The Meeting of the Russian President V.V.Putin with Prime Minister of the Republic of Turkey Recep Tayyip Erdoğan

July 17, 2005

Bocharov Ruchei, Sochi

Photo by the Presidential Press Service

PRESIDENT VLADIMIR PUTIN: Welcome to Russia, dear Mr Prime Minister. I am very grateful to you for accepting my invitation.

I think that this meeting is fully justified. Cooperation between Russia and Turkey has been constantly increasing over recent years. The same is true for our trade and economic turnover, which now exceeds $10 billion. We have set ourselves the realistic goal of raising trade between our countries to the $25 billion-mark over the next few years. We are interested not only in trade but also in investment activity and cooperation in the energy and high-technology sectors. We have common tasks in many areas that we could resolve effectively together.

Our political dialogue is at a good level. I would be interested to hear your opinion on the situation in the region, in Iraq. In general, we have a lot of different subjects to discuss today.

I am very happy to see you. Welcome.

PRIME MINISTER OF TURKEY RECEP TAYYIP ERDOGAN (translated from Russian): First of all, I would like to say how glad I am to be able to have a working dinner today with my friend the President of Russia, Vladimir Putin. I would like to pass on to you greetings from our people to the friendly people of the Russian Federation.

Political, economic and cultural relations between the Russian Federation and Turkey have undergone significant changes, especially over the last two-and-a-half-three years. I am sure that they will only continue to grow and develop in the future. The relations we are building up between our countries today – our political, trade and cultural ties, including tourism – show just what potential there is for their future development. There is no doubt that the steps we have taken in the energy sector are of great importance. I think that we do indeed have plenty to work on together.

Thank you very much.

 

BOCHAROV RUCHEI RESIDENCE, SOCHI. President Vladimir Putin held talks with Turkish Prime Minister Recep Tayyip Erdoğan.                                                                                                                                  

Photo by the Presidential Press Service

MrPutin and Mr Erdoğan discussed bilateral trade and economic relations, in particular, the question of increasing their cooperation in the energy sector.

Following their talks, Mr Putin and Mr Erdoğan made press statements and answered journalists’ questions.

Photo by the Presidential Press Service

 

Press Statements and Answers to Questions following Russian-Turkish Talks                                                                                                                                                                                          

July 18, 2005

Bocharov Ruchei, Sochi

PRESIDENT VLADIMIR PUTIN: Good afternoon, ladies and gentlemen.

Let me briefly inform you on the results of our work. Our two days of talks with Prime Minister of Turkey Recep Erdoğan are coming to a close. I would note that this meeting here in Sochi is the fourth in seven months. We think there is an objective need for these intensive contacts, as cooperation between our two countries continues to grow. We discussed a broad range of bilateral cooperation issues and, of course, talked above all about implementing the provisions set out in our joint political declaration that was signed in Ankara in December 2004.

We see a need today to reinforce the positive trends in our economic interaction, our cultural and humanitarian ties and in a number of other areas. Our countries are longstanding and reliable partners. It is enough to say that Russia is Turkey’s second-biggest trading partner as far as imports go, and is in eighth place for exports from Turkey.

We were pleased to note that trade between our two countries rose by almost 60 percent last year and came to a figure of around $11 billion. You know that we have set the goal of bringing our bilateral trade up to a level of at least $25 billion over the next few years. We have all the necessary possibilities and the resources required to do this.

We will continue the energy dialogue between our two countries. Russia will continue to act in strict accordance with the agreements we have reached and will deliver natural gas to Turkey, including through the gas pipeline crossing the Black Sea. There are a whole series of other promising projects also on our cooperation agenda. We need to bring the Blue Stream project up to its design capacity of 16 billion cubic metres of gas a year. We do not exclude the possibility of also building a new gas pipeline. Likewise, we are also examining the possibility of building oil pipelines, pipelines that would follow a number of different routes, and the Prime Minister and I discussed this in much detail yesterday and today.

What prospects and new areas for work do we have in mind? We are, of course, looking at cooperation in high-technology sectors, and also joint investment activity – both Russian investors working in Turkey and Turkish investment in the Russian economy.

We discussed all these subjects in detail. Direct Turkish investment in the Russian economy currently comes to around $1.5 billion, and Russian investors are ready to take a much more active part in privatisation projects in Turkey. We very much hope that the Turkish government and the Prime Minister will do all they can to encourage Russian capital to take part in the Turkish economy. I am sure that this would be in the interests of both our countries.

We discussed opportunities for carrying out large-scale cultural projects and we also spoke about regional and international political issues. We gave a lot of attention to the problem of stabilising the entire Caucasus and Black Sea basin region. We are ready to work together with the other countries of the region to build up an atmosphere of trust and good-neighbourliness.

We also concentrated our attention on the issue of a settlement for Cyprus. I would like to note that Russia will support all the United Nations Secretary General’s efforts aimed at ensuring a fair solution to this problem.

I am grateful to the Prime Minister for sharing his views on developments in the situation in Iraq, Iran and a number of other regions. I must say that I am satisfied indeed with the results of our talks. They were very open and exceptionally productive.

