UAE and Turkey sign multi-billion dollar deal

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The United Arab Emirates said it has signed an estimated $50 billion deal with Turkey as President Recep Tayyip Erdoğan visited the oil-rich Gulf to attract investment from the region and boost his country’s ailing economy.

The UAE’s state news agency said the Gulf state and Turkey struck a series of provisional agreements that included the establishment of a joint economic and trade commission, a commitment to develop energy and natural resources projects, and an extradition treaty.

ADQ, one of Abu Dhabi’s state investment funds, also said it would provide up to $8.5 billion through bonds to support reconstruction efforts after the February earthquake, which devastated a vast area of ​​southern Turkey. Had given. The fund also said it would provide $3 billion in export credit financing to Turkish companies to boost bilateral trade.

It was not immediately clear how the estimated $50 billion value of all the agreements was calculated. But the deals signal a deepening of ties between the regional powers, which have spent much of the past decade at loggerheads, often supporting rival sides during the turmoil that erupted in the Middle East after the popular Arab uprisings of 2011. We do.

Erdoğan, who held talks with UAE President Sheikh Mohamed bin Zayed Al-Nahyan, said the agreements would “elevate our ties to the level of a strategic partnership”.

Turkey’s leader has visited Saudi Arabia, Qatar and the United Arab Emirates this week to drum up support and investment for Turkey’s economy, after appointing a new economic team following his victory in May elections.

His government has returned to more conservative economic policies after Erdogan’s economy management was widely blamed for pushing the lira to a record low against the dollar, fueling rising inflation and scaring off foreign investors.

Bankers said Erdogan had taken with him on his trip to the Gulf a list of assets in which Turkey wants to sell stakes as Ankara seeks to replenish severely depleted reserves and manage the current account deficit. trying to collect.

The UAE, the Gulf’s trade and finance hub, has also shifted from its more assertive foreign policy to economic diplomacy over the past two years, which officials say faces growing competition from neighboring Saudi Arabia.

A Gulf-based banker said that Emirati authorities had sent an “all-point bulletin” to bankers in the UAE to “be prepared and help us on ideas and ready for implementation” ahead of Erdogan’s visit.

The rapprochement between Abu Dhabi and Ankara began two years ago, when Sheikh Mohammed held talks with Erdogan in the Turkish capital.

At the time, ADQ had committed $10 billion in investments in Turkey and had previously backed Turkish start-up 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 more clarity for investment with the new economic team in place. Led by Finance Minister Mehmet Simsek, the 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 an effort to drum up support for the economy, as many Western investors are wary of the president’s commitment to more conservative policies. be careful about.

Riyadh and Ankara struck a deal this week for Saudi Arabia to buy Turkish drones, in what was described as Turkey’s biggest defense export deal ever, after Erdogan held talks with Saudi Crown Prince Mohammed bin Salman.