Turkish President Recep Tayyip Erdogan visited the United Arab Emirates on Wednesday and met with Sheikh Mohamed bin Zayed Al Nahyan, the President of the UAE. The two parties signed 13 bilateral agreements worth $50.7 billion, covering areas such as energy, transportation, infrastructure, logistics services, e-commerce, finance, healthcare, food, tourism, real estate, defense industry, artificial intelligence, and advanced technologies.
In a statement on Wednesday, Erdogan’s office said that the agreements will “elevate the bilateral relations between the two countries to the level of a strategic partnership.”
According to the Xinhua News Agency, the statement also mentioned that both countries agreed to establish a high-level bilateral strategic council to oversee the implementation of the agreements. Erdogan began a three-day Gulf tour from Saudi Arabia on Monday, followed by Qatar and the UAE, with the aim of securing investment and financing agreements.
Ankara seeks to improve its relations with the Gulf countries after years of tensions. Last year, the UAE reached a $5 billion currency swap agreement with Turkey to support the struggling Turkish lira, signaling a warming in diplomatic relations.
Series of Agreements
The British newspaper “Financial Times” reported that Turkey and the Gulf state have concluded a series of temporary agreements, including the establishment of a joint economic and trade committee, commitments to develop energy and natural resource projects, and an agreement on the extradition of criminals.
ADQ, a government investment fund in Abu Dhabi, said it will provide up to $8.5 billion through bonds to support reconstruction efforts after the February earthquake that devastated a vast area in southern Turkey. The fund also announced it will offer $3 billion to finance export credits for Turkish companies to enhance bilateral trade.
Erdogan, who held talks with UAE President Sheikh Mohamed bin Zayed Al Nahyan, stated that the agreements will elevate the relationship to the level of a strategic partnership. This week, the Turkish leader visited Saudi Arabia, Qatar, and the UAE to garner support and investment for the Turkish economy after appointing a new economic team following his victory in May’s elections.
UAE as a Trade Hub
Bankers said that Erdogan brought with him on his Gulf tour a list of assets that Turkey seeks to sell, as Ankara looks to increase foreign currency to replenish severely depleted reserves and manage the soaring current account deficit. Over the past two years, the United Arab Emirates has transformed into a trade and finance hub in the Gulf, shifting away from its more assertive foreign policy towards what officials describe as economic diplomacy, as it faces increasing competition from neighboring Saudi Arabia.
Bankers received a “pitch from all angles” from UAE officials before Erdogan’s visit “to be prepared and assist in ideas and execution.”
The British newspaper noted that Sheikh Mohamed’s visit to Turkey occurred again in June, and now there is greater clarity about the investments with the new economic team, led by Finance Minister Mehmet Şimşek. This group has strong ties across the Gulf and has begun to reverse Erdogan’s controversial policies.
Analysts believe that the Gulf region, home to some of the world’s largest sovereign wealth funds, served as a clear starting point for Erdogan’s attempt to garner support for the economy, as many Western investors remain cautious about the President’s commitment to more traditional policies.