Bulgarian economy: gaining or losing from Russia-Turkey crisis?
When two great powers spoil their relations, smaller countries incur losses as well. Will this turn out to be true about Bulgaria in the context of a major conflict that broke out between Russia and Turkey, old adversaries but in recent years almost brothers? Or will the proverb saying that fish is easily caught in troubled waters turn out as true as ever? Or to put it directly: could Bulgaria gain from the Turkey-Russia crisis or is it more likely to sustain losses from the collapse of economic relations between the two great powers?
It is hard to give an unambiguous answer. Bulgaria hasn't got the potential to supply to the huge Russian market an amount of goods previously imported by Turkey, including food, where a major niche is likely to open up very soon following Moscow sanctions. Bulgarian agriculture for example, does not grow citrus fruit and lacks a year-round cycle of growing large quantities of fresh vegetables and fruit. True, the canning industry can rely on brighter Russian prospects but the question is whether canning factories will be able to respond fast or shall have to wait for the new harvest. Until then though, Russian sanctions on food from the European Union might be lifted, who knows?
Moscow's restrictions will also affect Russian imports of textiles from Turkey, a world leader in that sector. Bulgaria has very good positions in that sector too, and local businesses should immediately try to jump on the Russian train after the Turkish passenger is down from it. Bulgaria could also win new positions on the Turkish energy market after Russians have frozen the construction of a new N-plant there. No matter how financially volatile is the state of the Bulgarian energy sector, this country generates enough electricity and permanently exports it to neighbor countries. The collapse of this major energy project in Turkey for sure spells a better future to Bulgaria's electricity exports.
The list of potential gains for the Bulgarian economy that have suddenly emerged from the Russia-Turkey conflict include tourism. For Russian domestic reasons and because of Ukraine, Russian tourists' numbers have tangibly declined in almost all European countries, including Turkey and Bulgaria. Russians however, remain some of the most desired and most numerous tourists across the world. The explicit veto of President Putin on trips of Russians to Turkey is a good reason for the Bulgarian tourism sector to rejoice. It has become instantly aware that its urgent priority is to try and take the vacancy in the sector and attract more Russians to the Bulgarian Black Sea resorts.
In the new context, the topic of a gas hub on the Black Sea near Varna, so much desired by the Bulgarian political class, is back into the spotlight. It is now almost certain that the Turkish Stream gas pipeline project from Russia to Turkey, Greece and ultimately Europe, a project openly scorned by Sofia since it came to replace South Stream, will not be pursued. A gas hub on the Turkey-Greece border is as unlikely, because it would have nothing to distribute. And, given the speeded up construction of gas system connections with neighbor countries and anticipated own gas deposits, Bulgaria could soon more realistically nurture its ambitions to become a gas distribution center for Central and Western Europe.
Every cloud has a silver lining, a proverb goes. There is a handful of ways to trust its wisdom though there are neither absolute nor eternal truths today. All the more so that a possibly worsening conflict of Russia with the most powerful and economically most important neighbor of Bulgaria is also the source of real threats that might overnight erase all potential benefits for this country.