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Friday, March 16, 2018

Russian-Turkish reconciliation not a word about geopolitics

Relations of our country with Turkey after 24 November 2015 and has been in severe crisis. However, in a sense, they have reached a qualitatively new level — between Russia and Turkey, finally, formed a single Eurasian space. However, only information policy, which was immediately filled with the incessant hum of voices from both sides — officials, political analysts and experts as well as members of the public. And after a meeting between Putin and Erdogan in St. Petersburg, in General, the verdict was that the current Russian-Turkish reconciliation “forced”, “situational” and likely “will not last long”.

But do not forget the truism that “there is nothing more permanent than something temporary”, and try to descend from the heady heights of geopolitical solid economic soil.

It seems to be particularly new to say about Russian-Turkish economic agenda, which was made in the Konstantinovsky Palace under the motto “now, colleagues, we last left off?”. Everything is familiar and understandable: “Akkuyu”, “Turkish stream, Turkish builders, agricultural, Charter and tourism. Return to the previous level of relations will be carried out in stages, in the framework of the program for a three-year period, which will be prepared by the parties. Strategic objective four to increase trade turnover to 100 billion dollars on the agenda remains.

However, I believe that given the difficult economic situation in Russia, it was dry figures should be placed at the forefront during the discussion of any foreign policy issue. That, in fact, showed a press conference following the meeting of the two presidents, Putin in public was willing to discuss only the economy, leaving policy and then to the closed doors.

A red thread in the sides made official statements was the subject of the resumption of Russia to build the first Turkish nuclear power plant “Akkuyu” in the framework of the intergovernmental agreement from 2010.

The key here must be regarded as voiced by President erdoğan’s decision on the assignment of the “Akkuyu” status “strategic investment” that, according to Turkish law, implies preferential taxation. Let me explain by numbers: at the budget cost of the project in the amount of approximately $ 20 billion, according to conservative estimates, approximately a quarter, i.e. 5 billion, would have gone to taxes. That is straight from the Russian budget to the budget Turkish.

Russia, admitted striking “preschool” error at the stage of preparation of the text of the agreement, considering, and with tears, for almost five years, this decision unsuccessfully sought. It is obvious that the tax burden is killing the economic component of the project in the Bud, making it simply impractical and, therefore, unrealizable. So call Erdogan’s statement a step in the direction of Russia would be some exaggeration. NPP “Akkuyu” Turkey is still needed, and now even this barrier is removed.

However, there are other challenges of comparable scale, the main of which is the financing of the station. Investment in $ 20 billion at current oil prices — a very heavy burden for the Russian “wallet”. To facilitate its can only be one thing — selling 49% stake of the Akkuyu foreign investor, who will share with Russia the hardships of financing. The intergovernmental agreement allows it. And given the fact that the same agreement Russia is obliged to transfer to the Turkish technology companies and in General how to attract them to participate in the project, it is only logical that the co-investor is the company or consortium from Turkey.

Again, the “fingers”: if the Turkish side will take at least a third of the funding of the project, which is a quite realistic estimate of the cost of those contracts, which the Turks expect it will mean direct savings to our budget of $ 7 billion. Not bad for a country in which “no money”. I am sure that the Russian leadership remembers this, it remains only to wait, what this will evolve in practice.

Continue: Turkish officials have expressed interest in the soonest resumption of supplies to Russia of fruits and vegetables. In addition, it is not a secret that many officials in Russia have interpreted the anti-sanctions is somewhat broader than that envisaged by the relevant resolutions of the government. The result of this “expansion” approach was the disappearance from the Russian counters not only Turkish tomatoes, but whole groups of the goods with the label “Made in Turkey”, the 24th of November last year, simultaneously turned into a brand.

