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Wednesday, May 22, 2024

Erdogan embarked on a three-state Gulf tour to strengthen trade and bilateral relations

Turkish President Erdogan's Gulf tour focuses on business and investment, strengthening economic ties and exploring new opportunities.

In a bid to enhance business and investment opportunities, Turkish President Recep Tayyip Erdogan embarked on a three-state Gulf tour, starting with his arrival in Jeddah. Leading an extensive delegation of government ministers, officials, and prominent business leaders, Erdogan’s visit seeks to strengthen bilateral relations and foster cooperation in various fields. The trip, which includes Saudi Arabia, the UAE, and Qatar, aims to pave the way for joint investments and commercial activities. With trade between Turkey and the Gulf states experiencing significant growth, Erdogan’s focus on attracting foreign direct investment is crucial to bolster Turkey’s international currency reserves and address imminent debt repayments.

Building Strong Bilateral Relations

Upon his arrival in Jeddah, Erdogan was warmly received by Crown Prince Mohammed bin Salman, emphasizing the significance of the visit. The leaders engaged in discussions concerning bilateral relations and explored avenues to enhance cooperation in diverse areas. Notably, several agreements were signed during the visit, covering sectors such as energy, defense industries, research and development, direct investment, media, and partnerships with Turkish company Baykar. These agreements will contribute to strengthening economic ties and opening up new avenues for trade and investment between the two countries.

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Gulf as a Vital Trade Partner

Trade between Turkey and Saudi Arabia alone amounted to $6.5 billion last year, with the figure reaching $3.4 billion in the first half of this year. Over the past two decades, Turkey’s trade with all Gulf states has soared from $1.6 billion to approximately $22 billion, highlighting the increasing economic interdependence. Erdogan aims to further bolster these figures through business forums held in all three countries during his tour. By actively engaging with Gulf partners, Turkey aims to explore new investment opportunities in defense industries, infrastructure, superstructure investments, and asset procurement. This approach will not only benefit Turkey’s economy but also offer lucrative prospects for the Gulf states.

Diversifying Economic Partnerships

Several factors have contributed to the recent improvement in relations between Turkey and the Gulf states. These include the Abraham Accords, the change in the US administration, the 2021 AlUla agreement, the economic impact of the COVID-19 pandemic, the war in Ukraine, and earthquakes in southeastern Turkey. Recognizing the importance of fostering economic partnerships, Turkey has focused on attracting foreign investment. Saudi Arabia’s state-owned oil company, Aramco, recently met with 80 Turkish contractors to discuss potential projects worth $50 billion. This demonstrates the eagerness of both sides to forge stronger economic ties.

Revitalizing the Turkish Economy

Erdogan’s visit to the Gulf states holds significant importance for Turkey’s urgent need to attract foreign direct investment and bolster its international currency reserves. With several debt repayments looming in November, the Turkish government recognizes the necessity of securing external resources. By rebuilding relations with regional neighbors, Erdogan aims to garner economic support for the Turkish economy before crucial elections in May. This approach is expected to increase bilateral trade and attract Saudi tourism flows to Turkey. Furthermore, it is anticipated that new deals for military and defense equipment procurement will be established, as the Saudi government seeks to diversify its suppliers beyond the United States.

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Recep Tayyip Erdogan’s Gulf tour marks a pivotal moment for Turkish business and investment. With a strong focus on bilateral relations, economic cooperation, and investment opportunities, the visit holds significant potential for both Turkey and the Gulf states. By forging new economic partnerships, exploring joint investments, and diversifying trade avenues, Erdogan aims to stimulate economic growth, attract foreign direct investment, and fortify Turkey’s international currency reserves. As the tour progresses, it is expected that additional agreements will be signed across various sectors, including energy, pharmaceuticals, technology, food, logistics, agriculture, and petrochemicals. These developments are poised to strengthen economic ties and pave the way for mutually beneficial opportunities for years to come.