Erdogan and Putin last summer in Sochi, Russia
-Analysis-
ISTANBUL — As Russia has become increasingly isolated since the invasion of Ukraine, the virtual pariah state has drawn notably closer to one of its remaining partners: Turkey.
Ankara has committed billions of dollars to buy the Russian S-400 surface-to-air missile system, and contracted to Russia to build Turkey's first nuclear power plant. The countries’ foreign policies are also becoming increasingly aligned.
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Sign up to our free daily newsletter.But the depth of this relationship goes much further. Turkish president Recep Tayyip Erdoğan speaks to Russian President Vladimir Putin more than any other leader: 16 times in 2022, and 11 times in 2021. Erdoğan has visited Russia 14 times since 2016, compared to his 10 visits to the U.S. in the same time period (half of which were in 2016 and 2017).
But no less important is the way the two countries are increasingly tied together by commerce.
In 2015, China was the number one source of exports to Turkey, having shipped $24.8 billion of goods to Turkey that year, followed by Germany at $21.3 billion and Russia at $20.3 billion.
This ranking remained unchanged for the next three years, until Russia took a narrow lead in 2018 and 2019. China returned to the top in 2020 and 2021, but in 2022, Russia took first place by a long shot: $54.3 billion.
Russian exports rising
Let’s look at the three countries Turkey has bought the most exports from:
Russian exports to Turkey have increased by nearly 300% in the past eight years, while exports from China increase by just 50% and exports from Germany remained flat.
Let’s take a look at companies founded in Turkey with Russian capital or shareholders. Twenty-seven such companies companies were founded in 2015. In 2022, that number was 140, bringing Russia from seventh to first place in this category.
Graph of leading exporters to Turkey
Turkey buys more exports from China (blue), Germany (yellow) and, increasingly, Russia (green).
Source: Turkish Statistical Institute/TÜİK data Graphic: Diken
Russian-backed Turkish companies
Looking at the number of foreign-backed companies founded in Turkey over the same period, Russia didn't crack the top three for seven years until sharply rising to first place in 2022. The number of Russian-backed corporations increased five-fold last year compared to 2021.
In 2015, there were 99 limited companies founded in Turkey with Russian shareholders, compared to 1,223 companies founded in 2022. Russia climbed to second place from ninth in 2015 — but those numbers barely shifted until a sudden jump in 2022.
After struggling to make the top 10 for seven years, Russia hit number two in 2022. The number of limited companies founded by Russians increased by nearly eight times in 2022 when compared to the previous year. It's also interesting to note that Iran has been at number one for the past four years.
Finally, let’s check the real estate market. Previously, people from Middle Eastern countries were the top buyers of housing in Turkey — in particular Iraq, Saudi Arabia and Iran. But that changed in 2022, when there were more than twice as many Russian buyers as Iranians.
Russians bought three times as many properties in Turkey in 2022 compared to the previous year. After taking first or second place for years, Iraqis are now in third place while Iranians, among the top five since 2015, are sitting in second, behind Russia.
Foreign investment by country of Turkish companies. Almanya is Germany; BAE is the United Arab Emirates.
Source: Turkish Statistical Institute/TÜİK data Graphic: Diken
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