clear message to that effect. However, these policies are geared towards the long-term. Turkey has sent a clear signal, yet Gazprom will remain the dominant player, even if it loses some market share.10

Another aspect of Russian-Turkish energy relations concerns the fate of the Nuclear Power Plant built by Rosatom at Akkuyu. The $20bn project has never had a smooth ride, both because of the financial model it is based upon and due to its sheer scale. The Turkish government has been reluctant to provide financial guarantees or tax breaks to Rosatom, which owns 100 per cent of the company that will build and operate the facility. If the project is cancelled, the party in breach would need to pay hefty compensation of up to $15 bn. Turkey and Russia are therefore playing cat and mouse; neither wants to be the spoiler and face the indemnity. Rosatom has made a substantial investment in Akkuyu, having already spent  $1bn – or considerably more, according to Turkish officials. At the same time, contrary to its rhetoric, Turkey might struggle to find another company to take over the project. In other words, it is too early to write the deal off. There is an ironic twist, too, that the nuclear energy it would produce will reduce demand for electricity from power stations burning (Russian) gas.

Looking beyond energy, there are signs that the Russian government is quietly scaling down the sanctions, conscious of the boomerang effect. Even pro-Kremlin analysts like Sergei Markov have acknowledged the cost for Russian consumers: “Sanctions are not very well thought-out, because their adoption was mostly driven by emotions, but what’s there to do? Russia had to respond on the go.”11 For instance, certain agricultural products, such as lemons, have been excluded from the import ban.  The same applies to Turkish firms already carrying out construction projects in the Russian Federation – especially those linked to the 2018 World Cup, such as the Sheraton Hotel in Rostov.12 While the visa requirements for crew members forced some low-cost airliners, such as Pegasus Air and Onur Air, to temporarily halt flights, national carrier Turkish Airlines, a leader amongst foreign companies servicing the Russian market, has encountered no problems.13 In defiance of the Kremlin, the president of Tatarstan has declared that Turkish companies are to remain in the autonomous republic.14 In sum, even after the downgrade, business ties between Russia and Turkey will keep some of their old momentum.

Strategic Implications

Will the squabble between Putin and Erdoğan, coupled with economic sanctions, alter the long-term security policy calculus in Ankara and Moscow? Turkey’s posture in the Black Sea and post-Soviet Eastern Europe has traditionally been risk-averse. Russia, for its part, has been trying to drive a wedge between Turkey and U.S./NATO, welcoming the ruling Justice and Development (AK) Party’s pursuit of strategic autonomy in foreign affairs.15 Thus, in recent years, Ankara and Moscow have been quite successful in managing conflict in cases when their interests have diverged. Tensions over Syria might change that, but there as yet few signs of a spill-over to other regions such as the Caucasus.

Turkey has long pursued a policy of non-interference in Chechnya or other Muslim-majority republics in Russia’s south, disregarding public opinion at home.  Erdoğan shunned calls by the numerous Circassian diaspora to boycott the 2014 Sochi Winter Olympics, raising the issue of the 1860s ethnic cleansing by Russian imperial authorities. In return, Russia has been adhering to the principle of non-interference in domestic affairs with regard to the Kurdish issue in Turkey. As early as 1998, it clamped down on the Kurdistan Workers’ Party (PKK) infrastructure on its soil and did precious little to help its ally Syria when Turkey threatened an all-out invasion to dislodge Abdullah Öcalan, the nationalist movement’s founding leader.

In the aftermath of the Su-24 episode, however, Russia has moved closer to the Democratic Union Party (PYD), stepping up its support for the PKK’s offshoot in Syria, which also benefits from ever stronger links to the U.S. Moscow favours the PYD’s inclusion in the Geneva talks on Syria – which Ankara opposes.16 There is a high probability that Russia, as well as Iran, will continue to court nationalist Kurds in order to gain leverage in both Syria and Iraq. Meanwhile, Turkey’s capacity to influence politics in the Northern Caucasus is limited. Its proxies on the ground in Syria are a more reliable instrument for putting pressure on Russia. There is talk that the Russian-Turkish rivalry might play out in other regions – e.g. in case war breaks out between the Azeris and Armenians in Nagorno Karabakh. Some knock-on effects are being felt even in the Balkans, insofar as countries like Bosnia and Herzegovina or Bulgaria have parties or groups with strong links to either Moscow or Ankara. Yet, it would be off the mark to expect a domino effect of proxy conflicts. Faced with multiple challenges, Turkey has no sufficient resources of its own to mount a challenge to Russia.

Putin, for his part, is mostly interested in Turkey as a smokescreen to divert attention from his effort to forge a tactical alliance with the West over the fight against IS and other extremist militias. 

