CC BY
27RUSAD 9, 2023,105-126
Ara^tirma Makalesi - Research Article Geli? - Received: 26.03.2023 Kabul -Accepted: 22.06.2023 Yaym - Published: 30.06.2023 doi: 10.48068/rusad.1271140
THE IMPACTS OF THE UKRAINE CONFLICT ON TURKiYE-RUSSIA ECONOMIC RELATIONS
© Gokberk BALABAN
Abstract
Russia and Turkiye have enjoyed strong economic relations since the beginning of the 21st century despite various regional crises. The Ukraine crisis has been an issue between Moscow and Ankara since 2014 even though it did not affect the relations significantly. In February 2022, the crisis turned into a direct military conflict between Moscow and Kiev which led to considerable global consequences. Turkiye chose to remain neutral in this conflict and refused to participate in the Western sanctions. Since the beginning of the Ukraine conflict, Turkish-Russian economic relations have been a significant matter as the economy constitutes the main pillar of bilateral relations and the relations also have serious implications for the West. This article investigates the Ukraine conflict's impacts on the economic relations between Russia and Turkiye. The Ukraine conflict caused various positive and negative consequences for different economic aspects such as trade, energy, tourism, the defence industry and the construction sector while the conflict also brought about some threats and opportunities for Turkish-Russian economic relations. This study utilized primary sources including statistics regarding the economic data, reports about the topic and secondary sources such as previous academic articles. As a result, this study concluded that the economic relations between the two states continued to thrive despite the Ukraine conflict. This was thanks to Turkiye's neutral stance in the Ukraine conflict and the two states' compartmentalization policy. On the other hand, the asymmetrical interdependence between Russia and Turkiye further intensified during the Ukraine conflict in 2022 as the increase in Russia's exports to Turkiye surpassed Turkiye's exports to Russia by far.
Keywords: Russia, Turkiye, Ukraine, asymmetrical interdependence, compartmentalization.
^ ^ ^
UKRAYNA fATI^MASININ TURKiYE-RUSYA EKONOMiK iLi^KiLERiNE ETKiLERi
Oz
Rusya ve Turkiye, fe^itli bolgesel krizlere ragmen 21. yuzyilin ba^indan beri guflu ekonomik ili^kilere sahip olmu^tur. Ukrayna krizi, ili^kileri onemli olfude etkilemese de 2014'ten beri Moskova ve Ankara arasinda bir mesele haline gelmi^tir. Kriz, 2022 ^ubati'nda Moskova ve
a Yuksek Lisans ogrencisi, Ankara Sosyal Bilimler Universitesi/ Savunma Sanayii Bajkanligi, Ankara/Turkiye, gokberk.balaban@student.asbu.edu.tr
BY-NC-ND
Kiev arasinda ciddi küresel sonuflara yol afan dogrudan bir askeri fatijmaya dönüjmüjtür. Türkiye bu fatijmada tarafsiz kalmayi sefmij ve Batinin yaptirimlarina katilmayi reddetmijtir. Ukrayna fatijmasinin bajlangicindan bu yana; Türk-Rus ekonomik ilijkileri, ikili ilijkilerin temel unsurunu ekonominin olujturmasi ve ilijkilerin Bati ifin de ciddi sonuflari olmasi nedeniyle önemli bir konu olmujtur. Bu makale, Ukrayna fatijmasinin Rusya ve Türkiye arasindaki ekonomik ilijkileri üzerindeki etkilerini arajtirmaktadir. Ukrayna fatijmasi; ticaret, enerji, turizm, savunma endüstrisi ve injaat sektörü gibi farkli ekonomik yönlerde fejitli olumlu ve olumsuz sonuflara neden olurken fatijma ayni zamanda Türk-Rus ekonomik ilijkileri ifin bazi tehdit ve firsatlari da beraberinde getirmijtir. Bu falijma; ekonomik verilerle ilgili istatistikler, konuyla ilgili haberleri iferen birincil kaynaklardan ve önceki akademik makaleler gibi ikincil kaynaklardan faydalanmijtir. Sonuf olarak, bu falijma, iki devlet arasindaki ekonomik ilijkilerin Ukrayna fatijmasina ragmen gelijmeye devam ettigi sonucuna ulajmijtir. Bu durum, Türkiye'nin Ukrayna fatijmasindaki tarafsiz pozisyonu ve iki devletin kompartimanlajtirma politikasi sayesinde gerfeklejmijtir. Öbür taraftan, Rusya ve Türkiye arasindaki asimetrik karjilikli bagimliligin 2022'deki Ukrayna fatijmasi sirasinda Rusya'nin Türkiye'ye yaptigi ihracatindaki artijin Türkiye'nin Rusya'ya olan ihracatini ciddi jekilde ajmasi sebebiyle daha da derinlejmijtir.
Keywords: Rusya, Türkiye, Ukrayna, asimetrik karjilikli bagimlilik, kompartimanlajtirma.
Ж Ж Ж
ВЛИЯНИЕ УКРАИНСКОГО КОНФЛИКТА НА ЭКОНОМИЧЕСКИЕ ОТНОШЕНИЯ
ТУРЦИИ И РОССИИ
Аннотация
В данной статье исследуется влияние Украинского кризиса на российско-турецкие экономические связи. В 21-м веке, несмотря на различные региональные проблемы, Россия и Турция поддерживают прочные отношения в сфере экономики. С началом Украинского кризиса в 2014 году страны придерживались разных взглядов на проблему, что однако существенно не повлияло на эти отношения. В феврале 2022 года кризис перерос в прямой военный конфликт между Москвой и Киевом. Турция предпочла оставаться нейтральной и отказалась участвовать в санкционной политике против России, что имеет серьезные последствия для Запада. Важным фактором оставалась экономика, которая лежит в основе отношений Москвы и Анкары. Украинский конфликт создавал некоторые угрозы для этих отношений, но и о предполагал дополнительные возможности. Он мог оказать как положительное, так и g отрицательное влияние на различные сферы экономики России и Турции, такие как ^ торговля, энергетика, туризм, оборонная промышленность и строительный сектор. В Si g ю этом исследовании использовались такие источники, как статистические ой а?© экономические данные и отчёты по рассматриваемой теме, были проанализированы |106| существующие в литературе точки зрения на проблему. Автор пришел к выводу, что российско-турецкие экономические отношения продолжали развиваться, несмотря на Украинский конфликт. Это произошло благодаря турецкой нейтральной позиции и политике "раздельного мышления" ("компартментализации") относительно двух государств (России и Украины). С другой стороны, асимметричная взаимозависимость между Россией и Турцией еще больше усилилась во время Украинского конфликта,
поскольку рост экспорта России в Турцию намного превысил экспорт Турции в Россию.
Ключевые слова: Россия, Турция, Украина, асимметричная взаимозависимость, компартментализация.
Ж Ж Ж
Introduction
The Ukraine crisis has been an issue for Russian-Turkish relations since 2014 and it has become more important after Russia's military operation on 24 February 2022 as the crisis turned into a direct military conflict between Ukraine and Russia. The conflict posed a challenge to the relations between Russia and Turkiye. Since the Ukraine conflict started, Russia-Turkiye economic relations have been a crucial issue as the economy is the foundation of the bilateral relations and these relations also carry important implications for Europe and the USA. This paper will focus on the economic aspect of the relations. The research question for this study is "What are the impacts of the Ukraine conflict on Turkiye-Russia economic relations?" The conflict brought some negative and positive consequences for Turkish-Russian economic relations alongside various threats and opportunities. In the paper, these consequences, threats and opportunities will be evaluated. The concepts of asymmetrical interdependence between two countries and the compartmentalization policy which is practiced by Ankara and Moscow in recent years are also analyzed in this article.
This study contributes to the field in three ways. Firstly, there are several studies which examine Russia-Turkiye relations in terms of asymmetrical interdependence or compartmentalization policy.1 However, there are few studies that analyze these two concepts extensively in the same work.2 This study incorporates both concepts and offers a wider perspective on the relations. Secondly, there had not been a quite sufficient article on investigating the economic impacts of Russia-Turkiye economic relations. This study fills aforementioned space in the field by analyzing the recent statistics and events in 2022 in light of the Ukraine conflict and it presents a clear picture of the current bilateral economic relations which were affected by the conflict. Thirdly, this study examines Russia-Turkiye economic relations by categorizing according to different sectors, utilizing official statistics and graphs created by the author from these statistics. Therefore, this article facilitates to observe details and also comprehend the overall bilateral economic relations in a more efficient way.
