Turkey-Russia Spat: What Does it Mean in the Long Term?

putin-and-turkeyBy MUSTAFA GURBUZ and VLADIMIR FEDORENKO

Turkey’s spat with Russia is not a spontaneous act. The recent tensions will hurt coalition efforts against the Islamic State (ISIS, Daesh), delaying a diplomatic solution in Syria. By shooting down a Russian military jet, Turkey shows its strong determination to secure the Azaz-Jarablus line along its southern border. Russia, in return, will be forcefully active in northern Syria to punish Turkey, getting more vocal about Turkey’s murky relations with ISIS, and more willing to support the Kurdish YPG expansion into Azaz-Jarablus. As economic ties between Turkey and Russia is strongly symbiotic, how the rift over Syria will influence energy geopolitics is to be watched closely.

The opposing narratives of Turkish and Russian authorities only tell part of the truth: Russia conducts provocative operations along Turkey’s borders and Turkey asserts hawkish determination in supporting the Syrian opposition. Skirmishes of warplanes are not rare and certainly not the first time by Russian planes. Russia’s bombing of Turkmen forces appears most frequent in the Turkish media, and yet, not seen a convincing reason even among Turks. Therefore, Turkey’s response needs to be read in a larger picture.

Putin’s remarks on being “stabbed in the back” give a false impression that Turkey and Russia have been close allies in their fight against ISIS. It is merely a Putinesque way of legitimizing Russia’s role in Syria, if not an utmost illusion.

Russia’s involvement in the Syrian civil war was a direct threat to Turkey’s interests. Turkey has long proposed a no-fly zone in northern Syria both to facilitate its support to the anti-Assad forces and to stop YPG’s expansion. Russia saved the Assad regime at the most critical time by crushing the Syrian opposition, and thus, got directly at odds with Turkey.

Russia did not only crackdown on the opposition—which made Turks most frustrated—but also meddled with the Kurds in Syria, seeking cooperation with the YPG, which is considered as a terrorist organization by Turkey due to its ties with Kurdistan Workers’ Party (PKK).

Turkey’s hawkish response, thus, is an outcome of long tensions in the region. Turkey has been insisting on establishment of a “no fly zone” by the coalition. For Ankara, such a zone would provide shelter for refugees, prevent Kurdish expansion, and train the Syrian opposition. Although the Turks do not expect their efforts will make a no-fly zone likely, they continue to show their determination in securing the Azaz-Jarablus line to all actors in the region, including the US-backed Kurdish YPG forces. The AKP’s electoral victory in November also gave a strong hand to Erdogan at the G-20 meeting hosted in Turkey. The Turkish government, perhaps wrongly so, believes that NATO would respect the Azaz-Jarablus line as Turkey’s turf.

But recent developments also raise questions about the civil-military dynamics in Turkish politics. Prime Minister Ahmet Davutoglu highlighted that it was his own order to apply the rules of engagement (read: not the Turkish military). Only a few days after the crisis, two generals and a retired colonel were arrested on charges of espionage and terrorism for their role in the interception in 2014 of trucks carrying arms to Syria. As Halil Karaveli observes, “Mr. Erdogan’s declining fortunes have thus restored the power of the military. His weakness made him turn to it because, after the June election, the Kurdish movement stood in the way of his quest to rule by diktat.” From this perspective, the crisis with Russia may well be triggered by the military officers who increasingly exploit Turkey’s diminishing rule of law under Erdogan’s relentless authoritarianism.

What will future bring?
Russia has already increased attacks on Turkey’s borders, and now strongly cooperates with the Kurdish YPG against the Syrian opposition that is backed by Turkey. The YPG is trying to capture Azaz from the opposition, while fighting against ISIS in Jarablus area. After the YPG victory in Tal Abyad thanks to US support, Turkey declared Jarablus its red line to stop the Kurdish expansion. So far, the United States has taken the Turks’ repeated warnings seriously, but this time around YPG receiving support from Russia in the Jarablus region is a serious challenge—not only for the Turks but also American policy makers. If the US fails to convince the YPG to focus on ISIS instead of a westward expansion, the coalition may have further cracks to the damage of already fragile Turkish-American relations.