As status quo powers, Turkey and Russia have enjoyed a fairly productive relationship in the Black Sea as well. Ankara consistently opposed giving NATO a larger role in maritime security, preferring multilateral platforms such as BLACKSEAFOR, which include Russia too. Turkey has been as keen as Russia on keeping the restrictions on naval ships from outside the region entering the sea, which were imposed by the 1936 Montreux Conventions on the status of the Bosporus and the Dardanelles. During the August 2008 war in Georgia, a friendly country, Ankara delayed the entry of the U.S. navy to provide humanitarian relief as a concession to Russia. Later on, in March 2014, Turkey did not react too harshly to the annexation of Crimea in March 2014, which clearly tipped the balance of power in the area to its disadvantage. While Ankara’s views on NATOization are evolving as a consequence, there is little evidence that a more robust balancing/containment strategy is taking shape. After a surge, by a factor of ten, in 2014, the U.S. naval presence in the Black Sea was actually reduced in 2015.17 Russian media have speculated that Turkey might use the Straits to slow down Russian traffic to the Eastern Mediterranean.18 But, thus far that has not been the case on the ground. As a side note, it is worth mentioning that with the opening of an oil terminal at Ust-Luga in the Baltic, the Black Sea has progressively lost its importance as an export route for Russian crude.

Conclusion

Turkey and Russia are, no doubt, living through a difficult period in their relationship.  However, these two powerful states share a centuries-long relationship that has seen lots of ups and downs. What the recent crisis shows is that it was premature to speak of a strategic alignment back in the good days when everything looked like it was going smoothly. By the same token, the intensity of their rivalry should not be exaggerated. Both Russia and Turkey, as well as the U.S. and major Western European powers, have incentives to keep tensions at bay. However, the war of words between Putin and Erdoğan is far from over and might erupt anew depending on how the situation in Syria evolves.

Endnotes

1.  Dimitar Bechev, ‘Russia and Turkey – What Does Their Partnership Mean for the EU?’, European Policy Centre, 13 February 2015.

2.  Bloomberg, 7 February 2016.

3.  The Council was established in 2010. At its last meeting held in Ankara (December 2014) the two governments agreed to triple trade flows to USD 100 bn by 2020.  See Turkey, Russia to seek new ways to deepen economic ties despite disagreements in Syria, Ukraine,Hurriyet Daily News, 1 December 2014.

4.  Selin Girit, ‘Turkey faces big losses as Russia sanctions bite’, BBC, 2 January 2016.

5.  ‘Turkish economy risks losing $9 billion over Russia crisis: Deputy PM’, Hurriyet Daily News, 7 December 2015.

6.  Reuters, 28 January 2016.

7.  Gazprom has announced that it is cancelling the 10.25% discount it offered Turkey in early 2015 as an extra to the Turkish Stream deal. Yet, the six private companies which buy gas from Gazprom, in addition to state-owned BOTAŞ, have stated that they are still in negotiation with the Russian supplier. Daily Sabah, 29 January 2016.

8.  ‘Russia halts Turkish Stream project over downed jet’, RT, 3 December 2015.

9.  ‘Russia’s Gazprom says exports up 3.4% in January’, Hurriyet Daily News, 2 February 2016.

10.  ‘Turkey Hunts for Alternatives to Russian Energy’, EurasiaNet, 27 January 2016.

11.  Mansur Mirovalev, ‘Russians pay the price of new anti-Turkish measures’, Al Jazeera, 28 December 2015.

12.  Gazeta.Ru, 10 January 2016.

13.  Kommersant, 27 January 2016.

14.  Kommersant, 27 January 2016. A “white list” of 64 Turkish companies has been approved by Russia at Tatarstan’s insistence. Kathrine Hille, Putin’s Fury with Erdogan takes toll on Tatarstan’s trading links, Financial Times, 2 February 2016.  Elsewhere in the Commonwealth of Independent States (CIS), Kazakhstan’s President, Nurstultan Nazarbayev met with Davutoğlu on February 6 and, stated his country was “putting every effort to make our brotherly people closer”, Tengrinews.kz, 6 February 2016.

15.  In late November 2013, during the session of the Russian-Turkish High-Level Cooperation Council,  Erdoğan hinted Turkey might seek observer status at the Russia- and China-dominated Shanghai Cooperation Organization (SCO).  Turkish PM Erdoğan to Putin: Take us to Shanghai, Hurriyet Daily News, 23 November 2013.

16.  PYD has now unveiled plans to open its office in Moscow, the first in Europe. Rudaw.net, 7 February 2016.

17.  In 2014, U.S. warships spent a total of 207 days in the Black Sea, compared to 27 days in 2013. The count for January-December 2015 was 137.  ‘U.S., NATO Warships Show Support As Russia-Turkey Naval Tension Rises, EurasiaNet’, 5 December 2015.

18.  RT, 1 December 2015.

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