With billions in trade and tourism dollars on the line, the Turks are already back-peddling
This post first appeared on Russia Insider
Turkey may have bitten off more than it could chew when it decided to pull its little stunt of shooting down a Russian jet.
Russia is Turkey's 2nd biggest trading partner, with a turnover of $30 billion in 2014. In additon, over 3 million Russian tourists visit Turkey annually. Already the Russian government is telling its citizens to avoid traveling to Turkey, and Russia is cancelling flights.
The Turks stand to lose big. Here's a breakdown of the economic links between Russia and Turkey (Reuters):
- Turkey's seaside resorts are among the most popular tourism destinations for Russians; for Turkey, Russia is the source of the second-largest number of tourist arrivals after Germany.
- Russian Foreign Minister Sergei Lavrov on Tuesday advised Russians not to visit Turkey and said the threat of terrorism there was no less than in Egypt, where a bomb attack brought down a Russian passenger plane last month.
- Russia's tourism agency also recommended the suspension of package holiday sales to Turkey.
- Turkey, which has visa-free travel with Russia, has become more attractive for Russian tourists after Moscow suspended flights to Egypt. About 4.4 million Russians, including 3.3 million Russian tourists, visited Turkey in 2014.
- Turkish food exports so far have not been affected by Moscow's ban on most Western food imports launched in 2014. In 2014, 4 percent of Turkey's exports, mainly textiles and food, worth $6 billion went to Russia, Renaissance Capital said in a note on Tuesday.
- Turkish exports to Russia have fallen 40 percent over January-September to $2.7 billion.
ENERGY AND COMMODITIES
- Turkey is the second-largest buyer of Russian natural gas after Germany. Russia is Turkey's largest natural gas supplier, with Ankara buying 28-30 billion cubic meters (bcm) of its 50 bcm of natural gas needs annually from Russia.
- Russia also supplies oil and oil products to Turkey. Russia was its fourth-largest supplier in 2013, according to the Russian embassy in Turkey www.turkey.mid.ru.
- Turkey together with Egypt is the largest buyer of Russian wheat. It bought 4.1 million tonnes of Russian wheat in the previous marketing year, which ended on June 30.
- Turkey is also a large buyer of Russian steel semi-finished products.
- Turkey commissioned Russia's state-owned Rosatom in 2013 to build four 1,200-megawatt reactors in a project worth $20 billion.
- Russia and Turkey also have the TurkStream pipeline project, an alternative to Russia's South Stream pipeline to transport gas to Europe without crossing Ukraine. The South Stream plan was dropped last year due to objections from the European Commission.
- Russia's Gazprom has recently almost halved the planned capacity of its TurkStream gas pipeline project to 32 billion cubic meters (bcm) per year.
In other words, Turkey has a whole lot to lose, and little to gain, from a fallout with Moscow. Fighting Russia in Syria using its ISIS proxy is one thing, directly attacking the world's biggest nuclear weapons state is another - a move Erdogan is unlikely to have made without consulting Washington.
In fact, it is far more likely that Washington put Turkey up to this - both to attempt to sabotage any possible improvement in Russo-Turkish ties and as a rather callous and knee-jerk attempt to show that the western coalition is not powerless before the Russian intervention in Syria.
Another possible motive is wiping the controversy about western-funding of ISIS off the media radar with an even bigger story. But Russia is derailing that by speaking out even more about Turkish links to ISIS.
Now the Turks seem to be trying to back out of the hole they've dug themselves into, with Turkish Prime Minister Davutoglu saying Turkey "will work with Russia and our allies to calm tensions."
Even President Erdogan seems to be backpeddling fast, saying in a speech in Ankara:
"We are strategic partners. Joint projects may be halted, ties could be cut? Are such approaches fitting for politicians?
"First the politicians and our militaries should sit down and talk about where errors were made and then focus on overcoming those errors on both sides."
But it may already be too late for Erdogan to mend fences - unless a Turkish apology is forthcoming and Turkey changes its behavior vis-a-vis ISIS and Syria, it's unclear if Russia will once again consider doing serious business with them.
Eventually, the Turks will have to decide between their neo-Ottoman imperial ambitions and vital future economic partnerships with their neighbors - principally Russia - from which they stand to gain far more than they will get from their meddling in the Middle East.
But a change of course for Turkey seems unlikely to happen on Sultan Erdogan's watch.
This post first appeared on Russia Insider
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