Russian-Turkish trade and economic relations have been developing on a wide-reaching legal-contractual foundation, which includes intergovernmental agreements on cooperation in various areas of interest.
In 2008, the trade turnover between the two countries reached an unprecedented high of $33.8 billion, showing a 49% growth compared with $22.7 billion in 2007 while exceeding the volumes of $25 billion planned for 2008. Russia has grown into Turkey's most important trading partner in terms of trade turnover, surpassing Germany. Turkey is Russia's fifth largest trading partner, overtaking Japan, the United States and the UK.
The global economic crisis has affected the sales volume between Russia and Turkey, which saw a decrease of $6.7 billion, or 51%, in this year's first five months.
Russian-Turkish trade balance was in Russia's favour in 2008, totalling over $21.6 billion. Russia's exports to Turkey mostly include energy products which amount to 70%, metals and metalware accounting for 20%, while the imports are mainly machinery, equipment and transport facilities amounting to over 30%, consumer goods which total up to 13-15% and food accounting for about 15-20%. The imbalance in the amount of Turkey's exports to Russia is partly made up with the country's revenues from shuttle trade, tourism, and cash remittance from Turkish construction companies and individuals, as well as road transport services on Russia's territory, which are estimated by experts at about $6 billion.
Turkish investors are known for their dynamic activities on the Russian market, with Turkish companies operating in manufacturing household electronic appliances, construction materials, household chemicals, textile, glass and glassware, beer, as well trade, tourism and financial services. Turkish portfolio investments in Russia are worth in the region of $100 million, mostly as securities purchased by five Turkish banks operating in Russia, namely Yapi Kredi Bank Moscow, Garanti Bank Moscow, Credit Europe Bank Moscow (formerly Finansbank Moscow), Ziraatbank and DenizBank Moscow. There is also a vast amount of investments into numerous joint ventures and enterprises in Russia taken on long-term leases by Turkish companies. The overall Turkish investments in 2008 are estimated to have decreased to $3.3 billion, or by 44%, as compared to 2007.
The total Russian investments in Turkey worth $4 billion have shown a multiple growth at the end of 2005, after Alfa Group signed a $3.3 billion contract with Turkish shareholder Çukurova group for purchasing a 13.2% stake in Turkey's leading mobile phone operator Turkcell. In 2008, Russia's oil giant LUKoil bought Turkish fuel distributor Akpet, which operates jet terminals and 693 gas filling stations in Turkey, for $555 million.
Currently, the number of Turkish construction companies operating in Russia totals 150. Since the late 1980s, Turkish companies have launched over 800 projects, with contracts estimated over $20 billion and works and services worth about $12 billion. The major projects include the construction of the Sheremetyevo-3 terminal at Moscow's Sheremetyevo airport, two thermal power plants in Moscow with the capacity of 170 megawatts each and two thermal plants in the city of Surgut with the capacity of 800 megawatts each, a power generating unit at the Shatura power plant, as well as construction of buildings within the Moscow International Business Centre project.
Additional projects involve constructing a glass container manufacturing plant in the city of Novosibirsk and Krasnodar Region, with investments worth about € 200 million, a metals plant in Rostov Region, with investments totalling $130 million, a carpet and carpet ware production facility in Rostov-on-Don worth 680 million roubles ($22.2 million), and an agricultural machinery assembling plant in the Krasnodar Region.
The number of Russian contracting companies operating in Turkey is considerably less, with the total amount of works worth $400 million. The situation is expected to change with a number of joint projects being implemented, such as the construction of a metals plant in the Turkish city of Iskenderun by Russia's Magnitogorsk Iron and Steel Works and Turkey's Atakas Group with the capacity of 2.3 million tons of flat-rolled products per year and with the total amount of investments worth $1.4 billion . The plant's first unit is scheduled for launch in this year's second half, with the plant's construction works to be completed in 2010. Upon launching, the plant is expected to fully settle the flat-rolled products deficit in Turkey, experts estimate.
Russian contractor Mosmetrostroi has completed the construction of the 3km-long tunnel under the Bosphorus within the Marmaray Project, launched on May 2, 2009.
Russia's Novolipetsk Steel is seeking to start the construction of a large-scale metals plant in the city of Zonguldak, while the company Capital Partners plans a $1.5 billion project of a major tourist centre in Turkey.
Russian-Turkish cooperation in the tourism industry is actively expanding, with 2.7 million Russians visiting Turkey in 2008 and 522,000 Russian tourists visiting the country in this year's first five months.
The use of national currencies for bilateral payments could be prospective amid the current financial breakdown, with four Turkish banks having already started to use the Russian rouble in transactions at their Russian branches. Mutual payments in national currencies could positively affect the trade turnover between the two countries and lower the expenses of currency conversion.
The Joint Russian-Turkish Intergovernmental Commission on Trade and Economic Cooperation was launched in 1992 to expand and coordinate bilateral trade and economic contacts. The commission, headed by Russian Deputy Prime Minister Igor Sechin starting from June 2009 and Turkish Minister of Energy and Natural Resources Taner Yildiz, comprises five joint working groups operating in trade, investments, contracting services and legal-contractual agreements, energy production, transport, industry, high technology, small and medium-sized businesses, and tourism.
Russia's constituent entities undergoing the most rapidly expanding trade and economic ties with Turkey are the Republic of Tatarstan, Republic of Bashkortostan, Moscow and Moscow Region, Stavropol, Krasnodar and Rostov regions, as well as the North Caucasian republics.