1 Bk. Robert Hamilton & Anna Mikulska, "Cooperation, competition, and compartmentalization: Russian-Turkish relations and their implications for the West," Foreign Policy Research Institute (2021), eriçim 05.04.2023, https://www.fpri.org/article/2021/04/cooperation-competition-and-compartmentalization-russian-turkish-relations-and-their-implications-for-the-west/; Habibe Ozdal, "Transformation of Turkish Foreign Policy and Its Reflections on Turkey-Russia Relations," in Turkey's Challenges and Transformation, ed. Harun Arikan & Zeynep Alemdar (Palgrave Macmillan, 2023), 249-266. https://doi.org/10.1007/978-3-031-25799-5_15; Davut Han Aslan & Sevde Içilak, "Russia-Turkey Energy Relations after 2002: The Asymmetry of Interdependence," Spofeczenstwo i Polityka 63/2 (2020): 125-146; Seçkin Kostem, "The Political Economy of Turkish-Russian Relations: Dynamics of Asymmetric Interdependence," Perceptions: Journal of International Affairs 23/2 (2018): 10-32.
2 Bk. Tolga Demiryol, "Turkiye-Rusya tliçkilerinde Enerjinin Rolu: Asimetrik Karçilikli Bagimlilik ve Sinirlari", Gaziantep University Journal of Social Sciences 17/4 (2018): 1438-1455.
This study consists of two sections. The first section provides a brief background to the Russia-Turkiye economic relations from the historical aspect. The second section which analyzes the bilateral economic relations during the Ukraine conflict is formed of four parts. The first part examines the bilateral trade between Ankara and Moscow with the statistics regarding 2022 and previous years. The second part analyzes the energy aspect which is the main economic dimension between the two states meanwhile the third part explores tourism, a vital sector for Turkiye to acquire hard currencies from its northern neighbour. The fourth part investigates the ties between Russia and Turkiye in terms of defence and construction industries.
1) The Background of Turkiye-Russia Economic Relations
The history between the Ottoman Empire and the Russian Empire was mostly a history of wars and the economic relations between the two monarchies did not develop sufficiently. Shortly after the First World War, both Ankara and Moscow were clearly excluded by the Western international order and they had to battle against Western-led interventions almost concurrently.3 Turkish revolutionaries led by Mustafa Kemal Ataturk fought against the Western imperialist powers and their instrument Greece meanwhile the Russian revolutionaries warred against the White Army which was eminently supported by the West. As the two countries whose existences were seriously threatened, Turkiye and the Russian Soviet Federative Socialist Republic constructed very fruitful relations. In 1921, the two states signed the Treaty of Brotherhood in Moscow and the Soviet Russia helped Turkiye substantially during the Turkish Independence War by providing a significant amount of gold and weapons.
In 1925, the Treaty of Friendship and Neutrality was signed between the Soviet Union and the Republic of Turkiye in Paris and the positive relations were further enhanced economically through trade agreements between the two countries in 1927 and 1937. Turkiye received significant support from the Soviet Union on its first five year industrialization plan that contributed to the Turkish economy significantly as the Soviet Union established numerous factories in Turkiye like aluminium, steel and textile plants alongside oil refineries which assisted the Turkish industry to rise.
After the Second World War, the level of collaboration between the states decreased since Turkiye affiliated itself with the West more and joined NATO in 1952. The economic relations between Turkiye and the USSR continued even though not being at 2 the same level in the 1920s and the 1930s. During the Cold War, the economic activities O between the states fluctuated depending on the political environment. For instance, the
Q co Z
< g Western states took a hostile stance against Turkiye due to the Cyprus issue in the 1960s
Ss a?© and the 1970s and applied sanctions against Ankara. Intending to follow a more |108| independent foreign policy, Ankara improved its relations with Moscow. In the 1960s, the development plans were put into practice by the Turkish government and Ankara cooperated with Moscow in these plans which further enhanced the economic relations. As in the early republic days of Turkiye, Soviet Union made considerable investments in
3 Samuel John Hirst & Onur Isci, "Smokestacks and Pipelines: Russian-Turkish Relations and the Persistence of Economic Development," Diplomatic History 44/5 (2020): 836.
the 1960s and the 1970s which helped the Turkish industry to significantly develop. In the coming years, the energy relations between the Republic of Turkiye and the USSR started and the first natural gas import agreement was signed between the two sides in 1984.4 This constituted the foundation of the energy relations between Turkiye and Russia today.
After the dissolution of the Soviet Union, the Russian Federation had to deal with political, economic and social crises which lasted nearly a decade in the meanwhile Turkiye also faced internal issues in the 1990s, especially economically. Despite their economic problems, Moscow and Ankara maintained economic relations and searched for further collaboration. Black Sea Economic Cooperation Organization was founded in 1992 in Istanbul to strengthen the economic ties between the regional actors. In the 1990s, informal trade which is also known as "suitcase trading" between Russia and Turkiye increased. The energy relations between Russia and Turkiye enhanced significantly after 1991 with the increasing importance of pipeline politics.5 Russia became the biggest energy supplier of Turkiye. At the beginning of the 21st century, the economic relations further developed with the signing of Eurasian Cooperation Action Plan between the two states in 2001. Common political views such as both countries' opposition to the invasion of Iraq helped the development of economic ties and the trade volume between the two countries increased year by year. Russian tourists constituted a substantial part of incoming tourists to Turkiye. Incoming Russian tourists to Turkiye continued to increase with the mutual visa exemption agreement between Moscow and Ankara in 2011.
Considering the turbulent political environment in the 21st century, the Turkish-Russian relations had to face several regional challenges. Firstly, the Georgia crisis which peaked in 2008 was an issue since both Turkiye and Russia were neighbours to Georgia because Russia and Turkiye had different perspectives on the crisis as Ankara did not recognize the independence of Abkhazia and South Ossetia. However, Turkiye did not take an anti-Russian stance either and it appeared to separate itself from the Western allies.6 Secondly, the Syrian conflict which began in 2011 and continued for years was another regional issue that had more serious implications than the conflict in Georgia. The views of Russian and Turkish governments were mainly contrasting since Russia favoured the Syrian government and Turkiye called for the removal of Bashar Assad. However, the two governments also cooperated on the Syrian conflict and this cooperation led to several crucial agreements and the Astana mechanism as the negotiation mechanism. The Astana mechanism proved the joint capacity of Russia and Turkiye for cooperation and the function of compartmentalization.7 Furthermore, the officials of the two countries demonstrated their determination to resolve the Syrian conflict by meeting even shortly
4 "Sovyet Sosyalist Cumhuriyetleri Birligi'nden Türkiye Cumhuriyeti'ne Dogal Gaz Sevkiyatina Dair-Türkiye Cumhuriyeti Hükümeti ile Sovyet Sosyalist Cumhuriyetleri Birligi Hükümeti Arasinda Anlajma," T.C. Resmi Gazete (1984), erijim 05.04.2023, https://www.resmigazete.gov.tr/arsiv/18598.pdf
5 Volkan Ediger & Duygu Durmaz, "Energy in Turkey and Russia's Roller-coaster Relationship," Insight Turkey 19/1 (2017): 135.
6 Mustafa Aydin, "The long view on Turkish-Russian rivalry and cooperation," GMF (2020), erijim 05.04.2023, https://www.gmfus.org/news/long-view-turkish-russian-rivalry-and-cooperation
7 Ipek Cemil Dogaf & Mehmet £agatay Güler, "Turkey and Russia in Syrian War: Hostile friendship," Security and Defence Quarterly 35/3 (2021): 87, 89.
after the assassination of the Russian ambassador to Turkiye, Andrey Karlov, by a FETO terrorist. Thirdly, the civil war in Libya which was fought in 2010s and still not completely resolved has been another challenge to Turkish-Russian relations. Ankara and Moscow had contrasting views in Libya too as Turkiye supported the Libyan Government of National Accord while Russia backed the House of Representatives. Fourthly, the conflict between Azerbaijan and Armenia over the disputed Nagorno-Karabakh region became a recent regional issue in 2020. There were concerns that the relations between Russia and Turkiye could be negatively affected since historically Turkiye sided with Azerbaijan and Russia more with Armenia. However, the Nagorno-Karabakh conflict did not produce negative results for the Turkish-Russian relations either. On the contrary, Ankara and Moscow worked together to ensure the peace in the region such as establishing joint observation points.
Turkiye and Russia concurrently emerged as geopolitical rivals but also as partners in the conflicts in the Caucasus, North Africa and Middle East.8 Strong economic interdependence between Russia and Turkiye became an element which helped to resolve various political disagreements.9 Considering all the mentioned regional challenges, the economic relations between the two countries were not seriously affected as the two states successfully compartmentalized their different political views and maintained their economic ties at significant levels.
Even though Moscow and Ankara had conflicting perspectives on Ukraine as in other regional issues, the economic relations were not actually affected by the start of the Ukraine crisis in 2014 either. However, the relations significantly deteriorated with the downing of a Russian jet by Turkiye on November 24, 2015. The jet crisis caused Russia to seriously diminish the economic ties with Turkiye and the sanctions applied by Moscow caused major problems for the Turkish economy. A letter from the Turkish President Erdogan was sent to Putin on 27 June 2016 to apologize for the jet incident which helped the relations to normalize. Shortly after, in the 15 July 2016 coup attempt, the Russian President declared his support to the Turkish state against the putschists. Putin was the first foreign leader to call the Turkish president for support and Erdogan made his first abroad visit after the coup attempt to Russia. These developments marked a turning point for the relations of the two countries and the economic relations started to get back into track again.
o
^ 2) Turkiye-Russia Economic Relations During The Ukraine Conflict
O In the late 2013, the Ukrainian president Viktor Yanukovic turned down a deal with
Q co Z
< g the European Union and decided on a further cooperation with Russia on economic terms.