Urgent shift to alternative foreign suppliers or otherwise has taken place. Somewhere the shelves were empty, somewhere the range was reduced, but, in General, the first eight months of the crisis, the hole was patched. This gave an opportunity for Putin not overly encouraging guests to St. Petersburg Turks, indicating that niches are filled and, in General, “a Holy place is never empty”. Of course, the transition to new corridors of delivery was not free, and as always, all paid for by the end consumer. The prices of products in Russian stores went up steadily…

So, today or tomorrow the Turks will return and join the struggle for a place under the Russian sun. The curve of “demand-offer” from the course basic Economics reminds me that in addition to extending the range and prices in the shops should be reduced. The more that Turkey in many segments do the optimal supplier from the point of view of the ratio “price/quality”. The question is not idle, since the violation of the objective laws of Economics Russia is to be found.

This year Russian tourists to Turkish resorts with their know-how — all-inclusive — of course, will not allow. As water turns into wine, and today tens of thousands of compatriots for one remaining month of the tourist season will not turn back pre-crisis 3-4 million. Hoteliers of Turkey is fully aware, so now, demonstrating the instructive vision, begin to prepare for the 2017, 2018 and even 2019.

So this year the black sea resorts of Russia, including the Crimea, in the absence of a strong competitor, was given carte Blanche. And we hope that the respite will allow them to tighten their quality and prices so that when the Turks will again come into play, the visitors consisted not only of the “vacationers Willy-nilly”, but to make a free, informed, so to speak, the choice.

These arguments may look like a detail in the background voiced by Putin and Erdogan’s intentions as soon as possible to return to pre-crisis level of trade and economic relations with trade turnover, which reached at the peak of $ 35 billion. For comparison, in 2015, it was 24 billion, and in the first half of 2016 8.5 billion.

Then I could reveal the secret, saying that for Russian exporters with the onset of the crisis in relations with Turkey nothing has changed. After all, Turkey has not taken any retaliatory sanctions either against Russian gas or Russian oil.

However, the export of our energy resources in Turkey has been steadily declining, if in round figures: 2012 — 19 billion in 2013 is 17 billion, in 2014 — 16.5 billion, 2015 — $ 13 billion and, finally, 6 months of 2016 to 4 billion, in sharp contrast to the steady growth of the Turkish economy, requiring more and more energy.

But this fall, the collapse of world oil prices and, consequently, their associated long-term agreements, the prices on “blue fuel”. Also we cannot ignore Turkey’s attempts to diversify its sources of supply, efforts to transition to local energy as possible in a resource poor country. Hence, the clear position of the Turkish side about the fact that more than one thread “Turkish stream” they do not…

The strategic goal for the withdrawal of Russian-Turkish trade turnover to “orbital height” 100 billion dollars, in principle, could be left without much attention. Whoever is even slightly acquainted with the habits of the current Turkish government knows that its bread no feed, but let every foreign trip to mark new heights three times, and even better in five, exceeding current numbers.

Well here in the end of it? Just played up Russian Turkish President, as the resource content from the domestic exporters is not something that is under 100, and even under half the number there and in the coming years is not expected. And beyond oil, gas, coal, metal, and several positions on our economic interests in Turkey are minimal. And not because the Turkish markets are closed to Russia. After all, Turkey has a liberal economy, come to compete and sell. Here only the Russian manufacturers, for the most part, not ready to enter the highly competitive markets, one of which, no doubt, is Turkey.

Adopted by Russia in the framework of trade wars with the West the policy of import substitution, of course, correct. Just do not forget that import substitution is only one of the intermediate steps on the evolutionary ladder of economic development, and the “arrival station” to be considered as well, can not. The same Turkey this subject for a closed years of commercials in the seventies of the last century, and in the eighties already had begun to create a competitive on international markets, export-oriented economy. Something happened, something no, but a huge step forward the country has made.

So a key challenge for relations with Turkey at this stage, in addition to the direct and tangible economic benefits, should be considered a meticulous study of liberal reforms, which allowed Turkish manufacturers to become in some segments is highly competitive on the world stage. The experience of Turkey, of course, a number of other successfully developing countries, coupled with the remaining scientific and technical potential of Russia is of great importance for the exit of our country from the difficult economic situation in which it resides. And against the background of attempts to solve this global challenge and earning the cooperation of money for a leaky budget “here and now”, what’s the difference what kind of relationship we’re going to have with Turkey in the coming years — “situational” or “strategic”? Isn’t that right?

Relations between Russia and Turkey. Chronicle of events

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