As Turkish businesses grapple with high inflation and a sharply devalued currency, a recent visit to Qatar by Turkish President Recep Tayyip Erdogan raises hopes that the deepening of bilateral economic ties between the two countries will open new avenues. of trade and investment with other Gulf States.
Qatar is already the second largest foreign investor in Turkey, with significant holdings in the banking, maritime, retail and financial sectors.
While bilateral trade between the two countries is modest, Turkish traders say it has increased dramatically in recent years, when Qatar suffered a three-and-a-half-year blockade by four Arab states that eventually eased early. of this year.
Turkish construction companies, meanwhile, say Qatar has provided them with a unique opportunity to showcase their work globally – an openness they hope to continue to provide as the Gulf region continues to emerge from tensions. diplomats who interrupted trade.
While many details are still unclear, Turkey and Qatar signed more than a dozen agreements during a December 6-7 visit from Erdogan to Doha. Turkish President and Emir of Qatar Sheikh Tamim bin Hamad Al Thani oversaw the seventh major summit to coordinate strategy between the two close allies.
Many of the areas of cooperation announced relate to the sharing of know-how between the ministries responsible for emergency and disaster management, diplomatic training, promotion of culture and tourism, health sciences and medicine, religious affairs and media training.
“It used to be about declarations of intent, and now, during this trip, some of these general agreements have been better defined, implemented and detailed,†said Başar Arıoğlu, chairman of the Qatar Business Council of the Council for Foreign Economic Relations of Turkey. Al Jazeera.
The council has more than 70 members, said ArıoÄŸlu – companies that include construction contractors, architectural firms, real estate agents and groups dealing with the export of everything from furniture to medical products and health services. There is even a Turkish company that provides meals for the Qatari army, ArıoÄŸlu said.
A unique partnership
While Turkey and Qatar have been close on the political front for decades, the alliance took center stage in 2017, after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt imposed a blockade in Qatar. Demands to lift the blockade included severing important ties with Turkey, such as removing a Turkish military base in Qatar. In response, Turkey sent cargo planes with aid to Qatar and increased its troop presence in the country.
This type of global political partnership is what sets the Turkey-Qatar alliance apart, said Betul DoÄŸan-AkkaÅŸ, an associate researcher at the Al Sharq Strategic Research Center and a doctoral student in a joint program between Qatar University and Qatar. Durham University.
Turkey and Qatar have colluded not only to support groups after the Arab Spring of 2011, but more recently to support the same parties in major conflicts in places like Syria and Libya. After the Taliban took control of Afghanistan earlier this year, Ankara and Doha have also sought to cooperate on projects there.
“What makes their alliance unique is that their policies abroad overlap,†DoÄŸan-AkkaÅŸ said. “We can say that it is partly because of the political pragmatism for the two, but there must also be a deep motivation to have cooperation in all these different cases.”
With some $ 33.2 billion in foreign direct investment in Turkey, Qatar is the country’s second-largest investor. Qatar’s investments are spread across various sectors in Turkey. Qatar Holding has a 42% stake, worth almost $ 1 billion, in Istinye Park, one of Istanbul’s largest shopping centers. The Qatar Investment Authority holds a 10% stake in Borsa Istanbul, Turkey’s largest stock exchange. Doha-based belN Media Group owns Digiturk, one of Turkey’s largest sports and entertainment broadcasters. The National Bank of Qatar owns Turkey’s Finansbank, and other Qatari companies also have significant stakes in some of Turkey’s largest banks.
Since 2020, Qatar has also provided $ 15 billion in currency exchanges to Turkey, a crucial lifeline given the volatility of the Turkish lira, which collapsed in November and lost around 45% of its value this year.
Part of Turkey’s economic crisis, DoÄŸan-AkkaÅŸ says, stems from global perceptions of Turkey and President Erdogan, so just being seen as accepted and meeting with regional leaders has a measurable effect on the country. Turkish economy.