Ss a? © Following this decision, mass protests started against the Ukrainian government and an
11101 American-backed coup took place in February 2014. Afterwards, the Russian army took the control of Crimea on 27 February 2014 and the peninsula joined Russia through a
8 Vicken Cheterian, "Friend and Foe: Russia-Turkey relations before and after the war in Ukraine," Small Wars & Insurgencies (2023): 1
9 Giray Saynur Derman, "Turkey-Russian Federation Relations in the New Era," in Contemporary Turkish-Russian Relations Relations From Past to Future, ed. llyas Topsakal & Ali Askerov (Istanbul: Istanbul University Press, 2021), 63.
referendum on 16 March 2014. Ankara objected to Moscow and it called the Kremlin to respect the territorial integrity of Ukraine. A civil war erupted between the Ukrainian government the Donbass republics which continued for eight years. On February 24 2022, the Russian Federation declared a military operation into Ukraine and the crisis turned into a direct military conflict between the two states. The conflict intensified as the Western states led by the USA sent vast amounts of monetary and weaponry aid to Ukraine and applied numerous sanctions against Russia.
Turkiye condemned Russia's military operation but did not participate in the Western sanctions. Therefore, it can be said that Turkiye did not act as a regular NATO member. Turkish president Erdogan's declaration "We can neither give up on Ukraine nor Russia" marked Turkiye's neutrality in the conflict.10 Turkiye desired a swift end to the conflict as it is a neighbouring country to the both states through the Black Sea. Moreover, Ankara perceived the Ukraine crisis as a threat in terms of military, political, economic and humanitarian aspects. Due to the Montreux Convention and possessing crucial straits, Turkiye is a key player for the resolution of the Ukraine conflict. Ankara searched for a diplomatic solution for the issue and it undertook an intermediary role between Kyiv and Moscow. Turkiye started to mediate peace talks between Russia and Ukraine in March 2022 and Ankara has been continuing its efforts for a permanent peace in the region. Turkiye's efforts for peace in Ukraine were not limited to peace talks since Ankara played a major role in signing the grain deal in July 2022 and its extension in November 2022 which also contributed to the Russian exports to flow safely into other parts of the world. Furthermore, with Turkiye's mediation efforts, prisoner swaps were executed between the two sides. The political power of Ankara was increased due to being neutral and its intermediary role which is valued by the Kremlin. On the other hand, Turkiye's neutrality was challenged by the US and its allies as they put pressure on Turkiye for joining the sanctions and restricting the economic activity with Russia. However, despite all these challenges, Turkiye managed to maintain its neutral status.
Previous articles written on the Turkish-Russian relations on the Ukraine crisis reached different conclusions. Ivan Timofeev argued that Turkiye is among the winners of the Ukraine crisis.11 Howard Eissenstat remarked that Ankara does not want to antagonize Moscow because Turkiye is extremely vulnerable to Russian energy and wheat. He also argued that neither Kyiv nor Moscow complain about Ankara's stance regarding providing drones to Ukraine and avoiding sanctions against Russia because 40 .
they both want to draw Turkiye to their side.12 Ozgur Unluhisarcikli, the director of the z
German Marshall Fund's Ankara bureau, claimed that Turkiye has a pro-Ukrainian D 23 NC-position on the conflict but not outright anti-Russian either. He described the relations US2 ,B
oi o? ©
_ |111|
10 "Cumhurbajkani Erdogan: Rusya'dan da Ukrayna'dan da vazgefmemiz mumkun degil," NTV (2022), erijim 05.04.2023, https://www.ntv.com.tr/turkiye/cumhurbaskani-erdogan-rusyadan-da-ukraynadan-da-vazgecmemiz-mumkun-degil,QbFvVaiQTkClCa8unMwwgA
11 Ivan Timofeev, "Ukrainian Crisis, Turkey and Eurasia: Who Wins?" Valdai Club (2022), erijim 05.04.2023, https://valdaiclub.com/a/highlights/ukrainian-crisis-and-eurasia-who-wins/
12 Tom Wheeldon, "Turkey juggles relationships with Russia, Ukraine amid economic crisis," France 24 (2022), erijim 05.04.2023, https://www.france24.com/en/middle-east/20220331-turkey-juggles-relationships-with-russia-ukraine-amid-economic-crisis
between Ankara and Moscow as "competitive cooperation" which indicates that rivalry does not necessarily prevent them from cooperation in economy.13 Robert Pearson stated that, in the conflict between Russia and Ukraine, the main objective of Turkiye was to prevent a wider conflict and also to preserve prosperous and consistent relations with both countries.14
Politically, the Russian and Turkish governments had different political views on regional issues. Even though they are not on the same page with geopolitical problems and solutions, this did not have a serious negative economic effect on the two countries' economic relations which was thanks to the compartmentalization policy that Ankara and Moscow have implemented. Even though the two states had different views on the Ukraine conflict, they did not allow their differences prevent their economic collaboration. Many scholars stated that Moscow and Ankara successfully compartmentalized their different views on Syria, Libya and most recently on Ukraine.15 Ankara managed to maintain its neutral status on the Ukraine issue and avoided a potential problem with Moscow as it had with the jet fighter crisis in 2015. Turkiye experienced serious negative economic and political consequences in the jet crisis and Ankara has been aware of what is at stake in relations with Moscow on the Ukraine conflict.
The trade volume between Russia and Turkiye has been quite unbalancedly distributed and it created an asymmetrical interdependence between Turkiye and Russia. This asymmetrical interdependence between Turkiye and Russia evidently favoured the latter.16 The main reason behind this asymmetry is the dependence of Turkiye to Russia on key energy sources, mainly natural gas and oil. Oni§ and Yilmaz argued that the asymmetrical interdependence could limit Turkiye's bargaining power which might also challenge these states' strategic partnership.17 Yilmaz Aydin remarked that the asymmetrical trade structure between the two states demonstrated that Turkiye was quite vulnerable in the cases of political tensions with Russia.18
13 Ozgur Unluhisarcikli, "Turkey vis-à-vis Russia's War against Ukraine," Istituto Affari Internazionali (2023), eriçim 05.04.2023, https://www.iai.it/sites/default/files/iaicom2311.pdf o 14 Robert Pearson, "Turkey between Ukraine and Russia," Middle East Institute (2022), eriçim 05.04.2023,
https://www.mei.edu/publications/turkey-between-ukraine-and-russia Z 15 Filiz Tutku Aydin, "Turkey's policy on the Russian-Ukrainian crisis," SETA (2022), eriçim 05.04.2023,
u https://setav.org/en/assets/uploads/2022/02/A77En.pdf; Hamilton & Mikulska, "Cooperation, competition"; Carter
^ " ^ Boone, "The Turkey-Russia relationship: Why "compartmentalization" and not conflict?" RIAC (2021), eriçim
P <--1 1X1 05.04.2023, https://russiancouncil.ru/en/blogs/carter-boone/the-turkeyrussia-relationship-why-
c£ & © compartmentalization-and-not-conflic/
|112| 16 Senem Aydin, Evren Balta & Andrew O'donohue, "Turkey, Russia, and the West: Reassessing Persistent Volatility,
Asymmetric Interdependence and the Syria Conflict," Istanbul Policy Center (2020), eriçim 05.04.2023, https://ipc.sabanciuniv.edu/Content/Images/Document/reassessing-persistent-volatility-asymmetric-interdependence-and-the-syria-conflict-93d479/reassessing-persistent-volatility-asymmetric-interdependence-and-the-syria-conflict-93d479.pdf; Demiryol, "Turkiye-Rusya tliçkilerinde Enerjinin Rolu," 1438-1455; Kostem, "The Political Economy of Turkish-Russian Relations," 11.
17 Ziya Onis & Çuhnaz Yilmaz, "Turkey and Russia in a shifting global order: cooperation, conflict and asymmetric interdependence in a turbulent region," Third World Quarterly 37/1 (2015): 5.
18 Yilmaz Aydin, "Rusya Federasyonu ve Turkiye Arasinda Diç Ticaretin Yapisi ve Geliçimi", Rusya Araçtirmalari Dergisi 6 (2021): 174.
The Ukraine conflict had impacts on Turkiye-Russia economic relations on various fields. This study will analyze the main areas of trade, energy, tourism, defence and construction industries respectively.
a) Trade
Turkiye mainly exports vegetables, fruit, textile products and electrical machines to Russia meanwhile it imports natural gas, oil, metals, grain and fertilizer from Russia. The fact that Russia's exports to Turkiye have higher level of importance such as energy sources makes Turkiye more dependent on Russia than Russia depens on Turkiye which intensifies the asymmetrical interdependence between the two states.
