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The deal on C-400 draws Turkey into the ruble zone

The deal on C-400 draws Turkey into the ruble zone

29.12.2017
Tags: Russia, Armament, Turkey, Politics, International relations, Analytics, Air Defense, Economics

The parameters of the deal on Turkey's purchase of Russian S-400 air defense missile systems have been finally determined. One of the features was the loan agreement - more than half of the amount for the air defense system Ankara will pay in installments, with rubles. Is it profitable for Russia and is there no risk that Turkey will not be able to pay off this debt?

Russia and Turkey signed an agreement in Ankara on the supply of S-400 anti-aircraft missile systems. Turkish Defense Minister Nurettin Janikli told the Hurriyet daily on Friday that the deal was fully agreed upon and that Ankara will receive four divisions of the complexes. As the newspaper writes, these are 36 machines and 144 ready-to-launch missiles.

On Wednesday, Rostekha CEO Sergei Chemezov confirmed to Kommersant newspaper that Turkey bought four divisions for 2,5 billion dollars. The peculiarity of the agreement was that Russia lends 55% of the amount on credit.

"We plan to start the first deliveries in March of the year 2020", - he announced, stressing that the deal is advantageous first of all politically - for the first time the NATO country buys our S-400 air defense system. The loan term and its other terms have not been announced yet.

Another 12 September Erdogan announced that the deal was concluded and the Turks had already made a deposit, RIA Novosti reported. He also said that the agreement involves a loan in rubles, which is beneficial to Ankara.

The deputy director of the Center for Analysis of Strategies and Technologies Maxim Shepovalenko is not surprised that the agreement turned out to be credit. He explained that "with all the will" the solvency of even such rich countries, and Turkey is still included in the "big twenty", is not so great as to pay off immediately if it is a question of such a large sum. He called "more than good" the indicator in 45% of the total amount that Turkey will pay immediately.

"To depend only on effective demand means losing demand for this product. Assembly lines should not be idle. Enterprises of the Almaz-Antei concern will work day and night. This is ensuring our download. This is the currency gain. The price was compiled taking into account all commercial components,

- said the expert to the newspaper VZGLYAD, adding: - So this is a very profitable transaction. And this kind of deals are rare, they are very expensive. On the fingers you can list the countries that are ready to immediately withdraw from the budget such big money - immediately lay out two billion. Something similar happens when building Russian NPPs abroad. So this is quite a natural practice. "

Such a waste, reminded Shepovalenko, the governments plan ahead for several years. "To sell on credit is a normal world practice. Turkey is a solvent state and will be able to pay off the credit scheme. "

C-400 "Triumph" is a long-range anti-aircraft missile system adopted for service in 2007. It is designed to destroy aviation, cruise and ballistic missiles, including medium-range missiles. In April, the VCS reported that the missiles for S-400, capable of destroying targets in near space, began to be used.

The Turks are drawn into the ruble zone

Experts say that against the backdrop of a successful Russian operation in Syria, those wishing to acquire Russian weapons, including anti-aircraft systems, have already lined up. Even if we assume that Turkey will one day refuse to pay off the debt, Moscow will immediately find other buyers, Shepovalenko believes.

"If Turkey refuses the deal, we will refund the advance and sell C-400 on the move. Remember the story of the Iranian S-300, which immediately left. This is the case when the product will be scattered like hot cakes. While we fulfill the Chinese contract, Indian. There will always be someone to put, "the expert assured.

The very fact of such a deal with the country of the North Atlantic alliance Shepovalenko considers "the largest political defeat of NATO". He recalled that the complexes of the previous generation - S-300 - are also in service with Greece, which is part of NATO, "but they do not make the weather there."

"In fact, this is a very strong geopolitical loss of Americans and NATO. We are pulling the Turks out of the orbit of American political influence. This is a very serious step towards having Turkey if not in friends, then certainly not in the opponents ", - summed up the military expert.

Economists are also convinced that Ankara is able to pay on the loan.

"This loan is the face of the Turkish state. They are acquiring an extremely necessary means of protection against external aggression, "Vasily Koltashov, head of the Center for Economic Studies of the Institute of Globalization and Social Movements, explained to the newspaper. "And the external aggressor may be their formal ally, that is, Western states, for which they have been oriented economically and politically for so long."

According to him, in Turkey they understand that if they can not pay off and start behaving, for example, like Ukraine with its debt to Russia, "then it discredits them and shows weakness."

"Ankara can negotiate on any other loans, delay, without hiding its difficulties. But in this case for the Turks it is important to repay as they agreed. Do not put Russia in a position where it will have to demand payment, "the expert believes.

The term and other conditions of the loan expert called a political issue. In his opinion, Moscow can offer a comfortable repayment term at 10-15 years if it wants to allow Turkey to feel even more secure.
"If they realize in Ankara that they need long-term partner relations with Russia, the term can be very long. But if Turkey feels confident, the deadline can be two or three years. For Turkey, this deal is a demonstration of mistrust of its former partners and a demonstration of rapprochement with Russia. The purely financial component here is not so great. The economic agreement has a very big political overtones, "Koltashov summed up.

As the newspaper VZGLYAD wrote, Venezuela remains one of the main debtors of Russia. In 2011, Caracas also received from Moscow a target loan of 4 billion dollars for the supply of Russian military products. By the end of 2013, arms were delivered for 2,65 billion. By April 2014, Venezuela had lent another 962 million dollars. Initially, under the terms of the deal, Venezuela was to repay the debt by the autumn of 2018, but already at 2014, Russia agreed to postpone the maturity date for the 21 year. However, Venezuela has missed payments on loans several times, and now the deadline is shifted to 27 year.

In the US, too, for many years there is a program of lending to countries that spend this money on American weapons, military equipment or services. For example, according to this program, Israel in 1998-2007 years received an average of 2,4 billion dollars a year, and from the year 2008, an agreement is in place to annually transfer to Israel 2,9-3,1 billion for these purposes.

Andrew Rezchikov
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