analysis of effects of international sanctions and turkish conflict on

International Journal of Economic Theory and Application 2016; 3(1): 1-13 Published online January 12, 2016 (http://www.aascit.org/journal/ijeta) ISSN: 2375-298X

Keywords European Union,

Russia,

Turkey Sanctions,

Energy,

Foreign Trade

Received: December 9, 2015

Revised: December 21, 2015

Accepted: December 23, 2015

Analysis of Effects of International Sanctions and Turkish Conflict on Russian Economy

Lembo Tanning1, Toivo Tanning

2

1Faculty of Transport, TTK University of Applied Sciences, Tallinn, Estonia 2Tallinn School of Economics, Tallinn, Estonia

Email address [email protected] (L. Tanning), [email protected] (T. Tanning)

Citation Lembo Tanning, Toivo Tanning. Analysis of Effects of International Sanctions and Turkish

Conflict on Russian Economy. International Journal of Economic Theory and Application.

Vol. 3, No. 1, 2016, pp. 1-13.

Abstract The purpose of this article is to analyse effects of international sanctions and Turkish

conflict on Russian economy. The international sanctions are imposed against Russia

following Russia's annexation of Crimea and the Russian military intervention in

Ukraine. With regard to acute political and economic situation in Eastern Europe, with

the EU and Russia on mutual economic partial blockade, has become very topical, what

is the position of energy in the European countries. Conflict Russia-Turkish is new and

associated with war in Syria. Goal is to analyze energy trade between European Union

(EU) countries and Russia, and the effects of sanctions on Russian economy. The focus

is energy trade between the EU and Russia. Energy security is always one of the most

important problems for the EU. What are the prospects for a partial boycott of resources?

What you can expect from Russia? How are you doing Russian foreign trade and

business? Have it has affected the sanctions or boycott? That's what we look at to

October 2015. That's why we look at the beginning of the whole economy, and then

external trade. We analyze Russia, which has the EU largest energy suppliers. What are

the prospects for a partial boycott?

1. Introduction

The international sanctions are imposed against Russia following Russia's annexation

of Crimea and the Russian military intervention in Ukraine.

Starting with the 2014 Crimean crisis, soldiers of ambiguous affiliation began to take

control of strategic positions and infrastructure within the Ukrainian territory of Crimea,

which Russia then annexed. [1 - 3] On 4 March, during his press conference, Putin

denied Russian troops interfered [4] but then admitted on 17 April that Russian troops

had been active in Crimea and said this had laid the ground for the Crimean status

referendum. [3, 5, 6]

President Putin said Russian forces had been active in Crimea in order to support local

defence forces, the first time he has admitted deployment of Russian troops on the Black

Sea peninsula. "We had to take unavoidable steps so that events did not develop as they

are currently developing in southeast Ukraine," Putin said in a televised call-in with the

nation. "Of course our troops stood behind Crimea's self-defence forces." [4]

After the annexation of Crimea, demonstrations by pro-Russian groups in the Donbas

of Ukraine escalated into an armed conflict between the separatist forces and the

Ukrainian government. Russia supports separatists of personnel and battle technique.

Russian president Putin denies this.

2 Lembo Tanning and Toivo Tanning: Analysis of Effects of International Sanctions and Turkish Conflict on Russian Economy

Ukrainian crisis has made several governments to apply

sanctions against individuals and businesses from Russia and

Ukraine from March 2014. Sanctions were approved by the

United States, the EU and other countries and international

organisations. Sanctions against Russia are multi-round.

Russia has responded with sanctions against a number of

countries, including a total ban on food imports from the EU,

United States and in other countries. Both these sanctions

applied to Russia and Russian import bans in response have

contributed to the collapse of the ruble and caused in 2014–

15 Russian financial crisis. [7 - 13]

The continuing financial Russian crisis and the associated

shrinking of the Russian economy is the result of the collapse

of the Russian ruble beginning in the second half of 2014.

The crisis has affected the Russian economy, both consumers

and companies, and regional financial markets, as well as

Putin's ambitions regarding the Eurasian Economic Union.

These sanctions applied to Russia and Russian import bans in

response have contributed to the collapse of the ruble and the

2014 - 2015 Russian financial crisis.

