Grain Deal, Gas Hub & De-Dollarization: What Signal Do Putin-Erdogan Talks Send to West?
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Russian President Vladimir Putin and his Turkish counterpart Recep Tayyip Erdogan held bilateral talks on Monday, touching upon energy and food security, as well as major regional and geopolitical issues.
Vladimir Putin and Recep Tayyip Erdogan met in Sochi on September 4 to discuss the creation of a gas hub in Turkiye, mutual trade, the use of national currencies, the Black Sea Grain Deal, and the Ukraine conflict, among other issues.
"It was very important that the sides have this first person to person meeting since Erdogan’s reelection," Gilbert Doctorow, an international relations and Russian affairs analyst. "The arrival of Erdogan with a business delegation and the talk of continuing major projects including the gas hub and a second nuclear reactor is all by itself important."
Monday's summit clearly demonstrated that Russia is a constructive global player who is willing to normalize the situation in the world, as per Dmitry Evstafiev, political scientist and professor at the Higher School of Economics (HSE) University.
"The meaning of today's meeting is that relations between Russia and Turkiye have been restored at the highest political level," Evstafiev told Sputnik. "This is very important in today's geopolitical environment, when we are witnessing a crisis in relations at the highest level of the political leaders of most countries. Today's talks have shown that, despite all odds, relations between the Turkish president and the Russian supreme commander-in-chief are preserved. This is certainly very important, it is very positive."
4 September 2023, 02:45 GMT
Will Russia and Turkiye Revive Grain Deal?
During the meeting, Putin and Erdogan discussed the Black Sea Grain Deal, which was suspended by Russia on July 17 after the West failed to implement its part of the agreement. The US and EU failed to lift or ease sanctions preventing Russian shipments of grain and fertilizers in accordance with the deal.
During the press conference, Putin stated, "Russia will be ready to revive the grain deal and will do it immediately when all agreements are implemented."
"It seems to me that what happened today with regard to the grain deal is fundamentally important," said Evstafiev. "Russia has clearly stated that in relations with its partners in the grain deal, in gas and on all other issues, it is shifting from the principle of unconditional trust in partners to the principle of at least partial 'prepayment.' That is, something must be done that will guarantee the interests of Russia."
The revival of the grain deal depends on Washington’s approach to the Ukraine conflict more so than Turkiye’s mediation, suggested Dr. Ali Demirdas, political analyst and a contributor to The National Interest.
"And the Biden administration’s approach to the Ukrainian crisis is driven largely by the perceived urgency that it desperately needs to score a major ‘victory’ against Russia. In order to do that, Washington has already been pouring billions upon billions to Zelensky only to pour more because the oft-relied Ukrainian counteroffensive has stalled and even been rolled back," Demirdas told Sputnik.
Demirdas noted that Biden’s popularity is dwindling and it will slide even further if Russia prevails in the grain deal dispute. Therefore, the expert expects Team Biden to try to derail any attempts to restore the agreement or to lift sanctions on Russia.
For his part, Doctorow believes that the ball is in the UN's court right now.
"Actually the ball is in the court of the United Nations," he said. "[Secretary-General of the United Nations Antonio] Guterres is apparently doing what he can to get Western agreement to restore the Russian Agricultural Bank that handles grain sales back into SWIFT and also to address other Russian complaints over unfulfilled promises. We shall see in the coming days if this works."
While the West is trying to present Russia's decision to exit the deal as hurting the Global South, Moscow has repeatedly stressed that as a result of the grain agreement, the poorest developing countries only got a minuscule part of Ukraine food exports, while the lion's share was taken by the EU. Furthermore, President Putin asserted to the countries of the Global South that Russia has the capacity to replace Ukraine's agricultural products on the global market, and offered grain free of charge for countries in need.
How is Russo-Turkish Gas Hub Going?
