Turkish leader Erdogan's visit to Gulf aimed at boosting economic ties, experts say

Boosting economic ties will be on top of Turkish President Recep Tayyip Erdogan’s visit to the Gulf this week, experts and officials told The National.

Mr Erdogan is set to visit Saudi Arabia, Qatar and the UAE on a three-day official trip that will start on Monday, to enhance co-operation and trade, an official from his office in Ankara told The National.

Sinan Ulgen, a former Turkish diplomat and director of the Istanbul-based Edam think tank, said the main reason for the President's tour is to drum up economic support from the Gulf Co-operation Council countries, to aid Turkey’s ailing economy.

“So far these countries have provided some funding to help replenish Turkey’s depleted foreign reserves,” Mr Ulgen said.

“But going forward the expectations are much higher.”

Speaking to Turkish media on Thursday, Mr Erdogan said he hopes to reach major investment deals during the visit next week.

He said these investments could be made in Turkey or in any of the three Gulf states.

“We would like to increase all kinds of relations by travelling to Saudi Arabia, Qatar and the UAE,” Mr Erdogan said.

Turkey's Finance Minister Mehmet Simsek and Central Bank Governor Hafize Gaye Erkan visited Saudi Arabia on Wednesday, in the lead up to Mr Erdogan's trip.

Relations between Ankara and Saudi Arabia and the UAE are improving, especially on the economic front, Anna Jacobs, the Crisis Group’s senior Gulf analyst, told The National.

“Both Turkey and Gulf Arab states are taking full advantage of the new regional context of de-escalation and diplomacy to explore unprecedented economic deals and political dialogue,” Ms Jacobs said.

The re-election of Mr Erdogan in May and the formation of a new cabinet pushed this momentum further, she said, adding that Gulf states viewed this as a “clearer sense of political and economic stability” in Turkey.

“There seems to be considerable hope in Ankara that Gulf Arab states can be a huge source of much needed foreign investment, and Gulf Arab states see major potential there,” she said.

Moving forward

An increase in economic co-operation and alignment is expected from both sides, especially on regional security issues, the analyst added.

“The economic side will be especially important. Gulf Arab states are hyper-focused on their economic diversification drives and pursuing greater economic co-operation across the region, especially with huge economies like Turkey's,” she said.

Trade and investment deals worth billions have been signed between Turkey and the GCC's two largest economies, Saudi Arabia and the UAE.

“Yet, we are only at the early phases of Turkey-Gulf rapprochement,” Ms Jacobs said.

From the standpoint of the Gulf countries however, the main channel of economic engagement is likely to be foreign direct investment targets, Mr Ulgen said.

“The realisation of these targets can become uncertain because they will be conditioned by market dynamics and not solely by sovereign decisions,” he said.

On the political front, Turkey’s ties with Riyadh and a host of Arab countries were strained by Ankara’s support of the Muslim Brotherhood in Egypt during the wave of protests witnessed across the Middle East after 2011.

“The backdrop to this improvement is the radical shift in Turkey’s foreign policies with an end to the overt support to the Muslim Brotherhood-linked entities,” Mr Ulgen adds.

In addition to the “changing geopolitical considerations is the realisation that the US is no longer interested in providing the same degree of political attention and security umbrella to the Gulf region despite the ongoing difficulties with Iran,” he said.