Russian Federation (Russia) is a country in northern

Eurasia. Following the dissolution of the Soviet Union in

1991, the Russian SFSR reconstituted itself as the Russian

Federation and is recognized as the continuing legal

personality of the Union state. At 17 million km2, Russia is

the largest country in the world. Russian economy ranks as

the ninth largest by nominal GDP and sixth largest by PPP in

2014. Russian extensive mineral and energy resources, the

largest reserves in the world, have made it one of the largest

producers of oil and natural gas globally. Russia has the

largest stockpile of nuclear weapons in the world. It has the

second largest fleet of ballistic missile submarines and is the

only country apart from the United States with a modern

strategic bomber force. [14]

Modern Turkey was founded in 1923 from the Anatolian

remnants of the defeated Ottoman Empire. Turkey joined the

UN in 1945 and in 1952 it became a member of NATO. In

1963, Turkey became an associate member of the European

Community; it began accession membership talks with the

EU in 2005. Over the past decade, economic reforms have

contributed to a quickly growing economy. [15]

Turkey is a founding member of the United Nations, the

OECD, the OIC, the OSCE, the ECO, the BSEC, the D-8 and

the G-20 major economies. In 2013, Turkey became a

member of the Asia Cooperation Dialogue (ACD). [15]

In line with its traditional Western orientation, relations

with Europe have always been a central part of Turkish

foreign policy. Turkey became one of the first members of

the Council of Europe in 1949, applied for associate

membership of the EEC (predecessor of the EU) in 1959 and

became an associate member in 1963. [15]

Turkey has the second largest standing armed force in

NATO, after the US Armed Forces, with an estimated

strength of 495,000 deployable forces, according to a 2011

NATO estimate. [16] Turkey is one of five NATO member

states which are part of the nuclear sharing policy of the

alliance, together with Belgium, Germany, Italy, and the

Netherlands. [17] A total of 90 B61 nuclear bombs are hosted

at the Incirlik Air Base, 40 of which are allocated for use by

the Turkish Air Force in case of a nuclear conflict, but their

use requires the approval of NATO. [18]

Russia–Turkey relations: on 24 November 2015, Turkish

F-16 combat aircraft shot down a Russian Su-24 during an

airspace dispute close to the Turkish-Syrian border. [19]

Let's also be the Russian-Turkish conflict the probable

effects the Russian economy on the basis of existing

economic failure. [20].

The methodology is based on the Eurostat [21].

More detail theoretical foundations are given in earlier

publications of the authors [22 - 34] and other authors' works

[35 - 39]

All figures are the authors’ illustration.

2. Analysis of Gross Domestic

Product

The growth of the entire economy, measured using gross

domestic product (GDP) will be viewed as background.

In background reviewed to the global economic power

situation, the EU, United States, China and Russia economic

development. The focus of Western civilization is in the

competition in Asia, especially China, India and other

emerging economies of developing countries, so that today's

developed countries of Western civilization are not left in the

future subordinate, economically, and politically, is highly

dependent on China, India and other developing countries of

today. It is also important economic competition of the

United States and the European Union.

As follows we look at the world's and EU economic power

of GDP.

Figure 1. GDP (purchasing power parity) [40].

When in 2013 was leader U.S. with 16 720, second EU 15

850 and then China 13 390 billion USD, then in 2014 there

has been principle change - the world's economic (GDP by

PPP) leader has increased China. The basis of GDP by

official exchange rate was in 2014: EU 17.42, U.S. 17.42 and

China 10.36 trillion USD.

In 2013 was GDP real growth rate of U.S. 1.6%, of EU

International Journal of Economic Theory and Application 2016; 3(1): 1-13 3

0.1% and of China 7.7%. In 2014 was GDP real growth rate

of U.S. 2.4%, of EU 1.4% and of China 7.4%. [40 - 41].

Figure 2. GDP growth of Russia, EU28 and USA, % change year over year

[40, 42].

Based on current prices and exchange rates of the euro, the

EU is still low superiority in front the United States.

Figure 3. GDP growth of Russia, % change year over year [40, 42].

Table 1. International environment (Annual percentage change) Autumn

2015 Real GDP growth [40, 42].

2013 2014 2015* 2016* 2017*

USA 1.5 2.4 2.6 2.8 2.7

- China 8.0 7.4 6.8 6.5 6.2

- India 6.9 7.1 7.2 7.4 7.5

- Russia 1.3 0.6 -3.7 -0.5 1.0

EU28 0.2 1.4 1.9 2.0 2.1

* forecast

The relative weight of Russia was 3.3% of the world

economy, based on GDP (at constant prices and PPS) in

2014.

Turkey was the 18th economy by GDP (PPP) in the world.

GDP per capita was in 2014 $19,700 (to the world: 85 ).

GDP growth of Turkey dropped to 4.4% in 2013

and 2.9% in 2014. [43]

3. International Trade of European

Union

Next, we look the EU, Turkey and Russian foreign trade,

with an emphasis on energy resources. From 2002 to 2014,

extra-EU27 imports (all products) increased from 937 billion

to 1680 billion EUR or 1.8 times. However, there were also

decreases: 2003 = -2 billion and 2013 = -116 billion, but

particularly strongly in 2009 = -349 billon EUR. Even in

2010 had not yet reached 2008 level (44). In 2009, the three

major groups of extra-imports declined: mineral fuels

(mineral fuels, lubricants and related materials) = 160 billion;

machinery (machinery and transport equipment) 72 billion

and other goods (other manufactured goods) 79 billion EUR.

