RONDELI BLOG

What issues were discussed at the Putin-Erdogan meeting?

2022 / 08 / 13

Zura Batiashvili, Research Fellow at GFSIS

On August 5, another Putin-Erdogan meeting was held in Sochi, the second such meeting in the last three weeks (the previous meeting was held on July 19 in the framework of the Russia-Iran-Turkey summit in Tehran).

The meeting was held against the background of a substantially complicated situation for Russia in the war againstUkraine, with Moscow trying to take a time-out (a temporary ceasefire agreement so as to gather forces for further offensives),and looking for ways to circumvent the imposed sanctions. Adding to this, Turkey wants to conduct a military operation in Syria and is attempting to simultaneously solve its economic challenges (80% official inflation, unemployment, devaluation of the national currency, high deficit, etc.).

What issues did Putin and Erdogan discuss in this four-hour meeting, and what should we expect in the future?

Putin-Erdogan meeting in Sochi

The Political Part of the Negotiations

Ankara remains the only powerful actor in the region that has maintained good relations with both Russia and Ukraine and thus can talk to both sides.

Russia wants to use the diplomatic opportunity of Turkey to achieve its own goals in the international arena: the war with Ukraine has come to a stage that it needs to break off war faring for a while to gather forces and prepare for new attacks. Yet, Ankara's ability to convince Ukraine to maintain the status quo and freeze the conflict is limited.

In turn, Ankara wants Moscow to give a "green light" for it to start another military operation against the pro-Kurdish YPG ("People's Protection Units", which Ankara considers to be an extension of the terrorist organization PKK - "Kurdistan Workers' Party" operating in Turkey) in northern Syria. The aforementioned would help the Turkish authorities mobilize the votes of nationalist constituents in light of the upcoming elections. Until now, Turkey has not been able to get consent for the operation from either the USA, Iran, or Russia (Turkey tried to acquire such consent from Iran and Russia at the summit held in Tehran).

Ahead of the Sochi meeting, the Kremlin urged Turkey not to "destabilize" Syria. At the same time, it indicated that Ankara needs to start a dialogue with the Assad regime. Indeed, on August 11, for the first time in many years, a conversation between the foreign ministers of Turkey and Syria took place, this considering that Turkey has not recognized the Assad regime for years and had cut off diplomatic relations with its neighbor.

In a joint statement released after the meeting, it was notedthat the two sides will work against terrorist organizations in Syria. However, there is one important point: Russia and Turkey label different organizations operating in Syria to be terroristorganizations and have made similar statements multiple timesin the past, which have never resulted in concrete results.

Before the Sochi meeting, Kremlin press speaker Dimitri Peskov announced that the conversation between the presidents would also concern military-technical cooperation. However, the subsequent joint statement did not mention anything on the matter. Russia also put the issue on the agenda before the Tehran summit, yet, the management of Baykar, the Turkish company producing "Bayraktars", was forced to issue a statement saying that they would not supply Russia with unmanned aerial vehicles, in which Russia had an interest due to the current war with Ukraine.

At the meeting, the parties also discussed issues related to the Caucasus region. It is interesting that in parallel to the Putin-Erdogan meeting, another meeting was held in Sochi between the foreign minister and the head of intelligence of Turkey, and the leader of Chechnya - Kadyrov, who had had tense relations with Ankara due to the assassinations of Chechens living in Turkey.

It is also interesting that the Putin-Erdogan meeting strangely coincided with another escalation of the Armenian-Azerbaijani conflict. Therefore, many (especially in Armenia) suspect that the parties may have reached some sort of an agreement on this issue.

The Economic Part of the Negotiations

On the economic side, the parties discussed several issues:

- Deepening of economic cooperation in areas such as trade, energy, transport, agriculture, industry, and finance – as Turkey has not joined the sanctions imposed by the West on Russia). Recently, many Russian companies have been established in Turkey, and in the first half of 2022, trade between the two countries increased by 40%. These are issues leading Ukraine and the West to suspect that Moscow may be trying to circumvent the imposed sanctions through Turkey. After the meeting, Erdogan announced that five Turkish banks had joined the Russian MIR payment system. It has also been reported that Russia wants to buy shares in the Turkish oil refining sector (factories, terminals, and reservoirs) to disguise the origin of Russian oil during its subsequent re-export to European countries. Russia also wants to open correspondent accounts for Russian banks in Turkish state banks. These are issues that, if agreed to, could result in secondary side sanctions for Turkey, which would further complicate its economic problems. Therefore, it is natural that Turkey is highly cautious about this matter;

- The Black Sea, the so-called "wheat corridor". Turkey and the countries of the Middle East are highly dependent on wheat exported from Russia and Ukraine, and, for many developingcountries, this issue is not only an economic matter but also a matter of political stability;

- Export of Russian natural gas. Ankara receives 45% of its natural gas from Russia. Ankara agreed to pay part of the total Russian gas cost in Rubles, a condition that Moscow has been demanding from the Europeans for a long time. In general, the parties have been wanting to conduct bilateral trade in national currency for a while. For Turkey, which has a significant shortage of foreign currency against the backdrop of its economic challenges, this arrangement is economically plausible, especially during the upcoming autumn-winter season. One issue they need to take into consideration, however, is that such a decision may have a political cost. It should be noted that the details of the Putin-Erdogan deal on this matter, what part will be paid in Rubles, how the payments will be made, etc., are unknown;

Akuyu nuclear power plant under construction in the Mediterranean region of Turkey

- "Rosatom" on the construction of the Akuyu nuclear power plant in Turkey, which should produce 10% of the energy needed for the country. For the construction of the plant, Russia has already transferred a substantial amount- USD 3 billion - to Turkey, and plans to transfer a total of USD 15 billion. This has helped to strengthen the Turkish Lira exchange rate. It should also be noted that with these transfers, suspicions arose that these operations might be used to circumvent the sanctions imposed on Russia.

Conclusions

Russia and Turkey continue to cooperate in many fields and remain open to dialogue. They especially need each other in the face of economic difficulties, but their cooperation has its limits and "red lines", and at the moment primarily concerns military matters. Turkey, despite cooperation with Russia, remains a member of NATO and supports Ukraine, including from a military perspective;

Economic ties and trade are a priority for both parties. However, Ankara will have to be very careful not to cross the "red lines" set by the West, which could lead to the imposition of secondary sanctions. In this regard, Ankara has a bitter experience with the Turkish state bank Halkbank, which is accused by the US ofhelping Iran to evade its own sanctions. Due to this previous experience, a substantial financial threat resembling “the sword of Damocles” has been hanging over Ankara's head for a whilenow;

It is possible that the economic situation in Turkey and Russia will worsen from autumn. Therefore, the parties may be tempted to deepen bilateral economic and trade relations;

Moscow is trying to take a time-out of the war with Ukraine and wants to use Ankara for this purpose. However, Ankara's maneuverability (degree of influence over Kyiv) is limited;

Ankara's desire to start a military operation in Syria carries many risks, both on the ground (in northern Syria) and in the international arena. However, this does not mean that Ankara cannot start the operation unilaterally, as Ankara has experience in conducting unilateral military operations in its immediate neighborhood.

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What issues were discussed at the Putin-Erdogan meeting?

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