PRIME MINISTER OF TURKEY RECEP TAYYIP ERDOGAN (translated from Russian): First of all, I would like to thank the President. I would particularly like to note the attention and hospitality we have all received, both myself and the members of my delegation, over our two days here.

You all understand very well what it means for us to be meeting for the fourth time in seven months. Both sides have put maximum effort into ensuring the greatest possible development of bilateral relations in trade and the economy, in culture, in humanitarian affairs and other areas. Our meeting is without doubt of great significance for our countries’ future. It was with satisfaction that I was once again able to confirm that the President and I fully agree on the need to intensify our efforts in the interests of regional peace, security, stability and ensuring global peace.

We made use of this opportunity to once again underscore our common will to combat international terrorism, which is carrying out action against innocent people, against defenceless women and children.

Our bilateral trade has increased considerably over recent years and I am sure that the rapid rise confirmed by the results for 2004 will continue this year.

I would like to take advantage of your presence here to once again thank the President for the active part he played in settling the question of Turkey’s agricultural exports to Russia, thanks to which this situation has now been successfully and quickly resolved.

We have set ourselves the goal of raising our bilateral trade to a figure of $25 billion and we are taking confident steps towards this objective. During our talks, both sides confirmed their firm desire to continue developing our trade relations.

We had important discussions on cooperation in the tourism sector, on this sector’s development and on cultural exchanges between our countries.

We have decided to organise a Year of Turkey in Russia and a Year of Russia in Turkey. We intend taking measures to decide as quickly as possible all the issues relating to organising these events.

I would particularly like to note something that you probably already know, namely, that Russian tourists were the second-biggest group of foreign tourists visiting our country in 2004. I would like to thank our Russian friends for their interest in our country.

We also held important talks on the energy sector. We had a broad and comprehensive discussion of our cooperation in the oil and gas sectors. We had the chance to look at issues concerning the Blue Stream project. The relevant ministries and agencies in our countries will continue the necessary work in this area.

We also raised the issue of the Black Sea Economic Cooperation Organisation and what we can do to make its activities more effective, because we are certain that Russia and Turkey have a leading role to play in this organisation’s work.

We discussed regional issues. We talked about what we could do together to strengthen peace, stability and security in our common region. We discussed the situation in Iraq, in Iran and in the region in general. We also examined the Cyprus issue. We were very pleased to hear of Russia’s support for United Nations Secretary General Kofi Annan’s efforts to settle this problem.

We also had the opportunity to discuss the issue of settling the Nagorny Karabakh problem. We were pleased to hear the President’s position, which is that it is now time to take serious steps to settle this conflict. We are sure that more effective work by the OSCE’s Minsk Group under Russian, U.S. and French co-chairmanship could make an important contribution to settling this problem. We do not want to live in a world dominated by hostility; we want to live in a world in which peace reigns. We want to see lasting, fair and rapid settlements to conflicts. On this issue we see that our two countries share a common position and common desire, and we welcome this fact.

We are in favour of accelerating the process of direct investment, both by Turkish businesspeople in Russia and by Russian businesspeople in Turkey. We are confident that future will be even better, and we are working every day to take new steps in this direction.

I think this working visit to Russia has been very successful and I would once again like to thank the President for the attention and hospitality he has shown.

QUESTION: This is a question for the Russian President and the Turkish Prime Minister. You said it is your goal to bring bilateral trade up to $25 billion. What do you think needs to be done to achieve this goal? No doubt, we are not talking here simply of increasing trade, but above all, we are talking about investment projects. What kinds of investment projects? What significance does the political climate, in which there were differences between us, have for our relations?

A separate question for Mr Putin: the presence of a major Russian business representative was noted here. Is his presence here linked to the Turkish Prime Minister’s visit?

Thank you.

VLADIMIR PUTIN: A favourable political climate is, of course, an essential condition for developing trade and economic ties and investment activity. We already know the figures: Turkish construction companies’ business on the Russian market represents a figure of more than $12 billion. The Turkish state treasury receives hundreds of millions of dollars through providing services to Russian tourists visiting Turkey. Would people go to Turkey if the conditions were not good there? Of course they wouldn’t. And if Russia offered Turkish construction firms unfavourable conditions, would they have had so many contracts? Of course not. All of these activities require favourable conditions – favourable political conditions, good security guarantees.

We have not mentioned this yet, but I would like to tell you that yesterday and today we actively discussed our cooperation within the BlACKSEAFOR organisation.  The Prime Minister said that we need to continue developing economic cooperation in the Black Sea region. This will help put in place the conditions necessary for expanding and diversifying our cooperation.

