The currency crisis and the growing need for the Turkish government to provide foreign exchange resources provided a rich opportunity for wealthy Arabs to own companies and businesses at low cost.
According to Pak Sahafat News Agency International Group, In the last month of 2021, at a time when the economic crisis was at its height, Turkey took a step towards normalizing relations with the UAE, and the visit of the Crown Prince of Abu Dhabi to Turkey and his meeting with Erdogan became an important turning point in Turkish foreign policy.
But the normalization of relations between Turkey and the rich Arab country of the Persian Gulf is not only synonymous with road construction for foreign investment. According to economists, in addition to some obvious benefits, such as the $ 10 billion investment of the Emirati people in Turkey in the first phase, it has also had negative consequences and risks.
It was previously thought that the currency crisis in Turkey and the sharp devaluation of the lira against the euro and the dollar would only benefit the citizens of Bulgaria and Greece, who traveled to Turkey daily and filled their trunks with cheap Turkish goods and returned home.
But the same situation exists for the Arabs on a much larger scale, and the wealthy sheikhdoms of the Persian Gulf have become clients of Turkish real estate and corporations.
The currency crisis and the growing need for the Turkish government to provide foreign exchange resources provided a rich opportunity for wealthy Arabs to own companies and businesses at low cost.
Qatar, which was already there, was also adorned with the UAE
The wealthy Al Thani family has made big deals in Turkey over the past few years. The Queen of the Mother Museum of the Emir of Qatar has bought several hectares of valuable land around the new Istanbul crossing, and the deal has earned her tens of millions of dollars in the short term.
But this is just one of Qatar’s major acquisitions in Turkey, and other examples, such as the sale of a majority stake in the Turkish Pallet Tank Plant to Doha, are another important issue that has provoked a backlash from critics and opponents of Erdogan.
Needless to say, Erdogan’s opponents’ sensitivity to Qatar has political and intellectual reasons and backgrounds. Erdogan’s secular and Kemalist opponents believe that the alliance between Akparti and Al Thani means trying to strengthen the Muslim Brotherhood discourse in Syria, Tunisia, Libya and elsewhere, and therefore, before it benefits the people and the Turkish economy, only Helps the dominant discourse of the ruling party.
As a result, it is not unreasonable to say that Erdogan’s opposition parties do not want to see Qatar, and that relations with the rich Persian Gulf gas-selling country will probably change somewhat if we see the removal of Akparti from Turkish power in the 2023 elections.
It is an auction of companies! Take the basket
According to the economic report of the Turkish daily Qar, in 2021, several important factors caused thousands of small, medium and large Turkish companies to go bankrupt, and in addition to buildings, equipment, concessions, production tools, sell ​​your machines and possessions.
Meanwhile, there was no serious desire on the part of the wealthy to buy bankrupt companies, but wealthy Arabs flocked to Turkey and bought hundreds of companies.
The Qataris came in first on the shopping list of Turkish companies and the UAE came in second.
The main reasons for selling companies were:
- Severe recession due to widespread outbreak of coronavirus.
- Rising inflation in Turkey, the devaluation of the lira and the appreciation of the dollar, and as a result, the debt of those Turkish companies that had received financial facilities from foreign banks and credit and financial institutions multiplied.
- Hundreds of companies were confiscated by public and private banks and auctions were held to convert the confiscated property into cash.
Mohammed Hassan al-Suwaidi, CEO of the UAE Wealth Fund ADQ, which manages public investment, is one of the UAE’s most powerful and influential economic officials.
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In 2021, he sent large UAE government and private sector funds to Turkey to buy real estate and companies, and said openly: “The devaluation of the Turkish lira may create opportunities. This means that investing in Istanbul, Ankara and other Turkish provinces will bring great profits in the long run. We are considering options for developing multiple platforms for the development of some risky assets.”
Al-Suwaidi said in a statement to the Financial Times: “Turkey’s geographical location is very important from the point of view of the supply chain and the export of goods. It is a country that reaches Germany in 12 hours, has a population of 84 million and has unique conditions for investment.
As a result, we are working on this country and we are interested in continuing to work. “Our businessmen are eager to invest in finance, logistics and food in Turkey.”
Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed traveled to Ankara on November 24, 2021 and was welcomed by Recep Tayyip Erdogan in an official ceremony. This trip helped to solve many problems between Turkey and the UAE.
Now, in the next phase of the normalization process, Turkish Foreign Minister Mevlüt Çavuşo .lu has announced that Erdogan will visit the UAE in February.
More opportunities for Arab investment in Turkey are expected after Erdogan’s visit to Abu Dhabi. But Turkish economic analysts say the country’s debt to foreign banks and the damage and crisis caused by successive dollar shocks are far more complex than just opening up the Turkish economy to Arab capital.
However, at this stage, Turkey has to please only Qataris, Emirati and Chinese. This is because large and medium-sized European financial and credit institutions are reluctant to invest in Turkey, and evidence shows that there will be no significant change in 2022.
Finally, it should be noted that the economic crisis of 2021 has overshadowed many of Turkey’s issues, and the field of foreign policy, especially Turkey’s relations with the rich Arab countries of the Persian Gulf, is one of the important issues that has attracted the attention of diplomatic analysts.
It seems that Turkey has many economic incentives to strengthen, develop and maintain relations with rich Arab countries, and among these countries, the situation of Qatar, the United Arab Emirates and Saudi Arabia will be different.