Following on from Turkey's President Recep Tayyip Erdogan letter to his Russian counterpart Vladimir Putin on Monday, economic relations will top the agenda in the normalization process between Turkey and Russia.
Russia ranks as the second biggest exporter to Turkey and the third in imports, according to 2015 data compiled by the Turkish Statistical Institute (TurkStat) and Russian Federal State Statistic Service (Rosstat).
The foreign trade volume between two countries was $38 billion in 2008. This amount decreased to $23.3 billion in 2015 as a result of Russian economic regression in the wake of the decline in oil prices. The fall in the foreign trade volume between Turkey and Russia shrank after the application of sanctions against Turkey because of the downing of the Russian jet in November 2015.
Turkey's exports to Russia decreased by 61.5 percent to $484.6 million in the first quarter of 2016 compared to the same period of 2015, especially in textiles, food, automobiles, petrochemicals, electrical devices and in the mining sector.
Turkish companies' investments in Russia diminished as a result of custom problems, and with constraints in employment of Turkish citizens and the cancelation of visa exemptions. The numbers of Turkish companies, which hold approximately $12 billion in total investment, decreased dramatically after the crisis because of regulation restrictions applied to Turkish shareholders.
It is forecast that Russia holds $10 billion in investments mainly in the tourism and energy sectors in Turkey. Russians bought 7,500 real estate properties before the crisis. Out of Turkey's foreign construction projects, Turkish firms hold 20 percent in Russia, which up to now have been worth about $64 billion in total.
Energy trade is one of the critical issues between the two countries. Turkey imported 27 billion cubic meters of gas from Russia in 2015, according to the Turkish Energy Market Regulatory Authority (EMRA).
Russian energy giant Gazprom cancelled the 10.25 percent discount allocated for Turkish companies in February 2015 and reduced the volume of gas transferred by 50 percent from the West Line to Turkey. Private suppliers - Bosphorus Gas, Enerco Energy, West Line, Kibar Energy, Aurasia Gas and Shell Energy- exported 10 billion cubic meters of gas to Turkey annually under the agreement signed in 2013. But in May this year, the gas volume transferred to Turkey returned to normal levels, according to Aleksandr Medvedev, deputy chairman of the management committee at Gazprom.
Russia is also destined to play a key role in the deployment of Turkey's first nuclear plant. The Akkuyu Nuclear Power Plant project will be carried out by Russia with a budget of $25 billion.
Putin also affirmed that the gas project between Turkey and Russia could be resurrected in an announcement last month. The Turkish Stream project plans to carry Russian gas to Europe via the Black Sea and Turkey. However a lack of progress in the project was put down to Russia's non application of the 10.25 percent gas price discount to Turkey's gas contract with Russia which was previously agreed on. After the Russian jet downing, both Turkish and Russian officials made statements about freezing talks on the Turkish Stream project.
The crisis also affected the tourism sector of Russia whose economy shrank by approximately 3.7 percent last year. The number of Russian tourists visiting Turkey decreased by one million and regressed to 3.6 million in total in 2015 compared to 2014. However with the banning of charter flights from Russia to Turkey and the sales of tour packages after the tension between the two countries, the number of Russian tourists coming to Antalya decreased by 96 percent up to May this year compared to last year.
Reporting By Emre Gurkan Abay in Moscow
Writing By Dilara Zengin
Anadolu Agency
dilara.zengin@aa.com.tr