In 2013 declined mineral fuels 50 billon EUR. The one hand,

it is natural that the economic downturn is also required

fewer imports of goods. Also, the crisis will force companies

to greater savings. So in 2009 declined of raw materials

extra-import 37%.

In 2011 was total EU import from Russia 201.3, in 2012.

215.1(record), in 2013. 207.0 and in 2014. 181.3 billon EUR.

The table shows the share of extra-EU27 trade by product

group, expressed in value terms and in % of the total flow

[44]. In 2009 increased share of imports by product (%)

almost all product group, except raw materials and mineral

fuels. Since Russia ban imposed an EU exports of food

products, then will be its impact in recent months.

Total extra-EU28 exports were in Jan-Sep 2015 1331.4

billons EUR. It growth was 6%. Extra-EU28 exports food &

drink goods were in Jan-Sep 2015 83.2 billon EUR (+6%). In

2013 were trade exports to United States 288,239 million, to

Switzerland 169,591 million, to China 148,269 million, and

to Russia 119,775 million EUR. From 2002 to 2013 share of

exports of USA declined from 28% to 16.6%, then China

share increased from 4% to 8.5%, and Russia share from

3.9% to 6.9%. Share of extra-EU28 exports to USA in 2013

was 16.6% [44].

Table 2. Extra-EU27 imports trade, by product group. Million EUR [44].

2008 2009 2012 2013 2014

Food, drinks 80,820 73,755 92,994 93,418 98,498

Raw materials 75,542 47,534 81,102 76,391 73,279

Mineral fuels 458,038 298,445 547,113 497,293 442,360

Chemicals 124,299 112,523 163,165 157,602 164,853

Machinery 425,435 352,810 452,353 434,297 451,238

Other goods 375,019 296,500 388,172 382,307 408,554

The table shows the share of extra-EU27 trade by product

group, expressed in value terms and in % of the total flow. In

2009 increased share of imports by product (%) almost all

product group, except raw materials and mineral fuels.

Since Russia ban imposed an EU exports of food products,

then will be its impact in recent months. Total extra-EU28

exports was in Jan-Feb 2015 265.0 billon EUR, but in Jan-

Feb 2014 266.1 billon EUR. In Feb 2015 was it growth 2%.

Extra-EU28 exports food & drink goods were in Jan-Feb

2015 16.9 billon EUR (+1%). [45]

In 2013 were trade exports to United States 288,239

million, to Switzerland 169,591 million, to China 148,269

million, and to Russia 119,775 million EUR. From 2002 to

2013 share of exports of USA declined from 28% to 16.6%,

then China share increased from 4% to 8.5%, and Russia


share from 3.9% to 6.9%. Share of extra-EU28 exports to

USA in 2013 was 16.6%. [44]

In 2013 was trade balance with United States 92,250

million, with China -131,786 million, with Russia -86,702

million and with Switzerland 75,325 million EUR. [44]

The crisis year 2009 decreased trade of mineral fuels, but

in next year was although the growth, but the pre-crisis level

was exceeded only in the 2010th. Is fuel consumption growth

good or bad?

In 2013 were trade imports from China 280,055 million,

from United States 195,989 million, and from Russia

206,478 million EUR. From 2002 to 2013 share of extra-

EU28 imports of USA declined from 19.5% to 11.6% and of

Japan from 7.9% to 3.4%, then China share increased from

9.6% to 16.6%, and Russia share from 7% to 12.3%. [46]

In Jan-Feb 2015 was total extra-EU28 exports 265.0

billion EUR (-0%) and extra-EU28 imports 272.5 billion

EUR (-1%). Energy goods were accordingly 12.6 billion

EUR (-34%) and 51.4 billion EUR (-34%). At the same

period was EU28 exports to Russia 10.8 billion EUR (-34%)

and EU28 imports from Russia 20.9 billion EUR (-36%);

exports to United States 54.6 billion EUR (+18%) and

imports from United States 37.7 billion EUR (+17%). [45]

Figure 4. International imports of mineral fuels, Million EUR. [47].

The biggest fall of EU-28 imports of mineral fuels was in

2009 year – 160,286 million EUR or 34.8%. But in 2013

decline was EUR 49,820 million or 9.1% compared to the

previous year. In 2014 were imports of mineral fuels of EU-

28 443,524 million EUR.