Turkiye and Russia targeted an assertive 100 billion dollars bilateral trade and the two countries have been striving to reach that value.19 The two countries had a trade volume of 3 3,2 billion dollars in 2013 and the Ukraine crisis in 2014 did not have a serious negative impact on the bilateral trade. Although, the jet crisis had a detrimental effect on the trade in 2015 and 2016, the trade volume increased again from 2017 until 2019. The trade was negatively affected due to covid-19 period in 2020. However, the bilateral trade quickly recovered in 2021 and reached a record by far in 2022. It can be observed that there has been a considerable imbalance between the two countries exports to each other which peaked in 2022. In 2021, the value of imports of Turkiye from Russia was 29 billion dollars while the worth of its exports to Russia were 5.8 billion dollars.20 In 2022, the worth of Turkiye's imports from Russia rose to 58.8 billion dollars while the value of exports to Russia was 9.3 billion dollars.
Graph 1: Russia-Turkiye Bilateral Export Statistics
Billion $
70 -
60 -
50 -
40 -
30 20Ï26 10 0
Bilateral Export Statistics Between Russia-Türkiye
Hy jj^ 51,8 |^2,9 2_j3,7 2^42 U^
7,2 6,2 3,7^ 15, 1,8 2,9 3,7 4,^'' 4,5 5,8 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 ■ Russia PTiirkiye
Kaynak: TÜlK21
In 2022, the trade deficit between the two countries more than doubled comparing with 2021. The growing trade deficit is a clear indicator of the growing asymmetrical
Ot- CT^ ©
|113|
8,
19 "Turkey, Russia Reinstating $100 Billion Bilateral Trade Target: Erdogan," Reuters (2016), erijim 05.04.2023, https://www.reuters.com/article/us-russia-turkey-trade-idUKKCN10K1LA; "Turkey Unveils Russia Trade Plans," RT International (2022), erijim 05.04.2023, https://www.rt.com/business/560359-turkey-unveils-russia-trade-plans/
20 "Dij Ticaret Istatistikleri, Aralik 2021," TÜlK (2022), erijim 05.04.2023, https://data.tuik.gov.tr/Bulten/Index?p=Dis-Ticaret-Istatistikleri-Aralik-2021-45535
21 "Dij Ticaret Istatistikleri, Aralik 2022," TÜlK (2023), erijim 05.04.2023, https://data.tuik.gov.tr/Bulten/Index?p=Dis-Ticaret-Istatistikleri-Aralik-2022-49633
interdependence between the two states. Increasing energy and commodity prices in the first half of 2022 was one of the main reasons behind the rise in the value of Turkiye's imports.
Russia became the number one import source for Turkiye in 2022 by surpassing China meanwhile Russia went from 10th position to 8th position in the list of exporter countries to Turkiye in 2022.
Graph 2: Turkiye's top five import sources in 2022
Billion $ Turkiye's top five import sources in 2022
70 60 50 40 30 20 10 0
■ Russia ■ China ■ Germany ■ Switzerland ■ USA Kaynak: TUlK22
It appears that in 2021, Turkiye became the largest agricultural importer from Russia, with imports totalling $4.3 billion. Turkiye heavily relies on Russian wheat, with 65% of its wheat imports coming from Russia, followed by Ukraine at 13%.23 Turkiye was negatively affected by the conflict due to disruptions of the wheat trade as Turkiye also re-exports this wheat by producing various food products and selling it to other countries. However, the situation improved after Turkiye brokered the grain deal and Russia continued to be Turkiye's biggest wheat supplier in 2022. Turkiye is very dependent on sunflower oil to Russia as well with nearly 60%.24 The price of agricultural products including wheat and sunflower significantly increased in due to the conflict in its first few months which caused to worsen the trade gap between Russia and Turkiye.
The increasing bilateral trade in 2022 demonstrated that the two states 0 successfully compartmentalized their different political opinions on the Ukraine conflict
^ and the conflict did not prevent the from enhancing their trade and economic relations.
z
u
q m Z _
< g ^
m 22 "Di? Ticaret Istatistikleri, Aralik 2022."
o£ a?© 23 Servet Yanatma, "Bugdayda Yeterlilik Derecesi: Turkiye, Ukrayna Ve Rusya'ya Bagimli Mi?", Euronews (2022),
|114| eri?im 05.04.2023, https://tr.euronews.com/2022/03/07/bugdayda-yeterlilik-derecesi-turkiye-ukrayna-ve-rusya-
ya-bag-ml-m
24 "Tarim Urunleri Piyasalari-Bugday," T.C. Tarim ve Orman Bakanligi, eri?im 05.04.2023, https://arastirma.tarimorman.gov.tr/tepge/Belgeler/PDF%20Tar%C4%B1m%20%C3%9Cr%C3%BCnleri%20Piya salar%C4%B1/2022-Temmuz%20Tar%C4%B1m%20%C3%9Cr%C3%BCnleri%20Raporu/7-BU%C4%9EDAY%20T%C3%9CP%20Temmuz%202022.pdf;
"Tarim Urunleri Piyasalari-Ayfifegi," T.C. Tarim ve Orman Bakanligi, eri?im 05.04.2023, https://arastirma.tarimorman.gov.tr/tepge/Belgeler/PDF%20Tar%C4%B1m%20%C3%9Cr%C3%BCnleri%20Piya salar%C4%B1/2022-Temmuz%20Tar%C4%B1m%20%C3%9Cr%C3%BCnleri%20Raporu/5-AY%C3%87%C4%B0%C3%87E%C4%9E%C4%B0%20T%C3%9CP%20TEMMUZ%202022.pdf
Additionaly, the Turkish and Russian presidents announced that trade with Russian ruble was to be increased and Turkiye would make 25% of its natural gas imports through Russian ruble.25 Moreover, the fact that both countries gradually dumping the use of the US dollar signalled a new era on their bilateral trade.
As the Western countries applied more than a thousand sanctions against Moscow since the beginning of Russia's military operation in Ukraine, some Western firms withdrew from Russia and Turkish firms started to fill the space. Especially in textile industry, Western sanctions paved the way for the Turkish companies increase their market share in Russia.26
b) Energy
Energy can be considered as the most important economic aspect between Ankara and Moscow since Russia is a highly trusted energy partner to Turkiye as Moscow did not cut the energy exports to Turkiye even during the jet crisis in 2015. Russia has been Turkiye's largest energy supplier, with a share of nearly 45% in Turkiye's natural gas imports and 24% in its oil imports in 2 0 21.27 Energy imports from Russia constitutes the main reason for Turkiye's asymmetrical interdependence to Russia. Turkiye took steps to alleviate this asymmetry such as increasing the renewable energy investments and it has been looking for alternative countries to increase the diversity of energy import sources. However, Turkiye is still quite dependent on Russian energy as Russia was the biggest gas exporter and the second biggest oil exporter to Turkiye until March 2022. Starting from April, Russia also became Turkiye's biggest oil import source and it has gained a huge share by surpassing the former biggest supplier Iraq. This situation mainly stemmed from the Western sanctions on Russian oil as Moscow redirected its oil from Europe to other countries, including Turkiye. Russia consistently increased its oil exports to Turkiye and Russian oil reached a 63% share in the oil imports of Turkiye in November 2022 according to the official Turkish monthly statistics.
o
Q Z U
Q m ^ < o ^
U rn
cä a? ©
__|115|
25 "Cumhurbajkam Erdogan: Rusya ile Rubleyle Alijverij Iki Tarafa da Kazandiracak," BBC News Türkfe (2022), erijim 05.04.2023, https://www.bbc.com/turkce/articles/c8750xmlxvpo;
"Putin: Türkiye Dogal Gaz ödemesinin yüzde 25'ini ruble ile Yapacak," Euronews (2022), erijim 05.04.2023, https://tr.euronews.com/2022/09/16/putin-turkiye-dogal-gaz-odemesinin-yuzde-25ini-ruble-ile-yapacak
26 "Rusya'ya Yaptirimlar Türk Firmalara Yaradi," CNN TÜRK (2023), erijim 05.04.2023, https: //www.cnnturk.com/video/dunya/azerbaycan/rusyaya-yaptirimlar-turk-firmalara-yaradi
27 "Yillik Sektör Raporu Listesi," EPDK, erijim 05.04.2023, https://www.epdk.gov.tr/Detay/Icerik/3-0-94/yillik-sektor-raporu
70% 60% 50% 40% 30% 20% 10% 0%
■ January ■ February ■ March ■ April ■ May ■ June
■ July ■ August ■ September October ■ November ■ December
Kaynak: EPDK28
On the other hand, Turkiye has also been a crucial state for Russia since it is the second largest importer from Gazprom after Germany. For this reason, the position of Turkiye as a major consumer provides a significant contribution to the Russian economy. Moreover, Ankara and Moscow agreed to build the first nuclear power plant of Turkiye in 2010 which further improved the energy cooperation between two states and the power plant became operational in 2023. The two countries also have been discussing the possibility of building a second nuclear power plant in Turkiye. Moreover, Turkiye increased its coal imports from Russia in 2022 with more favourable prices due to the Western sanctions.29
When the Ukraine conflict started in February 2022, global energy prices rose in the first half of the year. The significant increase in Turkiye's energy imports from Russia and global energy price hikes caused the trade asymmetry between the two states to grow. Consequently, the asymmetrical interdependence between Ankara and Moscow further deepened in 2022, making Turkiye even more dependent on Russia. However, Turkiye also gained an advantage in importing Russian energy sources after Western sanctions as more oil and gas could be diverted from Europe to Turkiye.
