Murat Yetkin:  Putin and Erdoğan’s joined destiny

The joint statement published by President Tayyip Erdoğan and Russian President Tayyip Erdoğan, after the 4-hour meeting in Sochi on August 5, indicates an effort of two leaders to overcome a critical stage together outside the US’s gravity.


For Putin, that critical stage is solving the cash flow problem, finding a way to circumvent the US and EU sanctions in order to be able to continue the invasion of Ukraine.



For Erdogan, the possibility of losing power if he goes to the elections in 2023 without alleviating the economic crisis. It also needs external resources.


If Türkiye and Russia can find trade routes outside the channels of the American banking system, this can both relieve Putin economically without being subject to sanctions and provide Erdogan with fresh resources on the way to the elections. Erdogan’s victory in the election allows this process to continue, which is also beneficial for Russia.

This equation, which made the meeting in Sochi possible, was first introduced to Erdogan by Russian Deputy Prime Minister Aleksey Overchuk, who came to Ankara on 14 June with Putin’s private message.


We’re a little tight, what if we pay in 10 months?

As a matter of fact, telling the journalists on his return plane from Sochi that bilateral trade should be carried out partially in rubles and lira instead of dollars, Erdogan gave special emphasis to the heads of the Central Bank. He said that five Turkish banks are also preparing to work with the Russian credit card system Mir, which will make it easier for Russian tourists to spend money in Türkiye.


After the joint statement, Deputy Chairman of the Government Aleksander Novak, who had signed an agreement with the Minister of Commerce Mehmet Muş, broke the first news about the reconciliation: Türkiye could buy natural gas “partially” in rubles, not dollars.


Details have not been disclosed yet, but backstage, it is said that there can also be some facilitation for Türkiye in these payments, at least until the 2023 elections. If this situation leads to a decrease in natural gas prices and fuel prices as we enter the winter months, it will be to the advantage of the people. It would be like an election gift for Erdoğan who promised the public an economic relief in February or March.


The fertilizer detail in the joint statement is also important. Russia is the world’s number one exporter of fertilizers, and rising fertilizer prices in Türkiye are part of the problem in agriculture. It is also within possibility that some of the factories that export fertilizers from Russia to Europe might move to Türkiye and continue their activities from Türkiye.


And also, there is an issue of oligarch investments.


Competing with the UAE for oligarch investments

Interesting topics that I learned were discussed in Sochi and the preparatory meetings for Sochi was the demand of the Russians to establish more free trade zones in Türkiye. The Russians imply more investment if more free trade zones are established, especially on the Black Sea coasts.


Behind this scene, there is the competition between Türkiye and the United Arab Emirates (UAE) over where and how the Russian money in circulation in the world can be kept and used. The advantage of Dubai here is that it is already one of the world’s trade centers and is advanced in FinTech. For this reason, the Russian investors, most of whom are still not sanctioned, are in the UAE, whether they are oligarchs or not.


Türkiye’s advantage over the Russians is that it is geographically close to Russia and Europe (in terms of production and export opportunities) and that despite being a NATO member, it can resist possible US pressure much more than the UAE.




Turkish Economy Won’t Survive The Winter

The Russians still want a Free Zone declaration to feel safe. A source close to the developments said that Erdogan responded to this request, saying “It’s easy”.


Ukrainian peace and grain

All these differences of opinion do not affect the joint destiny of Erdogan and Putin. For example, Türkiye continues to support Ukraine, which is under Russian attack, including the sale of military equipment and even grants.


Erdogan said that he proposed to both Ukrainian President Volodymyr Zelenski and Putin to make them meet again in Türkiye.


While the two leaders met in Sochi, the Razoni ship carrying Ukrainian corn to Lebanon was sailing between Marmaris and Rhodes. Three more ships are being prepared, the system is working in that respect. Erdogan also announced that Putin wanted him to be an intermediary for the transportation of Russian grain to the markets.


These are developments that will benefit Türkiye in the long run. On the other hand, elections in Türkiye are also a factor in this equation. Of course, Putin will want the continuation of the joint destiny with Erdogan, which has reached a new stage in Sochi.


Will the meeting in Sochi relieve Putin from the pressure of US sanctions and Erdogan from the pressure of the economic crisis towards the election? That’s the real question.


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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.