Both trend lines run almost parallel. Of euro area not

subject the superpower the UK buys a little, since it himself

can be from the North Sea oil and gas.

Extra-EU28 trade balance of mineral fuels shows, that the

money outflow from the EU is high, particularly in Russia

(2014 = 135,394 million EUR) and Norway (2014 = 44,525

million EUR). In 2002 - 2013 it has risen four times in

Russia and in Norway two times. [44]

In 2014 was share of mineral fuels imports of Russia

30.7% (2013=32.2%), of Norway 10.6% (9.9%), of Algeria

6.4% (6.3%), of Nigeria 6.1% (5.5%), of Saudi Arabia 5.5%

(5%), of Libya 2.8% (4.6%), and of Kazakhstan 5.0%

(4.4%). Share was of CIS 39.3%, of OPEC 29.0% and of

Africa countries 20.6%. [46]

Of crude oil production of the EU has declined during the

period 2002 - 2013 2.3 times and the natural gas 1.7 times.

The EU energy security, especially in times of crisis, it is

important imports of mineral fuels. The key here is Russia. If

there is a partial economic blockade of Russia, it may be said

that 2013 is face of history. Now is the important information

latest months.

Table 3. Extra-EU28 trade imports of mineral fuels, by main partners. Million EUR. [46].

2008 2009 2010 2011 2012 2013 2014

Russia 126,064 89,002 121,298 153,495 164,369 160,606 136,183

Norway 56,379 37,603 44,821 54,807 55,721 49,612 47,087

Algeria 20,008 17,047 20,328 27,173 32,023 31,391 28,412

Nigeria 14,975 9,585 13,480 23,237 32,044 27,765 27,201

Saudi Arabia 18,838 9,460 12,567 23,993 29,983 25,116 24,285

Kazakhstan 15,403 9,735 14,285 20,959 22,693 22,308 22,263

USA 10,282 7,807 10,017 17,053 19,705 18,930 16,175

Azerbaijan 10,555 7,458 9,971 15,381 14,152 14,209 13,004

Libya 31,770 20,565 28,800 10,269 32,722 22,938 12,281

Iraq 9,163 6,364 7,124 9,703 12,719 10,586 11,586


Figure 5. Total extra EU-28 import mineral fuels and petroleum [46].

Figure 6. Total extra EU-28 import mineral fuels and petroleum from Russia [46].

Both curves run almost parallel, that is with identical

regularities. Trend lines show, that decrease the extra EU-28

import mineral fuels and petroleum is legitimate. It also

shows a simple rectilinear graph.

Conclusion - past 12 months is significantly reduced

imports of mineral fuels compared to the same month last

year.

4. External Trade of the Russia

Russian foreign trade is divided into far abroad or other

and into CIS countries.

4.1. External Trade to 2014

Table 4. External trade of the Russia. Billion USD [48].

2000 2008 2009 2013 2014 2015 IQ 2015 IIQ 2015 9M

Export 103.1 467.6 301.7 523.3 496.7 89.5 91.1 261.4

Import 33.9 267.1 167.3 341.3 308.0 45.2 48.1 134.3


Figure 7. Export of the Russia. Billion USD [48].

In 2014 of export of Russia was 87.2% to other countries

and only 12.8% to CIS countries.

In total volume of exports of Russia in 2014 the largest

share accounted for the other countries: the Netherlands -

13.7%, China - 7.5%, Germany - 7.5%, Italy - 7.2%, Turkey -

4.9%, Japan - 4.0%, Republic of Korea - 3.7%, Poland -

3.2%, United Kingdom - 2.3%, Finland - 2.3%, USA - 2.1%,

Belgium - 1.9% and France - 1.5%.

Shipments from the following countries predominated in

imports: from China - 17.8%, Germany - 11.5%, USA -

6.5%, Italy - 4.4%, Japan - 3.8%, France - 3.8%, Republic of

Korea - 3.2%, United Kingdom - 2.7%, Poland - 2.5%,

Turkey - 2.3%, the Netherlands - 1.8%, Czech Republic -

1.7% and Finland - 1.6%. [49]

Share of turnover of Russia stayed in Jan - Aug 2015

compared to Jan - Aug 2014 in %: total 65.7; other countries

65.9 (share of total turnover 87.6%); EU 61.1 (share 45.7%);

Italy 64.4 (6.2%); Germany 65.5 (8.7%); Netherlands 58.9

(8.7%); France 58.0 (2.1%); Finland 57.5 (1.8%); China 70.2

(11.7%); South Korea 64.8 (3.4%); United States 70.9

(4.1%), Japan 68.7 (4.0%) and Turkey 78.1 (4.7%). CIS

countries was total only 64.4% (share 12.4%): Belarus 64.5

(4.6%); Kazakhstan 76.2 (3.1%) and Ukraine 44.3 (2.8%).

