Turkiye: Erdogan embarks on a Gulf tour to boost ties, sign new deals

Turkish President Recep Tayyip Erdogan is embarking on a trip to the Gulf this week, marking his first post-reelection multi-country tour that is expected to yield new agreements to further diplomacy and economic cooperation with the region.

The three-day tour comes after Erdogan secured reelection in late May and builds on Ankara’s diplomatic efforts since 2021 to normalize strained ties with Saudi Arabia and the United Arab Emirates (UAE) and will seek to expand its already strong partnership with Qatar.

Erdogan is scheduled to arrive in Jeddah on Monday, where he will meet Saudi King Salman bin Abdulaziz Al Saud and Crown Prince Mohammed bin Salman (MBS).

He is expected to travel to Doha on Tuesday and hold talks with Qatar’s Emir Sheikh Tamim bin Hamad Al Thani.

Erdogan’s last stop will be the United Arab Emirates. He is scheduled to meet President Sheikh Mohamed bin Zayed Al Nahyan (MBZ) in Abu Dhabi on Wednesday.

The tour will aim at further strengthening relations with the three nations, Erdogan said ahead of the tour.

“We would like to further strengthen all kinds of relations between us by traveling to Saudi Arabia, Qatar and the UAE,” he told reporters last Wednesday while returning from a NATO summit in Lithuania.

Ahead of the presidential runoff that eventually extended his rule into the third decade, Erdogan stressed his intention to meet and thank leaders of the Gulf countries he said had recently sent funding to Turkiye, helping relieve the central bank and markets. He did not name the countries nor specify when or how much financing arrived in Turkiye.

Ankara has secured some $28 billion in currency swap deals in recent years with the United Arab Emirates, Qatar, China and South Korea, most of which are believed to be in the Turkish central bank’s reserves.

Turkish officials have said they expect new investments from Gulf states soon after Vice President Cevdet Yılmaz and Treasury and Finance Minister Mehmet Simsek traveled to the UAE and Qatar ahead of Erdogan’s trip and held talks with top officials and their counterparts.

Simsek and Hafize Gaye Erkan, the new governor of Turkiye’s central bank, last week traveled to Saudi Arabia to meet with officials and investors.

“We have hope in this visit. I sent my friends ahead of time. They visited Saudi Arabia, Qatar and the UAE. We will visit (these countries) with a delegation,” Erdogan said last week.

“During the preliminary visits, our friends gave certain information. During our visit, we will have the opportunity to see and experience the support they will provide Turkiye personally.

“In our previous meetings, they said: ‘We are ready to make significant investments in Turkiye.’ We will finalize this through this visit,” the president noted. He added that these investments could be in Turkiye, Saudi Arabia, Qatar or the UAE.

Turkiye expects Gulf countries to make direct investments of about $10 billion initially in domestic assets as part of Erdogan’s trip; two senior Turkish officials told Reuters earlier this month.

Overall investments of up to $30 billion are expected over a more extended period in Turkiye’s energy, infrastructure and defense sectors, the sources, who spoke on condition of anonymity, given the talks are private and deals are not yet finalized, said.

Direct investments worth about $10 billion “should come within a short time and this is crucial,” said one of the officials. “Expectations are high for the Gulf visit. Some important agreements will be signed.”

Turkiye’s Trade Minister Omer Bolat last week said the UAE could make investments of up to $30 billion in multiple areas.

More than 200 businesspeople will be accompanying Erdogan on his Gulf trip this week, according to the Foreign Economic Relations Board (DEIK), which will be organizing expansive business forums in the three countries.

The business world anticipates discussing billions of dollars worth of collaboration agreements in sectors such as construction, housing, digital technologies, energy, tourism, health care, food, agriculture, transportation and finance, said DEIK Chair Nail Olpak on Saturday.

Expressing optimism about revitalizing economic relations and forming stronger partnerships, Olpak also said they expect a significant increase in mutual investments in the short term.

“Our relations with Qatar have always been good. The bridge of dialogue and friendship, which has changed positively with the UAE and Saudi Arabia since last year, has quickly started to reflect on our economic relations,” he noted.

“Now, as we open the doors to a new era together, we see that bilateral economic relations are reviving, and even stronger and more vigorous partnerships are being formed, leaving behind the old days.”

Olpak said the cooperation they are aiming at will carry bilateral trade volumes with all countries in the region much higher.

“We are hearing the footsteps of new export records for the coming period,” he noted.

Turkiye’s exports to Saudi Arabia reached $1.5 billion as of the end of 2022, with a total trade volume of nearly $6 billion. Olpak said the goal is to reach $10 billion in the short term and eventually $30 billion in the long term.

In terms of Qatar, exports amounted to $1.5 billion at the end of last year, and the current total trade volume is around $2.2 billion. Olpak stressed the aim of reaching $5 billion in the first stage.

Regarding the UAE, Olpak said exports reached $5.3 billion in 2022, with a total trade volume of approximately $10 billion, emphasizing the aim to rapidly lift these figures further.

Olpak said while trade was important and had greater potential, the goal this time was not limited to that alone.

“We have made targeted initial contacts in areas such as mutual investments, partnerships in existing and new projects, acquisitions, takeovers and collaborations in third countries, as well as large-scale housing projects,” he noted.

“Our aim is to achieve good and high-volume results, and we believe that we will achieve it.”