Erdogan Rekindles Russian Ties as Putin Eyes Turkey Investment

EghtesadOnline: Turkish President Recep Tayyip Erdogan and his Russian counterpart Vladimir Putin agreed to deepen economic cooperation as they seek to restore ties that soured after a deadly encounter between their air forces last year.

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10 August 2016

In their first meeting since Turkey shot down a Russian warplane near its border with Syria, the two leaders discussed joint initiatives, including a long contemplated pipeline that would carry Russian gas to Turkey and possibly to Europe. They also considered a shared investment fund to finance projects in third countries, according to Bloomberg.

While the patch-up began before last month’s attempted coup in Turkey, the trip has since gained in significance, and is Erdogan’s chance “to show Turkish society that he’s not isolated,” said Ozgur Unluhisarcikli, director of the German Marshall Fund of the U.S. in Ankara. Erdogan is also demanding the U.S. extradite Fethullah Gulen, the preacher he blames for the military uprising, and can use the meeting with Putin to send a message to Washington, he said.

“That unfortunate incident on November 24 cast a black shadow on our relationship, which was good and efficient,” Erdogan said at a news conference with Putin in St. Petersburg, the Russian leader’s home town. “Both sides have the determination and will to restore bilateral ties to their former levels and even improve them.”

Putin, who once called Turkey’s downing of the Russian jet a “stab in the back” and imposed a series of punitive sanctions, said after their first meeting that the “logic of mutual respect” has shaped bilateral ties.

Gulen’s “terrorist organization and the powers behind it” have tried to undermine Turkey’s ties with Russia, Erdogan said. Following a failed a coup attempt targeting his administration last month, he accused Gulen’s followers of having masterminded the failed putsch and ordered a massive purge of the military that included the formal arrest of the Turkish pilots involved in the downing of the Russian jet.

‘Big Goals’

Turkey is chasing “big goals” in its rapprochement with Russia, including the establishment of a joint investment fund, Erdogan said. The fund, whose size wasn’t announced, would allow Turkey and Russia to “do business” in both countries and elsewhere, Turkish Economy Minister Nihat Zeybekci said.

Turkish Stream, a pipeline designed to carry Russian gas to Turkey and possibly to European markets beyond, is “one of the most important steps” to be taken jointly, Erdogan said. Russia in December shelved talks on the planned link, with Gazprom PJSC, the world’s largest gas exporter, saying the route was still possible if political relations improved.

The two leaders’ agenda included the fight against terrorism and the Syrian crisis, Erdogan’s spokesman Ibrahim Kalin said in a recent interview with the TASS newswire, according to his office. Kremlin foreign policy aide Yuri Ushakov told reporters last week that Russia expects to gradually lift sanctions on Turkey and hopes that the Turkish position on Syria would become “more constructive.”

Erdogan tried to avoid making elaborate comments on Syria, where Turkey and Russia are on opposing sides. During a news conference following a long discussion of the civil war, he avoided the subject and instead talked in detail about joint initiatives intended to deepen economic integration between Turkey and Russia.

‘Common Goal’

“A democratic transformation can only be reached through democratic means,” said Putin, who has turned the war in Syrian President Bashar al-Assad’s favor since deploying Russian planes to support government forces. Russia and Turkey “have a common goal of resolving the Syrian crisis,” he said.

Russia’s intervention in Syria has posed a major challenge for nations like Turkey that have backed rebel forces in the conflict and insist Assad must stand down as part of any settlement. Activists monitoring the war say Turkey, which borders Syria, hasslowed arms shipments to rebels since the July 15 coup attempt, signaling a possible strategic rethink.

Turkey may adopt a “low-profile” stance on Syria and move “closer to the idea of a negotiated settlement where Assad is in office at the beginning of the process but is not in office at the end of it,” Unluhisarcikli said.

Tourist Slump

In an interview broadcast by Russian state television on Monday, Erdogan called Assad a “killer” who shouldn’t be supported. His spokesman Kalin told TASS that “in cooperation with Russia, we would like to facilitate a political transition in Syria as soon as possible.”

Russian sanctions on Turkey included a ban on charter flights taking Russian holidaymakers to Turkish beaches. That led to a 93 percent slump in Russian visitors in June compared to the same month in 2015. Turkey’s exports to Russia have also dropped, falling an annual 63 percent in June.

The ban on agricultural imports from Turkey, a major blow to Turkish farmers, may be lifted by the end of the year as Russia ensures products are in compliance with its regulations, Economy Minister Alexei Ulyukayev told reporters after the two presidents met.

Zeybekci, the Turkish minister of economy, said Russia’s intention to restore economic ties was evident at the meetings, citing a common interest in completing the Akkuyu nuclear power plant, a project that’s being implemented by Russia’s Rosatom on Turkey’s Mediterranean coast. The project would be given the status of a strategic investment, qualifying for special incentives, Erdogan said.