[50]

Chare (% of total) in 2014 of Russian exports of mineral

products was 70.5% or 350 billion USD. [61] Structure of

exports of Russia to other countries chare in 2014 of Russian

exports were mineral products 74.1% or 321 billion USD

from total exports and of imports were machinery, equipment

and transport means 47.6% or 136 billion USD. [51]

In 2014 export by commodity structure of Russia to other

countries: coal 153 million ton, crude oil 223 million ton;

petroleum products 165 million ton; natural gas 173 billion

m3; electric power 14671 million kWh; wood in the rough

20.9 million m3; iron ore and concentrates 23.0 million ton;

pig irons 20522 million USD; steel-making iron 4359

thousand ton; copper 290 thousand ton, crude nickel 238

thousand ton and crude aluminium 2911 thousand ton. [52]

4.2. External Trade in 2015

Table 5. Exports of the Russia. Billion USD [53].

2000 2008 2009 2010 2011 2012 2013 2014 2015 9M

Total 103.1 467.6 301.7 397.1 516.7 524.7 526.4 496.7 260

other 89.3 397.9 254.9 337.5 437.3 445.5 452.9 428.6 224.5

CIS 13.8 69.7 46.8 59.6 79.4 79.2 73.5 68.1 35.5

Figure 8. Dynamics of total and with far abroad countries export and import of Russia, thousand USD, Jan 2014 – Sep 2015 [51].


The figure shows that the trade balance (export - import),

despite the large decline export, remains relatively stable,

circa 15 billion USD per month. Foreign trade turnover

(export and import) of CIS lands is very small compared to

far abroad countries. The trend of Russian foreign trade is -

so going to trade with far abroad countries, so it is total trade.

Then in Mar 2014 was saldo 19 618 million, in Mar 2015

15 375 million, but in Aug 2015 only 8705 million USD.

Table 6. External trade of the Russia, billion USD [54].

Oct2014 Nov14 Dec14 Jan2015 Feb15 Mar15 Apr15 May15 Jun15 Jul15 Aug15 Sep15

Turnover 68,4 59,8 62,9 40,1 44,8 49,9 46,8 46,9 46,4 44,7 41,9 42,5

Export 41,5 36,8 38,4 27,7 29,2 32,6 30,5 30,6 30,0 27,7 25,3 26,6

Import 26,8 23,1 24,5 12,4 15,6 17,3 16,3 15,5 16,4 17,0 16,6 15,9

Figure 9. External trade of the Russia, compared to the same period of the previous year [54].

Turkey's share of turnover in 2015 was 4.6%. It was

Turkey's fifth largest trade partner of Russia. Where Turkey

falls away, the Russian foreign trade volume will decrease

significantly.

Jan – Sep 2015 was turnover with Turkey 18073 million

USD, it was 76.4% when in Jan – Sep 2014, which was then

23660 million. Turkey share of turnover was 4.6%, only it

was higher in Chinese (11.8%), Germany (7.8%),

Netherlands (6.8%), Italy (6.1%), and same was Belarus

(4.6%).

However, it should also noted that in 2014, Russia was

Turkey most important trade partner (10.4%), in front China

(10.3%), Germany (9.2%) and the US (5.3%). In 2014 were

total Turkey's imports $232.5 billion. Thus, both will lose

$ 24.2 billion.

Table 7. Basic Exports from Russia to Other Countries, 2015 [50].

IQ 9M

Million USD % 2014 % of total Million USD % 2014 % of total

Exports: 90153 73,5 100 261410 68,5 100

fuel-energy goods: 58956 66,4 65,4 168210 62,1 64,3

crude oil 22726 58,5 25,2 69577 57,3 26,6

natural gas 11483 65,0 12,7 31331 71,4 12,0

metals: 8804 97,4 9,8 25576 84,1 9,8

ferrous metals 4733 85,7 5,2 13568 75,9 5,2

non-ferrous metals 3855 118,6 4,3 11243 96,0 4,3

machinery 5216 107,9 5,8 17063 96,1 6,5

chemical products 6497 94,0 7,2 19090 88,1 7,3

Import: 41849 62,5 100 134266 61,8 100

machinery 18810 60,2 44,9 59142 57,3 44,0

food products 5897 58,1 14,1 19103 63,9 14,2

chemical products 7499 72,2 17,9 25260 71,9 18,8

The sharp decline in food imports is caused Russian

boycotts of Western goods, which especially painfully

affected EU countries.

So stayed in Jan - Aug 2015 share of imports compared to

Jan - Aug 2014: fresh and frozen meat 69.9%; fresh and

frozen poultry meat 55.4%; frozen and fresh fish 57.4%;

cheese and curd 52.3%; butter 64.8% and so forth.

