01/07/2008 19:45
MOSCOW. (RIA Novosti political commentator Andrei Fedyashin) – Russian Foreign Minister Sergei Lavrov is to hold talks with his Turkish counterpart Ali Babacan when he visits Ankara on July 2.
He will be also received by President Abdullah Gul and Prime Minister Recep Tayyip Erdogan. Such a high-level welcome usually indicates that the host side attaches great importance to a visit, or that the trip is a prelude to a visit by the head of state. In some cases, both are true. A visit by President Dmitry Medvedev to Turkey, our major Black Sea neighbor and Russia’s special trade and economic partner, would be timely.
Russia and Turkey have many issues to discuss, apart from their routine agenda: settlement in the Middle East, Iraq, and on Cyprus; the Iranian nuclear program; the situation in the South Caucasus and Central Asia, and Kosovo. One of the major issues is trade and economic cooperation.
Trade between the two countries is booming. Last year, it was $22.5 billion, and in the first four months of this year, it soared more than 60% to reach $10.6 billion. Russian-Turkish trade in 2008 is expected to break all records of 2007. Russia accounts for a quarter of all projects built by Turkish companies abroad. Last year, they were awarded three billion dollars worth of contracts.
It is a pity, then, that the visit will be marred by the latest tourist scandal, whereby Turkish firms refused to provide accommodation for Russian tourists who had already sent them their money. But such problems are inevitable when the flow of the Russian tourists is rapidly on the rise. This sensitive issue will not be at the top of the agenda, but Mr. Lavrov will have to talk about the record of Turkish companies in fulfilling their commitments to their Russian partners. The situation here leaves much to be desired, and the problems are not confined to the tourism industry.
This year, Russia has blacklisted foreign companies that are not complying with their obligations to Russian partners, and avoiding implementation of rulings by international commercial courts of arbitration. The compilers of the blacklist have not disclosed the number of Turkish companies on their register, but it is rumored that there are dozens of them. It is rather difficult to monitor companies with a bad record because in Turkey a host of firms (legal entities) may be registered in the name of one individual. Therefore, while checking on the reliability of future partners, Russian businessmen are advised to ignore the name of the company, and to pay closer attention to its owners and managers. This will help them discard a dishonest partner.
Many Russian medium-sized businesses are reluctant to deal with Turkey because it is next to impossible for foreigners to win a suit against dishonest Turkish companies. The national courts prefer to help their compatriots. Turkish companies are also adept at the mechanism of bankruptcy to dodge the implementation of legal decisions, meaning foreigners seldom receive any money even if they do win a case in court.
Although these problems pose a real and substantial impediment to the development of partnership, Turkey and Russia have more important problems to discuss. Fundamentally, the established system of trade and economic ties has long become too narrow for Moscow and Ankara. For the last ten years it was based on the famous Blue Stream project. It is certainly unique and was well managed. It was the backbone for all other projects, and even determined our foreign policy partnership at both regional and global levels. But now it has become too small to embrace our new projects. For all the optimistic figures and facts, reliance on Blue Stream is likely to become a stumbling block to widening cooperation. Russia and Turkey have to put it on a new level.
They should expand their contacts in such major spheres as the nuclear power industry. The Atomstroyexport (Russia’s nuclear power equipment and service export monopoly) is ready to provide Turkey with a project for the construction of a nuclear power plant (NPP) that will be less expensive and more reliable than its American counterparts. Such NPPs will help Turkey to consolidate its positions at the regional energy market, especially considering Iran’s nuclear energy problems. Moscow has long been hinting to Ankara that it is best to give priority to economic expediency, especially in the energy industry.
The two countries will not be able to strip their relations of politics. But it would be sensible to thoroughly weigh all economic and political issues. Russia has long been ready for this.
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