The beginning of the Ukraine conflict seriously damaged Ukraine's energy transmittance role to Europe. Additionally, on 26 September 2022 the Nord Stream
04 . pipelines underwent a sabotage that came as a blow for European energy security as the
D
z Nord Stream used to play a significant role for fulfilling the energy needs of Europe. The q ^F sabotage impelled the Kremlin to search for a more reliable gas route to supply gas to d ™ ^ Europe and consequently, Turkiye gained more importance in transmitting Russian --energy to Europe. After the sabotage, Moscow and Ankara began working on Turkiye's
28 "Petrol Piyasasi Aylik Sektör Raporu Listesi," EPDK, eriçim 05.04.2023, https://www.epdkgov.tr/Detay/Icerik/3-0-104/petrolaylik-sektor-raporu
29 Patricia Cohen, "Turkey is strengthening its energy ties with Russia," The New York Times (2022), eriçim 05.04.2023, https://www.nytimes.com/2022/12/09/business/turkey-erdogan-energy-russia.html; Clyde Russell, "Column: Russia boosts coal exports as western sanctions yet to bite," Reuters (2022), eriçim 05.04.2023, https://www.reuters.com/markets/commodities/russia-boosts-coal-exports-western-sanctions-yet-bite-russell-2022-07-05/
Graph 3: Russia's monthly share in Turkiye's oil imports in 2022
Russia's monthly share in Turkiye's oil imports in 2022
llllllllllll
role as a gas hub for Europe.30 Although being an energy-dependent country, Turkiye aims to take advantage of its geopolitical location to gain access to strategic developments relating to energy.31 Turkiye already plays a role in transmitting Russian natural gas to Europe through Turkstream with a capacity of 31.5 billion cubic meters per year. Coincidentally, Turkstream project was started after the cancellation of Southstream in 2014 due to the European sanctions against Russia on the Ukraine crisis. If Turkiye becomes the main gas hub for Europe, it would bring the energy cooperation between Ankara and Moscow to another level and this can be perceived as a serious advantage for the Turkish economy and an opportunity for enhancing the relations with Russia further.
c) Tourism
Tourism is another vital aspect of economic relations between Russia and Turkiye as Russia has been the key tourist source of Turkiye for many years except the jet crisis period. In 2021, Russian tourists accounted for 16% of the tourists that visited Turkiye with 4,6 million people.32 The Western sanctions imposed after the Russian military operation in Ukraine decreased the expectations of Turkish tourism sector in 2022, especially regarding Russian tourists. In April 2022, the President of the Russian Association of Tour Operators (ATOR), Maya Lomidze, estimated that 2 million Russian tourists would be an optimistic number for 2 0 2 2.33 The President of the Association of Turkish Travel Agencies (TURSAB], Firuz Baglikaya, stated that Turkiye would not be able to reach its $40 billion revenue target in tourism due to the conflict in Ukraine.34 Despite all the challenges, nearly 5.1 million Russian tourists visited Turkiye in 2022, making it the second-highest number of visitors after German citizens and consequently, the total tourism income of Turkiye reached 46.2 billion dollars in 2022.
Graph 4: Number of Russian tourists visiting Turkiye by years 0
Q Z
Ù
30 Sinan Tavsan, "Putin suggests Turkey become regional 'gas hub' to Europe," Nikkei Asia (2022], eri?im 05.04.2023, ^ " ^ https://asia.nikkei.com/Business/Energy/Putin-suggests-Turkey-become-regional-gas-hub-to-Europe ^ 03
31 Soli Ozel & Gokfe Ufar, "The economics of Turkey-Russia Relations," Centre for Economics and Foreign Policy pi a* © Studies (2019], eri?im 05.04.2023, https://edam.org.tr/wp-content/uploads/2019/07/The-Economics-of-Turkey- |117| Russia-Relations_compressed.pdf
32 "Turkiye'ye 2021'de Gelen ziyaretfi sayisi 30 Milyonu A?ti," Basin ve Halkla lli?kiler Mu?avirligi-T.C. Kultur ve Turizm Bakanligi (2022], eri?im 05.04.2023, https://basin.ktb.gov.tr/TR-309194/turkiyeye-2021de-gelen-ziyaretci-sayisi-30-milyonu-asti--.html
33 "Rus Turist Sayisi 2 Milyona Du?ebilir," Turizmews (2022], eri?im 05.04.2023, https://www.turizmnews.com/rus-turist sayisi-2-milyona-dusebilir/26247/
34 §ehriban Kiraf, "Firuz baglikaya, 'Kufuk ve Orta Boy Tur Operatorlerinin Durumu Zor' dedi," Cumhuriyet (2022), eri?im 05.04.2023, https://www.cumhuriyet.com.tr/ekonomi/firuz-baglikaya-kucuk-ve-orta-boy-tur-operatorlerinin-durumu-zor-dedi-1920724
Million people Number of Russian tourists visiting Turkiye by years
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Kaynak: TUlK35
Turkiye was by far the most preferred destination by Russian tourists in 2022. Graph 5: Number of outgoing Russian tourists by countries in 2022
NUMBER OF OUTGOING RUSSIAN TOURISTS BY COUNTRIES IN 2022
■ Turkiye ■ UAE ■ Abkhazia ■ Egypt ■ Thailand
Kaynak: Assotsiatsiya Turoperatorov36
Among the concerns of the Turkish hotel industry with the beginning of the Ukraine conflict, Bulent Bulbuloglu, Vice-President of the Turkish Hoteliers Federation, stated that Turkiye could lose 50% of its Russian tourists due to the sanctions and the significant 0 depreciation of the Russian ruble.37 With the beginning of the Ukraine conflict, Russian
2 ruble faced a significant decline in its value and this caused fear among Turkish hotel
z
u sector as Russians' purchasing power would decline. However, the Russian Central Bank
Q m ^
< o gj took precautions such as increasing the interest rate and therefore, the Russian ruble
Ss a?© gained its value back and even reached to a higher value against the US dollar compared
|118| to before. In 2022, Russian economy contracted only 2.1% which was much less than
35 "Turizm Istatistikleri, IV. Çeyrek: Ekim-Aralik ve Yillik, 2022," TÜlK (2023), eriçim 05.04.2023, https://data.tuik.gov.tr/Bulten/Index?p=Turizm-Istatistikleri-IV.Ceyrek%3A-Ekim-Aralik-ve-Yillik%2C-2021-45785
36 "V kakiye strany yezdili rossiyskiye turisty v 2022 godu," Assotsiatsiya Turoperatorov (2023), eriçim 05.04.2023, https://www.atorus.ru/node/51287
37 "Ege, Avrupali Turisti Kaybetme Endiçesi Yaçiyor," Ekonomim (2022), eriçim 05.04.2023, https://www.ekonomim.com/sehirler/ege-avrupali-turisti-kaybetme-endisesi-yasiyor-haberi-653545
expected and it can be said that Russian citizens did not actually lose their purchasing power.38 In addition to visiting Turkiye as tourists, Russian citizens ranked first in real estate purchases in Turkiye among foreigners in 2022.39
The European countries restricted flights from Russia to Europe after Russia declared its military operation and for this reason, the number of Russian tourists visiting Europe drastically decreased in 2022.40 The Russian tourists who used to prefer EU countries for their holiday destinations redirected their holiday plans to Turkiye. Additionaly, Russians started choosing Turkiye as a winter holiday as well which was not very popular before.41 Furthermore, Western passengers traveling to Russia had to fly to Turkiye first, making it a more important connection point between the West and Russia. As a downside of the Western sanctions, the Russian airline companies faced problems such as not being able to receive components or repairment and this posed a threat to the stability for flights between the two countries. In terms of the flights to Turkiye, Turkish tour operators in Russia have established new airline companies for conducting flights to its southern neighbour which could ease the airline problem.42
After the Western economic sanctions against Moscow, the Russian tourists had a problem for their payments in Turkiye. As Visa and Mastercard halted their abroad operations for Russia, Russian citizens could not use their debit and credit cards abroad. In 2019, the Russian payment system "Mir" cards were accepted in Turkiye, and their popularity started to increase due to the Western sanctions. However, the USA applied pressure to Turkiye for restricting economic relations with Russia.43 As a consequence, the Turkish banks that enabled the use of Mir payment system had to suspend it in September 2022. Although, it was reported that Ankara and Moscow were in the process of developing an alternative payment system to Mir which could be operational in 2023.44
d) Defence and Construction Industries
Defence industry is one of the key sectors which constitutes an important pillar of Turkish-Russian economic relations. Turkiye purchased S-400 aerial defense systems from Russia in 2019, adding a powerful military aspect to the economic relations between the two countries. On the other hand, Ukraine started to import unmanned aerial vehicles from a Turkish company in 2019 and used them in Donbass during the civil war. Ukraine continued to deploy these drones against the Russian army which evidently constituted a
o
38 "Russian economy shrank 2.1% in 2022, much less than expected," Al Jazeera (2023], erijim 05.04.2023, https://www.aljazeera.com/news/2023/2/21/russias-economy-contracted-2-1-in-2022 2