In Sep 2015 share of imports from other countries

compared to Sep 2014: meat and meat products 65.3%,

including beef 41.4%, pig 135.3%, poultry 80.6%, fish


64.9%, dairy produce 76.8%, alcoholic and non-alcoholic

beverages 50.3% and so forth. [50]

In Jan – Aug 2015 the major part of Russian exports

account for fuels and energy products (64.8%) and other raw

materials. Share of machinery, equipment and transport

means is very small (6.3%) and it is twice the period under

review decreased.

Consequently, it is vital for Russia fuel and other raw

materials exports.

For oil and gas production requires knowledge of other,

and in particular the equipment.

Ranking place of Russia in 2012 in the world by crude oil

(including gas condensate), natural and associated gas was

two. [56] Consequently, it is essential to other countries.

In Jan – Aug 2015 the major part of Russian imports was

machinery, equipment and transport means (43.8%). It

decreased by 56.1%, with almost half.

Table 8. Dynamics of Russian total foreign trade to the period of the previous year [55].

Turnover Exports Imports

bln USD growth % bln USD growth % bln USD growth %

IQ 2014 195,5 96,9 123,0 98,3 72,5 94,7

IIQ 2014 213,0 100,6 132,3 104,0 80,6 95,5

IIIQ 2014 206,2 94,4 125,7 96,0 80,5 92,2

IVQ 2014 191,1 82,1 116,7 83,5 74,4 80,0

IQ 2015 134,8 68,9 89,5 72,8 45,3 62,4

IIQ 2015 139,3 65,4 91,1 68,9 48,2 59,7

IIIQ 2015 129,7 62,9 79,3 63,1 50,3 62,5

5. External Trade of Turkey

Figure 10. Total Turkey`s export and import, billion USD [57].

Turkey was in 2014 by export 31 and by imports of the

world 23. Exports commodities: apparel, foodstuffs, textiles,

metal manufactures, transports equipment and imports

commodities: machinery, chemicals, semi-finished goods,

fuels, transport equipment. [58]

Turkey exports in 2014 amounted 65% of imports. This

shows that the Turkish economy is much more will depend

on imports.

At the same time, however, years 2005 - 2014 exports and

imports increased by 2.15 times and 2.08 times. Thus, the

negative trade balance is only slightly diminished. [57]

Table 9. Exports by country and year (top 10 countries in exports) (Thousand $) [57].

Country 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

Germany 15 147 423 13 702 577 13 124 375 13 950 825 11 479 066 9 793 006 12 951 755 11 993 232 9 686 235 9 455 050

Iraq 10 887 826 11 948 905 10 822 144 8 310 130 6 036 362 5 123 406 3 916 685 2 844 767 2 589 352 2 750 080

UK 9 903 172 8 785 124 8 693 599 8 151 430 7 235 861 5 937 997 8 158 669 8 626 776 6 814 301 5 917 163

Italy 7 141 071 6 718 355 6 373 080 7 851 480 6 505 277 5 888 958 7 818 988 7 480 060 6 752 346 5 616 755

France 6 464 243 6 376 704 6 198 536 6 805 821 6 054 499 6 211 415 6 617 511 5 974 462 4 604 349 3 805 760

USA 6 341 841 5 640 247 5 604 230 4 584 029 3 762 919 3 240 597 4 299 941 4 170 688 5 060 854 4 910 715

Russia 5 943 014 6 964 209 6 680 777 5 992 633 4 628 153 3 189 607 6 483 004 4 726 853 3 237 611 2 377 050

Spain 4 749 584 4 334 196 3 717 345 3 917 559 3 536 205 2 818 470 4 047 267 4 579 995 3 720 458 3 010 857

UAE 4 655 710 4 965 630 8 174 607 3 706 654 3 332 885 2 896 572 7 975 400 3 240 940 1 985 696 1 675 187

Iran 3 886 190 4 192 511 9 921 602 3 589 635 3 044 177 2 024 546 2 029 760 1 441 190 1 066 902 912 940

If Turkey exports to CIS countries in 2005 were 4,785 million, then in 2013 already 16,924 million and 2014 million 15,616

USD.


Table 10. Imports by country and year (top 10 countries in exports) (Thousand $) [57].

