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Russia, Turkey Launch New Economic ‘Roadmap’
Strategic Culture Foundation (RSS)

The Putin-Erdogan meeting in Sochi has rapidly accelerated Russian-Turkish economic initiatives and financial ties. These include bypassing western sanctions, integrating money transfers, and trading outside the dollar.

By MK BHADRAKUMAR

In inter-state relations, the question is always one of balance and political opportunity. Statesmanship lies in striking the balance and seizing the opportunity thereof.

Russian President Vladimir Putin’s 4-hour meeting with Turkish President Recep Tayyip Erdogan in Sochi on Friday becomes an outstanding example of how two powers who have rivaled each other in history can still craft a common destiny by balancing their interests and create new opportunities to navigate their way forward in an uncertain world.

It is seldom that the outcome of a high-level working visit can be foretold with absolute certainty. Yet, that was what Erdogan did as he headed for Sochi. He said, “I believe that (today’s meeting) will open a whole different page in Turkish-Russian relations.”

The agenda of the Sochi meeting was based on a message Putin had transmitted to Erdogan via the Russian Deputy Prime Minister Aleksey Overchuk, who visited Ankara on 14 June. Overchuk is a politician who is more of a technocrat in economic management. Indeed, the Turkish president happily received him.

Needs-based relationship

From Putin’s side, Russia has an acute necessity today to open up trade and economic channels to mitigate the west’s barrage of sanctions, while, from Erdogan’s side, it is a top priority to generate ballast for the Turkish economy to lift it out of its crisis.

Equally, Russia and Turkiye are sailing in the same boat – they need to generate fresh resources without being subject to western sanctions in the current international environment where Moscow and NATO are confronting each other. From the Russian viewpoint, the relationship with Turkiye has become highly consequential, since it is both a NATO country and a Black Sea power.

Importantly, Erdogan’s agility and stamina to project strategic autonomy and pursue independent foreign policies is well-known to Moscow, as evident in the collaboration with Russia that he pioneered: the $20 billion Akkuyu nuclear power plant which Rosatom will complete by next year (to supply 10 percent of Turkiye’s energy needs), and the S-400 missile defense system purchase that Ankara clinched while defying Washington’s diktat and sanctions.

Putin’s proposal, which Overchuk presented to Erdogan, detailed a road map to circumvent the US and EU sanctions by finding trade routes outside the channels of the American banking system that would have a “win-win” outcome by way of generating cash flow for both economies.

Bypassing the dollar… and US sanctions

Following his talks with Putin in Sochi on Friday, Erdogan revealed to the Turkish journalists accompanying him on the plane that bilateral trade with Russia shall now be carried out partially in rubles and lira – instead of dollars – and that the Central Bank is working on the arrangement.

He further disclosed that five Turkish banks are preparing to work with the Russian credit card system Mir (which will make it easier for Russian nationals, especially tourists, to spend money in Turkiye.)

Russian Deputy Prime Minister Aleksander Novak, who is also the co-chairman of the joint economic commission with Turkiye, signed an agreement on Friday with the Minister of Commerce Mehmet Mus providing for Ankara to purchase natural gas from Russia “partially” in rubles — n...

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