Economic Aspects and Politics of Energy
Turkey and Russia have considerable partnership in the energy sector. With the annual amount of 27 billion cubic meters (bcm) Turkey is the second largest importer of Russian natural gas after Germany. Through Blue Stream and Trans-Balkan pipelines Turkey imports almost 70 percent of its annual natural gas consumption from Russia.

Here is a list of economic issues that could be jeopardized as an outcome of the current crisis.

Turkish Stream Project: On December 1, 2014 Russian President Putin proposed the construction of new 63-bcm pipeline Turkish Stream, which would replace South Stream pipeline that was earlier rerouted from Bulgaria to Turkey due to anti-Russian sanctions and then abandoned completely. Ankara welcomed the opportunity to become a regional energy hub with the new Turkish Stream pipeline (planned to run from Russia underneath the Black Sea through the Turkish East Thrace to Greece, supplying 16 bcm to Turkey and 47 bcm to the Turkish-Greek border). However, current geopolitical confrontation, the drop in oil prices, and growing LNG share in European markets are going to diminish the attractiveness of the Turkish South stream project.

Akkuyu Nuclear Project: Another Turkish and Russian mutual project being jeopardized will be Akkuyu Nuclear power plant (NPP). The cost of construction of the 4,800 MW plant is $22 billion and almost entirely financed by Russia. The Construction of Akkuyu started in April 2015 and it is expected to launch the first out of the four power blocks in 2020. The Akkuyu power plant—which is to be Turkey’s first NPP with annual contribution of 35 billion kWh—would constitute about 14.6 % of the Turkish national electricity production of 239,3 billion kWh. For Russia, the return on investment is about 18 years; therefore, Kremlin may consider delaying or even canceling the construction if the confrontation continues.

Russian Gas and Turkey: While the future of Turkish Stream Project and Akkuyu NPP could be at risk, it is unlikely that current supplies of natural gas from Russia are going to be cut. The idea that Russia controls Turkey’s energy supplies causes enough headaches for Ankara. Turkey’s energy reserves would only suffice for a month and Ankara has no other feasible alternative to resolve an energy dilemma in the short run. However, for the Russian economy—which already suffers hardships due to the Western sanctions, decrease in oil prices and gradual lose of share in natural gas market—selling gas to Turkey is extremely important. Therefore, if Moscow overstretches its energy policy towards Turkey, it will put Ankara in a very difficult position, but will also become extremely costly for Russia itself in the long run. Additionally, even before warplane accident the price of the natural gas resources was a matter of dispute between Russia and Turkey. Turkey even applied to Arbitration Institute of the Stockholm Chamber of Commerce to get 10.25 percent discount on Russian natural gas. If the discount is applied, Turkey could gain about $1 billion annually.

Farewell to the Turkish Coast: Tourism is a critical sector of the Turkish economy that provides about two million jobs in Turkey. Russian tourists are second largest group after Germans visiting Turkey. In the first nine months of 2015, more than three million Russians visited Turkey. Russian tourists contributed about $3.5 – 4 billion to the total annual revenue of Turkish tourism, which is $34.3 billion. One of Russia’s first responses after its downed jet was Lavrov’s announcement of no visits Turkey for tourism or any other reasons. Following his announcement, Russian tourism companies stopped selling vacation packages to Turkey and charter air flights from Russia to Turkey were suspended.

Abandoning Visa-Free Regime: Moreover, on November 27 Russia announced that from January 1, 2016 the visa-free regime with Turkey will be suspended. While it is not clear whether this cancellation of visa-free would affect only Russian citizens or Turkish citizens (or both), such a development will create significant difficulties for millions of tourists and businessmen. Since the warplane crisis many Turkish businessmen, workers, and truck drivers have encountered problems at Russian entry points.

Trade Ties: Trade volume between Turkey and Russian in 2014 was about $31 billion. Taking into account the service sector, this number is about $44 billion. For instance, 4 percent of all food stuff imported to Russia comes from Turkey and Turkish vegetables constitute 20 percent of all agricultural imports to Russia. As part of sanctions package against Turkey, Russia is planning restrictions on imports of Turkish food stuff, including vegetables and fruits. Russia is searching to find new suppliers of agricultural products. The Minister of Agriculture Alexander Tkachyov claimed that it is possible to substitute Turkish products in a week. Turkey may face difficulties in finding new markets in a turbulent Middle East or increase its export volumes to European markets.

Originally published at Rudaw (December 5, 2015)

 

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