Country 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

Russia 25 288 597 25 064 214 26 625 286 23 952 914 21 600 641 19 450 086 31 364 477 23 508 494 17 806 239 12 905 620

China 24 918 224 24 685 885 21 295 242 21 693 336 17 180 806 12 676 573 15 658 210 13 234 092 9 669 110 6 885 400

Germany 22 369 476 24 182 422 21 400 614 22 985 567 17 549 112 14 096 963 18 687 197 17 539 955 14 768 220 13 633 888

USA 12 727 562 12 596 170 14 130 546 16 034 121 12 318 745 8 575 737 11 975 929 8 166 068 6 260 873 5 375 548

Italy 12 055 972 12 884 864 13 344 468 13 449 861 10 139 888 7 594 645 10 682 037 9 751 280 8 649 577 7 566 262

Iran 9 833 290 10 383 217 11 964 779 12 461 532 7 645 008 3 405 986 8 199 689 6 615 394 5 626 610 3 469 706

France 8 122 571 8 079 840 8 589 896 9 229 558 8 176 600 7 091 795 9 022 015 7 849 709 7 239 953 5 887 817

S. Korea 7 548 319 6 088 318 5 660 093 6 298 483 4 764 057 3 118 214 4 091 711 4 369 903 3 556 269 3 485 389

India 6 898 577 6 367 791 5 843 638 6 498 651 3 409 938 1 902 607 2 457 908 2 299 732 1 579 405 1 280 473

Spain 6 075 843 6 417 719 6 023 625 6 196 452 4 840 062 3 776 917 4 548 182 4 342 994 3 832 589 3 555 106

Figure 11. Turkey's export and import with Russia, million USD [57].

The trend line (sixth degree polynomial, R2 = 0,833) shows the greatest import fluctuations. It is characterized by instability

of their relationship.

Russia was in 2014 for Turkey key import and seven export partner. This is a very important consideration. Turkey will lose

case of disruption of trade with Russia in exports nearly 6 billion, and in imports much as US $ 25.3 billion.

Table 11. Foreign trade by months in 2015(Thousand $) [59].

Exports Imports Balance Volume of trade

Year-Month Value Change, % Value Change, % Value Change, % Value Change, %

2015-01 12 302 703 -0,8 16 645 724 -13,7 -4 343 021 -36,9 28 948 427 -8,6

2015-02 12 232 530 -6,3 16 941 738 -7,1 -4 709 208 -9,2 29 174 267 -6,8

2015-03 12 522 475 -14,7 18 726 264 -6,0 -6 203 790 18,1 31 248 739 -9,7

2015-04 13 351 161 -0,1 18 373 680 -11,1 -5 022 519 -31,1 31 724 841 -6,8

2015-05 11 081 756 -19,0 17 868 798 -14,4 -6 787 042 -5,6 28 950 553 -16,2

2015-06 11 956 913 -7,2 18 200 120 -12,5 -6 243 207 -21,1 30 157 034 -10,4

2015-07 11 135 804 -16,6 18 212 579 -8,7 -7 076 775 7,3 29 348 383 -11,8

2015-08 11 032 751 -3,1 15 949 542 -18,2 -4 916 791 -39,4 26 982 292 -12,6

2015-09 11 599 598 -14,6 15 401 671 -25,2 -3 802 073 -45,8 27 001 269 -21,0

2015-10 13 289 681 3,1 16 910 787 -11,9 -3 621 105 -42,5 30 200 468 -5,8

In 2014, by months, exports fell only in November, but imports in all months except August and January. The biggest trade

deficit was in December, US $ 5.8 billion. 2015, by months, was unstable, sometimes severe downturn.

Next, will analyze Turkey-Russian foreign trade based basic sources from Russia.

Table 12. External trade of Russia with Turkey (at actual prices; million US dollars) [60].

2000 2005 2009 2010 2011 2012 2013 2014

Exports

3098 10841 16377 20317 25350 27426 25476 24448

Imports

349 1732 3216 4867 6360 6859 7273 6651


In total volume of exports of Russia in 2014 the largest

share accounted for the other countries: the Netherlands -

13.7%, China - 7.5%, Germany - 7.5%, Italy - 7.2%, Turkey -

4.9%, Japan - 4.0%, Republic of Korea - 3.7%, Poland -

3.2%, United Kingdom - 2.3%, Finland - 2.3% and USA -

2.1%.

Shipments from the following countries predominated in

imports: from China - 17.8%, Germany - 11.5%, USA -

6.5%, Italy - 4.4%, Japan - 3.8%, France - 3.8%, Republic of

Korea - 3.2%, United Kingdom - 2.7%, Poland - 2.5%,

Turkey - 2.3%, the Netherlands - 1.8% and Czech Republic -

1.7%. [60]

6. Export Prices of Crude Oil

In 2000 was Russian average export prices of crude oil 175

USD per ton, in 2012 754 USD per ton and in 2014 493 USD

per ton. Russian average export prices of natural gas was in

2000 85.9 per 1000 m3, but in 2013 already 342 per 1000 m3.