39 "Russians Top List of Foreign Buyers of Turkish Real Estate in 2022—Agency," TASS (2023], erijim 05.04.2023 u https://tass.com/economy/1563331?utm_source=google.com&utm_medium=organic&utm_campaign=google.com ^ " &utm_reerrer=google.com ^ 03
40 "90% fewer Russian tourists visited Europe in 2022, authorities reveal," SchengenVisaInfo (2023), erijim pi a* © 05.04.2023, https://www.schengenvisainfo.com/news/90-fewer-russian-tourists-visited-europe-in-2022- |119| authorities-reveal/
41 "1 million Russians to spend the winter in Turkey," BusinessTurkey (2022], erijim 05.04.2023, https://businessturkeytoday.com/1-million-russians-to-spend-the-winter-in-turkey.html
42 "Rusya ifin uf Yeni Havayolu Geliyor," TURIZMGAZETESI (2022], erijim 05.04.2023, https://www.turizmgazetesi.com/haber/rusya-icin-uc-yeni-havayolu-geliyor/82406
43 Henry Foy, et al., "US and EU step up pressure on Turkey over Russia sanctions," Financial Times (2022], erijim April 5, 2023, https://www.ft.com/content/95243a73-22c8-447e-bbae-a10a206d7e9e
44 "Turkiye and Russia developing new payment system-diplomat," RT International (2023], erijim 05.04.2023, https://www.rt.com/business/571239-turkey-russia-new-payment-system/
threat to the Turkish-Russian relations. In terms of the bilateral economic-military relations of Turkiye with these two countries; it can be said that Russia is more of a provider to Turkiye, while Turkiye mostly serves as a provider to Ukraine. Additionaly, Turkiye is working on its national fighter jet for 2030 and Ankara aims to cooperate with Russia on this project.45 Russian officials have expressed their willingness to assist Turkiye with its fighter jet development.46 Moreover, there were talks of importing Su-35 and Su-57 fighter jets between Ankara and Moscow as Turkiye was removed of the F-35 jet project by the USA after Turkiye bought S-400 systems from Russia.
Construction is another key sector for the economic relations between Turkiye and Russia. Erdal Eren, the president of the Turkish Building Contractors Association, stated that Turkish contractors have undertaken projects worth around 22 billion dollars in Russia from 2019 until 2022, with contracts totaling 95 billion dollars signed since 1972. In 2022, Turkish building contractors had constructions in progress which were worth 21 billion dollars in Russia.47 Turkish construction industry reached a record 11.2 billion dollar worth of projects in 2 0 21.48 Even though the value of projects in 2022 went down to 2 billion dollars due to the conflict in Ukraine, Russia still maintained its number one spot for Turkish construction firms abroad.49 Turkish construction firms continue to be active in Russia and they have further opportunities as many of the buildings in the big cities like Moscow are under reconstruction. Moreover, the new regions who joined Russia through the referendums are damaged because of the battles and Turkish companies have a chance to play a major role in their reconsctruction process.
Conclusion
Russia and Turkiye have enjoyed strong economic relations, especially since the beginning of the 21st century. Ankara and Moscow have important ties of cooperation in trade, energy, tourism, defence and construction industries as examined in this paper. The Ukraine conflict created serious global consequences which especially damaged the relations between Russia and the Western countries. Although being a NATO member, Turkiye opted to remain neutral in this conflict and did not take part in the sanctions against Russia. Ankara also acted as an intermediary in the conflict and contributed to the peace process. Turkiye's neutrality helped ensure smooth economic relations between Turkiye and Russia, since Ankara and Moscow successfully compartmentalized their
^ 45 "Milli Muharip Ufak ifin Rusya Ile ij Birligi Gündemde," AirportHaber (2021), erijim 05.04.2023,
Z https://www.airporthaber.com/havacilik-haberleri/milli-muharip-ucak-icin-rusya-ile-is-birligi-gundemde.html
^ 46 "Rusya: Türkiye'ye MMU (TF-X) Konusunda Yardim Edebiliriz," SavunmaSanayiST (2021), erijim 05.04.2023,
^ " ^ https://www.savunmasanayist.com/rusya-turkiyeye-tf-x-konusunda-yardim-edebiliriz/;
P <--1 1X1 Emre Gürkan Abay, "Rusya, Türkiye ile Savunma sanayisi ve Havacilikta ij Birligini Gelijtirmek Istiyor," Anadolu
oi ct^© Ajansi (2021), erijim 05.04.2023, https://www.aa.com.tr/tr/ekonomi/rusya-turkiye-ile-savunma-sanayisi-ve-
|120| havacilikta-is-birligini-gelistirmek-istiyor/2336644
47 Merve Özlem £akir, "Türk müteahhitler hem Rusya hem de Ukrayna pazarini korumak istiyor," Anadolu Ajansi (2022), erijim 05.04.2023, https://www.aa.com.tr/tr/ekonomi/turk-muteahhitler-hem-rusya-hem-de-ukrayna-pazarini-korumak-istiyor/2511054
48 "Bakan Muj: "Türk injaat sektörü 2021'de yurt dijinda 29,3 milyar dolarlik ij üstlendi," T.C. Ticaret Bakanligi (2022), erijim 05.04.2023, https://ticaret.gov.tr/haberler/bakan-mus-turk-insaat-sektoru-2021de-yurt-disinda-29-3-milyar-dolarlik-is-ustl
49 "Müteahhitlik Sektörü 2022'de Yurt Dijinda 17,8 Milyar Dolarlik Ij Üstlendi," T.C. Ticaret Bakanligi (2023), erijim 05.04.2023, https://ticaret.gov.tr/haberler/muteahhitlik-sektoru-2022de-yurt-disinda-17-8-milyar-dolarlik-is-ustlendi
differing political views on the Ukraine conflict, as they have done in the past with other regional issues.
The trade between Russia and Turkiye was not quite affected by the beginning of the Ukraine crisis in 2014. The trade volume has reached to considerable amounts in the coming years despite the jet crisis and coronavirus period. The two states reached a record of 68 billion dollar trade volume in 2022 and Russia became the biggest import source for Turkiye which indicated that the two states left their different political views aside on the Ukraine conflict with the compartmentalization policy. As Turkiye imports critical commodities including fossil fuels and grain from Russia, Russian Federation has become a vital state for Turkiye. A problem in bilateral economic relations is that the trade gap between the two states has been growing in recent years which worsened the asymmetrical interdependence between Russia and Turkiye and this further enlarged with the Ukraine conflict in 2022. As Turkiye considerably increased its energy imports from Russia and the global energy prices hiked in the first half of the year, the trade asymmetry between the two countries grew in 2022. To reduce this asymmetry, Turkiye could export more agricultural products to Russia which could be used to pay for energy imports as the both sides executed in the early years of Republic of Turkiye and the USSR. However, the current agricultural production of Turkiye is far from supplying that level. Moreover, the Turkish government should work on diverse export opportunities to Russia and create favourable exporting conditions for its industries.
Energy is the main aspect of the economic relations between Turkiye and Russia as Russia has been the largest supplier of natural gas to Turkiye for decades. After the Ukraine conflict started, Russia also became the biggest import source of oil for Turkiye. Turkiye is a substantial contributor to the Russian economy as well since it has a strong and consistent energy demand. Moreover, the role of Turkiye as an energy transmitting country gained more importance after the Nord Stream sabotage. Therefore, the energy relations between Turkiye and Russia have significantly developed since the conflict started.
In tourism sector, the expectations were quite low about Russian citizens visiting Turkiye in 2022 due to the Ukraine conflict. However, Ankara and Moscow implemented solutions against the Western sanctions and they were able to maintain the economic activities in tourism sector. Utilization of the Mir payment system in Turkiye and creating new airlines companies were examples of the determination for partnership in spite of the barriers caused by the West. A considerable number of Russian tourists visited Turkiye in 2022 despite the negative expectations. Furthermore, Turkiye was by far the most travelled destination by Russian tourists last year.
Turkiye and Russia also have strong connections in defence and construction |121| industries. The S-400 purchase in 2019 was a key step which enhanced the cooperation between two countries. They work on other projects such as Turkiye's first national jet TF-X. However, Turkish military exports to Ukraine constitutes a barrier for the military cooperation with Russia. In the construction industry, Russia continued to have the largest value in 2022 for Turkish firms despite a substantial decline from 2021.
o
Q Z Ù •n z
o
* ©
Furthermore, Turkish firms continue to have a big potential in Russia for the reconstruction of newly joined regions to Russia which previously belonged to Ukraine.
