The United Arab Emirates said it had signed agreements estimated to be worth $50bn with Turkey as President Recep Tayyip Erdoğan tours the oil-rich Gulf in a bid to attract investment from the region and bolster his country’s ailing economy.
The UAE’s state news agency said the Gulf state and Turkey forged a series of provisional agreements that included the establishment of a joint economic and trade commission, commitments to develop energy and natural resources projects, and an extradition pact.
ADQ, one of Abu Dhabi’s state investment funds, also said it would provide up to $8.5bn through bonds to support reconstruction efforts after February’s earthquake that devastated a vast area of southern Turkey. The fund also said it would provide $3bn in export credit financing to Turkish companies to boost bilateral trade.
It was not immediately clear how the estimated $50bn value of all the agreements was calculated. But the deals mark a deepening of ties between regional powers that have spent much of the past decade at loggerheads, often backing rival sides during the turmoil that erupted across the Middle East after the 2011 popular Arab uprisings.
Erdoğan, who held talks with UAE President Sheikh Mohammed bin Zayed al-Nahyan, said the agreements would “elevate our relations to the level of strategic partnership”.
The Turkish leader has this week visited Saudi Arabia, Qatar and the UAE to drum up support and investment for Turkey’s economy after he appointed a new economic team following his victory in May elections.
His government has returned to more orthodox economic policies after Erdoğan’s management of the economy was widely blamed for pushing the lira to record lows against the dollar, fuelling soaring inflation and scaring off foreign investors.
Bankers said Erdoğan took with him on his tour of the Gulf a list of assets in which Turkey is seeking to sell stakes as Ankara looks to raise foreign currency to replenish severely depleted reserves and manage a yawning current account deficit.
The UAE, the Gulf’s trade and finance hub, has also over the past two years shifted away from its more assertive foreign policy towards what officials describe as economic diplomacy as it faces increasing competition from neighbouring Saudi Arabia.
A Gulf-based banker said Emirati officials sent out an “all-points bulletin” to bankers in the UAE ahead of Erdogan’s visit “to be ready and help us on ideas and be ready to execute”.
The rapprochement between Abu Dhabi and Ankara began two years ago, after Sheikh Mohammed held talks with Erdoğan in the Turkish capital.
At the time, ADQ committed to invest $10bn in Turkey and had previously backed Turkish start-ups Getir, a grocery delivery company, and Trendyol, the country’s largest ecommerce firm.
Sheikh Mohammed visited Turkey again in June, and bankers say there is now greater clarity for investments with the new economic team in place. Led by finance minister Mehmet Şimşek, this group has strong ties across the Gulf and has begun to reverse Erdogan’s controversial policies.
Analysts say the Gulf, which is home to some of the world’s largest sovereign investment funds, was an obvious starting point for Erdoğan in his bid to rally support for the economy, as many western investors remain wary about the president’s commitment to more orthodox policies.
After Erdoğan held talks with Saudi Crown Prince Mohammed bin Salman this week, Riyadh and Ankara struck an agreement for Saudi Arabia to buy Turkish drones in what was described as Turkey’s largest ever defence export deal.
Source: Economy - ft.com