From 2000 to 2013 increased price of coal 3.2 times and of

petroleum products 4.1 times. [61]

When January 2014 was average export price of the Russian

oil 743.9 USD / ton, but in January 2015 was 399.9 USD / ton

and in September 2015 it was 328.9 USD / ton. [61]

Figure 12. Average export price of the Russian oil [61].

Very high price increase of raw material, particular crude

oil price rise is strongly increased volumes of Russian export

financing. Thus, the cash flow the country and its economic

rise.

Figure 13. Monthly Basket oil price of OPEC, Mar 2014 – Dec 2015 [62].

Basket oil price of OPEC were in Jun-14 (max) 107.89, in

Jan-15 44.38, in 14 Apr 2015 55.91, in 15 June 60.17, in 25

Aug 40.47 (min) and in 09 Nov 42.13 USD/barrel.

Yearly Basket oil price: 2002=24.36; 2003=28.10;

2012=109.45; 2013=105.87; 2014=96.29; 2015 (09 Nov)

=51.72; 2015 (20 Nov) =38.37; 2015 (03 Dec) =37.89

USD/barrel. [62]

More than twice the decrease in oil prices in the world

market highly effective for the Russian economy.

7. Currency Exchange Rates of RUB

Currency exchange rates EUR/ RUB were in 01 Jan 2013

40.24, in 01 Sep 2014 48.98, in 16 Dec 2014 (max) 91.52

and in 30 May 2015 66.00.

Exchange rate in 08 Aug 2015 was EUR/ RUB 69.8089

and USD / RUB 63.8399.

Exchange rate in 10 Nov 2015 was EUR/ RUB 69.6136

and USD / RUB 64.6606.

Exchange rate in 05 Dec 2015 was EUR/ RUB 75.3111

and USD / RUB 69.3026. [63]

Figure 14. Currency exchange rates RUB/ EUR [63].

Figure 15. Currency exchange rates RUB / USD [63].

More than twice the decline in the exchange rate of the

rouble against the euro and the USD severely weakened the

Russian economy.

In recent months, oil prices and the exchange rate has


improved for Russia.

Taking into account this publication and the previous work

of the authors [22 - 34] have made the following conclusions

and suggestions.

8. Discussion & Conclusions

� In 2014 there has been principle change - the world's

economic (GDP by PPP) leader has increased China.

� The EU-28 and the euro area emerged from the crisis,

as evidenced by the positive GDP growth.

� Turkey's economy (GDP) has in recent years grown

faster than US and EU economy.

� Russian economy (GDP) almost stopped in 2014 (+

0.6%) and decreases strongly in 2015 year (QIII 2015=-

4.1%), but the EU and US economy continues to grow.

� The EU energy security is important imports of mineral

fuels. The key here is Russia.

� The biggest fall of EU-28 imports of mineral fuels was

in 2009 year – 34.8%. But in 2013 decline was 9.1%

and in 2014 11.0% compared to the previous year.

� In 2014 was EU share of mineral fuels imports of

Russia 30.7%, Norway 10.6%, Algeria 6.4%, Nigeria

6.1%, Saudi Arabia 5.5% and Kazakhstan 5.0%. Share

of CIS was 39.3%.

� Extra-EU28 exports food & drink goods grow in Jan-

Sep 2015 6% despite the Russian boycott.

� The major part of Russian exports account for fuels and

other raw materials. Share of machinery, equipment and

transport means is very small.

� In September 2015 were the Russian exports and

imports compared to beginning months of 2014 nearly

two times less. The export decline continues.

� In Jan - Sep 2015 decreased EU28 exports to Russia

30% and imports from Russia 27%, extra-EU28 imports

energy 26% and imports of mineral fuels of EU-28

32.7%.

� In Jan - Aug 2015 were Russian total exports 68.4% and

fuel-energy goods exports 62.1% compared to the same

period of the previous year.

� In 2014 export of Russia was 87.2% to other countries

and only 12.8% to CIS countries.

� In Jan - Aug 2015 external trade (turnover) of Russia

were with other (non-CIS) countries only 65.9%, with

EU 61.1% and with CIS 64.4% to the corresponding

period of the previous year.

� Also Turkey's foreign trade volume was in 2015

reduced.

� More than twice the decline in the exchange rate of the

rouble against the euro and the USD and twice falling

oil prices on the world market severely weakened the

Russian economy.

� Consequently, the EU and Russia business need each

other. Disturbances of commerce and boycotts resonate

both badly.

� Also the Russian-Turkey economic blockade is harmful

to both.

� Theoretically, someone does not win the blockade on

the economy. Disputes should be resolved

diplomatically.

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analysis of effects of international sanctions and turkish conflict on

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