The Russo-Turkish gas hub aimed at ensuring energy security and stability in Europe was also discussed by Putin and Erdogan. According to the Russian president, the negotiations will soon be finalized and the hub will take shape. For his part, the Turkish leader emphasized that the project is of utmost importance for his country.
In terms of financial benefits, the proposed gas hub is the future of Turkiye, as per Evstafiev. The expert believes that the Ukrainian gas transport corridor is living out its last months – maximum a year and a half. Given that the Nord Stream pipelines have been destroyed, the new Turkish hub may become the main gas route to Europe.
"A Russian hub in Turkiye would increase Ankara's role and Erdogan's prestige. The economic and financial repercussions would be a great help for the European economy, in particular for the German and Italian ones," Tiberio Graziani, chairman at Vision & Global Trends - International Institute for Global Analyses, told Sputnik.
Demirdas shares Graziani's stance with regard to the hub's significance to Europe:
"Europe, especially Germany, is dying to have access to cheap gas especially after the sabotage on the Nord Stream," he said. "The repercussions of this are so great that because Germany has lost cheap Russian gas, its economy and European Union in general, has plunged into a recession. Therefore they will surely welcome access to Russian gas via Turkiye."
Will Russia and Turkiye Continue De-Dollarization?
The issue of financial security was considered by the leaders of Russia and Turkiye alongside matters of food and energy security.
Russia and its partners have been shifting to local currencies for quite a while; however, Washington's weaponization of the US dollar and freezing of Russia's Central Bank assets became a wake-up call for global players. During the 15th BRICS Summit, the leaders of Brazil, Russia, India, China, and South Africa hailed the shift to national currencies and domestic payment systems to shield their economies from sanctions and financial voluntarism of the West.
After Monday's meeting, Putin announced that Russia and Turkiye were shifting away from dollars and euros in their bilateral settlements.
"At the moment there are many countries – including Turkiye – which are interested in the de-dollarization process," Graziani said. "The important fact is that most of these countries make up the Global South and are countries on the rise."
"These will be more or less manipulation-proof payments," noted Evstafiev, referring to the increased percentage of trade deals in national currencies between Russia and Turkiye. "Of course, the de-dollarization of financial relations between Russia and Turkiye, especially for such goods as gas, grain, energy in general, nuclear fuel for nuclear power plants in Turkiye, [is important]; they, of course, should be removed from the dollar circuit. But there is a nuance – in which circuit will they be? If in the contour of the Turkish lira, this, in my opinion, is not yet an option. The contour of the ruble is a more stable thing."
19 August 2023, 19:28 GMT
Russia and Turkiye Interested in Syria Peace Process
Turkiye and Russia have yet another issue of mutual interest, which is the peace settlement in Syria. Moscow and Ankara have done a lot to resolve the situation in Syria, and the Astana platform should be strengthened, President Putin said at talks with Erdogan.
According to Evstafiev, Ankara is interested in bringing the still simmering hostilities to naught in Syria. Currently, sporadic armed clashes in various parts of the Mideast state are ongoing, and "this is bad for Erdogan, because it undermines his ability to maintain a presence in extremely politically sensitive regions," the expert underscored.
Therefore, the Turkish leadership is likely to agree on the necessity: first, to restore the spatial territorial sovereignty of official power in Damascus; second, to recognize President Bashar al-Assad as the leader of the country, and on this basis to start a new cycle of political relations; third, to withdraw from Syria those foreign troops that maintained their presence there illegally, according to Evstafiev.
"If stabilization is not achieved in Syria, and if there is no understanding of common interest, it will always be a point of contention between Moscow and Ankara, which will be played by third forces, and not only the United States of America," the expert suggested.
According to Evstafiev, the Putin-Erdogan talks have sent a strong message to the West. However, the expert doesn't rule out that some issues will be used by Ankara as a bargaining chip in its long-term debates with the US and Europe on issues sensitive to Turkiye.
4 September 2023, 09:41 GMT