To sum up, Russia and Turkiye managed to maintain and further improve their economic relations despite the Ukraine conflict as Turkiye remained neutral and the two states successfully applied compartmentalization policy. Even though the conflict brought challenges to the relations, the two states found ways to overcome them. The West led by the USA constitutes the biggest threat to Turkiye-Russia economic relations as Ankara is constantly under pressure because of its neutral stance on the Ukraine conflict. Turkiye-Russia relations mainly depend on the position of Ankara. If Turkiye desires to maintain its vital economic relations with Russia, Ankara should sustain following an independent policy on Ukraine and should not make concessions to the West. For the Russian side, Ukraine crisis and the following Western sanctions reminded Moscow how important Turkiye is as an economic and a diplomatic partner. If Turkiye continues its neutral policy on the Ukraine conflict, the Turkish-Russian cooperation is likely to further improve and this would contribute to the prosperity of both states.
Beyanname:
1. Etik Kurul Izni: Etik Kurul Izni gerekmemektedir.
2. Katki Orani Beyani: Yazar, makaleye baçkasrnrn katkida bulunmadigini beyan etmektedir.
3. Çikar Çatiçmasi Beyani: Yazar, herhangi bir çikar çatiçmasi olmadigini beyan etmektedir. Declarations:
1. Ethics approval: Not applicable.
2. Author contribution: The author declares no one has contributed to the article.
3. Competing interests: The author declares no competing interests.
REFERENCES
"1 million Russians to spend the winter in Turkey." BusinessTurkey (2022). Erijim 05.04.2023. https://businessturkeytoday.com/1-million-russians-to-spend-the-winter-in-turkey.html
"90% fewer Russian tourists visited Europe in 2022, authorities reveal." SchengenVisalnfo ° (2023). Erijim 05.04.2023. https://www.schengenvisainfo.com/news/90-fewer-
§ russian-tourists-visited-europe-in-2022-authorities-reveal/
u
a ™ ^ Abay, Emre Gurkan. "Rusya, Turkiye ile Savunma sanayisi ve Havacilikta ij Birligini
U ~ Gelijtirmek istiyor." Anadolu Ajansi (2021). Erijim 05.04.2023.
oí a? © |122|
https://www.aa.com.tr/tr/ekonomi/rusya-turkiye-ile-savunma-sanayisi-ve-havacilikta-is-birligini-gelistirmek-istiyor/2336644
Aslan, Davut Han & Sevde Ijilak. "Russia-Turkey Energy Relations after 2002: The Asymmetry of Interdependence." Spoleczenstwo i Polityka 63/2 (2020): 125-146.
Aydin, Filiz Tutku. "Turkey's policy on the Russian-Ukrainian crisis." SETA (2022). Erijim 05.04.2023. https://setav.org/en/assets/uploads/2022/02/A77En.pdf
Aydin, Mustafa. "The long view on Turkish-Russian rivalry and cooperation." GMF (2020). Erijim 05.04.2023. https://www.gmfus.org/news/long-view-turkish-russian-rivalry-and-cooperation
Aydin, S., E. Balta & O'donohue. "Turkey, Russia, and the West: Reassessing Persistent Volatility, Asymmetric Interdependence and the Syria Conflict." istanbul Policy Center (2020). Erijim 05.04.2023.
https://ipc.sabanciuniv.edu/Content/Images/Document/reassessing-persistent-volatility-asymmetric-interdependence-and-the-syria-conflict-93d479/reassessing-persistent-volatility-asymmetric-interdependence-and-the-syria-conflict-93d479.pdf Aydin, Y. "Rusya Federasyonu ve Türkiye Arasinda Dij Ticaretin Yapisi ve Gelijimi." Rusya
Araptirmalari Dergisi 6 (2021): 154-176. "Bakan Muj: "Türk injaat sektörü 2021'de yurt dijinda 29,3 milyar dolarlik ij üstlendi." T.C. Ticaret Bakanligi (2022). Erijim 05.04.2023. https://ticaret.gov.tr/haberler/bakan-mus-turk-insaat-sektoru-2021de-yurt-disinda-29-3-milyar-dolarlik-is-ustl Boone, Carter. "The Turkey-Russia relationship: Why "compartmentalization" and not conflict?" RIAC (2021). Erijim 05.04.2023. https://russiancouncil.ru/en/blogs/carter-boone/the-turkeyrussia-relationship-why-compartmentalization-and-not-conflic/ Cheterian, Vicken. "Friend and Foe: Russia-Turkey relations before and after the war in Ukraine." Small Wars & Insurgencies (2023): 1-24.
Cohen, P. "Turkey is strengthening its energy ties with Russia." The New York Times (2022). Erijim 05.04.2023. https://www.nytimes.com/2022/12/09/business/turkey-erdogan-energy-russia.html
"Cumhurbapkani Erdogan: Rusya'dan da Ukrayna'dan da vazgefmemiz mümkün degil." NTV (2022). Erijim 05.04.2023. https://www.ntv.com.tr/turkiye/cumhurbaskani-erdogan-rusyadan-da-ukraynadan-da-vazgecmemiz-mumkun-degil,QbFvVaiQTkClCa8unMwwgA "Cumhurbapkani Erdogan: Rusya ile Rubleyle Alipverip iki Tarafa da Kazandiracak." BBC News Türkfe (2022). Erijim 05.04.2023.
https://www.bbc.com/turkce/articles/c8750xmlxvpo Cakir, Merve Özlem. "Türk müteahhitler hem Rusya hem de Ukrayna pazarini korumak istiyor." Anadolu Ajansi (2022). Erijim 05.04.2023. https://www.aa.com.tr/tr/ekonomi/turk-muteahhitler-hem-rusya-hem-de-ukrayna-pazarini-korumak-istiyor/2511054 Demiryol, Tolga. "Türkiye-Rusya ilijkilerinde Enerjinin Rolü: Asimetrik Karjilikli Bagimlilik
ve Sinirlari." Gaziantep University Journal of Social Sciences 17/4 (2018): 1438-1455. Derman, Giray Saynur. "Turkey-Russian Federation Relations in the New Era." In Contemporary Turkish-Russian Relations Relations From Past to Future, ed. ilyas Topsakal & Ali Askerov, 39-67. istanbul: Istanbul University Press, 2021. "Dij Ticaret istatistikleri, Aralik 2021." TÜiK (2022). Erijim 05.04.2023. https://data.tuik.gov.tr/Bulten/Index?p=Dis-Ticaret-Istatistikleri-Aralik-2021-45535
"Dij Ticaret istatistikleri, Aralik 2022." TÜiK (2023). Erijim 05.04.2023. https://data.tuik.gov.tr/Bulten/Index?p=Dis-Ticaret-Istatistikleri-Aralik-2022-49633
Ediger, Volkan & Duygu Durmaz. "Energy in Turkey and Russia's Roller-coaster Relationship." Insight Turkey 19/1 (2017): 135-156.
"Ege, Avrupali Turisti Kaybetme Endijesi Yajiyor." Ekonomim (2022). Erijim 05.04.2023. https://www.ekonomim.com/sehirler/ege-avrupali-turisti-kaybetme-endisesi-yasiyor-haberi-653545
Foy, Henry, James Politi, Sam Fleming & Laura Pitel. "US and EU step up pressure on Turkey over Russia sanctions." Financial Times (2022). Erijim 05.04.2023. https://www.ft.com/content/95243a73-22c8-447e-bbae-a10a206d7e9e
Hamilton, Robert & Anna Mikulska. "Cooperation, competition, and compartmentalization: Russian-Turkish relations and their implications for the West." Foreign Policy Research Institute (2021). Erijim 05.04.2023.
https://www.fpri.org/article/2021/04/cooperation-competition-and-compartmentalization-russian-turkish-relations-and-their-implications-for-the-west/
Hirst, Samuel John & Onur Isci. "Smokestacks and Pipelines: Russian-Turkish Relations and the Persistence of Economic Development." Diplomatic History 44/5 (2020): 834-859.
ipek, Cemil Dogaf & Mehmet £agatay Guler. "Turkey and Russia in Syrian War: Hostile friendship." Security and Defence Quarterly 35/3 (2021): 77-92.
Kiraf, ^ehriban. "Firuz baglikaya, 'Kufuk ve Orta Boy Tur Operatorlerinin Durumu Zor' dedi." Cumhuriyet (2022). Erijim 05.04.2023.
https://www.cumhuriyet.com.tr/ekonomi/firuz-baglikaya-kucuk-ve-orta-boy-tur-operatorlerinin-durumu-zor-dedi-1920724
Kostem, Sefkin. "The Political Economy of Turkish-Russian Relations: Dynamics of Asymmetric Interdependence." Perceptions: Journal of International Affairs 23/2 (2018): 10-32.
