It is always a question of balance and political opportunity in interstate relations. Finding a balance and taking advantage of that balance are the hallmarks of a statesman.
On Friday, August 5, Turkish President Recep Tayyip Erdogan and his Russian counterpart Vladimir Putin had a one-on-one discussion for about four hours in the Russian president’s summer house on the banks of the Black Sea.
The Turkish president declared, “Today, of course, the eyes of the whole world are turned toward Sochi,”
President Putin congratulated his host at the start of the discussions for negotiating and carrying out the grain agreement, which was overseen from Istanbul by representatives from Ukraine, Russia, Turkiye, and the United Nations.
The conference on Friday stands as a shining example of how even historically rivalling nations may work together to forge a common destiny by compromising on their respective priorities and opening up new paths for themselves in an otherwise uncertain environment.
Following the meeting, the two leaders released a joint statement in which they stated unequivocally that they would match the other side’s expectations in the areas of economics and energy.
The statement made no direct reference to either Russia’s military campaign in Ukraine or Turkiye’s possible new offensive against Kurdish rebels in Syria.
The parties confirmed that they attach considerable importance to progressing the political process in Syria, but the statement said so in oblique language.
Marriage of convenience?
Turkiye is positioning itself as a go-between for Russia and the West as the conflict in Ukraine continues. Ankara may be able to advance some of its geopolitical objectives in the Black Sea region, the Middle East, and even the South Caucasus with such an approach to international relations.
Erdogan reportedly tried to seek approval from Russia and Iran to undertake a “special military operation” in northern Syria at their meeting just 17 days prior to their summit in Sochi. The agenda in Sochi once again included the war-torn country.
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Both Putin and Erdogan see the need to produce ballast for their respective economies in order to pull their countries out of crises; for Russia, opening trade and economic channels to lessen the west’s bombardment of sanctions is a primary goal.
Additionally, Russia and Turkiye share a common goal: in the current geopolitical climate, when Moscow and NATO are at odds, both countries must find ways to generate new resources without incurring western sanctions. Turkiye is a NATO member and a major force in the Black Sea, making its relationship with Russia increasingly important.
Moscow knows that Erdogan has the flexibility and courage to show strategic autonomy in his foreign policy. This is clear in the ways he has worked with Russia: he started the $20 billion Akkuyu nuclear power plant, which Rosatom will finish by next year, and the S-400 missile defence system purchase, which Ankara got despite Washington’s repeated threats.
Furthermore, the plan included in Putin’s proposal, which Overchuk gave to Erdogan, outlined how to get around US and EU sanctions by locating trade avenues outside the American banking system that would result in a “win-win” situation by providing cash flow for both countries.
Both the countries want to shun dollar in their trade
The geopolitical targets of America are getting ready to defend themselves from dollar hegemony. There are currently procedures and initiatives in place to use national currencies rather than the dollar in international trade. These actions have gained traction.
Iran, Russia, China, and Turkiye are just a few of the nations attempting to find ways to deal with other nations without using the dollar. China and Russia have started a number of initiatives, such as SWIFT-like cross-border interbank payment networks. In various regional and bilateral agreements where they participate, both have raised their gold holdings to support their national currencies and started national currency swap agreements.
This is just one more step emerging economies have made to demonstrate their role in the global economy. The BRICS nations seem devoted to conducting business in local currency.
Erdogan informed the Turkish journalists travelling with him on the plane after his Friday meeting with Putin in Sochi that bilateral trade with Russia will henceforth be conducted in part in rubles and lira – rather than dollars – and that the Central Bank are working on ways to ensure that it happens.
He also revealed that five Turkish banks are getting ready to collaborate with the Russian credit card system Mir, making it simpler for Russian citizens, particularly tourists, to make purchases in Turkiye.
Aleksander Novak, the deputy prime minister of Russia and co-chairman of the joint economic commission with Turkiye, and Mehmet Mus, the minister of commerce, signed a contract allowing Ankara to pay for Russian natural gas “partially” in rubles rather than dollars on Friday.
There has been no disclosure of the proportion of gas agreement payments that will be made in rubles by either party. However, this action pits Erdogan against Washington. Russia may avoid dollar payments and the penalties linked to such payments, and the currency will enhance as a result of Turkiye’s payments in rubles.
Economic cooperation is strengthening
Also, Russia has signalled its desire to expand the number of free trade zones in Turkiye, particularly along the Black Sea coast, in the hopes of attracting additional investment from Russian companies.
Since Dubai is one of the world’s commerce centres and financial technology hubs, it is attracting a big portion of the Russian money that is now in circulation but is not sanctioned.
Given its proximity to Russia and Europe in terms of production and export opportunities, and its history of withstanding potential U.S. pressure, it is no surprise that Russian businesses like Turkiye as compared to the United Arab Emirates.
Erdogan thinks this would be a fantastic concept, both for the advancement of the underdeveloped Black Sea regions and for the overall boost it may provide to Turkiye’s economy, not to mention its electoral appeal in 2023 presidential elections.
Putin, without a doubt, has struck a deal with Erdogan that will drastically alter the nature of relations between Russia and Turkiye.
Putin has disrupted western sanctions by opening a door for Russia to maintain its broad business connections with the world market through Turkiye.
On the other hand, Erdogan sees a window of opportunity to reverse the economic downturn in his country by capitalising on ties to Russia and presenting himself as a successful candidate in the upcoming election.
Putin is benefiting from the time and effort he has put into developing Erdogan into a trusted partner over the past decade. Russia now sees Turkiye as a vital partner, therefore the investment in hosting the summit in Sochi has paid huge dividends.
Erdogan is both a villain and a hero to the west
Western capitals are showing signs of concern. The West has a hard time getting along with Erdogan, but it also can not do without Turkiye.
As the latest grain agreement demonstrates, Erdogan’s diplomacy may be disruptive and unpredictable, but there is also a hidden love for Turkiye’s strong regional ties, which give it political gravitas.
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The Turkish president, Erdogan, is both a villian and a hero for elevating the country’s offenses to a new level, but there is no denying Turkiye’s strategic importance to NATO. That is to say, Turkiye is an ally that is getting more and more annoying to have and almost impossible to do without.
For the Western Alliance, Erdogan’s refusal to put sanctions on Russia has been the cruellest blow of all. Despite providing a vital lifeline to struggling Russia, it also provides Erdogan with a platform from which to revive the Turkish economy and win reelection in 2023.