A visit by Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan (MBZ) to Ankara last month, for example, involved genuine economic cooperation in the form of a $ 10 billion investment pledge, but it also helped temporarily consolidate the struggling pound.
“Even when MBZ visited Ankara – even though he was not someone like [Qatari Emir Sheikh Tamim bin Hamad] Longtime Erdogan supporter Al Thani – his meeting had a positive effect on the Turkish economy. So when someone like Emir Al Thani and Qatar in general are seen to support Turkey, it means a lot politically and in terms of practical financial support, in addition to their investments and contribution to the volume. Exchanges. “
The most salient sign of the alliance, said DoÄŸan-AkkaÅŸ, is the fact that Qatar is not only one of the biggest clients of the Turkish defense industry, but also an investor in it. this. Qatar, for example, has a 50 percent stake in BMC, a major producer of Turkish military transport vehicles. “When someone is invested in your defense industry, you literally can’t have political problems with them,†DoÄŸan-AkkaÅŸ said.
A global showcase of Turkish capabilities
While Turkey and Qatar have had significant bilateral trade for years, the volume of this trade increased significantly following the blockade of Qatar in 2017. In 2013, bilateral trade was valued at only $ 643 million, but in 2018 it had grown to $ 1.63 billion, and $ 1.4 billion in 2020. About $ 1 billion was made up of Turkish exports to Qatar, mainly precious metals, furniture, coins and coins. airplane and electronics.
“The decision to apply an economic and political embargo for Qatar led by Saudi Arabia and also supported by many countries in the Middle East has already recently oriented Qatar towards Turkey in terms of exports”, Mahmut Asmali, president of the Association of Independent Industrialists and Businessmen of Turkey (MUSIAD) told Al Jazeera.
Asmali said that while the coronavirus pandemic had held back some of the bilateral trade levels, he expected the new deals signed in Doha this month to put trade back on an upward trajectory. “We believe that the product mix of bilateral trade will increase in the new period and that an area of ​​opportunity that spans many sectors will emerge.”
The blockade has allowed Turkish exports to Qatar to diversify considerably, said Arıoğlu, in a portfolio that now includes products ranging from furniture to clothing, dairy products and eggs to iron and cement.
“[The blockade] was a big bonus for the Turkish economy, as Qatar turned to Turkey for much of its basic supplies and trade with Turkey exploded during the embargo period.
While this is a positive sign that Qatar is now tightening ties with other Gulf countries, ArıoÄŸlu said Turkish companies hope their services will not be forgotten. “I think Qatar has already discovered Turkish companies, so this is a good opportunity for Turkish companies to prove themselves, to prove the strength of their supply lines in Turkey and the quality of their products,” he said. he declared.
The opportunities that the blockade presented to Turkish exporters are analogous to how Qatar’s largest infrastructure projects have allowed Turkish companies to showcase their own capabilities, ArıoÄŸlu said.
Yapi Merkezi, one of Turkey’s largest construction companies, and led by ArıoÄŸlu, has built up an internal experience with projects like Istanbul’s Eurasia Tunnel, which connects the Asian and European sides of the city. When Qatar looked for contractors to expand its metro system in Doha with the Gold Line, Yapi Merkezi was fortunate enough to work alongside other major global companies. Unlike similar contracts in other countries in the region, the Qatar deal allowed Yapi Merkezi to bring in several of his own engineers and other workers to the project, allowing the company to build on its expertise.
Arıoğlu said that today only a handful of infrastructure projects continue in Doha as the city prepares for the 2022 World Cup, but among these is North Field East, the largest project in Doha. liquefied natural gas (LNG) in the world. Turkish firm Tekfen said this month it was chosen as a subcontractor for a tender for the more than $ 400 million project.
This kind of opportunity, said ArıoÄŸlu, helps propel Turkey’s capabilities onto the world stage. “If you are in Qatar, you are visible to the world,†he said, “because we are competing with world-class international entrepreneursâ€.