"Milli Muharip Ufak ifin Rusya Ile ij Birligi Gundemde." AirportHaber (2021). Erijim 05.04.2023. https://www.airporthaber.com/havacilik-haberleri/milli-muharip-ucak-icin-rusya-ile-is-birligi-gundemde.html
"Muteahhitlik Sektoru 2022'de Yurt Dijinda 17,8 Milyar Dolarlik ij Ustlendi." T.C. Ticaret Bakanligi (2023). Erijim 05.04.2023. https://ticaret.gov.tr/haberler/muteahhitlik-sektoru-2022de-yurt-disinda-17-8-milyar-dolarlik-is-ustlendi
Onis, Ziya & ^uhnaz Yilmaz. "Turkey and Russia in a shifting global order: cooperation, conflict and asymmetric interdependence in a turbulent region." Third World Quarterly 37/1 (2015): 1-25.
Ozdal, Habibe. "Transformation of Turkish Foreign Policy and Its Reflections on Turkey-Russia Relations." In Turkey's Challenges and Transformation, ed. Harun Arikan & Zeynep Alemdar. Palgrave Macmillan, 2023. 249-266. https://doi.org/10.1007/978-3-031-25799-5_15
Ozel, Soli & Gokfe Ufar. "The economics of Turkey-Russia Relations." Centre for Economics and Foreign Policy Studies (2019). Erijim 05.04.2023 https://edam.org.tr/wp-content/uploads/2019/07/The-Economics-of-Turkey-Russia-Relations_compressed.pdf
Pearson, Robert. "Turkey between Ukraine and Russia." Middle East Institute (2022). Erijim 05.04.2023, https://www.mei.edu/publications/turkey-between-ukraine-and-russia
"Petrol Piyasasi Aylik Sektör Raporu Listesi." EPDK. Erijim 05.04.2023.
https://www.epdk.gov.tr/Detay/Icerik/3-0-104/petrolaylik-sektor-raporu "Putin: Türkiye Dogal Gaz ödemesinin yüzde 25'ini ruble ile Yapacak." Euronews (2022). Erijim 05.04.2023. https://tr.euronews.com/2022/09/16/putin-turkiye-dogal-gaz-odemesinin-yuzde-25ini-ruble-ile-yapacak "Rus Turist Sayisi 2 Milyona Düjebilir." Turizmews (2022). Erijim 05.04.2023.
https://www.turizmnews.com/rus-turist sayisi-2-milyona-dusebilir/26247/ Russell, Clyde. "Column: Russia boosts coal exports as western sanctions yet to bite." Reuters (2022). Erijim 05.04.2023. https://www.reuters.com/markets/commodities/russia-boosts-coal-exports-western-sanctions-yet-bite-russell-2022-07-05/ "Russian economy shrank 2.1% in 2022, much less than expected." Al Jazeera (2023). Erijim 05.04.2023. https://www.aljazeera.com/news/2023/2/21/russias-economy-
contracted-2-1-in-2022 "Russians Top List of Foreign Buyers of Turkish Real Estate in 2022-Agency." TASS (2023). https://tass.com/economy/1563331?utm_source=google.com&utm_medium=organic &utm_campaign=google.com&utm_reerrer=google.com "Rusya'ya Yaptirimlar Türk Firmalara Yaradi." CNN TÜRK (2023). Erijim 05.04.2023. https://www.cnnturk.com/video/dunya/azerbaycan/rusyaya-yaptirimlar-turk-firmalara-yaradi
"Rusya: Türkiye'ye MMU (TF-X) Konusunda Yardim Edebiliriz." Savunma Sanayi ST (2021). Erijim 05.04.2023. https://www.savunmasanayist.com/rusya-turkiyeye-tf-x-konusunda-yardim-edebiliriz/ "Rusya için ûç Yeni Havayolu Geliyor." Turizm gazetesi (2022). Erijim 05.04.2023.
https://www.turizmgazetesi.com/haber/rusya-icin-uc-yeni-havayolu-geliyor/82406 "Sovyet Sosyalist Cumhuriyetleri Birligi'nden Türkiye Cumhuriyeti'ne Dogal Gaz Sevkiyatina Dair-Türkiye Cumhuriyeti Hükümeti ile Sovyet Sosyalist Cumhuriyetleri Birligi Hükümeti Arasinda Anlajma." T.C. Resmî Gazete (1984). Erijim 05.04.2023. https://www.resmigazete.gov.tr/arsiv/18598.pdf
"Tarim Ürünleri Piyasalari-Bugday." T.C. Tarim ve Orman Bakanligi. Erijim 05.04.2023. https://arastirma.tarimorman.gov.tr/tepge/Belgeler/PDF%20Tar%C4%B1m%20%C 3%9Cr%C3%BCnleri%20Piyasalar%C4%B1/2022-Temmuz%20Tar%C4%B1m%20%C3%9Cr%C3%BCnleri%20Raporu/7-BU%C4%9EDAY%2 0T%C3%9CP%2 0Temmuz%2 02022.pdf
"Tarim Ürünleri Piyasalari-Ayçiçegi." T.C. Tarim ve Orman Bakanligi. Erijim 05.04.2023. https://arastirma.tarimorman.gov.tr/tepge/Belgeler/PDF%20Tar%C4%B1m%20%C 3%9Cr%C3%BCnleri%20Piyasalar%C4%B1/2022-Temmuz%20Tar%C4%B1m%20%C3%9Cr%C3%BCnleri%20Raporu/5-AY%C3%87%C4%B0%C3%87E%C4%9E%C4%B0%20T%C3%9CP%20TEMMUZ%2 02022.pdf
Tavsan, Sinan. "Putin suggests Turkey become regional 'gas hub' to Europe." Nikkei Asia
(2022). Erijim 05.04.2023. https://asia.nikkei.com/Business/Energy/Putin-suggests-Turkey-become-regional-gas-hub-to-Europe
Timofeev, Ivan. "Ukrainian Crisis, Turkey and Eurasia: Who Wins?" Valdai Club (2022). Erijim 05.04.2023. https://valdaiclub.com/a/highlights/ukrainian-crisis-and-eurasia-who-wins/
"Turizm istatistikleri, IV. Çeyrek: Ekim-Aralik ve Yillik, 2022." TÜiK (2023). Erijim 05.04.2023. https://data.tuik.gov.tr/Bulten/Index?p=Turizm-Istatistikleri-IV.Ceyrek%3A-Ekim-Aralik-ve-YiHik%2C-2021-45785
"Turkey, Russia Reinstating $100 Billion Bilateral Trade Target: Erdogan." Reuters (2016). Erijim 05.04.2023. https://www.reuters.com/article/us-russia-turkey-trade-idUKKCN10K1LA.
"Turkey Unveils Russia Trade Plans." RT International (2022). Erijim 05.04.2023. https://www.rt.com/business/560359-turkey-unveils-russia-trade-plans/
"Turtsiya Stala Krupneyshim Importerom Rossiyskikh Sel'khozproduktov v 2021 Godu." Interfax.ru (2022). Erijim 05.04.2023. https://www.interfax.ru/business/816244
"Türkiye'ye 2021'de Gelen ziyaretçi sayisi 30 Milyonu Ajti." Basin ve Halkla ilijkiler Müjavirligi- T.C. Kültür ve Turizm Bakanligi (2022). Erijim 05.04.2023. https://basin.ktb.gov.tr/TR-309194/turkiyeye-2021de-gelen-ziyaretci-sayisi-30-milyonu-asti--.html
"Türkiye and Russia developing new payment system - diplomat." RT International (2023). Erijim 05.04.2023. https://www.rt.com/business/571239-turkey-russia-new-payment-system/
Ünlühisarcikli, Özgür. (2023, March). "Turkey vis-à-vis Russia's War against Ukraine." Istituto Affari Internazionali (2023). Erijim 05.04.2023.
https://www.iai.it/sites/default/files/iaicom2311.pdf
"V kakiye strany yezdili rossiyskiye turisty v 2022 godu." Assotsiatsiya Turoperatorov
(2023). Erijim 05.04.2023. https://www.atorus.ru/node/51287
Wheeldon, Tom. "Turkey juggles relationships with Russia, Ukraine amid economic crisis." France 24 (2022). Erijim 05.04.2023. https://www.france24.com/en/middle-east/20220331-turkey-juggles-relationships-with-russia-ukraine-amid-economic-crisis
Yanatma, Servet. "Bugdayda Yeterlilik Derecesi: Türkiye, Ukrayna Ve Rusya'ya Bagimli Mi?."
Euronews
(2022).
Erijim
05.04.2023.
https://tr.euronews.com/2022/03/07/bugdayda-yeterlilik-derecesi-turkiye-ukrayna-ve-rusya-ya-bag-ml-m
"Yillik Sektör Raporu Listesi." EPDK. Erijim 05.04.2023. https://www.epdk.gov.tr/Detay/Icerik/3-0-94/yillik-sektor-raporu
|126|
^ ^ ^