Through which activities can we increase our trade turnover? Above all, we will enhance our cooperation in traditional areas. The energy sector is one of these, of course. This means not simply increasing supplies of, say, gas and oil, but also developing our cooperation. We are ready to build large underground gas storage reservoirs on Turkish territory, to enter Turkey’s gas distribution networks through the privatisation process, to use existing gas pipelines on Turkish territory and take part in building new ones to transport our energy resources across Turkey to other countries, including to those in Southern Europe. We are ready to develop our cooperation in the electricity sector, including in the area of delivering supplies to third countries, for example, supplying electricity to Iraq via Turkish territory. Finally, machine building, telecommunications systems, other high-technology areas, including the space sector, are all promising areas for our cooperation.

Then, of course, there is investment. I already said that Turkish direct investment in the Russian economy comes to around $1.5 billion. Russian investment in Turkey is less – around $200 million-$300 million. But we are ready to expand these activities significantly. One of our companies, Alfa Group, whose head you noticed here, intends very soon, if the right conditions are provided, to invest more than $3 billion in the Turkish telecommunications sector. Of course, when people have plans to undertake such large-scale projects, they look for political support, or at least some kind of political guarantees. But Russian interest in Turkey is not limited to the telecommunications sector. I know, for example, that other Russian companies, metal companies, would like to take part in Turkey’s metallurgical industry and are talking about investments of hundreds of millions of dollars. That’s not to mention the energy sector. In this area, unfortunately, there is an issue we have to settle but I hope that we will all be able to find a solution together.

Finally, there is military-technical cooperation. At the moment it is practically non-existent, but there is clear interest from Turkish consumers in our special equipment and military equipment. I was pleased to hear that the Prime Minister thinks it possible to organise repeat participation by our manufacturers in a tender for selling helicopters to Turkey. That is the general outline of the situation.

RECEP TAYYIP ERDOGAN: I will try to give a brief answer to your question. Along with the political climate, some economic conditions are also essential: cost price, productivity, the existence of relevant markets. As you know, in a modern economy, especially in the market economy, it is not demand that creates supply. Supply has to build demand. The cooperation and solidarity between our countries aims precisely at making this possible. We see this as a long, difficult and complicated road. This is the road we are going to take and we are certain that if we work together we can develop our common market. Businesspeople now feel confident, and this is linked to the emergence of a favourable political climate. Security and stability are absolutely essential conditions. Investors demand security and an atmosphere of trust. Investors will go to Russia, to Turkey, only when they see that the right conditions are in place. If they don’t find these conditions in our countries, they will go wherever these conditions are offered, because the ultimate aim of any businessperson is to make a profit.

We, for our part, are thinking at the highest level of our common interests and are working to put in place the required conditions and lay the foundation for these interests to develop. Recent events are the best example of this work. This includes our cooperation in the oil and gas sectors and our steps to develop ties in this area, including the work on building gas storage facilities. This also includes the steps we expect our businesspeople to take together in the private sector – in telecommunications, in the energy and metals sectors. We think the time has come to take rapid and decisive steps forward in this direction.

In this respect there is also room for us to work in the defence industry. As the President just mentioned, our defence industry agency has received confirmation of Russian companies’ interest in taking part in a new tender for the purchase of helicopters. Our work will continue in all these different areas.

QUESTION: A question for President Putin: you said that Russia will continue to support the UN Secretary General’s efforts to reach a settlement to the Cyprus problem. Does this mean we can expect a change in Russia’s position in the Security Council with respect to discussions on Kofi Annan’s report last year on his work in Cyprus and on new measures to help end the isolation of the Turkish republic of Northern Cyprus?

A question for the Prime Minister: you said that during your talks you looked at the possibility of building new gas and oil pipelines following different routes. Did you discuss specific routes and transport capacity along these routes, and did you discuss the cost of natural gas currently supplied to Turkey by Russia?

VLADIMIR PUTIN: Regarding the UN Secretary General’s efforts to reach a settlement to the Cyprus problem, we are absolutely certain that this is absolutely the right and necessary direction for all of us. We all know how the situation on the island is developing. The first thing we need to do is definitely to end the economic isolation of one part of the island, create the conditions for normal interaction between both parts of the island and make this the basis for complete normalisation in the interests of everyone living on the island. We will also look at what we can do through Russia’s bilateral cooperation with both parts of the island to reach these objectives, and we will continue to support the UN Secretary General’s efforts to normalise the situation.

RECEP TAYYIP ERDOGAN: Before answering your question directly, I would first like to make the following point. As you know, our countries have reached an agreement on Turkey’s support for Russia’s accession to the World Trade Organisation. We are fulfilling our commitments regarding our support for Russia and we expect that Russia will be able to become a full-fledged member of the WTO when it holds its conference in Hong Kong in December. This will take trade and economic relations between our two countries to a qualitatively new level. We will maintain our support on this issue.

Concerning your specific question, the Blue Stream gas pipeline currently has a design capacity of 16 billion cubic metres a year. At the moment, however, we are receiving no more than 4.7 billion cubic metres a year through the pipeline. In other words, there is considerable potential for increasing supplies and we have the possibility of using this route. One of our main objectives is to expand the pipeline, which currently runs to Ankara, to Ceyhan in the south. Our relevant organisations will continue work in this direction. If need be, we will make sure the necessary political will is there in order to ensure that these decisions go ahead.